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FCC relaxes restrictions on media ownership

In Utah, vote may let Bonneville buy 14 radio stations

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WASHINGTON — The Federal Communications Commission relaxed decades-old rules restricting media ownership today, permitting companies to buy more television stations and own a newspaper and a broadcast outlet in the same city.

The Republican-controlled FCC voted 3-2 — along party lines — to adopt a series of changes favored by media companies.

These companies argued that existing ownership rules were outmoded in a media landscape that has been substantially altered by cable TV, satellite broadcasts and the Internet.

Critics say the eased restrictions would likely lead to a wave of mergers that would land a few giant media companies in control of even more of what the public sees, hears and reads.

In Utah, the vote gives a big boost to buyouts already in the works.

Bonneville International Corp., the broadcast media arm of The Church of Jesus Christ of Latter-day Saints, is poised to purchase 14 radio stations in the Intermountain area.

"We believe that we will be able to close the acquisition," said Bruce Reese, president and CEO of Bonneville. When? "That's another question."

There are still details in the FCC's ruling that Bonneville needs to sort through before it purchases the stations from Simmons Media Group of Salt Lake City. Six stations are based in Idaho Falls and four in St. George. The four stations in Salt Lake City include KSFI ("FM-100"), KQMB ("Star 102"), KRSP ("Arrow 103.5") and a proposed new AM station (AM-820).

The LDS Church owns the Deseret News, KSL-TV and KSL-AM, a situation that was among about 40 "grandfathered in" nationwide when the FCC banned "cross-ownership" of broadcast and print media in the same market.

Salt Lake Tribune Publisher William Dean Singleton, president of Denver-based MediaNews Group, testified last month that federal rules should be changed to allow media companies to own newspapers and broadcast outlets in the same local market. MediaNews Group already owns 50 newspapers.

"It has long been very unfair that newspapers couldn't own broadcast outlets in their markets," Singleton said Monday. "And this eliminates that unfairness."

Singleton said MediaNews will "explore" purchasing broadcast outlets in its newspaper markets, but that there have been no discussions so far of making any such purchase in Utah.

The rule changes are expected to face court challenges from media companies wanting more deregulation and consumer groups seeking stricter restrictions.

The FCC also changed how local radio markets are defined to correct a problem that has allowed companies to exceed ownership limits in some areas.

The government adopted the ownership rules between 1941 and 1975 to encourage competition and prevent monopoly control of the media.

The decision was a victory for FCC Chairman Michael Powell, who has faced growing criticism from diverse interests opposed to his move toward deregulation.

"Our actions will advance our goals of diversity and localism," Powell said. He said the old restrictions were too outdated to survive legal challenges and the FCC "wrote rules to match the times."

The FCC said a single company can now own TV stations that reach 45 percent of U.S. households instead of 35 percent. The major networks wanted the cap eliminated, while smaller broadcasters said a higher cap would allow the networks to gobble up stations and take away local control.

The FCC largely ended a ban on joint ownership of a newspaper and a broadcast station in the same city. The provision lifts all "cross-ownership" restrictions in markets with nine or more TV stations. Smaller markets would face some limits, and cross-ownership would be banned in markets with three or fewer TV stations.

The agency also eased rules governing local TV ownership so one company can own two television stations in more markets and three stations in the largest cities, such as New York and Los Angeles.

The FCC kept a ban on mergers among the four major TV networks: ABC, CBS, NBC and Fox.

"The more you dig into this order, the worse things get," said Michael Copps, one of the commission's Democrats. He said the changes empower "a new media elite" to control news and entertainment.

Fellow Democrat Jonathan Adelstein said the changes are "likely to damage the media landscape for decades to come."

The Democrats said the new rules mean a single company can own in one city up to three TV stations, eight radio stations, the cable TV system, cable TV stations and the only daily newspaper.

A 1996 law requires the FCC to study ownership rules every two years and repeal or modify regulations determined to be no longer in the public interest. Many previous proposed changes were unfinished or were sent back to the FCC after court challenges.

As the vote approached, opposition intensified. Critics bought television and newspaper ads, wrote letters and e-mails, and demonstrated outside television stations owned by major media companies.

Some ads took on Rupert Murdoch, whose News Corp. owns Fox News Channel, 20th Century Fox TV and film studios, the New York Post and other media properties. Murdoch told a Senate committee last month he has no plan for a media buying spree after the changes, other than his proposed acquisition of DirecTV, the nation's largest satellite television provider.

The critics of eased rules include consumer advocates, civil rights and religious groups, small broadcasters, writers, musicians, academicians and the National Rifle Association. They say most people still get news mainly from television and newspapers, and combining the two is dangerous because those entities will not monitor each other and provide differing opinions.

Large newspaper companies such as Tribune Co. and Gannett Inc. wanted the "cross-ownership" ban lifted.

"The relaxation of the rules will allow newspaper-owned broadcast stations to offer more and better local news and public service programming," said John Sturm, president of the Newspaper Association of America. "Local audiences will be the big winners."

News Corp. and Viacom Inc., which owns CBS and UPN, stand to benefit from a higher national TV ownership cap because mergers have left them above the 35 percent level. Those companies, along with NBC, persuaded an appeals court last year to reject that cap and send it back to the FCC for revision.

Lawmakers have split mainly along party lines. Democrats demand more public scrutiny of the changes while Republicans support Powell. Some lawmakers critical of the FCC have proposed legislation to counter relaxed regulations.