Updated: FCC Relaxes Cross-Ownership Rules; 3-2 In Favor; 30 Percent Cable Cap Imposed
By Joseph Weisenthal - Tue 18 Dec 2007 11:26 AM PST
By a vote of 3-2, split along party lines, the FCC has approved a plan to relax media cross-ownership rules. The rule change, which comes amid opposition from some politicians, allows companies to own both newspapers and broadcast stations within a top-20 market. The move, first proposed by Chairman Kevin Martin in November, overturns a 32-year ban on such arrangements. Martin described the old regulation as obsolete in a time of proliferating media platforms. The two Democrats on the commission, Michael Copps and Jonathan Adelstein, had already signaled their intent to oppose it. Among their concerns is a possible loophole that would allow companies to apply for a waiver of the top-20 market rule. Kevin Martin’s statement (.pdf)
Bloomberg: In backing the chairman’s plan, the FCC defied 25 U.S. senators, who vowed in a letter released yesterday to block the decision. The senators, including Republicans and Democrats, said more time is needed to review a policy that has “a substantial impact on the American people.’’ “I reject the claim the process has been unfair or too rushed,’’ Martin said.
The old rule had been seen as a possible hindrance to Sam Zell’s purchase of Tribune, but last month the company was granted a temporary waiver that would let it transfer its Chicago newspaper and broadcast assets over to Zell. Tribune’s ownership of The Chicago Tribune, WGN(AM) and WGN-TV predates the 1975 regulation, so it was already exempt.
Update: Later in the meeting, the commission voted to institute a cap preventing any cable operator from controlling 30 percent of the national pay-TV market. It was another 3-2 vote, but this time Martin was joined by the two Democrats on the commission, while the Republican members dissented.
AP: The FCC at one time capped cable subscribership at 30 percent, but the limit was invalidated by a court decision in 2001. The cap will prevent large cable companies like Comcast (NSDQ: CMCSA) from getting larger. Comcast Corp., the nation’s largest cable company, reported 26.2 million subscribers to the FCC through Sept. 30, for a nationwide market share of all pay-television subscribers of 27 percent.
