FCC Proposing Leaving Local TV/Radio Ownership Caps In Place

Rulemaking would drop radio-TV cross-ownership limits and only loosen newspaper-broadcast cross-ownership rules as well as ask whether SSA's are OK

By John Eggerton -- Broadcasting & Cable, 11/18/2011 3:07:53 PM

According to a source familiar with the document, FCC Chairman Julius Genachowski has circulated a rulemaking proposal recommending the FCC scrap the radio-TV cross-ownership rules, but leave in place the radio and TV local market ownership caps and essentially preserve the FCC's attempted loosening of the newspaper-broadcast cross-ownership rules, which the FCC tried to do under Republican Chairman Kevin Martin. "It is more or less the same framework of the 2006 Quadrennial," said the source of the newspaper-broadcast change.  

The Notice of Proposed Rulemaking (NPRM), which is currently being circulated among the commissioners, may be voted without being on a public agenda meeting, according to the source -- there are apparently at least three votes for it -- but the final order will likely be scheduled for that public vote sometime next year, after a sufficient notice and comment period on the proposed changes.

Since the NPRM has not yet been voted, there is still opportunity for commissioners to make suggested tweaks and modifications, and for industry to pitch its points, but circulation of the item essentially represents the chairman's OK on the plan.

While the NPRM basically reinstates the Martin plan of making combos between TV stations and newspapers in the top 20 markets presumptively in the public interest, it does put out for comment the Martin four-part test for determining whether such combos should be allowed and whether they should be the criteria. That test is "the extent to which the combination will increase the amount of local news in the market; whether each media outlet in the combination will exercise independent news judgment; the level of concentration in the DMA; and the financial condition of the newspaper or broadcast station, and whether the new owner plans to invest in newsroom operations if either outlet is in financial distress."

Broadcasters will not be happy with the news that the local market caps are not scheduled to be lifted, or that the newspaper-broadcast cross-ownership ban is not being scrapped. Even a bipartisan trio of former FCC chairmen conceded to C-SPAN that they thought the ban should be scrapped but did not propose doing so for political reasons, and broadcasters have argued that the local caps are an artifact of a bygone era that prevent them from competing more cost-effectively in a media landscape remade by digital delivery.

The NPRM would be the follow-up to the Notice of Inquiry on the commission's quadrennial media ownership reg review, which is required by Congress. But it is also responsive to a Third Circuit Court of Appeals remand of the Martin plan to loosen the newspaper-broadcast cross-ownership ban. The court said the FCC had not given that change adequate notice or opportunity for comment. But it had no problem with Martin's decision not to loosen the other media ownership rules.

Circulating the NPRM now gives commissioner Michael Copps a chance to weigh in on the NPRM before he exits by the end of next month.

Also as part of the NPRM, the FCC will ask whether shared services agreements and other joint TV station operating agreements violate those local market station limits the FCC is keeping in place.

Cable operators, led by the American Cable Association, have argued that agreements are a way to sidestep the rules and provide broadcasters with unfair bargaining power in retrans deals.