Martin FCC Cross-Ownership Waiver Plan Draws Concern
The part of FCC Chairman Kevin Martin’s media ownership proposal of most concern to some commissioners and opponents of consolidation is a waiver process, said agency and public- interest group officials. Tuesday, Martin unveiled a plan that would let the FCC under certain circumstances waive a ban on joint ownership of a broadcaster and a newspaper in smaller markets (CD Nov 14 p7). In the 20 largest markets, cross-ownership rules would be lifted entirely for companies not seeking to merge a top-four TV station and in cities with at least eight other newspapers and TV outlets.
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Other commissioners likely will scrutinize the waiver policy if Martin puts the proposed rules in an order and circulates it for a vote, two FCC officials said. Some commissioners may focus more intently on the waivers than any other aspect of the chairman’s plan, said a source. Another source said commissioners likely will have many questions about how the waiver process would work, because Martin gave few details on it. It’s unclear how high a hurdle Martin’s plan would put in front of waiver seekers, said FCC officials.
Also unclear to some regulators is whether waiver- seekers would have to prove that a merger of a paper and TV or radio station would increase the amount of news coverage in a market overall or only by outlets to be merged, said FCC officials and opponents of consolidation. A news release by Martin said a condition of approving a waiver would be “a showing that the combined entity will increase the amount of local news in the market.” An accompanying document proposing to redraft FCC multiple ownership rules left agency officials and others with a different impression. It said the commission must consider “whether the cross-ownership will increase the amount of local news disseminated through the affected media outlets in the combination.” An FCC official said she couldn’t comment right away.
The distinction between the wording of the news release and proposed rule change puzzled some. An FCC official called the difference “an inconsistency.” The release indicated a waiver threshold was whether cross-ownership would lead to more local news stories, the official said. But the proposed order “takes a narrower view” by saying a criterion is whether waiver seekers themselves would boost news coverage, said the source. Opponents of media consolidation criticized what they see as an inconsistency.
Free Press Research Director Derek Turner called the waiver a “loophole” and the most worrisome aspect of Martin’s proposal. “The waiver proposal is a great black box” because it’s unclear what it would entail, he said. “We are extremely concerned it is a way of essentially eliminating the rule,” he said. Instead of issuing a news release, Martin should issue a further notice of proposed rulemaking laying out all the details of his proposal, said Turner.
Media Access Project President Andrew Schwartzman called the waiver plan “the most troubling” part of Martin’s proposal. “The language that the chairman published creates an open-ended process made-to-order for any good lawyer who wants to get a waiver,” he said. “Under this rule, all you need to show is financial distress, which is going to mean whatever three FCC commissioners say it means, and it could easily be presented as ‘We're not making enough money’ or ‘We've got too much debt service.'”
Waivers would be hard to get, Martin said. “There is a strong presumption against” granting them to stations in markets below No. 20, he told reporters Tuesday. The FCC would consider exemption requests case by case, he added. “Even stations that have been cross-owned have maintained a lot of that editorial independence,” he said, citing Belo properties in Dallas.
Consolidation opponents criticize the entire plan on grounds that no cross-ownership should be allowed in any market. Industry officials said Martin didn’t go far enough in his attempt to strike down an outdated rule. The NAB and the Newspaper Association of America want the cross-ownership ban dropped, said officials of those groups. The ban “is a relic of a bygone era and should be eliminated,” said an NAB spokesman. The group is “disappointed” by Martin’s proposal, “but we recognize the political realities that he is facing,” he added.
Waivers would be too difficult to get because Martin’s plan presumes cross-ownership in smaller markets isn’t in the public interest, said NAA President John Sturm. “While that may be a reputable presumption, that is a tough, tough standard,” he said. “I frankly don’t understand the people on the other side who think this is a big loophole.” - Jonathan Make