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FCC Ready to Start Media-Rule Review

6/23/2002 8:00 PM Eastern

Senior Federal Communications Commission officials are planning to conduct a massive overhaul of media-ownership rules, in a deliberate attempt to tackle nearly all the tough issues at the same time.

Kenneth Ferree, who will oversee the effort as chief of the FCC's Media Bureau, said his staff expects to deliver recommendations to agency chairman Michael Powell in the spring of 2003.

"This is quite an undertaking, and to do this by the spring of '03 is quite aggressive," Ferree told reporters at a June 10 press conference at FCC headquarters.

Some in the industry disagreed with that assessment.

The Tribune Co., an owner of TV stations and newspapers, has for years been pressing the FCC to eliminate a rule that bars the common ownership of a daily newspaper and a radio or TV station in the same market, without FCC permission. Tribune had been expecting the agency to vote on changing the rule soon.

"This is a kick in the teeth," said Tribune Washington office vice president Shaun Sheehan, who added that the FCC had failed to review its media-ownership rules every two years, as required by Congress. "I expect the commission to do what the law says."

The FCC postponed the newspaper-broadcast vote despite pressure to conclude the proceedings in recent days from Capitol Hill. Senate Majority Leader Tom Daschle (D-S.D.) and Sen. Harry Reid (D-Nev.) sent Powell a letter June 6 expressing that view.

House Commerce Committee chairman Billy Tauzin (R-La.) and Telecommunications and the Internet Subcommittee chairman Fred Upton (R-Mich.) went a step further, sending Powell a letter June 4 urging an immediate repeal.

The decision to postpone the review until next year could be a political risk. If the Democrats win control of both the House and Senate in the fall elections, Congress could pass legislation early next year that restricts the ability of the GOP-controlled FCC to liberalize certain rules.

The broad rulemaking will review six rules in all, including the newspaper-broadcast restriction. Others include the rule that bars a TV station owner from reaching more than 35 percent of TV households; a restriction that prohibits CBS, NBC, ABC or Fox from combining at the network level; and a rule that bars the ownership of two TV stations in the same market if fewer than eight independently owned stations would remain.

"All of these rules are really kissing cousins in some sense," said Ferree. "You can't look at the rules in isolation."

Cable-ownership rules are the exception to the FCC's plan for a single "omnibus, blockbuster" rulemaking, Ferree said. The agency expects to decide separately on what limits on cable-company size are appropriate, if any, and on the appropriate number of channels that a cable operator may fill with affiliated programming.

Ferree said the analysis required by Congress to determine cable-system ownership limits was so different from the analysis required in reviewing ownership of broadcast properties that the FCC decided to craft its cable rules separately.

The FCC's media-ownership overhaul is the product of three defeats in the U.S. Court of Appeals for the D.C. Circuit, which is pressing it to either justify its rules every two years, modify them or eliminate them, consistent with the scheme crafted by Congress in 1996.

Ferree said the FCC's goal was to draw on outside academic studies and internal reviews — coupled with comments and analyses produced by various companies and public-interest groups — to fashion rules that reflect the realities of current media markets and can withstand judicial review.

"We all know that more and better work has to be done here. Our challenge now is to do it once, right," Ferree said.

The D.C. Circuit struck down an FCC rule that effectively banned the common ownership of a cable system and a TV station in the same market. Although the FCC is not planning to revive that rule verbatim, cable systems owners that buy TV stations today may find that those purchases clash with new FCC rules designed to curb media concentration in local markets.

"No matter what we do, at the end of this process, everybody is going to have to comply. There is no special waiver for cable," Ferree said.

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