SECTION: FINANCIAL; Pg. H02

LENGTH: 390 words

HEADLINE: Narrowing the Lines of Communication?

BODY:


It is only a matter of time before nearly all barriers to cross-ownership in the media industry are lifted, after a ruling last week by the U.S. Court of Appeals here in Washington. In major metropolitan areas it may be possible, even common, for one giant corporation to own the dominant newspaper, the cable television monopoly, a local broadcast station, several radio stations and even the dominant Internet access provider.

The decision came in a challenge brought by Fox Television, NBC and CBS parent Viacom Inc. to decades-old Federal Communications Commission regulations designed to ensure a "diversity of voices" in mass media. The three-judge panel ruled unanimously that the FCC acted arbitrarily and capriciously in barring a company such as Viacom from owning a broadcast license and a cable franchise in the same city. And it ordered the FCC to reconsider its rule limiting how many stations a television network could own. Although an appeal to the Supreme Court is possible, most legal analysts doubt it would succeed. The decision will give added support to FCC Chairman Michael K. Powell, who views such restrictions as anachronisms in an era of Internet, broadband and satellite technology. For similar reasons, he has also moved to eliminate commission rules limiting consolidation among providers of cellular, long-distance and local telephone service. Any excess concentration, Powell argues, can be handled by the Justice Department in its traditional role as enforcer of the antitrust laws.

Justice's resolve, however, is about to be tested by the proposed purchase of DirecTV by EchoStar Communications Corp., which would eliminate competition between the two leading providers of satellite TV service, and the proposed merger of two of the country's biggest cable companies, Comcast Corp. and ATT Broadband.

Even before the ink was dry on last week's ruling, stocks of companies that own groups of television stations shot up in anticipation that the four major networks would seek to own stations in every major metropolitan area. There is also intense market speculation that General Electric Co. might use the opportunity to sell NBC, the only major network not owned by a larger media company. One possible buyer: AOL Time Warner, the very model of a modern media conglomerate.



LOAD-DATE: February 24, 2002