This summer, FCC chairman Julius Genachowski said the commission was on track to issue an order on media ownership rules by year’s end. Now, there are reports that the order may come at the commission’s meeting on Nov. 30.
While the chairman’s office had no official comment, the FCC has been reviewing the media ownership rules for months, as required by Congress, as well as a court order from the Third Circuit Court of Appeals that tossed out the FCC’s last revision of the rules.
Last December, the FCC issued a ruling-making proposal that would end radio and television cross-ownership rules and relax ownership rules for newspapers and television stations. But it proposed to keep radio and television ownership caps in local markets.
The Los Angeles Times said the commission is expected to allow newspapers and television or radio stations in the 20 largest markets to merge. This time, there is little opposition to easing the rule.
The newspaper was clear that this rule change would be a benefit to its own parent, the Tribune Company, as well as a handful of other media companies in the United States.
What has lessened the controversy is the quick rise of the Internet. The growth of the Internet has crushed newspaper revenues. Few seem to care so much today about the growth potential of newspapers or television broadcasters, both of which are being quickly overshadowed by the Internet.
However, there’s disagreement over the importance media ownership from a former FCC commissioner.
“It ought to be … a huge issue. Big media wanted us to believe the age of media consolidation was over, but not so,” former FCC Commissioner Michael J. Copps told the Los Angeles Times.
Copps opposed loosening the rules in 2003 and 2007 and now heads an effort to highlight the problems of media consolidation. He noted as examples Comcast Corp.’s takeover of NBCUniversal last year and Sinclair Broadcasting Group’s purchase this year of seven TV stations from Four Points Media.
Media companies, on the other hand, are pushing for the rule changes, with the support of the NAB.
“The ownership rules that govern broadcasting come to us from the ‘I Love Lucy’ era, and the realities of today’s communications market simply cry out for a dramatic loosening of these rules,” Gordon Smith, the NAB president and CEO, told the newspaper. “If we want to end up with just the Internet being the source of news, that’s the country we’re heading for. I think that’s a huge mistake.”
Cross-ownership limits have been a hindrance to sales of newspaper companies, and looser restrictions would make it easier for broadcasters to make such purchases, Justin Nielson, an analyst at media consultant SNL Kagan, told the Los Angeles Times.
But, he noted, that might not be enough for some troubled newspapers.
“There are synergies in terms of owning a newspaper and TV station in the same market, although it seems like in most cases, there isn’t a huge advantage because newspaper advertising has been in decline,” Nielson told the newspaper.
After peaking at $47.4 billion in 2005, newspaper print advertising revenue fell 56 percent to $20.7 billion last year, according to the Newspaper Association of America. Ad revenue from newspaper websites — only $3.2 billion last year — has not made up the difference.
Despite the issues before the FCC, the industry is already is moving away from the consolidation trend, the Los Angeles Times reported. Companies with newspapers and broadcast stations are often dividing into two entities and often selling the newspapers.