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Martin's Goal: Tweak Ownership Rules

FCC chairman pushes for vote on plan that lifts some—but not all—limits 11/16/2007 07:00:00 PM Eastern

FCC Chairman Kevin Martin pulled a neat trick last week in his showdown with media consolidation critics over the issue of revising ownership rules.

On the one hand, he offered a rule rewrite that was confined to a limited lifting of the newspaper-broadcast cross-ownership ban. But there was a caveat up his sleeve: He did not include most of the deregulation that would have allowed broadcasters to own more radio and TV stations in smaller markets—deregulation Martin himself voted for in 2003.

Martin plans to push ahead with a Dec. 18 vote on that proposed “moderate” change—which he unveiled last week in a New York Times op-ed piece—despite threats of legislation by powerful senators, and complaints from inside and outside the commission. If that vote is held, Martin says, it would effectively end the years-long FCC review of ownership rules as directed by Congress and a federal court.

Martin's proposal, which he characterized as more conservative than the deregulation initially put forth, confines changes to lifting the ban on owning a newspaper and broadcast outlets in the same market, but only presumptively for the top 20 markets, and excluding any of the top-four-rated stations. Notably absent is the notion of allowing more multiple TV and radio station ownership in a single market.

Martin's plan would help the much-troubled Tribune Co. in four of the five markets where its newspaper-broadcast combinations are under waivers; the company would likely have to divest in Hartford, Martin said last week. Tribune needs either the rule change or more waivers to be able to close its deal with investor Sam Zell by the end of the year.

Fox might also have to make a new pitch for keeping WWOR in New York. WNEW is grandfathered, and Martin indicated he would not be looking to unwind any such combinations.

In his Times piece, Martin gave a shout-out to Democratic FCC Commissioner Michael Copps, a longtime harsh critic of the media-ownership review process. That may have been Martin's attempt to curry favor for his plans, but it was one trick he apparently missed.

Copps and fellow commissioner Jonathan Adelstein called Martin's plan a “wolf in sheep's clothing” proposal that “could propel a frenzy of competition-stifling mergers across the land,” adding that the possibility of waivers in smaller markets was a loophole that “big media will drive a truck through.”

Martin also received no applause from media-reform organization Free Press, a big backer of a bill from Sens. Byron Dorgan (D-N.D.), Barack Obama (D-Ill.), John Kerry (D-Mass.) and others. The bill could stop the Dec. 18 vote by requiring the FCC to hold separate inquiries on localism and diversity, and let the public weigh in for three months before amending the rules. Calling Martin's proposal more “corporate welfare” for “Big Media,” Free Press complained about what they saw as a liberal waiver policy for stations below the top 20 markets.

While Sen. Dorgan now sees even more urgency to pass a bill blocking a December vote, Martin suggested that if he wasn't able to proceed, Tribune might not get its temporary waivers after all, though Martin could not speak directly to the Tribune deal since it is before the commission.

“Could there be time-limited waivers? Potentially, yes,” he told reporters last week. “But that would [occur] if the commission was anticipating taking action on the rules in the next few weeks,” and was granting waivers in anticipation of that. “If we're not going to act on any changes of the rules, then we should be applying those rules as they apply now,” he added.

Under the chairman's current proposal, Tribune's ownership of WTXX-TV and the Hartford Courant in a market outside the top 20 would not pass muster. Martin suggested that Tribune could apply for a waiver under the new policy, with the commission deciding on a case-by-case basis. But, he admitted, “I anticipate that the application of the rules in the Hartford situation would require them to divest.”

Copps and Adelstein accused Martin of using the Tribune deal as a “human shield,” and holding the deal hostage in his desire for a vote. They added they were ready to vote on the waivers within the coming days.

E-mail comments to jeggerton@reedbusiness.com

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