FCC vote doesn't quiet the debate

WASHINGTON - The Republican chairman of the Federal Communications Commission is disputing Democratic assertions that a new rule easing restrictions on media ownership is full of loopholes and will lead to a wave of mergers and fewer choices for consumers.

Democratic Commissioner Michael Copps described the commission's decision approving the measure as "one that would make George Orwell proud."

FCC Chairman Kevin Martin said the commission action was a "relatively minor loosening" of a single rule.

The conflicting impressions say a lot about the divisive nature of the media-ownership debate. Too much of the media in the hands of too few companies raises fears of an emerging corporate big brother and fewer news and information sources.

The commission vote, along strict party lines, will allow a single company to own a television or radio station and a newspaper in the 20 largest metropolitan areas of the country.

"I think this was actually a very moderate attempt to adjust our rules to reflect some of the changes that are occurring in the marketplace," Martin told the Associated Press in a recent interview.

However, the two Democrats on the commission say the rule will open the door to a new wave of media consolidation. The chairman was also criticized for granting waivers to a number of current cross-ownership arrangements.

Martin says the loopholes are actually exceptions that create a high hurdle for such combinations to be approved in markets that are not among the 20 largest in the nation.

Last month, Martin outlined his plan in the New York Times and released the text of the rule to the public. The chairman argued that the newspaper industry was in financial trouble and that the commission should provide relief by changing the 32-year-old cross-ownership ban.

But the transaction could take place only if it were in the 20 largest metropolitan areas and involved only one TV or radio station. Also, the TV station could not be among the top four in the market and, post-transaction, at least eight independent media voices would remain.

The rule itself - despite a commission vote - has yet to be released to the public.

Martin told the Associated Press that his proposal creates two paths for cross-ownership approval - one for larger markets with many voices and one for smaller markets.

In smaller markets, the presumption is that it is not in the public interest to allow those combinations. But there are two exceptions: if it creates more news or bails out a failing station.

For the news exception, the transaction must create at least seven hours of new local news programming per week on a station that has not aired local news.

For the failing-station exception, the TV station must have a 4 percent or lower audience share and a negative cash flow for the previous three years, and the buyer must show the combination will benefit the public.

The rule also provides a path to approval for combinations that may not meet those factors but still may be in the public interest.

For approval, applicants must demonstrate by "clear and convincing evidence" that the combination will increase the diversity of independent news outlets and increase competition among independent news sources.

Martin was also criticized after the vote for waivers granted to other station combinations.

The chairman says 36 of those are in cities where the combination predates the 1975 ban. The cross-ownership permission in those markets does not transfer to a new owner.

In five other markets, the owners asked for waivers before 2000 in anticipation that the commission would relax the ban.

Martin said a public-interest analysis was done in those markets: "They had already done a lot of integration of their newsroom operations, and there had already been a lot of the synergies created. There was a determination made that it would actually be more harmful to the public interest to require those things to be pulled back apart."

The decision is likely to be challenged in court, and members of Congress are trying to invalidate it with legislation, though the Bush administration has threatened to thwart those efforts.