FCC Chairman Kevin Martin is sticking by his assertion that the easing of cross-ownership restrictions in the top 20 Nielsen DMAs is a modest update of the rules and that the floodgates are not open to a new wave of dealmaking regardless of market size. Martin has asserted that cross-ownership dereg from the 2003 ownership rulemaking was almost endorsed by the court that sent most of the package back for reconsideration.
The court remand could have been read as an invitation to open the entire US open to cross-owned combinations, asking only that the justification for such a rulemaking, and the cap limits attached to it for print, television and radio properties, be better justified. The court did not instruct the FCC as to whether the rule should be tightened, loosened or left alone.
The toxic nature of the ownership dispute in general has been very much in evidence, as interested observers have criticized Martin for both going too far and not going far enough.
The decision to give regulatory blessing to a number of combinations already in existence has drawn widespread fire. Martin said in a press conference before the 12/18/07 FCC meeting that he assumed if the combinations were deemed in the public interest under a blanket prohibition policy, they should still be OK in a slightly relaxed regulatory environment. Still, they were added to the rulemaking at the last minute, which if nothing else may have presented the appearance of trying to slip them through.
The remaining concerns are about the ease of getting waivers for smaller-market combinations. Martin continued to insist that there is a high bar standing in the way of such combinations, including three years of negative financial results and long-standing lack of ratings success, coupled to a requirement that news operations be increased by the new owner. Others fear that if the loopholes are there, they’ll be used.
RBR/TVBR observation: It’s hard to argue against the loopholes are made to be used argument as the XM/Sirius merger situation moves forward. There are no other satellite audio services in existence and numerous antitrust experts have argued against the merger before Congress and elsewhere. Add that to the fact that their merger into one company was prohibited by the FCC at their birth, you’d have to assume that the current proposal would have no traction whatsoever. The fact that it’s getting serious consideration would appear to lend credence to the phrase "anything goes."