New owners taking the broadcasting plunge
The Federal Communications Commission is getting ready to take up the issue of local and national broadcast ownership caps, as well as the issue of broadcast and newspaper cross-ownership.
New rules which we passed on partisan lines at the Commission 6/2/03 were not struck down by the Third Circuit Court of Appeals, as you read various places from time to time. They were not even labeled as being bad rules. They were instead said to be poorly justified. They were sent back to the Commission to either be rewritten or better explained.
It is well known that Kevin Martin is particularly in favor of easing restrictions on newspaper/broadcast combinations. As we've noted many times, that concept was almost endorsed by the Third Circuit, which noted that in many markets where such combinations exist, they are demonstrably the finest news operation in town. Still, the Court had a problem with how the Commission arrived at the local media counts that would be permitted for markets of varying sizes.
In addition to cross-ownership, the 6/2/03 rulemaking focused on television issues, proposing to raise the national audience potential cap from 35% to 45% (it's now 39% following some back-room legislative maneuvering on Capitol Hill), easing the rules to allow far more local TV duopolies and making possible triopolies in the largest markets. Broadcasters were disappointed that the rules did little to help operators in the smallest market where the financial need for increased efficiency of operation were the most acute.
All of this was attacked with great ferocity, sparked in part by Democratic Commissioner Michael Copps, who managed to get the public involved in matters usually reserved for inside-the- Beltway policy wonks.
Back in February, coming as somewhat of a surprise out of the clear blue sky, key House member Fred Upton (R-MI), Chairman of the pertinent House Subcommittee on Telecommunications and the Internet, came out with a proposal to up the local radio cap from eight to 10 stations, and up to 12 stations in the largest market, a request rarely voiced by any radio companies we know of other than occasional remarks to that effect from Clear Channel and from CBS/Infinity back when Mel Karmazin was there.
Despite the possibility that another attempt at deregulation may be in the offing, some observers have noted that there has not seemed to be much clamor for dereg any more. Perhaps TV/newspaper combos produce great news. Multimedia companies seem to have had difficulty figuring out how to make them pay off on the balance sheet.
Broadcast earnings have been sluggish in general, and in a reversal from the norm, the greatest punishment has been inflicted on operators in the largest markets.
Tomorrow:
We're seeing large companies actually divest stations, rather than invest in new additions to their portfolios.
