Analyst Concerned About Diversity Index - Multichannel

Analyst Concerned About Diversity Index

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A novel approach to measuring media concentration might deserve a special
round of public comment to avoid litigation risk, a media analyst said
Friday.

Blair Levin, with Legg Mason Inc., said the Federal Communications Commission
was debating whether to seek public comment to ensure that new media-ownership
rules could not be defeated in court on procedural grounds.

The FCC is crafting what is called a "diversity index," which would be used
to inventory media properties in a market and measure ownership concentration
based on the assignment of numerical values to newspapers, TV stations, radio
stations, cable systems and the Internet.

In theory, mergers would likely sink or swim based on their numerical value
in the diversity index.

Levin said foes of the FCC's new media-ownership rules -- which are expected
to be unveiled by late May -- could have a shot at defeating the rules in court
on the basis that the agency did not give parties a chance to evaluate the
operational aspects of the diversity index prior to adoption.

"We believe there are legal precedents going both ways and a complete legal
analysis cannot be done without knowing the details of the new proposal," Levin
wrote.

"The FCC could determine that even if legal precedent allows the commission
to vote a rule out without additional comment, it would still be more prudent to
solicit a wide range of reactions to the specific proposal in order to assure
that the rule does not have unintended consequences," he added. "And just as
significant, politically and legally, it would not give opponents of the final
rules a procedural argument against them."

On Thursday, Sens. Wayne Allard (R-Colo.), Olympia Snowe (R-Maine) and Susan
Collins (R-Maine) wrote FCC chairman Michael Powell urging public comment on
proposed media-ownership changes -- and, by implication, the diversity index, as
well -- before they were adopted.

However, on Friday, Sen. Sam Brownback (R-Kan.) wrote Powell saying that the
process had dragged on and the FCC should issue rules "without further
delay."

FCC Media Bureau chief Kenneth Ferree, whose staff is developing the
diversity index, issued a statement indicating that a new comment period was
unnecessary.

"Recently, there has been a lot of premature speculation about the outcome of
the FCC's broadcast-ownership-rules review. The FCC was very clear in the NPRM
[notice of proposed rulemaking] that it was interested in thinking about
diversity in a more accurate way than the [FCC] had in the past. The concept of
a diversity index is simply a more sophisticated way to analyze data that is in
our record, it doesn't tell you what the rule should be," Ferree
said.

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