Supremes, FCC, solons ponder big biz news
WASHINGTON — The media biz is paying rapt attention to Washington this week, where ownership rules and the fate of future consolidation are playing out in major venues from the Supreme Court and Capitol Hill to the Federal Communications Commission.
The action began Monday when the Supreme Court declined to second-guess a federal appeals court ruling striking down a key cable ownership rule. That means big cable guns don’t have to worry about resurrection of the specific FCC reg, which blocked a cable operator from reaching more than 30% of the national audience.
Earlier this year, the appeals court said the 30% cutoff was arbitrary and unconstitutional. The judges said the FCC could recalibrate the cap at a higher level, but must provide adequate justification.
Consumer advocates who petitioned the Supreme Court to reconsider the lower court ruling say they don’t trust the Republican-controlled FCC to come up with a new cap that will protect the public interest.
Also Monday, consumer groups and industryites rushed to file comments as to why the FCC should or shouldn’t void another key ownership rule that blocks a broadcaster from owning a newspaper in the same major market. The FCC will take action once the entire review process is completed.
And today , the proposed merger of EchoStar and DirecTV will be the subject of back-to-back hearings on Capitol Hill, with both EchoStar topper Charlie Ergen and DirecTV topper Eddy Hartenstein testifying. Lawmakers are concerned that the landmark marriage of the two satcasters will form a monopoly.
“It’s a big week, and an opening gun in the battle for the heart and soul of media in the 21st century,” Center for Digital Democracy prexy Jeffrey Chester said.
Chester is particularly concerned about the fate of the newspaper/
broadcast cross-ownership rule, since FCC chair Michael Powell has openly opposed it. Chester’s org joined the Consumer Federation of America, the Consumers Union, the Civil Rights Forum, the Leadership Conference on Civil Rights and the Media Access Project in filing comments with the FCC.
Threat to public debate
“Newspapers and broadcasters provide different functions in our civic discourse,” the filing points out. “Allowing cross-ownership will undermine the marketplace of ideas by weakening the institutions that provide in-depth analysis, opinion and investigative reporting, and threatening the unique institutional motivation and perspective that newspapers bring to public debate.”
The Newspaper Assn. of America and the National Assn. of Broadcasters, who have long campaigned to get rid of the cross-ownership rule, said in separate FCC filings that newsgathering operations would actually benefit if broadcasters and newspapers were allowed to merge and pool resources, particularly in smaller markets.
The NAA and NAB said the FCC would be hard-pressed to justify the 26-year-old rule, especially in the age of cable and satellite.
‘A backward-looking relic’
“The newspaper/broadcast cross-ownership rule must be regarded as a backward-looking relic, reflecting a bygone media age in which the broadcast industry was dominated by only three networks offering a single channel of video programming each,” the NAB filing said.
In the past, media moguls such as Rupert Murdoch have gotten around the cross-ownership rule by petitioning the FCC for specific waivers.
NAA prexy-CEO John Sturn said the rule is especially unfair considering the deregulation enjoyed in recent years by other segments of the media biz.
“We believe the FCC’s deregulation of other media over the years — with only newspaper publishers excluded — leaves the newspaper-broadcast rule exposed as unconstitutional in today’s First Amendment climate,” Sturn said.