FCC chief proposes to relax media ownership ban

By Peter Kaplan

WASHINGTON (Reuters) - The head of the U.S. Federal Communications Commission on Tuesday proposed that the agency relax its ban on the cross-ownership of newspapers and broadcast stations in the 20 biggest U.S. cities. FCC Chairman Kevin Martin said the "relatively minor" rule change would help bolster the newspaper industry by allowing owners in the top markets to buy a TV or radio station. The plan is less ambitious than a 2003 FCC proposal to scale back the ownership restrictions, which was struck down by the federal courts. Martin said it was the only change he would seek.

"I think this is a balanced approach," Martin said. Martin outlined the proposal first in a column published in Tuesday's edition of the New York Times. The agency issued a formal announcement later on Tuesday morning.

"A company that owns a newspaper in one of the 20 largest cities in the country should be permitted to purchase a broadcast TV or radio station in the same market," Martin wrote his newspaper column. "But a newspaper should be prohibited from buying one of the top four TV stations in its community." Long-standing FCC rules restrict media cross-ownership and ban ownership of a newspaper and a TV or radio station in the same market, unless the FCC grants a waiver.

Consumer groups and Democrats on the FCC have expressed reservations about easing ownership rules, fearing that more consolidation in the industry would eliminate independent voices and degrade local news coverage.

If cross-ownership limits were eased or lifted, it could help some investors, such as real estate tycoon Sam Zell, who is leading a proposed leveraged buy-out of media group Tribune Co. Zell wants the FCC to reaffirm waivers that allow Tribune to cross-own daily newspapers and broadcast outlets in some markets.

Martin said the proposal would strike a balance between protecting the quality of local news coverage while preventing too much concentration of ownership. Allowing cross-ownership would not be a problem in the 20 biggest markets, Martin said, because there are a large number of outlets for news and opinion in those markets. Martin recently said he wants the agency to wrap up its examination of media ownership and reach a decision by December 18 on whether to ease limits on how many media outlets a company may own in a single market.

However, two senators have threatened to introduce bipartisan legislation that would impose a 90-day delay on any FCC decision to ease media ownership rules. The bill planned by Sens. Byron Dorgan, a North Dakota Democrat, and Trent Lott, a Mississippi Republican, would require the FCC to study the issue for at least 90 more days.

(Reporting by Peter Kaplan; Editing by Brian Moss)