NAA: FCC Rule Change Would Have Little or No Impact on Minority Ownership

Argue that in increasingly online world, newspapers can hardly be seen as dominant

By John Eggerton -- Broadcasting & Cable, 12/11/2012 3:14:42 PM

The Newspaper Association of America says FCC chairman Julius Genachowski's proposal to loosen the newspaper/TV cross-ownership rules and lifting limits on newspaper/radio do not go far enough, but defended the move as thoroughly vetted and said criticisms that it would harm minority ownership are unsubstantiated.

In fact, NAA said that the change would have little or no impact on minority ownership, or consolidation in general.

In a letter to the chairman Tuesday, NAA president Caroline Little said the FCC proposal does not go far enough and that the rule should be repealed in its entirety. "It makes no sense to continue to prohibit local television stations that currently produce local news from investing in local newspaper journalism," she said.

A number of past FCC chairs, Republican and Democrat, have agreed the ban should go, but have pointed to pressure from Congress not to lift it.

Little said that newspapers could hardly be considered dominant players in the news business anymore.

"Google brought in more advertising revenue in the first six months of this year than all printed daily and Sunday newspapers and magazines in the United States combined," she said. "The online, television and mobile app markets are teeming with new players, and newspapers can no longer be seen as dominant."

She also took issue with suggestions the chairman had not sought sufficient input on the changes. She pointed out that the initial proposal to relax the rules was released months ago "after rounds of comment and empirical, peer-review studies." That is the same point the chairman's office has made in defending the decision to try and vote the item by the end of the year, a deadline now pushed to at least early January after the chairman agreed to extend comment on an associated biennial ownership report.

As to the criticism by many minority groups that the item does not sufficiently gauge the impact of the changes on minorities and women, Little said there was absolutely no support for the claim. She said few minority-owned TV stations would be eligible for cross-ownership because they are in smaller markets. "Quite simply, the FCC's modest proposal would have little to no impact on minority ownership."

Little said that the item was unlikely to lead to many new mergers, which in its opinion was one of the item's drawbacks. "The proposal would bar television/newspaper combinations outside the top 20 markets and would not allow for combinations if the television station is ranked in the top four in a market. This is unfortunate, as top-four television stations are far more likely to produce local news and, therefore, are logical candidates to invest in newspapers. Lower-ranked stations that produce no local news are less likely to make investments in local journalism. In our view, the current proposal does not go far enough to generate much-needed investment in local journalism."

Genachowski and the other commissioners are all slated to appear before the House Communications Subcommittee Wednesday, where they are expected to be asked about the ownership vote and the criticism surrounding it.