FCC chief vows to lift media cross-ownership rule

His proposal, unveiled today, could have major implications in the $8.2-billion deal to take the Tribune Co. private.

"The newspaper industry has faced significant challenges recently ... and I think it's important we do all we can to ensure we still have a vibrant industry," FCC Chairman Kevin J. Martin said this morning.
By Jim Puzzanghera
Los Angeles Times Staff Writer

8:14 AM PST, November 13, 2007

WASHINGTON -- The head of the Federal Communications Commission this morning unveiled a proposal to lift a three-decade-old rule barring ownership of a newspaper and broadcast station in the 20 largest U.S. markets.

"The newspaper industry has faced significant challenges recently . . . and I think it's important we do all we can to ensure we still have a vibrant industry," FCC Chairman Kevin J. Martin said in a conference call this morning. Martin also outlined his plans in an opinion article that appeared in today's New York Times.

The proposal has major implications for Tribune Co., owners of the Los Angeles Times and KTLA. The company needs the rule lifted or special waivers from the FCC for its ownership of newspapers and TV stations in Los Angeles and four other markets in order to close an $8.2-billion deal to take the company private.

Four of the five markets -- Los Angeles, Chicago, New York City and Miami/Ft. Lauderdale -- would be covered by the rule. The fifth market, Hartford/New Haven, Conn., would not, and Tribune may be required to sell either the newspaper or the broadcast station.

Although Tribune, along with other newspaper and broadcast companies, long has advocated removal of the so-called cross-ownership rule, the timing is not great for closing the deal led by real estate magnate Sam Zell by the end of the year. Martin's plan will be followed by a public comment period, with a proposed vote Dec. 18.

Tribune has said it prefers temporary waivers because the Dec. 18 vote would be too late to close the deal by year's end. Tribune says it needs 20 working days to close, and there are financial penalties if that happens after Jan. 1. Tribune officials had no immediate comment.

Martin said today that his proposal was not specifically designed to help Tribune, and said he would not consider a temporary waiver pending the Dec. 18 vote.

"It's not directly related to any particular sale, but I do think it's important for us to adopt rules and not continue to do things on a case-by-case basis," Martin said.

He emphasized that his proposal was modest and that he did not propose scrapping the rule in smaller markets, as the FCC suggested in 2003 before that change and several others were halted by a federal court.

In order for a company to own a broadcast TV or radio station along with a newspaper in the 20 largest markets, the market will still have to have at least eight major, independently-owned media outlets, defined as major newspapers and full-power TV stations. And any TV station involved in such a deal could not be one of the four largest in the market.

Martin's proposal, which has been expected for several weeks, could touch off controversy similar to that in 2003. The FCC's two Democrats, Michael J. Copps and Jonathan S. Adelstein, have loudly complained that Martin is trying to rush consideration of new media ownership rules after a process begun last year seemed certain to stretch into 2008. A growing bipartisan group of lawmakers in Congress also have strongly criticized Martin's proposed timetable as rushed and have vowed to try to block it.

Along with many consumer, public interest and minority groups, the Democratic commissioners and lawmakers have said the FCC first must finish a long-running proceeding studying how broadcasters serve their local communities.

Martin said today that he was circulating a final report and recommendations among the other commissioners and hoped to have it approved before or at the same time as the changes in the cross-ownership rule.