raj2001
05-13-03, 09:07 AM
http://www.nytimes.com/2003/05/13/business/media/13FCC.html
(Subscription required)
F.C.C. Prepares to Loosen Rules on Media Ownership
By STEPHEN LABATON
ASHINGTON, May 12 — The government proposed the most significant overhaul of its media ownership rules in a generation today, including a change that would allow television networks to own enough local stations to reach 90 percent of the nation's viewers.
That change — a result of increasing the cap on ownership and simultaneously preserving a 1980's formula that discounts the reach of UHF stations — is part of the package of proposals that officials said appeared to have the support of the Republican majority of the Federal Communications Commission.
The commission staff sent the detailed plan early this evening to the five commissioners ahead of a final vote in three weeks. The commission has not formally made the plan public, though major portions were disclosed today and in previous days by officials and industry experts.
The proposed changes represent the most important rewriting of the ownership rules in decades, permitting the largest media conglomerates to expand into new markets and own more properties in a single city. Analysts expect companies, including Viacom and the News Corporation, to seek to expand their media holdings substantially.
Others, like the Tribune Company and the Gannett Company, might seek to acquire broadcasters or newspapers in cities where they already have a presence. Media brokers and Wall Street bankers have begun advising clients on what is expected to be a scramble of mergers that would reshape the media landscape in many communities across the country.
In a recent interview and in other comments, the agency's chairman, Michael K. Powell, said that revisions in the media ownership rules would be more modest than critics had maintained and that changes in technology and viewing habits, combined with court decisions and a Congressional directive, necessitated that the current regulations be reconsidered.
But the agency's two Democrats have expressed concerns about many aspects of the proposal. In interviews today before receiving the detailed plan, the two commissioners, Michael J. Copps and Jonathan S. Adelstein, said that they were troubled by reports that the commission's staff, after extensive consultations with Mr. Powell, would recommend raising the ownership cap while retaining the formula that discounts the audience size of UHF stations.
"I'm afraid we may be moving in a more dramatic fashion that could permanently alter the media for generations to come," Mr. Adelstein said.
Mr. Copps said that the changes, including the sharp increase in the television ownership cap, "would be a green light to considerable and significant consolidation in the future."
"It's hard to imagine how the proposals foster the goals of the rules, which are diversity of voices, localism and competition," he said.
One change will permit a company to own both a broadcast station and a newspaper in all but the smallest markets. A second would permit a television company to own three stations in the largest markets; the current limit is two.
The most fiercely lobbied proposal would loosen the national television ownership cap, which had been set at 35 percent of the nation's viewers before a federal appeals court ordered the commission last year to reconsider it after a challenge by the networks.
Local affiliates and small broadcasting stations fear that any further growth in the networks would be detrimental to viewers in a variety of ways. They say it would homogenize entertainment, discourage local news coverage in favor of national broadcasts and reduce the commercial leverage of the local stations to offer independent programming.
Mr. Powell and other supporters of the proposal say that the rules need to reflect the changing marketplace and to help preserve free over-the-air television. In a world where consumers can receive their news and information from hundreds of channels in addition to the Internet, it makes little sense to preserve rules of a bygone era, they say.
Officials said that the commission was expected to increase the national television ownership cap to 45 percent of the nation's viewers and also retain the rule that considers two viewers as one viewer of a UHF station — the band that over the air has generally been Channel 14 and above.
The provision, known as the UHF discount, came about in a different regulatory and technological era, when a vast majority of viewers received television signals free over the airwaves and had to use special equipment like antennas that resembled rabbit ears to pick up UHF stations. Today, about 85 percent of viewers use paid services from cable and satellite providers, rendering the distinction between VHF and UHF largely a relic.
Officials close to Mr. Powell said today that the agency had decided to retain the discount because under the agency's interpretation of the law, it was not clear it had the authority to alter it in the current proceedings. They said that there was nothing in the public record to justify changing the way the commission counted UHF viewers and that Mr. Powell had attributed the growth of new networks in recent years to the UHF discount, including UPN, Pax, WB and Fox.
Others outside the agency noted, however, that most of those networks are hardly independent — UPN is owned by Viacom, WB is owned by AOL Time Warner, and Paxson is 32 percent owned by NBC. Critics of the plan have focused on the UHF provision as emblematic of the selective way that the agency has approached deregulation.
"It's total hypocrisy," said Gene Kimmelman, a director at Consumers Union who has testified in Congress against loosening the rules. "If the theory behind changing the rules is that the F.C.C. needs to keep up with market conditions, to preserve a significant discount for UHF stations is simply a fraud on the regulatory process."
Andrew Jay Schwartzman, president of the Media Access Project, which advocates diversity of the airwaves, said that the UHF discount "eviscerates the cap."
"The 45 percent number that has been floated is a fake number," he said referring to the concentration of the nation's viewers by one company. "It will realistically be much much higher."
(Subscription required)
F.C.C. Prepares to Loosen Rules on Media Ownership
By STEPHEN LABATON
ASHINGTON, May 12 — The government proposed the most significant overhaul of its media ownership rules in a generation today, including a change that would allow television networks to own enough local stations to reach 90 percent of the nation's viewers.
That change — a result of increasing the cap on ownership and simultaneously preserving a 1980's formula that discounts the reach of UHF stations — is part of the package of proposals that officials said appeared to have the support of the Republican majority of the Federal Communications Commission.
The commission staff sent the detailed plan early this evening to the five commissioners ahead of a final vote in three weeks. The commission has not formally made the plan public, though major portions were disclosed today and in previous days by officials and industry experts.
The proposed changes represent the most important rewriting of the ownership rules in decades, permitting the largest media conglomerates to expand into new markets and own more properties in a single city. Analysts expect companies, including Viacom and the News Corporation, to seek to expand their media holdings substantially.
Others, like the Tribune Company and the Gannett Company, might seek to acquire broadcasters or newspapers in cities where they already have a presence. Media brokers and Wall Street bankers have begun advising clients on what is expected to be a scramble of mergers that would reshape the media landscape in many communities across the country.
In a recent interview and in other comments, the agency's chairman, Michael K. Powell, said that revisions in the media ownership rules would be more modest than critics had maintained and that changes in technology and viewing habits, combined with court decisions and a Congressional directive, necessitated that the current regulations be reconsidered.
But the agency's two Democrats have expressed concerns about many aspects of the proposal. In interviews today before receiving the detailed plan, the two commissioners, Michael J. Copps and Jonathan S. Adelstein, said that they were troubled by reports that the commission's staff, after extensive consultations with Mr. Powell, would recommend raising the ownership cap while retaining the formula that discounts the audience size of UHF stations.
"I'm afraid we may be moving in a more dramatic fashion that could permanently alter the media for generations to come," Mr. Adelstein said.
Mr. Copps said that the changes, including the sharp increase in the television ownership cap, "would be a green light to considerable and significant consolidation in the future."
"It's hard to imagine how the proposals foster the goals of the rules, which are diversity of voices, localism and competition," he said.
One change will permit a company to own both a broadcast station and a newspaper in all but the smallest markets. A second would permit a television company to own three stations in the largest markets; the current limit is two.
The most fiercely lobbied proposal would loosen the national television ownership cap, which had been set at 35 percent of the nation's viewers before a federal appeals court ordered the commission last year to reconsider it after a challenge by the networks.
Local affiliates and small broadcasting stations fear that any further growth in the networks would be detrimental to viewers in a variety of ways. They say it would homogenize entertainment, discourage local news coverage in favor of national broadcasts and reduce the commercial leverage of the local stations to offer independent programming.
Mr. Powell and other supporters of the proposal say that the rules need to reflect the changing marketplace and to help preserve free over-the-air television. In a world where consumers can receive their news and information from hundreds of channels in addition to the Internet, it makes little sense to preserve rules of a bygone era, they say.
Officials said that the commission was expected to increase the national television ownership cap to 45 percent of the nation's viewers and also retain the rule that considers two viewers as one viewer of a UHF station — the band that over the air has generally been Channel 14 and above.
The provision, known as the UHF discount, came about in a different regulatory and technological era, when a vast majority of viewers received television signals free over the airwaves and had to use special equipment like antennas that resembled rabbit ears to pick up UHF stations. Today, about 85 percent of viewers use paid services from cable and satellite providers, rendering the distinction between VHF and UHF largely a relic.
Officials close to Mr. Powell said today that the agency had decided to retain the discount because under the agency's interpretation of the law, it was not clear it had the authority to alter it in the current proceedings. They said that there was nothing in the public record to justify changing the way the commission counted UHF viewers and that Mr. Powell had attributed the growth of new networks in recent years to the UHF discount, including UPN, Pax, WB and Fox.
Others outside the agency noted, however, that most of those networks are hardly independent — UPN is owned by Viacom, WB is owned by AOL Time Warner, and Paxson is 32 percent owned by NBC. Critics of the plan have focused on the UHF provision as emblematic of the selective way that the agency has approached deregulation.
"It's total hypocrisy," said Gene Kimmelman, a director at Consumers Union who has testified in Congress against loosening the rules. "If the theory behind changing the rules is that the F.C.C. needs to keep up with market conditions, to preserve a significant discount for UHF stations is simply a fraud on the regulatory process."
Andrew Jay Schwartzman, president of the Media Access Project, which advocates diversity of the airwaves, said that the UHF discount "eviscerates the cap."
"The 45 percent number that has been floated is a fake number," he said referring to the concentration of the nation's viewers by one company. "It will realistically be much much higher."