Wednesday, December 19, 2007

FCC Tweaks Cross-Ownership Rules

By Radio Ink - Dec. 18, 2007

WASHINGTON -- Despite pressure on Chairman Kevin Martin from Congress to delay the vote, the FCC this morning amended its newspaper-broadcast cross-ownership rules but made no changes to its local radio ownership and radio-television cross-ownership limits.

Under the new cross-ownership rule, the FCC will consider combinations of either a radio or TV station with a newspaper on a case by case basis, but will face a presumption that any combination will not be in the public interest. "This is a high hurdle," said FCC attorney Jamila-Bess Johnson, who presented the rule at the agency's monthly meeting this morning. "The applicants must prove that merger would create more, relevant voices."

In the nation's top 20 markets, any radio station can combine with a major newspaper, but only television stations outside of the top four according to Nielsen ratings data may merge with a newspaper. Also, any proposed newspaper/TV combo in the top 20 markets must demonstrate that eight independent voices will remain in the market post-merger.

All proposed mergers outside of the top 20 markets will face the case-by-case review. Among the criteria that will be considered include the level of media concentration in the market, and whether the combined entity will bring more local news to the market. The applicants must also demonstrate that the broadcast and newspaper entities will maintain their own staffs, and retain independent editorial standards.

Other criteria to be considered are the financial health of the individual entities. In the case of broadcast outlets, if a station has been dark for at least four months or is in bankruptcy, it will be considered a "failing" or "falied" business by the FCC. The FCC will also consider if the station has posted negative cash flow for the previous three years. A station's ratings data will also be considered.

If a merger applicant can demonstrate that a proposed combination will result in a new source of news, and will generate at least seven hours of new local news programming per week on a broadcast station, the presumption that the combination will not serve the public interest will be reversed.

While considerable time was spent on the details of the new cross-ownership rule, a scant few sentences were dedicated to discussion of the local radio ownership rule. These limits were remanded by the Third Circuit Court of Appeals in 2003 for further justification by the FCC. In her prepared remarks, Johnson noted simply that the current limits are structured under caps created by Congress, and are being retained.

Commissioner Deborah Taylor-Tate in her remarks, however, stated that the remarks of citizens who spoke out about radio consolidation at the six public hearings on the rule review weighed in the decision, and noted that large radio groups like Clear Channel and CBS are voluntarily divesting some of its radio stations. "This is a sign of the market working," she said, adding that these divestitures may improve minority and small business ownership of broadcast outlets.

Improving ownership among those groups is a hot button issue for Democrats Michael Copps and Jonathan Adelstein, who are in the minority on the five-member commission. In prepared comments at today's meeting, both expressed dismay that more isn't being done with today's vote to encourage minority and small business ownership.

The commission also retained its existing radio/television cross-ownership limits. Under these caps, one owner can control up to two television and six radio stations in a market where twenty independent voices will exist post merger, and can control two television and four stations in a market where ten independent voices will exist post-merger.

A handful of representatives from anti-media consolidation group Code Pink charged towards the commission dais just as the five commissioners were preparing to vote, with claims that included, "This vote is a sham," "The public interest is not being served by this commission, and "On behalf of the public we want to stop this vote." The activists were escorted from the room by FCC security.
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