Resolution Would Reverse Change to the FCC’s Cross-Ownership Rule

On March 5, Sen. Byron Dorgan and 14 senators (10 Democrats, 3 Republican and 1 Independent) introduced a “Resolution of Disapproval” to rescind the Federal Communications Commission’s (FCC) December 18, 2007 order relaxing the 32-year old ban on newspaper/broadcast cross-ownership in the same market. Under rules outlined in the Congressional Review Act of 1996, the Senate must act on the Resolution within 60 legislative days of its introduction.

NAA is actively opposed to this Resolution which would fully reinstate an outdated rule, which has shackled the newspaper industry since 1975.

The FCC’s change to the newspaper/broadcast cross-ownership rule is in response to a directive from Congress in the Telecommunications Act of 1996, which requires the FCC to review its media ownership rules every two years (and now every four years) to “determine whether any of [these] rules are necessary in the public interest as a result of competition.” The newspaper/broadcast cross-ownership rule is the only 1970’s rule on local broadcast ownership that has not been modified since its inception.

The FCC’s December order provides very limited relief from the newspaper/broadcast cross-ownership prohibition. Only in the top 20 markets is there a positive presumption in favor of cross-ownership, but the criteria provides that newspaper publishers could own, at most, only one TV station or one radio station - but not both. In addition, newspapers seeking a license for ownership of a television station in the same market would be prohibited from owning a TV station that is ranked among the top four in their market based on audience share and at least eight independent newspapers and/or full power commercial TV stations must remain post transaction. In contrast, a FCC order in 2003 (which the Third Circuit Court of Appeals sent back to the agency with other local ownership rules) would have aggressively relaxed this cross-ownership ban in the top 170 markets.

Below the top 20 markets, the FCC’s order includes a waiver standard for combinations that do not meet the strict criteria for a presumption in favor of cross-ownership. In considering a waiver, the negative presumption against cross-ownership could be overcome considering FCC factors, such as local news increase, level of concentration in the DMA and the continued separation of news and editorial staff, or reversed if the broadcast station currently does not air local news and the new owner commits to provide at least 7 hours of local news programming a week or either the newspaper or the broadcast outlet meets criteria for a “failed” or “failing” property.

This is not the first time the Senate has tried to invalidate FCC changes to its media ownership rules. In 2004, the Senate adopted a Resolution of Disapproval of the FCC’s 2003 order changing six media ownership rules, including a controversial rule that would have increased the national television ownership cap to enable one company to own TV stations reaching 45 percent of the nation’s homes (from 35 percent). Congress eventually codified a national television ownership cap of 39 percent, which remains in effect today and is not impacted by the FCC’s December 18 order. The Resolution of Disapproval did not proceed in the House of Representatives because the Third Circuit Court of Appeals remanded all of the media ownership rules back to the Commission. In doing so, however, the Court agreed with the FCC’s determination that the absolute ban on newspaper/broadcast cross-ownership “was no longer in the public interest.”

Next Steps: The Senate Commerce Committee is expected to act on the Resolution of Disapproval by early April.

First Published:
March 12, 2008