LAS VEGAS -- Following on the heels of a decision by regulators to loosen some broadcast ownership rules last year, industry leaders are watching carefully to see whether further relief might be forthcoming.
The Federal Communications Commission is reviewing a number of regulations governing media ownership -- including a restriction against one company owning a broadcast station and daily newspaper in the same market and a ban on one entity owning two networks.The latter is a thorn in the side of CBS and Viacom, which are seeking to complete their deal but still keep the UPN network that Viacom now owns.
In a session with reporters at the National Association of Broadcasters meeting here, Viacom Chairman Sumner Redstone said Monday the companies are hopeful about the prospects for completing the CBS merger this month without having to shed UPN or spin off syndicated shows.
He added that keeping the network in the Viacom-CBS fold is key for UPN's survival.
"There is no public service argument that could be made that would warrant the death of UPN, which is just what would happen if we don't get it," Redstone said.
He said he hopes and expects they will be able to keep UPN. "If we keep it, it will succeed."
Other experts also say that the rules could have the unintended consequence of diverting money away from broadcast networks to cable.
"Watching another network die because nobody is willing to invest any money in it doesn't make any sense," said Thomas Van Wazer of the Washington law firm Sidley & Austin.
If the rules are not changed by the time the deal is closed, the companies have asked for two years to come into compliance. The merger also would run afoul of a rule that prohibits companies from owning stations that reach more than 35 percent of U.S. households. That could force divestitures by the companies.
"We will continue to fight very hard for relief from the caps because they just don't make any sense in the world in which we live today," Redstone said.
Fox and NBC have also waged battles on this front. But locally owned stations oppose any increase in the cap. They fear greater concentration of station ownership, especially by networks that distribute programming, would put smaller players in a weak position when negotiating to get shows.
The commission also is looking at the restriction on ownership of broadcast stations and newspapers in the same market. But an FCC official stressed Monday that the rule still serves an important function in making sure consumers have different outlets for their information.
"I don't think you can give too short a shrift to that rule and its intended purpose," said Roy Stewart, chief of the FCC's mass media bureau, which makes recommendations to the commissioners on the rules. He noted that most Americans still get their news and information from TV and newspapers.
Stewart also suggested that it might be valuable for the commission to first see the impact of last year's decision to allow a single company to own more than one local TV station in a market under certain conditions. The commission also provided leeway on a rule that prohibited ownership of radio and TV stations in the same market.
The newspaper/broadcast ownership ban does complicate another media deal, Tribune Co.'s acquisition of Times Mirror, which would give the company newspapers in cities where it already operates television stations. It's not an imminent threat, since the companies wouldn't have to address the issue until their stations come up for license renewal -- still six and seven years away.