FCC Eyes Cross-Ownership Waivers, Proposes End to Radio/TV Common Ownership Bar

The FCC is looking to revive some media ownership rules approved during Kevin Martin’s chairmanship, while ending a bar on one company holding radio and TV stations in the same market. A rulemaking notice that circulated Friday afternoon for the quadrennial review (CD Nov 7 p19) proposes to reinstate some cross-ownership rules approved 3-2 in 2007.

The draft Media Bureau item proposes to let companies seek waivers of a ban on common ownership of a daily newspaper and radio or TV station in a big city. This quadrennial review makes a new proposal, to eliminate the rule that bars in some instances shared ownership of both radio and TV stations in a market. It would retain existing caps on the number of radio and TV stations any company can own in each geographic region. That’s all according to commission officials. FCC spokespeople had no comment on the item.

The draft seeks to remedy paperwork issues in the last quadrennial review, by putting out specific rules for comment well in advance of any order being adopted, FCC officials said. The 3rd U.S. Circuit Court of Appeals in Philadelphia earlier this year rejected the newspaper/broadcast cross-ownership part of the last rules because the court said Martin offered inadequate public notice. A new proposal in the current draft notice would lift the ban on common ownership of radio or TV stations within a market, meaning the current caps on the number of radio stations or TV stations would apply instead, agency officials said. Some companies like Tribune are allowed currently by the FCC to own radio and TV stations in the same market under a waiver. Agency officials said the rulemaking proposes to keep the current dual network rule.

The item proposes what amounts to a presumption in favor of cross-ownership in the top-20 markets, and a presumption against them in smaller markets, FCC officials said. That’s similar to what was done under the last cross-ownership order, which was released in 2008, they noted. Like the last review, due to Congress in 2006 but voted on in December of the next year and released a few months later, this review also is late. It was due to have been completed in 2010, and agency officials had publicly said they hoped to finish the rulemaking and order in that time. Although the rulemaking notice may be approved within the next few weeks on circulation, the order won’t be approved until sometime in 2012, commission officials said.

Foes of broadcaster mergers and acquisitions had mixed reactions to the draft item, which they hadn’t seen. “Based on what I've heard, the proposals represent an effort to take a measured view of the industry,” said Senior Vice President Andrew Schwartzman of the Media Access Project. The radio/TV cross-ownership ban “matters less to most of my clients than the local radio and TV rules and the newspaper/broadcast cross-ownership rule,” he noted. MAP represented Prometheus Radio Project in its successful challenge at the 3rd U.S. Circuit Court of Appeals to the media ownership rules approved under Chairman Michael Powell, in a case that remained before the court in its consideration of challenges to the rules enacted under Martin.

It’s unclear if the rulemaking notice deals with when shared services agreements, local marketing agreements and the like would trigger media ownership rules, so that such agreements among two or more separately owned TV stations within the same city would constitute actual common ownership, agency and other officials said. Media M&A foes hope that what they call “covert consolidation” through SSAs and such will be addressed. “The FCC absolutely needs to deal with the issue of what we call covert consolidation, and the impact that is has in local markets,” said Policy Counsel Corie Wright of Free Press. Of the newspaper/broadcast cross-ownership rule enacted under Martin, it’s “completely littered with loopholes” and “not a rule at all,” because waivers can be obtained and it’s unclear how well the FCC could enforce the performance of any stations that got exemptions, she said: “So we would hope not to have a repeat of those rules."

The FCC asks about what showings those seeking waivers of cross-ownership rules should make, agency officials said. The 2007 order also had several showings broadcasters could make, and no one has availed themselves of the order and sought that exemption, agency and industry officials said. Some companies like Gannett and Tribune have separate waivers letting them own dailies and broadcast stations in the same market, they noted. The presumption in the draft is essentially against common ownership of a broadcaster and daily in Nielsen Designated Metropolitan Areas smaller than No. 20, FCC officials said.

The agency asks about at least four showings for waiver seekers, without tentatively proposing that those standards ought to apply, FCC officials said. They are about: The extent to which the combination would increase the amount of news from the affected properties; Their ability to have independent news judgment exercised by editorial employees; The level of concentration in the DMA; and the financial state of the broadcaster and daily.