IP: Industry Standard on FCC Fox approval

[David Farber <dave () farber net>]

> User-Agent: Microsoft-Outlook-Express-Macintosh-Edition/5.02.2022
> Date: Wed, 25 Jul 2001 17:09:41 -0400
> Subject: Industry Standard on FCC Fox approval
> From: Aaron Pressman <apressman () thestandard com>
>
> (posted on the web at
> http://www.thestandard.com/article/0,1902,28238,00.html)
>
>
> FCC Republicans OK Fox Purchase
>      By Aaron Pressman
>      Jul 25 2001 02:03 PM PDT
>
>      The commission's new pro-business majority sets aside media-ownership
> rules to allow the $5.4 billion purchase of Chris
>      Craft Industries.
> -------------------------------

The new Republican majority on the Federal Communications Commission on 
Wednesday approved Fox Television's $5.4 billion purchase of rival 
broadcaster Chris Craft Industries. The approval came despite the 
objections of Democrats, who complained that the deal exceeded several of 
the agency's media-ownership limits.

Wednesday's announcement marked the first show of power by Republican 
Chairman Michael Powell, who only this month gained a working majority of 
like-minded commissioners. The announcement also signals that a further 
easing of the agency's media rules is likely during the next year.

By adding Chris Craft's 10 TV stations to the 24 it already owned, Fox 
Television will be able to reach 41 percent of the national TV audience, 
despite an FCC rule limiting any broadcaster's reach to 35 percent. In New 
York City, Fox will own two TV stations and a newspaper, the New York Post, 
despite an FCC rule barring common ownership of TV and newspaper properties 
in the same city. Fox had already received an FCC waiver that allowed it to 
own both the Post and one of the TV stations.

The three Republican members of the FCC said Fox might eventually have to 
comply with the 35 percent national-audience cap, but not until 12 months 
after a federal appeals court decides on the legitimacy of that rule. Nor 
is that decision expected for many months. In the meantime, the FCC may 
simply decide to raise the cap.

The Republicans on the commission gave Fox two years to comply with the 
newspaper/cable cross-ownership ban, well after the agency is expected to 
review - and possibly rescind - that rule.

Democrats argued that approving the acquisition despite its rule violations 
was tantamount to abandoning the media-ownership limits.

"These are long-term waivers that appear to be based on the anticipation 
that prior to the termination of the waivers, the rules may be relaxed such 
that compliance need never occur," Democrat Michael Copps said. "Sound 
decisions should not be premised upon subjective conjecture about how 
future actions by the courts, Congress or the commission may change the law 
or alter the rules under which we are instructed to operate."

Democrats also complained that the decision violated a law prohibiting 
foreigners from owning more than 25 percent of a U.S. media company. Fox's 
parent, Rupert Murdoch's News Corp., is based in Australia.

But Powell characterized the decision as a run-of-the-mill approval - one 
that would give the merger partners adequate time to divest stations 
exceeding the rules.

"I find it fantastic that the minority would characterize these divestiture 
periods as deviations from our rules in order to approve the transaction," 
he said. He added that a 1995 FCC decision had already granted Fox a waiver 
from the foreign-ownership limit.

The new chairman, who took over from Democrat William Kennard in January, 
has expressed repeated skepticism about many of the agency's 
media-ownership limits.

Bolstering Powell's hand, a federal appeals court in March threw out agency 
rules barring cable companies from reaching more than 30 percent of cable 
households nationwide. The court said such limits violated the First 
Amendment unless backed by compelling evidence of the harms of unrestrained 
media consolidation.

Because the president appoints the five members of the FCC, George W. 
Bush's presidential victory assured a Republican takeover of the 
commission. No more than three members can come from the same political 
party. But delays in the nominating process held up the appointment one of 
Bush's picks, Republican Kevin Martin, until July 3.



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