No Short-Term Fix On Ownership Conflicts

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Media General, Tribune and other TV groups with newspaper holdings that conflict with FCC anti-consolidation rules face a wait of a year or more before they will learn whether they must sell some of their properties.

FCC Commissioner Kathleen Abernathy told reporters Thursday that license renewals for those companies and others with ownership conflicts will remain stalled until the FCC's larger rewrite of its overall ownership rules is completed, a process that could take a year or more.

License renewals are required for every broadcast station and give the FCC an opportunity to judge whether stations are complying with agency regulations and are serving the public interest.

As part of a license renewal, the FCC can order stations to come into compliance with all agency rules, including ownership limits. Companies won't be forced to sell properties before the ownership review is done, but divestiture orders could be issued once it is complete.

Deciding how to handle licensees that have purchased a newspaper in the same town as their stations is one of the FCC's biggest dilemmas.

FCC rules bar ownership of a daily paper and a station in the same market. Media General and some owners have established local TV/newspaper combos anyway by exploiting a quirk in FCC policy allowing a station owner to buy and hold onto a newspaper until the local station's license is up for renewal, a process that happens only once every eight years.

Abernathy said the effort to set new ownership rules would take a minimum of eight months, but would probably last more than a year. "It's all going to be controversial," she said. "We don't know what will be legally sustainable."

The new ownership review will be the third time since 1999 that the FCC has tried to alter its broadcast ownership rules. Two previous tries were thrown out by federal appeals courts. Last month the Supreme Court refused to hear appeals of a lower court order requiring the FCC to rewrite the last version of rules set, and almost immediately stayed, by the FCC in 2003.

Media General operates TV/newspaper combos in Myrtle Beach, Panama City, and Columbus, Ga. that have caused license renewals to be delayed because of uncertainty of cross ownership ban's future.

Media General does not want to divest any of the properties it owns. The FCC is not willing to order combos broken up now because there is a chance those would be deemed permissible down the road. Similar issues could be faced by Gannett in Phoenix in 2006 and by Tribune in Los Angeles, Hartford, Conn.; and New York City in 2007.

Abernathy said resolving the newspaper crossownership issue is the most urgent component of the ownership review, which also will tackle FCC limits on local TV ownership, TV/radio crossownership and radio market measurement. "These folks need clarity," she said.

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