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FCC forces compliance with TV/newspaper limit

by Ira Teinowitz in Washington | Published August 22, 2012 at 12:39 PM

The Federal Communications Commission on Tuesday, Aug. 21, told several media companies that the Supreme Court's June refusal to hear challenges to cross-ownership restrictions means they will have to either sell off newspaper or broadcast properties or ask for a waiver.

The FCC's order came in a long-running battle over whether newspaper companies and broadcasters can buy each other in markets where they compete. Broadcasters argue that cross-ownership keeps costs down and ensures better local content and that existing FCC rules preventing it are outdated, failing to account for the growth of cable and the Internet. Consumer groups argue that the rule ensures communities get diverse choices for news and information and broadcasters serve the public interest.

The FCC in 2007 eased its general ban on cross-ownership. Ownership was allowed in bigger markets as long as eight independent voices remained. There were also conditions on the number of properties any one company could own.

Those revisions put several existing ownership arrangements in violation. Among them were combinations by Cox Enterprises Inc. in Atlanta (where it owns the Atlanta Constitution) and in Dayton, Ohio; Calvary Inc. in Pittsburgh; Bonneville International Corp. in Salt Lake City; Scranton Times LP in Wilkes-Barre, Pa.; and Morris Communications Co. LLC in Amarillo, Texas, and Topeka, Kan.

All the affected media companies are expected to seek waivers.

The FCC's action Tuesday cited media companies whose stations and newspaper ownership rules violated the rules the FCC issued in 2007 and whose status were on hold pending lawsuits.

The FCC has yet to make decisions on several subsequent deals that violated media cross-ownership, with the biggest being Tribune Co.'s cross-ownership of properties in Chicago, the Miami area, Los Angeles and Hartford, Conn. While Tribune was originally exempt from the cross-ownership rule, the company's restructuring as an employee stock ownership plan by Sam Zell brought a change in ownership that triggered the ownership rules.

News Corp. has waivers to operate the Daily News and broadcast stations serving the New York City market.

FCC action to enforce the 2007 limit was put off pending legal challenges of the rules change. A panel of the U.S. Court of Appeals for the 3rd Circuit subsequently rejected the commission's change and the U.S. Supreme Court in June turned down broadcasters' attempt to get that court's decision reconsidered.

The FCC said Tuesday that with the legal fight now over, the media companies have to either sell off their holdings or submit waiver requests by Sept. 27.

"We hereby confirm that, as a result of the Supreme Court's action, the deadline for the media parties to amend their waiver requests or renewal applications or file requests for permanent waivers is Sept. 27, 2012," the FCC said in its order. "Further, because the Supreme Court denied the petitions for a writ of certiorari, the media parties are subject to the newspaper/broadcast cross-ownership rule that is now in effect and their waiver showings should address factors relevant to that rule."

Angela Campbell, an attorney for public interest groups, suggested the importance of the notice is that the FCC is holding companies to the old rules, despite its subsequent reexamination of media ownership that includes another look at the cross-ownership issues.

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