Originally featured on BroadcastEngineering.com
FCC reshapes rules on media ownership
The FCC approved two new rules that are likely to reshape the nation’s media landscape by setting new parameters for the size and scope of the largest news and cable companies.
Both rules are certain to be reviewed by courts in the coming months. On Capitol Hill, lawmakers said that they would try to undo the rule about the newspaper industry.
By a Republican party line vote of 3 to 2, this rule gives owners of newspapers more leeway to buy radio and television stations in the 20 largest cities. A company can own both a newspaper and either a television or radio station in those markets as long as there remains at least eight other independent sources of news. If it is a television station, the rule requires that it cannot be one of the top four.
The new rule is intended to help the newspaper industry, which is suffering from dwindling advertising revenue, and to recognize that the historical conditions that gave rise to cross-ownership restrictions have changed, now that more news sources are available on the Internet and cable television.
But the rule change drew criticism from newspaper executives, who said it was too modest to be meaningful, and from prominent lawmakers and commission Democrats, who called it a Christmas present to the nation’s largest conglomerates.
Telecommunications lawyers told the “New York Times” that it could pave the way for Rupert Murdoch to win permanent waivers to control two television stations in New York, as well as the “New York Post” and the “Wall Street Journal.”
In a second 3 to 2 vote, Kevin Martin joined two Democrat commissioners to tighten the reins of growth on the cable television industry. The FCC re-established a national cable television ownership ceiling at 30 percent, meaning one company cannot have more than 30 percent of all cable subscribers. The rule introduces fresh regulation to an industry where there has been little of it, angering both the cable industry and Republican commissioners, who favor a free market approach.
The decisions were a blow to Comcast Communications, the nation’s largest cable company, which has grown substantially over the last decade through a series of acquisitions and will now be unable to buy more cable companies unless it can get the order overturned by a court. By taking Comcast out of any bidding, the new rule was also a setback to smaller cable operators thinking of selling to other companies.
Martin has been critical of the cable television industry for raising rates faster than the rate of inflation and for failing to offer consumers enough lower-price choices in subscription packages.