The wait is on as D.C. ponders regs

Imagine the media in your town a year or so from now:

Quite possibly one conglom will own the newspaper down the street, the TV station around the corner, another station across town, the local cable system, and even a large chunk of the national TV audience through its network assets.

Unlikely? Not if Republican Federal Communications Commission topper Michael Powell has his way.

Consumer advocates and some Capitol Hill solons in fact are growing increasingly concerned about just how far Powell and the Commission plan to take media deregulation.

Ownership rules which are likely to be being overhauled, if not overturned, include:

  • An FCC reg prohibiting a broadcaster from owning a newspaper in the same major market.

Powell has made it clear that he wants this rule erased from the books, and soon.

The FCC is reviewing the cross-ownership ban, allowing all sides to comment. Last fall, Powell set up an internal task force that is eyeballing this and all other ownership issues.

Most lobbyists expect the reg agency to take a final vote on the newspaper-broadcast rule by the fall.

  • In one of several milestone rulings from the bench, a federal appeals court in Washington last month tossed out a rule banning a cabler from owning a TV station in the same market.

But the big victor, AOL Time Warner, can’t charge ahead quite yet. First, it will have to wait to see if the FCC decides to refashion the rule in some manner.

Considering Powell’s deregulatory bent, odds are the ownership rule is headed for permanent pasture.

  • In the same ruling, the appeals court ordered the FCC to rethink a key ownership rule barring a broadcaster from reaching more than 35% of the national audience.

The court, however, didn’t go so far as to accept the argument made by big broadcasters Viacom/CBS and News. Corp./Fox that the cap itself was unconstitutional. It only questioned the arbitrariness of the 35% limit.

However, don’t expect a final FCC decision on the broadcast ownership cap anytime soon: The reg agency is expected to launch an exhaustive public review before taking final action.

Bets are the FCC will keep the cap in some fashion, drawing the line at 50% of the national aud. In the meantime, nets eager to buy up more TV stations probably won’t consummate too many deals, but will do lots of courting.

  • The same appellate court late last year ordered the FCC to rethink a similar cap blocking a cabler from reaching more than 30% of the national audience.

The agency has commenced a review of that cap, trying to see if it should retain the rule and if so, at what percentage mark.

What is certain is that the big cablers — Viacom and AOL TW among them — can’t close any deals until the FCC completes its review. And a final vote is months away.

  • There’s another waiting game going on regarding an FCC rule dictating how many TV stations one company can own in the same market.

The FCC recently ruled that a conglom can go ahead and have a duopoly in the market if there are eight other “voices,” i.e., stations.

Sinclair Broadcasting is challenging the eight-voice test, saying it should be eliminated. Sinclair maintains that it is small-market broadcasters who are suffering the most, so they should be allowed to combine forces. Prognosticators believe Sinclair will prevail. Wall Street analysts say there’s bound to be a flurry of deals if the duopoly rule is further relaxed.

Meanwhile, consumer advocates and pols like Sen. Ernest Hollings (D-S.C.) are questioning what happens to diversity if these regs are wiped out.

Hollings and other solons are sure to hold congressional hearings in the coming months on media consolidation.

Indded, earlier this month, Hollings had some harsh words for Powell, saying he would be better suited for a job at the U.S. Chamber of Commerce.

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