If the Federal Communications Commission votes in favor of chairman Julius Genachowski's proposed order on the media ownership rules, it will represent a significant step toward complete deregulation.
In the order circulated late Wednesday, Genachowski proposed to completely eliminate the ban on newspaper-radio combinations in any size market. The regulator would still leave in place the other modification of the rule proposed in 2007, to lift the ban on owning a newspaper and TV station in the top 20 markets.
The cross-ownership ban dates back to the days before cable and the Internet began to change the media landscape. It has been a particularly thorny issue for the FCC, caught between broadcasters and newspaper publishers who see the ban as antiquated and public interest groups worried that without the ban, more media consolidation would lead to fewer diverse voices in local markets.
Lifting the newspaper-radio ban is probably the least controversial move for the FCC, especially when one of the supporters of the ban, the Minority Media and Telecommunications Council, reversed its position. FCC's studies also suggested it should seriously consider removing the regulatory barrier to owning a newspaper and radio in a market as one way to preserve the newspaper business and bring more local news to radio.
"It's probably not radio-newspaper combinations that are most feared by consumer advocates," said Scott Flick, a partner with Pillsbury Winthrop Shaw Pittman.
For newspapers, it could bring some relief to a business that has lost 50 percent of its ad revenue since 2006 and is in need of outside investment. Financially strapped papers have either gone out of business or limited the number of days they publish, such as the 175-year-old New Orleans Times-Picayune, which recently announced plans to cut back its print publication to three days.
In the days leading up to the circulation of the order, newspapers stepped up their lobbying at the FCC for a total relaxation of the rule but also addressed the FCC's suggestion that it might consider relaxing the newspaper-radio cross-ownership ban.
"While we have not seen the draft order…it is gratifying to hear that the chairman agrees with us that this 1970s-era ban should be repealed as to radio ownership,” said Caroline Little, president and CEO of the Newspaper Association of America. “However, the same logic applies to television where a federal law banning television companies from investing in the newspaper industry just makes no sense in today’s diverse media marketplace."
The commission is expected to vote on the order in the coming days.