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Waivers Granted

Tribune Expects Chapter 11 Exit Within Weeks, With FCC Approval

Tribune said it expects to complete its exit from bankruptcy within weeks, now that the FCC approved the transfer of its TV station licenses, gave it a permanent waiver of its newspaper/broadcast cross-ownership ban in Chicago and issued temporary waivers in New York, Los Angeles, South Florida and Hartford, Conn. “This decision will enable the company to continue moving forward toward emergence from Chapter 11, CEO Eddy Hartenstein said in a news release Friday. As expected (CD Nov 15 p1), the Media Bureau gave Tribune permission to transfer its broadcast and earth-station licenses to the reorganized Tribune. In doing so, the bureau also rejected petitions to deny the Tribune applications from labor unions, Free Press, the National Hispanic Media Coalition, United Church of Christ and others.

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The temporary cross-ownership waivers set up a ticking clock for Tribune to either come into compliance with its ownership rules or seek a further waiver if the FCC adopts recently proposed changes to those rules, the order said (http://xrl.us/bnz242). But Hartenstein urged employees to ignore speculation about what might become of Tribune’s assets in the next 12 months. “There is likely to be a good deal of media speculation about Tribune’s future in the days ahead,” he wrote in a memo to employees: “Try to ignore it."

Republican commissioners largely praised the order but also criticized the FCC’s newspaper/broadcast cross-ownership ban. “The outdated ban itself should be eliminated,” Commissioner Robert McDowell said. But while “such rules still reside on our books, the Commission should grant waivers permanently and not in minuscule one-year segments that require speakers to crawl back to the government for permission to speak,” he said. The rules are an encroachment on First Amendment rights, he wrote (http://xrl.us/bnz3es). Commissioner Ajit Pai also would have preferred permanent waivers, he said (http://xrl.us/bnz3e6). “Given the financial conditions confronting the newspaper industry, we should be applauding companies that continue to operate daily newspapers rather than saddling them with artificial and outdated regulatory burdens.

The bureau said breaking up Tribune’s newspaper and broadcast assets in Chicago, which the company has owned since before the FCC adopted its ban on such combinations, would disserve the goals of its 1975 cross-ownership rule. “Tribune has shown that the Chicago combination is likely to continue to produce the public interest benefits that formed the basis of prior permanent waivers in that market,” it said.

In granting the temporary waivers of its cross-ownership ban in New York, Los Angeles, Miami and Connecticut, the bureau said Tribune failed to show it deserved permanent waivers in those markets. “We find that the temporary waivers will strike a reasonable balance between the goals of facilitating an expeditious resolution of the bankruptcy proceeding and promoting competition and diversity,” the order said. “Any potential harm to competition or diversity as a result of the waiver is less likely given that these assets are competing in diverse, competitive markets."

The order also gave Tribune permission to retain its TV station duopoly in Connecticut, where it owns WCCT-TV Waterbury and WTIC-Hartford. Tribune had said WCCT would be unable to survive if forced to operate on its own. Along similar lines, the bureau also granted waivers of a rule that would have barred Tribune from owning both WTTV Bloomington, Ind., and its satellite station WTTK Kokomo.