Monday, October 30, 2017

FCC Rule Change Could Cause ‘Runaway Media Consolidation’

The Republican-led Federal Communications Commission is moving to quickly undo roadblocks to increased consolidation among media companies, potentially unleashing an onslaught of deals among TV, radio and newspaper owners as they seek to better compete with online media.

Reuters reports FCC Chairman Ajit Pai on Wednesday disclosed his plans to ask the media and communications regulator on Nov. 16 to eliminate the 42-year-old ban on cross-ownership of a newspaper and TV station in a major market.

The changes would also make it easier for media companies to buy additional TV stations in the same market, or for local stations to jointly sell advertising time.

The move, along with other expected FCC media rule changes, could usher in a new era of media consolidation that could help struggling newspapers and TV stations, but limit the diversity of media voices.

FCC’s Pai has cited rising competition for advertising from websites like Alphabet Inc’s Google and Facebook Inc as a reason for easing the media ownership rules as well as helping struggling newspapers.

Big media firms including Tegna Inc and Nexstar Media Group Inc, have cited the potential rule change as motivating them to look for expansion opportunities.

In the near future, the decision could also allow Sinclair Broadcast Group’s, which is seeking approval for its proposed $3.9 billion acquisition of Tribune Media Co, to avoid some divestitures in order to get the deal approved.

Eliminating “outdated regulations that unnecessarily hobble local broadcast stations will benefit consumers in communities across the country,” said the National Association of Broadcasters Friday.

Advocacy group Free Press criticized Pai’s proposal, saying it “ignores how decades of runaway media consolidation have significantly harmed local news and independent voices.”

Anne Bentley, a spokeswoman for Tegna, a TV broadcaster formerly known as Gannett before it spun off the newspapers in 2015, said the company “expects to be a strategic and disciplined consolidator at this pivotal time of positive regulatory change.”

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