FCC's Wheeler Proposes 'Minor' Ownership Rule Changes

Tom Wheeler

WASHINGTON (Reuters) - The chairman of the U.S. Federal Communications Commission on Monday proposed retaining most rules limiting cross ownership of newspapers, radio and TV stations in the same market.

FCC chairman Tom Wheeler proposed retaining the existing rules barring companies in most instances from owning a newspaper and a broadcast TV or radio station in the same market, as well as other individual market limits on radio and TV stations with "slight modification," according to the summary of a proposal to fellow commissioners seen by Reuters.

Congress had ordered the commission in 1996 to review cross ownership rules every four years but the FCC last completed a review in 2006. The FCC still has not completed the 2010 or 2014 reviews.

The FCC in 1975 banned cross-ownership of a newspaper and broadcast station in the same market unless it granted a waiver, but allowed existing ownership structures to remain in place.

Wheeler is proposing to modestly relax the rule by providing an exception for failed or failing newspapers or stations.

The NAB’s Dennis Wharton in response:

“We’re disappointed that Chairman Wheeler continues to ignore the will of both the courts and Congress by proposing to retain broadcast ownership rules that long ago outlived their usefulness. It is shocking that regulators who bless mammoth mergers like AT&T/DirecTV and Charter/Time Warner Cable would still bar common ownership of two TV stations or broadcast/newspaper combinations in a local market. Ultimately, NAB hopes the five-member FCC, Congress or the courts end this indefensible FCC charade, and that meaningful ownership reform is adopted for the benefit of the millions of Americans reliant on free and local broadcasting.”

The struggling U.S. newspaper industry has long sought an end to the ban. The Newspaper Association of America told Congress in 2014 that cross-ownership allows journalists at newspapers and broadcast stations to collaborate.

Michael O'Rielly

Republican FCC Commissioner Michael O'Rielly said in a blog post this month that the cross-ownership limits should be scrapped.

"Broadcasters and newspapers have much to contribute in terms of diverse, local content, but many have been left fighting, some for their very survival, with an artificially-narrowed range of options," O'Rielly wrote.

The Pew Research Center said in a report this month that U.S. newspaper weekday circulation fell 7 percent and Sunday circulation fell 4 percent in 2015 -- the greatest declines since 2010.

Wheeler also proposed reinstating limits on ad-sharing by nearby TV stations that a court rejected in May, and he proposed retaining the four-decade old ban on common ownership of a broadcast station and nearby daily newspaper, according to a fact sheet circulated by the FCC.

Wheeler in 2014 led the FCC to vote to restrict ad-sharing, and Congress stepped in to declare existing arrangements couldn’t be affected until 2025, sparing Sinclair Broadcast Group Inc. and other companies that used the sharing. Any new rules would apply to new combinations.

Advertising revenue at U.S. newspapers fell nearly 8 percent in 2015 -- the steepest decline since 2009. The U.S. has shed more than 120 newspapers since 2004, Pew said.

In May, a U.S. federal appeals court struck down regulations aimed at cracking down on joint sales agreements by local broadcasters, saying an overall review of media ownership rules was long overdue and needed to be completed first.

The three-judge panel of the 3rd Circuit U.S. Appeals Court in Philadelphia said the commission's regulation "put the cart before the horse" because it had failed to finalize the overall review of media ownership rules.

Wheeler's proposal also leaves in place rules barring mergers among any of the top four national television broadcast networks -- ABC, CBS, NBC, and Fox.