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Copyright 2002 The Seattle Times Company  
The Seattle Times

December 4, 2002, Wednesday Fourth Edition

SECTION: ROP ZONE; Business; Pg. E3

LENGTH: 1033 words

HEADLINE: Fight builds over media ownership

BYLINE: Bill Cahir; Newhouse News Service

DATELINE: Washington

WASHINGTON -- Consider the following world: One corporation owns the television stations in your town, the daily newspaper, all of the top radio stations, the cable-TV system and the high-speed Internet network.

Sound impossible? Guess again.

The Federal Communications Commission is reviewing the rules that limit media ownership of TV, newspaper, radio and cable outlets. The panel will determine next spring whether to leave the regulations intact, ease the standards or deregulate these communications media.

Five companies dominate broadcasting in the United States: AOL-Time Warner, Clear Channel Communications, Walt Disney Corp., News Corp. and Viacom. Liberalization of the existing rules, critics say, would permit the media giants to intensify their grip on the news business, drive local voices off the air and block a variety of political viewpoints from reaching the airwaves.

The companies assert that technology has rendered the existing FCC regulations obsolete, including a rule that blocks them from owning newspapers and TV stations in the same market. They say new communications technologies effectively protect consumers from monopolies, ensuring that Americans everywhere have an array of choices for news and entertainment.

The FCC last month published a study about media consolidation that found companies owning both newspapers and television networks -- a situation permitted by FCC waivers and grandfather rules -- were not slanting their news coverage in a clear pattern for readers and viewers. Corporate bias, if present, was not obvious.

"From the time that these rules were conceived, a lot has changed," said Scott Baradell, spokesman for A.H. Belo Corp. "There was a time period when you had a limited number of outlets that you could access in terms of news sources. Today, it's a different world."

Belo's properties include the Dallas Morning News and WFAA-TV in Dallas. In Seattle, Belo owns the NBC affiliate KING-TV; its Web site,; and the regional cable channel NorthWest Cable News.

The FCC is reassessing regulations that:

* Block cross-ownership of TV stations and newspapers in the same market.

* Prevent corporations from owning more than one broadcast network.

* Forbid one company from providing TV broadcast services to more than 35 percent of the nation's population.

* Disallow cable companies from serving more than 30 percent of all paid-television subscribers.

* Block one company from owning more than eight radio stations in a single urban market.

Shaun Sheehan, a Washington, D.C., lobbyist for the Tribune Co., says newspaper companies need to partner with broadcasters to stay afloat. "Unless we find ways to cross-promote and cross-fertilize and grow, I think you're stifling democracy and big-city journalism," Sheehan says.

Tribune Co. owns TV stations and newspapers in four major markets: New York, Chicago, Los Angeles and Hartford, Conn.

Frank Blethen, publisher of The Seattle Times, has long opposed media cross-ownership. The concentration of media organizations under corporate ownership sacrifices journalism in favor of profits, he said in a September speech at the University of Illinois at Urbana-Champaign.

"Concentration of ownership is all about money and power," Blethen said. "The bigness of chains and the singular financial focus of public companies drive out all values and objectives that are not short-term and financial."

Sen. John McCain, R-Ariz., incoming chairman of the Senate Commerce Committee, has said he plans to conduct hearings about any change in the nation's media regulations.

Democrats say they are willing to consider relaxation of media-ownership standards but fret about a total repeal.

"I'm not going to argue ... that 35 percent cap (on broadcasting ownership) is the perfect place to set the limit," says Sen. Ron Wyden, D-Ore. "But I'll tell you that I also don't think it's in the public interest to say there shouldn't be any limits at all. ... "

Republicans control the FCC, 3-2. Chairman Michael Powell has launched the GOP drive to revise the media-ownership limits.

"This commission will block transactions that are anticompetitive and harm consumers," Powell said in an October speech. "However ... no transaction can or will be deemed unthinkable before the application is even filed with the commission. This commission will review mergers on their merits, and not attempt to shape the 'right' industry structure by public musings."

Michael Copps, a Democrat on the FCC, contends people need more time to review the commission's studies and data. He fears the commission is moving toward deregulation too swiftly, neglecting to consider the public interest.

"Suppose that we go ahead and lift all the caps," Copps says. "And suppose for the sake of argument that we make a mistake. How do you put the genie back in the bottle? And the simple and short answer is: You don't. It's out of the bottle. We'll have a rash of further consolidation. The effects of that will be around for the rest of our natural lives, and those of our children, too."

Michael McCarthy, a lawyer with the Washington law firm Wiley, Rein and Fielding, says media mergers do not automatically translate into biased or compromised news coverage.

McCarthy, a former vice president at Belo, contends cross-ownership of media improves service to consumers. Fears about the political influence of parent media companies are misplaced, he says: "You're not going to survive in the business if you just hammer home with one particular view."

Congress in 1996 eliminated the cap on the number of radio stations that one company could own nationwide. Since then, Clear Channel Communications has expanded from ownership of 40 stations to an empire of 1,240 stations.

Consumers have been hurt by consolidation of radio ownership, says Cheryl Leanza, deputy director of the Media Access Project in Washington, D.C. Variety in programming has been quashed, she says.

Listeners "are changing the channel, but the channel isn't changing," Leanza says.

Seattle Times business reporter Frank Vinluan contributed to this report.

LOAD-DATE: December 5, 2002

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