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FCC says News Corp. can buy TV stations

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WASHINGTON — A divided Federal Communications Commission has cleared News Corp.'s $4.4 billion bid to buy television station owner Chris-Craft, giving the companies a temporary reprieve from government rules that restrict media concentration.

With final approval in hand, Fox Television Stations, part of the News Corp. family, can complete the deal that gives it 32 stations, reaching nearly 41 percent of U.S. viewers.

Chris-Craft owns Salt Lake City's KTVX Channel 4 television station, but because Fox already owns KSTU-Channel 13, the U.S. Justice Department filed suit in April to block the sale. Sources say San Antonio-based Clear Channel Communications will buy Channel 4, but officials at KTVX and Clear Channel have yet to confirm it.

FCC Chairman Michael Powell defended the agency's review and decision, even as his Democratic colleagues and public-interest groups accused the commission of giving up on its duty to protect diversity on the nation's airwaves.

Technically, the deal brings News Corp. in violation of a federal rule that only allows a company to reach 35 percent of the population through its TV stations. The deal also runs afoul of a prohibition on one company owning broadcast stations and newspapers in the same market.

But on both fronts, the FCC delayed enforcing its rules. The commission decided to hold off on requiring the company to meet the 35 percent cap until an appeals court rules on a legal challenge to the limit — which is being raised by Fox and other networks.

On the newspaper-broadcast restriction, the agency gave the company two years to come into compliance. News Corp. already has a special waiver to operate the New York Post and one TV station in that market. The commission concluded that the old waiver did not extend to the company acquiring a second station in the city.

Still, the company may not have to shed any assets if the FCC relaxes that rule within the next two years. In the coming months, the commission plans to look at whether to modify the quarter-century-old restriction and some believe that under new chairman Michael Powell, the agency will look to ease or even eliminate that restriction.

Merger critics said the two-year waiver would give News Corp. Chairman Rupert Murdoch and others plenty of time to lobby for a relaxation of the rule. They also took aim at Powell, suggesting his leadership would open the door for even greater consolidation in the industry.