Media owners have been chomping at the bit to be able to own both a TV station and a newspaper in the same city. Two major deal makers - Samuel Zell, a Chicago investor who is leading the charge to take the Tribune Company (NYSE: TRB) private, and Rupert Murdoch, Chairman and CEO of News Corp. (NYSE: NWS) who has tried for years to change the rule so he can continue to control both the New York Post and the Fox television station in New York -- hope it happens soon. If the rules change for Zell, he'll be able to own TV stations and newspapers in five cities - New York, Los Angeles, Hartford and the Miami-Fort Lauderdale area.
Well they may get their wish if Federal Communications Commission Chairman Kevin Martin has anything to say about it, according to the New York Times. The Times reports that Martin plans to repeal the decades-old media rule forbidding companies from owning both a newspaper and a TV or radio station in the same city. Right now an $8.2 billion buyout of the Tribune Company is hanging in the balance. Zell wants to take the company from a public to a privately held company by its employees, but the rule is in the way of completing the deal.
Former FCC Chairman Michael Powell tried this a few years ago, and got shot down by the courts. Martin hopes the additional hearings and studies he's done since that ruling will be enough to satisfy the courts. In the earlier case, the FCC got more than three million comments against changing the rules, the most comments in its history. Opposition groups were diverse including the National Organization for Women, the National Rifle Association, the Parents Television Council and the United States Conference of Catholic Bishops.
Many are skeptical Martin will be able to pull it off, especially if he chooses to take short cuts to get this rule passed by the Commission by December, as he plans according to the Times. One Commission member who is adamantly opposed to the rule, Michael Copps, told the Times, "We shouldn't be doing anything without having a credible process and nothing should be done to get in the way of Congressional oversight and more importantly, public oversight. We've got to have that public scrutiny."
The Times noted that opposition is already lining up. One of the Congressional leaders of that opposition will be Senator Byron Dorgan (D-ND) who said at a hearing on Wednesday, "If the chairman intends to do something by the end of the year, then there will be a firestorm of protest and I'm going to be carrying the wood."
Those supporting the rule believe there has been enough of a change in the media to make the rule outdated, so it's time to repeal it. Companies, like the Times that own newspaper and radio station in the same city, did so before the rule went into effect in 1974. The rule was not applied retroactively.
Opponents believe there already is too much consolidation in media ownership in this country and are opposed to anything that would allow even more consolidation. They believe our news outlets are controlled by too few companies. Personally I agree. We don't want a few billionaires controlling most of the news we get.
Lita Epstein has written over 20 books including the Complete Idiot's Guide to the Supreme Court and the Complete Idiot's Guide to the Federal Reserve.