Wednesday, November 14, 2007
FCC Chair Kevin Martin has proposed changes to the media cross ownership rules. Here is his statement.
– Chairman Kevin J. Martin proposes that the Commission conclude its review of the broadcast ownership rules by adopting the regulatory changes set forth in Attachment A.
Chairman Martin proposes the Commission amend the 32-year-old absolute ban on newspaper/broadcast cross-ownership by crafting an approach that would allow a newspaper to own one television station or one radio station but only in the very largest markets and subject to certain criteria and limitations. Chairman Martin also proposes that the Commission make no changes to the other media ownership rules currently under review. The newspaper/broadcast cross-ownership rule currently prohibits common ownership of a broadcast station and a daily newspaper in the same market. Although the U.S. Court of Appeals for the Third Circuit (Court) remanded the specific cross-media ownership limits drawn by the Commission in 2003, it affirmed the Commission’s determination that this blanket ban on newspaper/broadcast cross-ownership was no longer in the public interest. The Court agreed that “…reasoned analysis supports the Commission’s determination that the blanket ban on newspaper/broadcast cross-ownership was no longer in the public interest.”
The media marketplace has changed considerably since the newspaper/broadcast cross ownership was put in place more than thirty years ago. Back then, cable was a nascent service, satellite television did not exist and there was no Internet. Consumers have benefited from the explosion of new sources of news and information. But according to almost every measure newspapers are struggling. At least 300 daily papers have stopped publishing over the past thirty years. Their circulation is down, their advertising revenue is shrinking and their stock prices are falling. Permitting cross-ownership can preserve the viability of newspapers by allowing them to share their operational costs across multiple media platforms. Chairman Martin’s proposal would permit cross ownership only in the largest markets where there exists competition and numerous voices. The revised rule would balance the need to support the availability and sustainability of local news while not significantly increasing local concentration or harming diversity. Under the new approach, the Commission would presume a proposed newspaper/broadcast transaction is in the public interest if it meets the following test:
(1) the market at issue is one of the 20 largest Nielsen Designated Market Areas (“DMAs”);
(2) the transaction involves the combination of a major daily newspaper and one television or
(3) if the transaction involves a television station, at least 8 independently owned and operating major media voices (defined to include major newspapers and full-power commercial TV stations) would remain in the DMA following the transaction; and
(4) if the transaction involves a television station, that station is not among the top four ranked stations in the DMA.
All other proposed newspaper/broadcast transactions would continue to be presumed not in the public interest.
Moreover, notwithstanding the presumption under the new approach, the Commission would consider the following factors in evaluating whether a particular transaction was in the public interest:
(1) the level of concentration in the DMA;
(2) a showing that the combined entity will increase the amount of local news in the market;
(3) a commitment that both the newspaper and the broadcast outlet will continue to exercise its own independent news judgment; and
(4) the financial condition of the newspaper, and if the newspaper is in financial distress, the owner's commitment to invest significantly in newsroom operations.
This proposed rule change is notably more conservative in approach than the remanded newspaper/broadcast cross-ownership rule that the Commission adopted in 2003. That rule would have allowed transactions in the top 170 markets. The rule Chairman Martin proposes today would allow only a subset of transactions in only the top 20 markets, which would still be subject to an individualized determination that the transaction is in the public interest.
With respect to the remaining broadcast ownership rules currently under review, the Chairman believes that any further relaxation in the radio or television broadcast markets should not be allowed. He therefore proposes to make no changes to the local television “duopoly” rule, the local radio ownership rule, and the local radio-television cross ownership rule currently in force.
The Chairman invites public comment on his proposals. Comments should be filed in MB Docket No. 06-121 by Dec. 11, 2007.
Here is a link to the statement on the FCC's website.