FCC Launches Media-Ownership Rules

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The Federal Communications Commission, under Republican chairman Michael
Powell, proposed new mass-media-ownership rules Thursday affecting the cable,
television, radio and newspaper industries.

By unanimous vote, the agency agreed to launch a pair of rulemakings that
could lead to greater concentration in the media at the national and local
levels, worrying consumer groups that fear a decrease in competition and
ownership diversity.

In one rulemaking, the FCC is planning to examine whether it needs to retain,
relax or eliminate a 1975 rule that prohibits the common ownership of a
newspaper and a broadcast property (television or radio) in the same market.

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

In the cable rulemaking, the FCC did not propose a specific cap. 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
newspaper-broadcast rule -- the FCC is likely to move aggressively in the
direction of relaxation, if not total repeal. Powell has often said flat
ownership bans -- especially ones that date back decades -- are dubious
propositions under the First Amendment.

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

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

Proponents of elimination of the newspaper-broadcast ban noted that because
of FCC waivers and combinations that existed before the 1975 rule took effect,
49 markets have single owners of a newspaper and a broadcast outlet without
raising concerns about economic competition or ownership diversity.

The FCC approach in these rulemakings was concrete evidence of a new attitude
at the FCC. 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 Roy Stewart, chief of the FCC's Mass Media Bureau,
referring to the newspaper-broadcast review.

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

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

As 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 needs to 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 also is going to review two other rules on cable ownership that deal
with situations where minority investments in cable systems should count toward
overall ownership limits.

And the agency is seeking comments on proposals that would limit the number
of channels a cable operator may occupy with programming networks it owns in
whole or in part.

The details on all of these proposals were contained in written notices, but
the FCC did not make the documents publicly available
Thursday.

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