Las Vegas Sun

March 28, 2024

FCC relaxes rules on media ownership

SUN STAFF AND WIRE REPORTS

The Federal Communications Commission today voted 3-2 along party lines to relax its media-ownership rules, opening the door for companies such as Tribune Co. and Rupert Murdoch's News Corp. to buy more local television stations and newspapers.

The new rules, pushed by FCC Chairman Michael Powell after the agency's broadest review of media ownership in decades, were opposed by Democrats and consumer groups. Media companies have said they need to buy more outlets to remain competitive with nationwide cable and satellite-TV rivals.

"None of us wants to see media ownership concentrated in the hands of a few," Commissioner Kathleen Abernathy, a Republican, said at the FCC meeting in Washington. "It's simply not possible to monopolize the flow of information in today's world."

Media executives in Las Vegas agreed.

"I don't think (the threat of fewer voices) is realistic at all," said Dick Fraim, president and general manager of KLAS TV, the Las Vegas CBS affiliate. "We have a cable system capable of carrying 500 stations ... It just doesn't square up with the facts."

Little change is expected in the Las Vegas market -- at least in the short-term.

"This market is very competitive," said Jonathan Lichstein, corporate and FCC counsel for Sunbelt Communications, owner of the Las Vegas NBC affiliate, KVBC TV. "There are a number of very competitive companies that own stations here ... It's going to be very difficult to find something for sale."

Brian Greenspun, president and editor of the Las Vegas Sun, said moves by Las Vegas' two daily newspapers would "not be out of the realm of possibility."

"I would not be surprised if either one or both of was interested in owning a television station," he said.

He did say, though, that a purchase would take a willing seller, and added that the newspaper has "no specific plans" to buy a television station.

Sherman Frederick, publisher of the Las Vegas Review-Journal, was skeptical of buyout possibilities in Las Vegas.

"I'm not seeing any logical change here locally," he said. "Certainly we're not going to see any difference a day after the ruling or 12 months after the ruling here in Las Vegas."

Frederick said the paper has no radio or television plans but would "always listen to opportunities."

The rules will let networks such as Viacom Inc.'s CBS unit expand into new markets and buy more local stations in some cities where they now operate.

Powell, responding to recent court decisions that struck down five of the rules, has said the agency must adapt its standards to a media landscape that now includes the Internet, hundreds of cable channels and satellite TV.

Critics of the FCC action, including the Consumers Union, the National Rifle Association and CNN founder Ted Turner, have said the new rules will lead to industry consolidation. Media mergers will mean higher advertising rates and homogeneity in news, entertainment and political views, they said.

Greenspun said the concerns are well founded.

In markets that have a single newspaper and a handful of television stations, diversity is limited quickly and the control of advertising rates could be oppressive, Greenspun said. Earning more income from advertisers would, in fact, be a driving force leading media companies to expand ownership, he said.

"That's why you would do it, in addition to combining resources for news gathering," Greenspun said. "That's going to have an affect on the remaining stations."

Frederick said some fears may be overstated, considering the number of emerging news and information sources.

"I don't think you have a fear of consilidation of voices," he said. "A lot of TV stations weren't giving you much anyway, unless you are divining some cosmic relevance from 'Three's Company' reruns. The television medium is largely entertainment. The real voices we get are largely national driven: Fox, CNN. That's not going to change."

In markets with three or fewer teleivison stations, media cross-ownership is not permitted under the new rules. In markets with four or more television stations, a newspaper can own one station.

In the largest markets, with more than nine television stations, the FCC has eliminated the cross-ownership rule. Las Vegas has 10 local stations, the Nevada Broadcasters Association said.

The new rules will allow media companies to increase revenue through acquisitions. They also may generate cost savings by letting several outlets in the same market share advertising, news and administrative staff.

The rules would:

Let networks own TV stations that reach as much as 45 percent of the national viewing audience. The current cap is 35 percent. Both Viacom and News Corp. now exceed the 35 percent cap because they have temporary FCC waivers.

Let newspaper publishers in large and midsize cities acquire local TV stations in the same market. The FCC has granted more than 40 temporary waivers to the 1975 rule, including Tribune Co. holdings in New York, Los Angeles and Chicago.

Let networks own three TV stations, not just two, in large markets such as New York and Los Angeles. The new rules also expand the number of markets in which companies can own as many as two TV stations.

Redefine radio markets in an attempt to break Clear Channel Communications Inc.'s hold on broadcast markets in some rural areas. Senator Byron Dorgan, a North Dakota Democrat, has called attention to Clear Channel's ownership of six of the eight radio stations in Minot, North Dakota.

Loosen restrictions on a company owning both TV and radio stations in large markets.

Keep the existing standard that prohibits mergers among owners of the four largest broadcast TV networks.

Bloomberg News and the Sun's Kevin Rademacher

contributed to this story.

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