Only the Big to get Bigger?

Having escaped Seattle with his scalp -- although the jeers and catcalls from last Friday's sixth and final public meeting on cross-ownership rule changes must still be ringing in his ears -- FCC chair Kevin Martin finally unveiled the extent of his proposed changes yesterday. Under his plan, noted Editor & Publisher, only newspapers in the 20 largest television markets would be allowed to hold station licences.

The rewrite Martin is proposing is, as his own office said in its announce-ment "notably more conservative in approach" than the sweeping cross-ownership rule change it proposed in 2003. That rule change was overturned by an appeals court that nevertheless endorsed the general idea that newspapers could own broadcast in their markets. Martin's rule would allow dailies only in the top 20 Nielsen Designated Market Areas (DMAs), and would allow a paper to own either one TV station or one radio station.

The drive by media activists to preserve local news diversity apparently had some impact on the extent of the proposed changes, as newspapers would have to show that also owning a broadcast outlet would "increase the amount of local news in the market." As a result, the Newspaper Association of America (NAA) expressed disappointment at the "extremely limited" change to what it called "the onerous, decades-old" cross-ownership ban. Small-market publishers also cricitized the limited extent of the change. Martin claimed in a New York Times op-ed piece on Tuesday that the financial viability of the newspaper industry is at stake. "If we don't act to improve the health of the newspaper industry, we will see newspapers wither and die," Martin wrote. "Without newspapers, we would be less informed about our communities and have fewer outlets for the expression of independent thinking and a diversity of viewpoints."

In that case, noted small-town publisher Sidney H. "Skip" Bliss of the 21,000-circulation Janesville, Wisc. Gazette, only dailies in the largest U.S. cities will see any relief. "To say that, and then to backtrack and say, well, there's only 20 newspapers that would see this relief when he seems to be talking about the whole newspaper business, well, it's really hard to understand."

Senator Byron Dorgan (D-ND), vowed to continue his plan to block the changes, claiming Martin's proposed relaxation of the rules is based on a faulty assumption. "He has yet to make the case for why any further media consolidation is necessary,"said Dorgan."Indeed, he is relying on an assumption that newspapers are doomed and that cross-ownership is necessary to save them. I believe this is not the case."

The targeted nature of the proposal further bolsters suspicions that it is intended to smooth the sale of the Chicago Tribune chain, which since buying up the Los Angeles Times chain has held waivers for several cross-ownerships nation-wide. Tribune has been granted temporary waivers pending the FCC's review of ther rules, but needs an answer by year's end. Martin's bid to ram through the change carries a Dec. 18 end date, which dovetails nicely with the Tribune sale, noted Radio Online.

In May, fourteen lawmakers from Illinois asked Martin to end the cross-ownership ban, so that Tribune could move forward with its bid to go private. The group, including Sen. Richard Durbin (D-IL) and House Reps. Rahm Emanuel (IL-5) and Dennis Hastert (R-IL), encouraged the FCC to act on Sam Zell's $8.2 billion bid "expeditiously and to avoid administrative delay."