News

FCC Starts Media-Ownership Rulemaking

9/16/2001 8:00 PM Eastern

Washington— The Federal Communications Commission last Thursday proposed new mass-media ownership rules that could broadly affect the cable, television, radio and newspaper industries.

The agency, under Republican chairman Michael Powell, voted unanimously to launch a pair of rulemakings that could lead to greater consolidation in the media at the national and local levels. That worried consumer groups that fear a decrease in competition and ownership diversity.

In one rulemaking, the FCC plans to examine whether it needs to retain, relax or eliminate a 1975 rule which prohibits the common ownership of a newspaper and a broadcast television or radio station in the same market.

In the other rulemaking, the FCC proposed policies that could result in limits on the number of subscribers one cable company may serve, an issue with which the agency has struggled since 1993.

The FCC did not propose a specific cap in the cable rulemaking. Instead, it sought comment on two approaches that apparently contain market-based triggers that would, if tripped, effectively bar a cable company from growing any larger.

Based on public statements by Powell — at least with respect to the print/broadcast cross-ownership rule — the FCC is likely to move aggressively in the direction of relaxation, if not total repeal.

Powell has often said that flat ownership bans, especially ones that date back decades, are dubious propositions under the First Amendment.

Center for Digital Democracy president Jeff Chester said the retention of the newspaper-broadcast cap and adoption of cable ownership limits were essential to protecting the First Amendment rights of the public.

"They have not been perfect. But the rules have helped constrain the power of the corporate media giants," Chester said in a statement.

Proponents of elimination of the newspaper-broadcast ban note that because of FCC waivers and combinations that existed before the 1975 rule went to effect, there are 49 markets in which a single entity is allowed to own a newspaper and a broadcast outlet with no concerns raised about economic competition or ownership diversity.

The FCC approach in these rulemakings was concrete evidence of a new attitude at the agency. Under Democratic leadership, the agency refused to touch the newspaper-broadcast rules. It also adopted cable-ownership rules that were broadly rejected by a federal court in March, in a suit brought by AT&T Corp. and Time Warner Entertainment.

"Without being facetious, there was an election that took place and we have a new group of commissioners now, and they want to do a more broad-based approach in the rulemaking," said FCC Mass Media Bureau chief Roy Stewart, referring to the newspaper-broadcast rule.

Under the FCC cable rule vacated by the court, an operator was barred from serving more than 30 percent of all subscribers to cable and other forms of pay television.

FCC Cable Services Bureau chief W. Kenneth Ferree said that in light of the court's ruling, the agency wanted to take a "fresh look" at the cable market, including cable's loss of market share to direct broadcast satellite carriers.

As was explained at last Thursday's meeting, the FCC is seeking comment on one approach that would base cable-system ownership limits on the number of subscribers a programming service must reach in order to be viable.

The second approach — which Ferree described as simple in theory but tough to police — would base the application of cable system ownership limits on the market power of cable operators.

The FCC will also review two other cable-ownership rules dealing with situations in which minority investments in cable systems should count toward overall ownership limits.

September