FCC Opens Massive Media Rulemaking

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By next summer, the Federal Communications Commission expects to complete
work on a massive overhaul of its broadcast-ownership rules, which some FCC
officials said have failed to keep pace with technology and, as a result, have
failed to survive judicial review.

The effort is expected to trigger a raucous debate over whether the
Republican-controlled FCC under chairman Michael Powell is catering to business
interests or instituting reforms that prior commissions refused to embrace
because of political pressure in favor of the status quo.

Precursor Group media analyst Scott Cleland said he expects 'a bitter,
partisan debate' in coming months.

A unanimous FCC voted Thursday to launch the rulemaking that some analysts
said will end up relaxing or eliminating regulatory barriers that have stood in
the way of ownership consolidation at the national and local levels for many
years -- in some cases for decades.

FCC officials expect to finish work next spring on at least six rules,
including the 35 percent national TV-ownership cap, the broadcast-newspaper
cross-ownership ban and the local-TV-station-ownership rule.

'This is the most comprehensive undertaking in the area of media ownership, I
believe, in the commission's history. It is ambitious, but I submit it is long
overdue,' Powell said.

Cable operators were once effectively barred by the FCC from owning TV
stations in their local markets until the U.S. Court of Appeals for the D.C.
Circuit eliminated the ban.

The deadline for the FCC and consumer groups to appeal the ruling to the U.S.
Supreme Court is Sept. 19. The commission is unlikely to appeal.

FCC officials said they do not plan to use the broadcast-ownership review as
a vehicle to revive the cable/TV-station cross-ownership ban.

'While not a priority issue for our association, the issue is better
addressed by market dynamics and the cable/broadcast cross-ownership prohibition
has outlived its usefulness,' said Daniel Brenner, senior vice president of law
and regulatory policy at the National Cable & Telecommunications
Association.

However, FCC officials indicated that new broadcast-ownership rules might
have an impact on the ability of a cable system to own a TV station in the same
market. The idea is that a cable/TV ownership restriction might kick in if
either the cable system or the TV station has a substantial ownership interest
in other mass-media properties in the market.

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