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FCC Dives Into Cross-Ownership Rules

In one of the first regularly scheduled federal agency meetings since Tuesday's terrorist attacks, the Federal Communications Commission (FCC) met Thursday morning in Washington, D.C., with FCC Chairman Michael Powell, the son of Secretary of State Colin Powell, declaring, "The flame of the American ideal may flicker, but it will never be extinguished. So we are here today. We will do our small part and press on with our business -- solemnly, but resolutely."

The primary business Thursday morning involved swiftly passing a proposal to review the FCC rule barring common ownership of a broadcast station and a daily newspaper in the same market, and to consider whether or to what extent the rule should be revised.

In addition, the commissioners agreed to review its horizontal and vertical limits for cable companies in response to the March AOL Time Warner ruling by the U.S. Court of Appeals for the District of Columbia that determined the FCC's prior limits had not been adequately supported and that the FCC had not sufficiently considered changes that have occurred in the multi-channel video programming distribution (MCPD) market.

The cross-ownership rules are certain to be controversial as they move through the regulatory process as critics believe a rollback in current restrictions will serve to further consolidate media power and distribution into the hands of a few media giants. When first passed 25 years ago, the rules were designed to promote diverse ownership and points of a view in a community.

In approving the Notice of Proposed Rulemaking (NPRM) the commissioners issued a series of wide ranging questions that will be used to collect "empirical data which will establish the foundation upon which the Commission will then analyze the rule."

The Telecommunications Act of 1966 specifically directs the FCC ro review its broadcast ownership rules every two years to determine whether if any of those rules "are necessary in the public interest as the result of competition, and to repeal or modify any regulation it no longer determines to be in the public interest."

Under Powell's leadership, the FCC has come under attack for being pro-business, but Powell and other commissioners have argued that today's media market is very much changed from the days when a city's population had no cable systems and only a handful of television stations.

Not surprisingly, the Newspaper Association of America (NAA) hailed the move by the FCC.

"This is very welcome news and long overdue," said NAA President and CEO John F. Sturm. "We have been urging the FCC to reexamine this outdated and onerous restriction for many years. With the ever-expanding number and types of media voices today, there simply is no reason that justifies continuation of the cross-ownership ban. It's been close to two years since the FCC -- under its former chairman -- relaxed the rules for local broadcast ownership; all those except for cross ownership, that is. It's time now for the commission to allow local newspaper publishers to compete for acquisition of television and radio stations in their markets."

In any event, the process will move slowly. Once the NPRM is published in the Federal Register, the public will have 60 days to comment. Another 30 days will be given to public to respond to the comments of the first 60 days. After that, FCC staff will compile the comments and make recommendations to the commissioners, a process an FCC staffer said, "takes some time in itself."

Once the commissioners receive the staff recommendations, Powell has the power to decided when, or if, to schedule a vote on the rule. All those events would most likely put any action of the rule into next year.