Draft Tribune Recon Order Leaves in Place 2007 FCC Waivers for Zell

The transfer of licenses to an earlier corporate incarnation of Tribune and waivers of cross-ownership rules so the company could hold onto radio and TV stations in markets where it owned daily newspapers would remain in place under a draft order, FCC officials said. They said a Media Bureau order that circulated Nov. 14 (http://xrl.us/bmxdnu) denied the substance of petitions for reconsideration of a 2007 commission decision that paved the way for Sam Zell to take the company private. The part of the 3-2 order (CD Dec 3/07 p6) the current item reverses would give a church group opposed to cross-ownership waivers standing to challenge applications to transfer control to Zell, agency officials told us last week.

Votes by FCC members on the draft aren’t considered a high priority, agency officials said. With other higher profile media and spectrum items awaiting approval by commissioners, it may be a little while before the order is adopted, officials inside and outside the regulator said. They noted that a draft bureau order would allow cross-ownership waivers for owners of a TV station and daily in the same top-20 market, and Tribune fits that bill. (See separate report below in this issue.) Commissioners may approve the recon order unanimously, and it may not provoke controversy on the eighth floor, agency officials said. An FCC spokesman declined to comment.

A Nov. 16 bureau order continued the permanent exemption Tribune under Zell had of cross-ownership rules for Chicago, where it’s owned the WGN TV and radio stations and Tribune since before there was a cross-ownership ban (CD Nov 19 p4). The company emerging from Chapter 11 got temporary waivers in Hartford, Conn.; Los Angeles; Miami/Ft. Lauderdale, Fla.; and New York. Tribune filed for bankruptcy protection in 2008, before the waivers required divestitures, the order noted (http://xrl.us/bn27p3). There’s less time pressure for commissioners to act on the recon petition than there was for the bureau to release the Tribune transfer order, since the latter item was related to the company’s emergence from bankruptcy, officials inside and outside the agency noted.

Because the draft recon order otherwise denies petitions to reverse the 2007 ruling from anti-consolidation groups including the United Church of Christ, the challenges by UCC and others remain moot, FCC officials said. They said the draft order would only change the fact that standing was denied to a UCC-related group to challenge the broadcaster and newspaper owner’s applications. The 2007 order said that because UCC and Media Alliance, which together filed a petition to deny the $8.2 billion deal in docket 07-119 (http://xrl.us/bn27sd), didn’t provide sworn statements by viewers in each of the radio and TV stations’ coverage areas except for WSFL Miami and WPIX New York, the objections were considered informal ones. Those challenges were denied, the order said (http://xrl.us/bn27pv). This month’s bureau order also denied a challenge to the applications from groups including UCC, and declined to hold off acting on them until the recon petitions were dealt with. “The Commission will address the petitions for reconsideration of Tribune I and related matters in a separate proceeding,” the recent bureau order said (http://xrl.us/bn27p3) of the 2007 proceeding. “In deciding to close on the transactions at issue here, Tribune must accept the risk that the Commission or a court could reverse the Commission’s grant of the applications in Tribune I."

UCC didn’t sue the FCC over the 2007 commission order in court because the item found the group had no standing, said Georgetown University Prof. Angela Campbell, representing the church for the school’s Institute for Public Representation, which she co-directs. The possibility of getting standing now is a “silver lining” she'd be “shocked” not to receive, Campbell said. UCC hasn’t decided whether to file an application for review asking the full commission to undo the bureau’s order letting Tribune emerge with its licenses intact and having new waivers, said public-interest communications lawyer Cheryl Leanza. She also represents the church and like Campbell hadn’t seen a draft of the recon order. Citizens and not just other broadcast licensees got the right to challenge FCC licensing decisions in a 1966 U.S. Court of Appeals for the D.C. Circuit decision (http://xrl.us/bn27rr), Leanza noted of a case UCC brought involving WLBT Jackson, Miss., among the few TV stations to have its license revoked. Tribune and News Corp.’s Fox have “all these waivers that were granted that expired,” she said of the broadcasters that haven’t had to make divestitures. “Now they just continue to hold onto all these properties, despite having an expired waiver.”