Proposal eases rules on owning papers, TV and radio stations

WASHINGTON -- Companies could own combinations of newspapers and television and radio stations in the same city and any one company could control TV stations reaching nearly half of U.S. homes under broad changes to media ownership rules proposed Monday.

The proposal by the Federal Communications Commission staff was delivered to the five commissioners. They have until June 2, when a vote is scheduled, to consider the recommendations.

The plan was not released to the public, but two government officials who saw it described the contents to The Associated Press.

Among the proposals is one to allow a single company to own TV stations that reach 45 percent of U.S. households instead of the current 35 percent. The major networks favor eliminating any cap.

Two existing "cross-ownership" rules -- one preventing a company from owning a newspaper and a radio or television station in the same city and another involving ownership of radio and TV stations in the same market -- would be rolled into a single rule that lifts most of the existing restrictions, the officials said.

Cross-ownership would be allowed in large and medium markets, but would face restrictions or bans in small markets.

The FCC is required to consider changes to the decades-old rules. Critics question whether restrictions intended to promote diverse viewpoints in the media still are needed in a market changed by satellite broadcasts, cable television and the Internet.

FCC chairman Michael Powell and the two other Republican commissioners support easing regulations and allowing individual companies to hold a greater stake in local and national media markets.

Consumer groups said Monday that local newspaper and broadcast markets already are highly concentrated. They said more mergers will occur if the changes are approved, hurting competition and stifling diversity by leaving a few huge companies in control of what people see, hear and read.

"Merging the dominant local newspaper with a major local TV station is dangerous to our democracy because it combines the key watchdogs who keep an eye on each other," said Gene Kimmelman, public policy director for Consumers Union, which publishes Consumer Reports magazine.

A rule preventing mergers among the four major TV networks -- NBC, CBS, ABC and Fox -- would remain in place under the proposal, the officials said. The FCC eased that restriction in 2001 by allowing the major networks to combine with newer networks like WB or UPN.

Another rule limiting radio ownership to eight stations in a market also would remain largely unchanged, the officials said.

The Newspaper Association of America and media companies such as Tribune Co. and Gannett Inc. have sought the repeal of the newspaper "cross-ownership" rule, saying it limits combinations that can improve the quality and quantity of news and local information.

Viacom Inc., which owns CBS and UPN, and News Corp., owner of Fox, stand to benefit from the higher national ownership rule because mergers already have left them above the 35 percent cap. Those companies along with NBC persuaded an appeals court last year to reject the current cap.

Smaller broadcasters and network affiliates worry that a higher cap will allow the networks to gobble up more stations and limit local control of programming.

A 1996 law requires the FCC to study ownership rules every two years, but many proposed changes have remained unfinished or were sent back to the agency after court challenges. Last year, the FCC combined reviews of a half-dozen rules into the single effort now under way.

Lawmakers, musicians, academics and consumer groups have asked Powell to delay the FCC's vote to allow more public comment. Other lawmakers, mainly Republicans, and Commerce Secretary Donald Evans have urged Powell to stay on schedule.

The FCC's two Democratic commissioners -- Michael Copps and Jonathan Adelstein -- say Powell is rushing through an important process that few in the public know about. Powell has said there is no need to delay because the agency has already conducted studies and gathered extensive public comment.