Shake-Up Expected if New FCC Rules Pass

AP Business Writer

SAN FRANCISCO – Many media companies are eagerly awaiting the expected loosening of rules on how many newspapers and broadcast stations they can own, while critics fear the result will be fewer public voices.

The changes, expected to pass 3-2 in a Federal Communications Commission vote Monday, will end a 28-year-old ban on ownership of newspapers and broadcast stations — television or radio — in the same market. The prohibition was intended to preserve a variety of viewpoints.

Cross-ownership has been barred in all but a few cities, such as Chicago, Atlanta and Milwaukee, where it existed before the ban.

The FCC also is expected to let companies build their portfolio of TV stations up to a new limit of 45 percent of the total U.S. market. The limit now is 35 percent.

The prospect of fewer owners controlling more communication channels deeply troubles some people. They predict even more cutbacks in already-shrinking newsrooms, resulting in more superficial, homogeneous coverage that ignores crucial community issues.

“If the FCC does this, we will have started down the path to the end of democracy,” said Seattle Times publisher Frank Blethen.

Supporters of the changes envision more nimble and profitable businesses that will pool the resources of newspapers and broadcasters to deliver better coverage.

“It gives you a much bigger megaphone to talk through,” said William Dean Singleton, president of Denver-based MediaNews Group, a newspaper publisher considering expansion into TV.

With the rise of cable and the Internet, top media companies persuaded the FCC’s three Republicans that the restrictions are no longer needed. The commission’s two Democrats are not convinced.

Most people still turn to television or newspapers for local news. Not all, however, depend on both sources. Some media companies want to reach more people by distributing the same stories through multiple channels.

“I wish everybody read a newspaper, but they don’t,” said Singleton, whose company owns 47 papers in 10 states, including The Denver Post, Los Angeles Daily News and The Salt Lake Tribune.

The FCC has indicated the new rules will allow cross-ownership mostly in large and medium-size markets. Restrictions would still apply in many small markets where there is only one paper and a few broadcast stations.

Under the FCC’s preliminary proposal, joint ownership of newspapers and TV stations could occur in 140 of the nation’s 150 largest markets, according to the Consumer Federation of America, a staunch opponent.

Markets eligible for cross-ownership span the nation, from San Francisco to Portland, Maine.

The maneuvering has already begun.

The stock of TV network owner Paxson Communications, for instance, has nearly doubled since mid-May, reflecting investor expectations that its 61 stations will make an attractive takeover target.

The Journal Co., parent of the Milwaukee Journal Sentinel and 42 radio and TV stations, has announced plans for an initial public offering of stock to raise as much as $250 million so it can expand under the new rules.

Other media companies, including Gannett Co., Tribune Co., Hearst Corp., Media General, Belo Corp. and E.W. Scripps Co., are expected to join in.

A notable exception is newspaper publisher Knight Ridder. Its management says it sees few financial advantages to cross-ownership.

Still, San Jose-based Knight Ridder supports ending the ban, and analysts say the company could emerge as a takeover target for a broadcaster interested in its 31 daily papers.

Mark Cooper, the Consumer Federation’s research director, said news coverage could suffer even if owners do not trim the payroll. That is because journalists would spend more time doing the same story for different media channels — going on-air when they could be doing more reporting, for example.

Perhaps the most ambitious test of cross-ownership to date is in Tampa, where Media General moved the staffs of The Tampa Tribune, WFLA-TV and Web site under the same roof three years ago.

The combination initially created some morale problems and strategic mistakes, but Eric Land, WFLA’s president and general manager, said: “This undertaking has created a more powerful form of journalism and made us a better community watchdog.”