Copps suggests possibility of revisiting cross-ownership rule

by Todd Shields, Bloomberg

The Federal Communications Commission should reconsider restrictions on combined ownership of broadcast stations and newspapers as daily publications struggle with a plunge in revenue, the agency’s head said.

The agency should “visit this whole problem” before long, Michael Copps, acting chairman of the FCC, said in an interview today.

Members of Congress and Attorney General Eric Holder have said they’re concerned with the newspaper industry after four bankruptcies in as many months. Sales and advertising are dropping amid the recession and a migration of readers to the Internet. Daily papers have announced staff or pay cuts in New York, Atlanta, Washington, D.C. and Boston in the past two days.

Copps, a Democrat, said the FCC’s rule didn’t meet “the needs of the industry, the economy or the public.” The rule generally bans combined ownership of a daily newspaper and nearby broadcast station, except in the largest markets.

His term as an FCC member expires next year. Copps is to relinquish the chairmanship when the Senate confirms Julius Genachowski, President Barack Obama’s selection for FCC chair. A hearing date hasn’t been set for Genachowski.

Copps was on the losing side of a 3-to-2 party-line vote in 2007 when the agency, led then by Republican Kevin Martin, loosened a ban on common ownership.

‘Media Frenzy’

In 2007, Copps said the FCC was “rushing to encourage more media frenzy.” The action provoked court challenges, still unresolved, by companies arguing the changes didn’t go far enough and those who said they went too far. The Senate voted to reverse the FCC’s action. The House didn’t act on the matter, leaving the ruling intact.

House Speaker Nancy Pelosi on March 16 called for an examination of whether antitrust enforcement harms newspapers by keeping them from mergers or other arrangements. A panel of the Judiciary Committee is to hold hearings soon.

In a March 18 session with reporters, Holder said it is “important for this nation to maintain a healthy newspaper industry.”

“To the extent that we have to look at our enforcement policies and conform them to the reality that that industry faces, that’s something that I’m going to be willing to do,” Holder said.

Senator Ben Cardin of Maryland has introduced a bill to allow newspapers to operate as non-profits, and Senator John Kerry of Massachusetts in a Feb. 26 statement said he will look into the “disturbing trend that is the disappearance of journalism.”

U.S. newspapers eliminated 5,000 newsroom jobs in 2008 as industry advertising revenue fell 16 percent, and 2009 “may be the worst year yet,” according to a study by the Pew Project for Excellence in Journalism.

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