The FCC today adopted Commissioner Martin’s proposal for limited multiple ownership relaxation, adopting a presumption in favor of approving the common ownership of a broadcast station and a daily newspaper in the Top 20 television markets (we wrote about that proposal here).  But the grant of such combinations would not be automatic, but instead would be considered on a case-by-case basis, so opposition to any merger could be submitted to the FCC.  Under the rules announced today, newspaper-television combinations would not be entitled to the presumption in favor of grant if they involved one of the Top 4 ranked television stations in a market, or if there would be fewer than 8 independent media voices (full power TV or significant daily newspapers that are not commonly controlled) after the combination.  As for the other multiple ownership rules, from what was said at the meeting, no change at all will be made.  We addressed some of the many multiple ownership issues before the Commission that were apparently either not addressed or will not be changed in our post, here. 

As the full text of the decision has not been released, details of how the Commission addressed every issue are not available.  From the comments of the Democratic Commissioners who dissented from the decision, changes were being made to the standards adopted today throughout the night and as early as an hour before the meeting was held (see Commissioner Copps’ impassioned statement against the new rules, here, where he details the last minute revisions).  Given the last minute nature of the final order, it may be a while before the full text is released.  However, from statements made today and from the Commission’s press release, some details of the decision are known.  They are summarized below.

First, all newspaper broadcast combinations will be addressed on a case-by-case basis.  This seemingly means that, while there will be a presumption that combinations of a daily newspaper and either one radio station or one television station (as long as it is not one of the Top 4 stations in a market) in the Top 20 markets in the United States (using DMA market rankings from Nielsen) will be permitted, this presumption could be rebutted if it could be shown that the combination would not be in the public interest.  How a positive presumption could be rebutted was not addressed at the meeting.  Combinations in smaller markets would be presumed to not be in the public interest, unless a showing could be made that overcame the presumption.  Specifics of how that presumption could be overcome were specifically discussed and outlined in detail.

In evaluating requests to rebut the presumption in smaller markets, the Commission will use a multi-part test that will include looking at:

• The level of media concentration in a market
• Whether the combination would increase the amount of local news coverage in a market
• Whether the newspaper and broadcast station would continue to have independent news and editorial staffs
• The financial condition of the combining media outlets, and whether the Buyer is willing to commit to spend money to increase newsroom operations

In addition, the Commission would consider the negative presumption to be overcome in any of the following specific situations:

• Where there was a "failed" station or newspaper, i.e. one in bankruptcy or which had ceased operation for 4 months before FCC approval for the combination was sought
• If there is a "failing station" or failing newspaper – found only in situations meeting a four part test:
  • If the television station in the proposed combination had an audience share of less than 4%
  • If the station or newspaper which is claimed to be failing had 3 consecutive years of negative cash flow
  • If public interest benefits could be shown, and
  • If it can be shown that there is no other out-of-market buyer for the failing outlet
• If the combination resulted in a new news operation at the broadcast station which would include at least 7 hours of weekly local news coverage.

Commissioner Copps derided these conditions,finding it difficult to believe that promises made to receive permission for a combination would be kept.  How, he asked, could it be believed that parties would buy a failing property that no one else wanted and increase costs by investing in news?  Instead, he found it much more likely that any new owner would cut costs by combining staff, leading to less diversity. 

There were also numerous arguments between the Commissioners about whether the process was fair, and whether it gave interested parties a meaningful opportunity to have their views heard and considered.  While Chairman Martin, in his statement appends a long list of the process that was gone through over the last several years in considering the ownership revisions, Commissioner Copps focused instead on the "end game," faulting the Chairman for rushing the decision – for example, by having his proposal published in the New York Times and released in a Press Release by the FCC the day after the last field hearing (meaning that the statements at that hearing could not have been considered in drafting the proposal), and having a draft final decision circulated weeks before comments on the Chairman’s proposal had even been received.

We may well have not heard the end of this proceeding.  First, the full text will need to be released, addressing some of the many unanswered questions, including what happened to all the reconsideration requests filed in connection with the already effective 2003 revision of the radio ownership rules, to the question of how the FCC dealt with the US Court of Appeals decision that had found the local television ownership rules (which forbid TV "duopolies" except in a market where there will be 8 independent voices after the transaction, and forbid combinations among the Top 4 stations in a market) to be arbitrary and capricious.  Legal challenges to the final decision may follow.  And many in Congress have been actively opposed to this decision, including 25 Senators who signed a letter indicating an interest in overturning this decision.  So, once again, stay tuned for the next episode in this long running series.