Watchdogs worry as FCC likely to ease media ownership rules

DAVID WESTPHAL; News Tribune Washington Bureau

6/3/03

WASHINGTON - For more than a half-century, the federal government has kept a wary watch on the concentration of big media power, nervous that a handful of broadcast and newspaper companies might corner the market on information and commentary.

Now, arguing that successive revolutions in cable TV and the Internet have drastically reduced the clout of media moguls by enlarging the field of competition, federal regulators will relax their guard.

On Monday, Republican members of the Federal Communications Commission are expected to push through new regulations that ease ownership barriers.

Michael Powell, the FCC chairman who has led the campaign for relaxing the old rules, says they're no longer needed in a world in which the number of media outlets has nearly tripled in the last four decades.

"It simply has become more difficult to just assert that an ownership restriction is essential to promoting diverse viewpoints, where so many outlets and owners thrive," Powell said recently.

Even so, Powell's likely victory, on an expected 3-2 party-line vote, will emerge only after a fierce fight from Democrats and an eclectic assortment of opposition groups. Organizations ranging from the Consumer Federation of America to the National Rifle Association say that, despite a changed media environment, the new rules inevitably would lead to ownership concentration and a stifling of information.

"It violates every tenet of a free democratic society to let a handful of powerful companies control our media," said Democratic FCC Commissioner Jonathan Adelstein.

For many of the largest broadcast and newspaper companies, Monday's FCC action will be the culmination of a long lobbying campaign. The commission is likely to:

•Allow broadcast networks to own more local affiliates. Currently, networks cannot own local stations that, taken together, reach more than 35 percent of the national audience. The FCC vote is likely to raise that number to 45 percent.

•Wipe out for most parts of the country the cross-ownership rule, which prohibits media companies from owning a community's dominant newspaper along with a TV or radio station. The ban may be retained in small markets.

•Increase the number of television stations a single company can own in a large market from two to three. Existing rules limiting ownership to two stations in a midsize market and one in a small market are expected to remain.

No one knows exactly how quickly or aggressively media companies will initiate mergers, acquisitions and swaps. Even after FCC approval, the rules could face court tests, and some in Congress are vowing legislative efforts to overturn the action.

But Michael Copps, another Democratic commissioner who opposes the rule changes, predicts a "veritable gold rush of media-company buying and selling." Copps said he has heard about acquisitions "where the terms are already decided, the deal is done."

Powell's case has other dimensions. In particular, he says, inaction could push over-the-air networks toward extinction because of the growing popularity of cable and satellite stations. "Free television itself serves a very important public interest, yet its future is not guaranteed," he said.

Opponents respond that Powell's arguments are merely cover for an ideologically motivated campaign to free media giants from government regulation.

Much of the expansion in new media outlets in recent years has resulted in only tiny gains in market share, they say, leaving traditional media in control of the marketplace.

"Public policy should err in favor of more competition rather than less so communities can enjoy a greater diversity of viewpoints so critical to democratic dialogue and debate," said Gene Kimmelman of the Consumers Union.

Opponents also contend the FCC has already demonstrated how rapid concentration can occur through its handling of radio market deregulation in 1996.

A study by the Future of Music Coalition, which represents musicians and recording artists, says just two companies, Clear Channel and Viacom, now control 45 percent of radio revenues nationally. Jenny Toomey, the group's executive director, said a "radical deregulation" of radio has resulted in "less competition, fewer viewpoints and less diversity in programming."

While defending the radio deregulatory plan, Powell appears likely to put the brakes on further radio concentration at Monday's meeting.

The new confrontation has created its share of strange bedfellows.

As expected, opponents include many Democrats and liberal-oriented interest groups. But their ranks also include Republicans such as Sen. Ted Stevens of Alaska and conservative groups such as the NRA and the Parents Television Council.

Brent Bozell, president of the parents group, said the networks increasingly have a lock on TV programming that many in the country find offensive. "The concept of community programming is alien to the suits in New York," he said.

The owners of all four big networks - ABC, CBS, NBC and Fox - are lined up in favor of the eased restrictions. So are many of the largest newspaper companies that also own broadcast properties - Gannett Co., Tribune Co., Hearst Corp., Media General Inc. and Belo Corp. The newspaper industry's primary trade association, the Newspaper Association of America, has been one of the key drivers for the cross-ownership rules changes.

But not all media companies are on board.

Many local broadcast stations oppose the idea of allowing networks to buy more affiliates, saying it would give too much programming clout to the big networks. A few newspaper companies also oppose the action - most notably The Seattle Times and its publisher, Frank Blethen, who has been waging a fierce defense of family-owned newspaper companies.

The McClatchy Co., which owns The News Tribune and 10 other dailies around the country, has taken no position on the proposal with the FCC. But Gary Pruitt, the company's chairman and chief executive, says McClatchy "won't be leading the charge to buy television ... in our newspaper markets."

Dale Kasler of The Sacramento Bee contributed to this report.