SOS
06-02-2003, 03:37 PM
Article (http://cbs.marketwatch.com/news/story.asp?guid={07D79EF9-C542-4880-AC8D-209D54F23B6F}&siteid=google&dist=google)
This means that a company can control more of the radio, TV, newspaper, and cable in a region. And less choice for you... :mad:
FCC vote paves way for bigger media
Agency relaxes long-standing restrictions on ownership
By Jeffry Bartash & Jon Friedman, CBS.MarketWatch.com
Last Update: 12:57 PM ET June 2, 2003
WASHINGTON (CBS.MW) -- In a bitter 3-2 vote, the Federal Communications Commission agreed Monday to allow broadcasters to buy more television stations and to let one company own newspapers and TV channels in the same city.
CBS MARKETWATCH TOP NEWS
Stocks surge as Dow flirts with 9,000 level
ISM factory index shows improvement
ImClone, Genentech lead biotech advance
Should FCC learn lessons from radio?
The move, which pitted the FCC's three Republicans against the two Democrats, casts aside decades-old government regulations and could spur more media industry mergers and acquisitions.
See CBS MarketWatch's special report: Are mergers ahead for the media? Also see Media Map: Who owns what in the top markets?
Republican Michael Powell, the chairman of the five-member FCC board, said the new rules are more likely to withstand legal challenges than the old rules, which had been rejected by U.S. courts.
He insisted that standing pat in the face of repeated court admonishments, "as some so stridently suggest, was not a viable option."
Powell also said the rules are better suited for a fast-growing media industry exposed to revolutionary shifts in technology such as the rise of satellite and the Internet.
The panel's two Democrats, however, warned that the ruling could backfire. They said it might enable a handful of companies to seize control of most of the nation's papers and broadcast stations, limiting the public's ability to hear alternative voices in the media.
Democratic Commissioners Michael Copps and Jonathan Adelstein said the FCC was taking the wrong path. They argued that the vote would harm the agency's long-enshrined goal of ensuring diversity, localism and competition in the media
"I see centralization, not localism; I see uniformity, not diversity; I see monopoly and oligarchy, not competition," Copps asserted.
Elsewhere, large media companies hailed the vote even as they said it did not go far enough. Consumer groups blasted the decision as bad for democracy. Both sides have promised to wage their fight in court.
What's in store
Under the new rules, the FCC lifted the national broadcast cap to 45 percent from 35 percent. That means a company can own a group of stations whose signals reach nearly one half of the potential national audience.
In addition, broadcasters will be allowed to own three stations in the biggest markets, up from two. They could add a second channel in smaller markets, instead of owning just one.
The FCC kept intact a rule that bars a broadcaster from owning two of the top four rated stations in any market. Those four are usually the affiliates of the major networks -- Fox, CBS, NBC and ABC. Nor can any of the four major networks buy each another, the continuation of a long-standing rule.
Perhaps more significant, the agency voted to drop a rule instituted in the mid-1970s that prevents companies from owning broadcast outlets and newspapers in the same city. The cross-ownership ban would remain in the smallest markets, however.
Regulations in the radio business, on the other hand, were actually tightened in some areas to limit the number of stations that a company can own in one market. Yet Adelstein charged that the FCC loosened other rules that could allow some previously off-limits deals.
The FCC acted in response to concerns about Clear Channel Communications, the radio behemoth that's been widely criticized for its perceived plain-vanilla programming and cutbacks on local news coverage.
Great divide
In the weeks leading up to the vote, opponents turned up the heat on the FCC. The agency's computer system even crashed briefly last week after it was inundated with emails against the proposal.
The FCC, for its part, was under pressure to respond to a series of legal defeats in the U.S. District Court in Washington, which said the agency had done little to justify its existing rules.
Still, the panel's two Democrats unsuccessfully sought a delay in the FCC vote, arguing that the public needed more time to debate the issue. Copps and Adelstein also said the FCC merely had to come up with better reasoning to defend most of its old rules; it didn't necessarily have to change them.
The court aside, the agency was also five months behind on completing its biennial review. Under a congressional law, the FCC is supposed to revisit its media rules every two years.
Nonetheless, many U.S. lawmakers have expressed alarm at the pending FCC changes, and some urged the agency to ignore its deadline.
After the agency vote, at least three senators, including Democratic presidential candidate John Edwards, said they would sponsor legislation to reverse the decision.
Yet there does not appear to be enough support in Congress to overrule the agency, while the White House has lent quiet approval.
Consumer groups hope to change that by ratcheting up the public pressure against the FCC changes.
Despite fears by consumer groups that the FCC ruling will ignite a wave of acquisitions, Wall Street is cautious about such prospects. Many analysts expect companies to swap small properties or to engage in selective buying of TV stations and newspapers.
Sanford Bernstein analyst Tom Wolzien, for one, said he expects to see media companies begin to announce acquisitions "before the end of the year."
Still, Marla Backer of the investment bank Research Associates doubts that media companies will go a buying binge.
"I don't think there will be that much cross-ownership of media assets (TV & print, or TV & radio) as a result, but probably purchases of TV stations by some of the bigger players in markets where they previously were prohibited," she said.
Jeffry Bartash is telecommunications reporter in Washington. Jon Friedman is Media Editor in New York.
This means that a company can control more of the radio, TV, newspaper, and cable in a region. And less choice for you... :mad:
FCC vote paves way for bigger media
Agency relaxes long-standing restrictions on ownership
By Jeffry Bartash & Jon Friedman, CBS.MarketWatch.com
Last Update: 12:57 PM ET June 2, 2003
WASHINGTON (CBS.MW) -- In a bitter 3-2 vote, the Federal Communications Commission agreed Monday to allow broadcasters to buy more television stations and to let one company own newspapers and TV channels in the same city.
CBS MARKETWATCH TOP NEWS
Stocks surge as Dow flirts with 9,000 level
ISM factory index shows improvement
ImClone, Genentech lead biotech advance
Should FCC learn lessons from radio?
The move, which pitted the FCC's three Republicans against the two Democrats, casts aside decades-old government regulations and could spur more media industry mergers and acquisitions.
See CBS MarketWatch's special report: Are mergers ahead for the media? Also see Media Map: Who owns what in the top markets?
Republican Michael Powell, the chairman of the five-member FCC board, said the new rules are more likely to withstand legal challenges than the old rules, which had been rejected by U.S. courts.
He insisted that standing pat in the face of repeated court admonishments, "as some so stridently suggest, was not a viable option."
Powell also said the rules are better suited for a fast-growing media industry exposed to revolutionary shifts in technology such as the rise of satellite and the Internet.
The panel's two Democrats, however, warned that the ruling could backfire. They said it might enable a handful of companies to seize control of most of the nation's papers and broadcast stations, limiting the public's ability to hear alternative voices in the media.
Democratic Commissioners Michael Copps and Jonathan Adelstein said the FCC was taking the wrong path. They argued that the vote would harm the agency's long-enshrined goal of ensuring diversity, localism and competition in the media
"I see centralization, not localism; I see uniformity, not diversity; I see monopoly and oligarchy, not competition," Copps asserted.
Elsewhere, large media companies hailed the vote even as they said it did not go far enough. Consumer groups blasted the decision as bad for democracy. Both sides have promised to wage their fight in court.
What's in store
Under the new rules, the FCC lifted the national broadcast cap to 45 percent from 35 percent. That means a company can own a group of stations whose signals reach nearly one half of the potential national audience.
In addition, broadcasters will be allowed to own three stations in the biggest markets, up from two. They could add a second channel in smaller markets, instead of owning just one.
The FCC kept intact a rule that bars a broadcaster from owning two of the top four rated stations in any market. Those four are usually the affiliates of the major networks -- Fox, CBS, NBC and ABC. Nor can any of the four major networks buy each another, the continuation of a long-standing rule.
Perhaps more significant, the agency voted to drop a rule instituted in the mid-1970s that prevents companies from owning broadcast outlets and newspapers in the same city. The cross-ownership ban would remain in the smallest markets, however.
Regulations in the radio business, on the other hand, were actually tightened in some areas to limit the number of stations that a company can own in one market. Yet Adelstein charged that the FCC loosened other rules that could allow some previously off-limits deals.
The FCC acted in response to concerns about Clear Channel Communications, the radio behemoth that's been widely criticized for its perceived plain-vanilla programming and cutbacks on local news coverage.
Great divide
In the weeks leading up to the vote, opponents turned up the heat on the FCC. The agency's computer system even crashed briefly last week after it was inundated with emails against the proposal.
The FCC, for its part, was under pressure to respond to a series of legal defeats in the U.S. District Court in Washington, which said the agency had done little to justify its existing rules.
Still, the panel's two Democrats unsuccessfully sought a delay in the FCC vote, arguing that the public needed more time to debate the issue. Copps and Adelstein also said the FCC merely had to come up with better reasoning to defend most of its old rules; it didn't necessarily have to change them.
The court aside, the agency was also five months behind on completing its biennial review. Under a congressional law, the FCC is supposed to revisit its media rules every two years.
Nonetheless, many U.S. lawmakers have expressed alarm at the pending FCC changes, and some urged the agency to ignore its deadline.
After the agency vote, at least three senators, including Democratic presidential candidate John Edwards, said they would sponsor legislation to reverse the decision.
Yet there does not appear to be enough support in Congress to overrule the agency, while the White House has lent quiet approval.
Consumer groups hope to change that by ratcheting up the public pressure against the FCC changes.
Despite fears by consumer groups that the FCC ruling will ignite a wave of acquisitions, Wall Street is cautious about such prospects. Many analysts expect companies to swap small properties or to engage in selective buying of TV stations and newspapers.
Sanford Bernstein analyst Tom Wolzien, for one, said he expects to see media companies begin to announce acquisitions "before the end of the year."
Still, Marla Backer of the investment bank Research Associates doubts that media companies will go a buying binge.
"I don't think there will be that much cross-ownership of media assets (TV & print, or TV & radio) as a result, but probably purchases of TV stations by some of the bigger players in markets where they previously were prohibited," she said.
Jeffry Bartash is telecommunications reporter in Washington. Jon Friedman is Media Editor in New York.