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FCC Votes To Relax Media Ownership Rules

Congressional opposition likely; White House supports measure

By Martin H. Bosworth
ConsumerAffairs.com

December 18, 2007 

Under the new rules, broadcasters in the nation's 20 largest media markets can now also purchase newspapers for their business, not that there has been any great rush to snap up moribund print properties, with the obvious exceptions of Dow Jones and the Tribune Company.

The 3-2 vote was strictly along party lines, with FCC Chair Kevin Martin and commissioners Robert McDowell and Deborah Tate, all Republicans, supporting the rule change. Commissioners Jonathan Adelstein and Michael Copps, both Democrats, opposed it.

Critics of the vote say it will open the door to more corporate buyouts of local media and decrease quality local journalism. The Free Press media coalition blasted the decision, with executive director Josh Silver saying that FCC chair Kevin Martin was "ignoring the public will and defying the U.S. Senate."

"[Martin's] decision to gut longstanding ownership rules shows once again how the largest media companies — with their campaign contributions and high-powered lobbyists — are corrupting the policymaking process at the expense of local news coverage and independent voices," said Silver.

Martin's push to pass the new rule also faces opposition in Congress. Prior to the vote, 25 senators from both parties wrote Martin to demand he slow down the vote and give the public more time to comment on the issue, as is customary with most proposed government regulations.

The letter, signed by Commerce Committee chairman Daniel Inouye and all four Senate Democrats running for President -- Barack Obama, Hillary Clinton, Chris Dodd and Joe Biden -- as well as Republicans Ted Stevens and Olympia Snowe, said that Martin "shortchanged the comment process...you have not completed a full review of localism prior to forcing a vote on a rule change dealing with media ownership limits."

"When you proposed a new rule on the effects of communications towers on migratory birds, you allowed for a 90 day comment period," the Senators wrote. "How could you decide to allow 90 days for a migratory bird rule and then shortchange the public on the media ownership rule?"

Sen. Maria Cantwell (D-WA), who signed the letter, said prior to the vote that Martin's decision would have "consequences." “Congress is certainly not afraid to take action against the FCC,” said Cantwell. "In the Senate, we’re going to make sure that if we have to pass legislation stopping the FCC, we will.”

Friends in high places

Martin, however, has the backing of the White House to pursue the media consolidation changes. Commerce Secretary Carlos Gutierrez wrote Senate Majority Leader Harry Reid prior to the vote, warning him that the Bush administration would fight any "attempt to delay or overturn these revised rules by legislative means."

Martin, a former Bush campaign operative whose wife Cathie has worked for both Bush and Vice-President Dick Cheney, has aggressively pursued a conservative, free-market agenda since succeeding Michael Powell to become FCC chair in 2005.

Martin oversaw the mega-merger of BellSouth and AT&T, creating -- once again -- the world's largest telecommunications company. Martin has also opposed legislation protecting the right of "net neutrality," enabling small Internet publishers equal access to the network.

Martin has been a friend indeed to the telecommunications industry, supporting video franchising rules that enable Verizon and AT&T to roll out high-speed service to communities without complying with local or state franchising regulations -- regulations that cable companies still have to abide by.

But Martin's generally hands-off attitude towards market issues comes to an end with the cable industry. Martin has continually pushed for greater regulation of cable companies and diversification of cable subscriptions in given areas, as well offering of "a la carte" channel packages that enable subscribers to only buy channels they want.

Many critics see the "a la carte" move as a back-door attempt to starve out cable channels that present adult-oriented content.

Martin recently introduced a proposal to reinstate a cap on cable companies owning more than 30 percent of the national market, a move that was supported by consumer groups and bitterly opposed by the cable industry -- and expected to be voted on at today's meeting.

Change in the weather

Martin's rush to push the media consolidation relaxation waiver may be due to several large media deals that would run into problems without it, such as Rupert Murdoch's buyout of the Dow Jones corporation and Sam Zell's desire to purchase the Tribune publishing company, though Martin has granted both deals waivers to continue.

The rush may also be attributed to Martin's tenure as FCC chair coming to an end. With a presidential election looming and the possibility of a Democrat taking the White House and the Democrats strengthening control of Congress, industry insiders speculate that Martin may be ensuring both the goals of the Bush administration and his own future political or lobbying ambitions.

Former FCC commissioners usually wind up practicing communications law on Washington's K St., offering advice and counsel to the media conglomerates they tenderly regulated during their time in office. Thus, one's actions today can lay up rewards in the next life, i.e., the private sector.

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