Proposal would ease ownership restrictions for newspapers and television and radio stations

Tuesday, May 13th 2003, 12:00 am

By: News On 6

WASHINGTON (AP) _ Regulators are considering a blueprint for easing media ownership rules that increases the national reach of TV networks and allows new combinations of newspapers, TV and radio stations. Critics warn the plan will lead to a handful of companies controlling what people see, hear and read.

The proposal by the Federal Communications Commission staff was delivered to the agency's five commissioners late Monday. They have until June 2, when a vote is scheduled, to consider the recommendations.

The plan was not released to the public, but two government officials who saw it described the contents to The Associated Press.

Among the proposals is one to allow a single company to own TV stations that reach 45 percent of U.S. households instead of the current 35 percent. The major networks favor eliminating any cap.

Viacom Inc., which owns CBS and UPN, and News Corp., owner of Fox, stand to benefit from the higher national ownership rule because mergers already have left them above the 35 percent cap. Those companies along with NBC persuaded an appeals court last year to reject the current cap.

``It is utterly unsupportable and unrealistic that broadcasters should be handcuffed in their attempts to compete for consumers at a time when Americans are bombarded with media choices via technologies never dreamed of a decade ago,'' Viacom President Mel Karmazin said Tuesday in testimony before the Senate Commerce, Science and Transportation Committee.

Smaller broadcasters and network affiliates worry that a higher cap will allow the networks to gobble up more stations and limit local control of programming.

``Media giants are trying to replace localism and community standards with financial opportunity and corporate objectives,'' said James Goodmon, president of Capitol Broadcasting Co., which owns and operates five TV stations in North Carolina and South Carolina.

FCC Chairman Michael Powell and the two other Republican commissioners support easing regulations, a loosening favored by many big media companies. They question whether decades-old ownership restrictions are needed in a market changed by satellite broadcasts, cable television and the Internet.

The FCC's two Democrats say Powell is rushing through an important process that needs more public comment.

Consumer groups say local newspaper and broadcast markets already are highly concentrated and more mergers will stifle diversity.

Under the FCC proposal, two existing ``cross-ownership'' rules _ one preventing a company from owning a newspaper and a broadcast station in the same city and another involving radio and TV station ownership in a market _ would be rolled into a single rule that lifts most existing restrictions, the officials said.

Cross-ownership would be allowed in large and medium markets, but would face restrictions or bans in small markets.

``Merging the dominant local newspaper with a major local TV station is dangerous to our democracy because it combines the key watchdogs who keep an eye on each other,'' said Gene Kimmelman, public policy director for Consumers Union, which publishes Consumer Reports magazine.

The Newspaper Association of America and media companies such as Tribune Co. and Gannett Inc. have sought the repeal of the newspaper ``cross-ownership'' rule, saying it limits combinations that can improve the quality and quantity of news and local information.

Another proposed change would alter a rule that limits TV station ownership so a company can own two TV stations in more markets and three in the largest cities like New York and Los Angeles, the officials said.

A rule preventing mergers among the four major TV networks _ NBC, CBS, ABC and Fox _ would remain in place under the proposal, the officials said. The FCC eased that restriction in 2001 by allowing the major networks to combine with newer networks like WB or UPN.

Another rule limiting radio ownership to eight stations in a market would remain largely unchanged, the officials said.