The FCC gave Sam Zell a cross-ownership waiver;Â then made himÂ buyÂ his own latte!
That’s how I characterized the night-timeÂ farce in whichÂ theÂ five-member Federal Communications Commission recentlyÂ decided not to take a modest step towardÂ reregulating cable television.Â The commissionÂ also postponedÂ the question of whether to continueÂ itsÂ media cross ownership ban.Â Since 1975 the FCCÂ has said newspapers cannot own television stations (or vice versa) inÂ the sameÂ metropolitan area. TwiceÂ since 2000, however,Â the deregulatoryÂ faction on the FCC has sought to ease or lift this cross-ownership ban.Â In 2003Â the FCC lifted the banÂ over public opposition. ButÂ that fiat was reversed by a combination of court and congressional action.
Last year, however, FCC Chairman Kevin Martin began the process of rethinking theÂ the ban. Big Media had expected Martin toÂ get three votes to lift the ban, arguing that newspaper and television chains face competition from Web media so letting them merge could be advantageous to them and not harmful to the public. TheÂ two democrats on the commission agree with public interest groups thatÂ furtherÂ media consolidation will only weaken local news coverage.
That abortive FCC meeting in late November was supposed to have lifted the cross-ownership ban in time to let billionaire Sam Zell (pictured above giving a lecture at a university) buy portions of the Tribune Company –which owns a handful of broadcast stations that it purchased before the FCC instituted the cross-ownership ban. Getting the ban lifted in 2007 was crucial to Zell’s plan to buy out Tribune, according to New York Times story in early November that said:
“Mr. Zell wants to complete the transaction by Dec. 31 to take advantage of tax rules that could save the newly formed company more than $100 million . . . Tribune executives have said that their banks need 20 working days after obtaining regulatory approval to line up $4.2 billion in financing to complete the deal. Mr. Martin expects to complete a vote on his plan on Dec. 18. “
Zell’s timetableÂ seemed to have been thrown out the window, however,Â when a dispute over cable ratesÂ divided the three republicans who normally vote as aÂ block toÂ marginalize the twoÂ democrats. ButÂ right afterÂ its farsical meeting the FCCÂ told Tribune CompanyÂ it would continue to enjoy aÂ waiver from the cross-ownership banÂ (newsÂ release) clearing the way for Zell to complete the transaction on his schedule. (And people say government doesn’t work!)
Meanwhile, both theÂ Senate and HouseÂ commerce committees haveÂ thrust themselves into theÂ mix.Â Â The senators will hold a hearing on December 13 at which all five FCC commissioners have been invited to talk (must they show or can theyÂ say no?). More recently leaders in the House launched anÂ investigation of that very same FCC meeting that I called shameless.
Stay tuned …