Murdoch Taking on F.C.C. Media Rule
WASHINGTON — As he nears completion of a deal to acquire Newsday from the Tribune Company, Rupert Murdoch appears likely to pose the first significant challenge to the media ownership rule that the Federal Communications Commission recently adopted.
Even without Newsday, Mr. Murdoch was in the process of seeking waivers to continue to control two newspapers (The Wall Street Journal and The New York Post) and two television stations (WNYW and WWOR) in the New York area.
With those waiver requests pending at the F.C.C., the Newsday deal means that Mr. Murdoch must now apply for a waiver to own the two television stations and three newspapers in the same market.
The new rule, approved by a deeply divided commission in December, permits a company to own just one paper and one television station in the same city in the top 20 markets so long as there are at least eight other independent sources of news and the station is not in the top four. (The stations controlled by News Corporation are the fourth- and sixth-largest in the New York market.)
The architect of the rule, Kevin J. Martin, the chairman of the commission, has made clear that there is a strong presumption against granting waivers.
The Newsday deal also becomes public as Congress takes up a measure that would restore the old ownership rule, which generally restricted a company from owning both a newspaper and a television station in the same city, unless the F.C.C. granted a waiver.
On Thursday, the Senate Commerce Committee is expected to approve the bill, which is sponsored by Senator Byron L. Dorgan, Democrat of North Dakota. Industry lobbyists say that the measure has a good chance of passing the House and the Senate this year, although President Bush has threatened to veto it.
Mr. Dorgan said in an interview on Tuesday that the measure was intended to prevent the media consolidation reflected by companies like the News Corporation and its recent acquisition of The Wall Street Journal and possibly soon Newsday.
“It’s exactly the kind of consolidation I would hope the commission finds is not in the public interest because the free flow of information in this country is not accommodated by having fewer and fewer voices determine what is out there,” Mr. Dorgan said. “They try to argue that there are all these outlets — the Internet, television, radio, newspapers and so on. It may be more outlets, but it’s the same ventriloquists. You have five or six corporate interests that determine what most Americans see, hear and read.”
Mr. Murdoch managed to control two local television stations through one permanent and one temporary waiver to the old rule. But the renewal of the licenses of both stations, under review since 2006, has been challenged by groups opposed to greater media consolidation.
“He was outside the permissible rules to begin with, and since the broadcast licenses were under review, he’s acquired The Wall Street Journal and now maybe Newsday,” said Andrew Jay Schwartzman, the president of the Media Access Project, an advocacy organization committed to diversity of media voices. Mr. Schwartzman has helped lead the effort against renewal of the New York broadcast licenses controlled by News Corporation.
Gary Ginsberg, a spokesman for News Corporation, declined to comment, as did Mr. Martin.
News Corporation has already joined a group of other broadcasters and newspaper companies in a lawsuit challenging the ownership restrictions as a violation of their First Amendment rights. In the meantime, the company is expected to seek a permanent waiver from the commission to permit it to own the two stations and three newspapers.
Industry lobbyists said that News Corporation would tell the commission that its ownership interests pose no problem because New York is the most diverse media market in the world. It is also expected to tell the commission that consolidation is vital to help the ailing newspaper industry — a variation of the claim made by Mr. Martin in justifying his decision to relax the old ownership rule modestly.
But critics of consolidation said that if the commission permitted the same company to control two television stations and three newspapers in the same market, it would make the rule look virtually meaningless.
Kevin J. Martin, the Federal Communications Commission’s head, is expected to leave next year.
“They’re playing double or nothing with these new rules by going after Newsday,” said Gene Kimmelman, a senior lobbyist in Washington for Consumers Union. “We’ll see how serious the chairman really is about applying his new rules.”
It is unclear whether Mr. Martin will still be running the commission when it decides how to proceed. The agency might not complete its review of the renewal of the broadcast licenses and waiver requests before next year, and many officials expect Mr. Martin to leave the agency after the arrival of a new president in January.
The new rule also leaves considerable discretion to the agency about how it should be applied, which could ultimately be helpful to Mr. Murdoch.
“While the F.C.C. did a decent job of trying to make the rules clear, the waiver criteria are flexible enough so that different people can interpret them in different ways,” said Blair Levin, a former top commission official, now an analyst at Stifel Nicolaus.