| Media cross ownership rule { April 29 2003 } Original Source Link: (May no longer be active) http://seattletimes.nwsource.com/html/businesstechnology/134685149_powell29.htmlhttp://seattletimes.nwsource.com/html/businesstechnology/134685149_powell29.html
Tuesday, April 29, 2003, 12:00 A.M. Pacific
FCC chief says rule barring media cross-ownership likely to be dropped
By Brier Dudley Seattle Times technology reporter
Against the backdrop of Seattle's brewing newspaper battle, Federal Communications Chairman Michael Powell yesterday defended his plan to allow media companies to own newspapers and television stations in the same city.
Powell said it's likely the FCC will drop the rule when it meets June 2, ending a 28-year ban on media cross-ownership.
"I think a change is likely, but I won't say definitely," he told reporters after speaking at the Newspaper Association of America convention at the Sheraton Seattle Hotel and Towers.
Cross-ownership is one of several media rules the FCC is revising in light of the less regulatory approach favored by Powell (the son of Secretary of State Colin Powell), who was named chairman in 2001 by President Bush.
Powell said new technologies and a new regulatory approach will break the "stranglehold" on the marketplace and bring benefits to the people. As examples, he described the proliferation of long-distance providers, wireless phone services and cable television offerings that resulted when the FCC loosened up the telecommunications business.
"The FCC never means to, but there's sort of this unbelievable tendency in history to try to protect and cut things off that seem new and strange and unusual, only to find out later that those were things that are really going to bring value," he said.
But watchdog groups, some lawmakers and even several members of the FCC fear that the cross-ownership change will have the opposite effect and result in further consolidation of the media.
The most outspoken critics say consolidation will harm democracy and the public interest.
Concentration of media ownership would allow owners to exert more influence over the public, reduce local news and diminish the watchdog role, according to a December report by the Consumer Federation of America.
"Every major paper is going to try and buy or be bought by a TV station; certainly the major chains will just go hog wild," said Mark Cooper, research director at Consumer Federation of America in Washington, D.C.
Already ownership of newspapers and TV stations has fallen from about 1,500 to 600 entities since the 1970s. It could fall to as low as 300 owners if Powell's rule change takes effect, according to a December report by the federation.
Seattle could see further media consolidation if the rule passes.
The Seattle Times and the Seattle Post-Intelligencer are haggling over a joint publishing agreement that could lead to the shutdown of one paper. The papers may simultaneously be exploring relationships with local TV stations.
Times Publisher Frank Blethen yesterday reiterated his belief that the P-I's owner, New York-based Hearst Corp., wanted to buy KOMO-TV when it was for sale recently. The Times has not disclosed any plans to acquire a station, but it has formed a small alliance with KING-TV. So far, the paper jointly produces a weather page with the station owned by Dallas-based Belo Corp. Blethen, who has lobbied against the cross-ownership rule change, was a rare critic of Powell at the convention of newspaper publishers.
"It's amazing to hear somebody use so many words to say nothing," Blethen told reporters after Powell's speech. "He's focused on technology and not news and how news serves our democracy, and the loss of the diversity of voices we're seeing through concentration of ownership."
Gregg Jones, publisher of the Greeneville Sun in Tennessee, told Powell the regulations handicapped newspapers by preventing them from buying TV and radio stations. "Had we been in the game, there might have been more local ownership, less radio consolidation, resulting very likely in more local news and information," he said.
Asked if he's concerned that the rule change could hurt competition in two-newspaper cities like Seattle, Powell said the regulations are primarily focused on who can own television stations.
The NAA also hosted Secretary of Commerce Donald Evans, who touted the president's economic stimulus plan as the ticket out of the recession. He also said plans to repeal the so-called death tax, which taxes the estate when a person dies, were off the table for now.
Evans paid special attention to the cornerstone of the stimulus plan, the proposed tax cut, saying that Bush will pursue at least a $550 billion reduction, down from the $726 billion he originally pushed. Brushing off critics' claims that the cut amounts to a tax break for the rich, he said it will most benefit people looking for jobs. "There are three reasons to pass the president's economic plan: the first one is jobs, the second one is jobs, and the third one is jobs," he said.
Seattle Times business reporter Lisa Heyamoto contributed to this report.
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