By Jeremy Pelofsky
WASHINGTON (Reuters) - U.S. communications regulators on Monday narrowly approved sweeping new rules that will allow television broadcasters to expand their reach, despite fears about reducing the diversity of viewpoints.
The Republican-led Federal Communications Commission voted 3-2 to allow the broadcast networks to own television stations that reach 45 percent of the U.S. audience, up from 35 percent.
Citing a need to update decades-old rules to reflect new sources of entertainment, information and news via cable television and the Internet, the FCC also voted to lift a ban that prevents a company from owning both a newspaper and a television or radio station in the same market -- except in cases involving the smallest markets.
"I have heard the concerns expressed by the public about excessive consolidation," FCC Chairman Michael Powell said ahead of the vote. "They have introduced a note of caution in the choices we have made."
The two Democrats on the FCC opposed relaxing the regulations, arguing that the changes would concentrate ownership in the hands of a few, reduce the diversity of viewpoints and stifle reporting of local news.
"The Federal Communications Commission empowers America's new media elite with unacceptable levels of influence over the ideas and information upon which our society and our democracy depend," said Commissioner Michael Copps.
The FCC is required to review media ownership rules every two years, but the revamping follows federal appeals court criticism that the agency had not justified the need for them.
Stocks of some companies affected by the decision rose, including a 3 percent gain in shares of Viacom Inc., which owns the CBS and UPN networks. Clear Channel Communications Inc. shares rose 4.7 percent, despite the radio company's disappointment with the decision.
FCC VOTE PROTESTED
Code Pink, a women's peace group, tried to disrupt the FCC vote singing "Mass deregulation of the mass communication is the end of democracy." They were escorted from the commission meeting room by police.
Media conglomerates had lobbied the FCC to further relax or eliminate the rules, while consumer groups and smaller broadcasters sought strict regulations. Industry experts think the new rules will likely be challenged in the courts.
While some critics expect a rash of media mergers based on the new rules, industry analysts have cautioned investors against expecting a gold rush.
Under the new rules, a company can own two television stations in markets where there are at least five stations, as long as one is not in the top four, based on ratings.
A company would be permitted to own three stations in markets where there are 18 stations, such as Los Angeles.
In markets with nine television stations, a company can own a daily newspaper, a television station and several radio stations. In markets with four to eight television stations, there would be stricter limits on cross ownership.
The FCC kept in place a ban on mergers among the four largest television networks -- ABC owned by Walt Disney Co., CBS, News Corp.'s Fox network, and NBC, run by General Electric .
The FCC also revamped how radio markets are defined to prevent a company from owning all the stations in a town and left intact the maximum number of radio stations a company can own, up to eight in markets where there are 45 radio stations.
(Additional reporting by Peter Kaplan)
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"Their" monopolization is in effect!
WASHINGTON (Reuters) - U.S. communications regulators on Monday narrowly approved sweeping new rules that will allow television broadcasters to expand their reach, despite fears about reducing the diversity of viewpoints.
The Republican-led Federal Communications Commission voted 3-2 to allow the broadcast networks to own television stations that reach 45 percent of the U.S. audience, up from 35 percent.
Citing a need to update decades-old rules to reflect new sources of entertainment, information and news via cable television and the Internet, the FCC also voted to lift a ban that prevents a company from owning both a newspaper and a television or radio station in the same market -- except in cases involving the smallest markets.
"I have heard the concerns expressed by the public about excessive consolidation," FCC Chairman Michael Powell said ahead of the vote. "They have introduced a note of caution in the choices we have made."
The two Democrats on the FCC opposed relaxing the regulations, arguing that the changes would concentrate ownership in the hands of a few, reduce the diversity of viewpoints and stifle reporting of local news.
"The Federal Communications Commission empowers America's new media elite with unacceptable levels of influence over the ideas and information upon which our society and our democracy depend," said Commissioner Michael Copps.
The FCC is required to review media ownership rules every two years, but the revamping follows federal appeals court criticism that the agency had not justified the need for them.
Stocks of some companies affected by the decision rose, including a 3 percent gain in shares of Viacom Inc., which owns the CBS and UPN networks. Clear Channel Communications Inc. shares rose 4.7 percent, despite the radio company's disappointment with the decision.
FCC VOTE PROTESTED
Code Pink, a women's peace group, tried to disrupt the FCC vote singing "Mass deregulation of the mass communication is the end of democracy." They were escorted from the commission meeting room by police.
Media conglomerates had lobbied the FCC to further relax or eliminate the rules, while consumer groups and smaller broadcasters sought strict regulations. Industry experts think the new rules will likely be challenged in the courts.
While some critics expect a rash of media mergers based on the new rules, industry analysts have cautioned investors against expecting a gold rush.
Under the new rules, a company can own two television stations in markets where there are at least five stations, as long as one is not in the top four, based on ratings.
A company would be permitted to own three stations in markets where there are 18 stations, such as Los Angeles.
In markets with nine television stations, a company can own a daily newspaper, a television station and several radio stations. In markets with four to eight television stations, there would be stricter limits on cross ownership.
The FCC kept in place a ban on mergers among the four largest television networks -- ABC owned by Walt Disney Co., CBS, News Corp.'s Fox network, and NBC, run by General Electric .
The FCC also revamped how radio markets are defined to prevent a company from owning all the stations in a town and left intact the maximum number of radio stations a company can own, up to eight in markets where there are 45 radio stations.
(Additional reporting by Peter Kaplan)
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"Their" monopolization is in effect!
