Fox to FCC: Remove All Media Ownership Rules (except the one Fox likes)

"[T]he media marketplace of 2006 has become so robustly competitive," Fox Entertainment Group and Fox Television Holdings' October 23rd public filing concludes, "and offers so many diverse voices on subjects too numerous to count, that the broadcast ownership rules cannot possibly survive the scrutiny required by Section 202(h)."

Section 202(h) of the Telecommunications Act of 1996 requires the FCC to periodically review its limits on how much media a single entity can own. Present rules put caps on the number of radio stations, TV stations, and newspapers a company can buy in a single market.

The agency opened a public comment cycle on the issue in June. Although the comment period ended on Monday, the public can file responses to comments that have already been made, like Fox's, until December 21st, thanks to a recent extension on the deadline.

Dozens of big media companies, including Sinclair, Clear Channel, CBS, and Hearst, have filed comments with the agency to meet its October 23rd deadline. But few of them have called for the Commission to eliminate almost all of its present broadcast ownership rules. Fox did, their statement signed by Ellen S. Agrees, Senior Vice President of the Fox Entertainment Group, and Maureen A. O'Connell, Senior Vice President for Rupert Murdoch's News Corporation.

Although the filing makes a variety of recommendations, it focuses on a single argument: the Internet has made FCC broadcast ownership limits irrelevant.

"Opponents of relaxing the media ownership rules continue to advance the spurious claim that deregulation is some sort of 'threat' to democracy," the Fox statement contends. "Their argument is unsupportable, because it wholly ignores the power of the Internet - without doubt the most democratizing technology in the history of human invention."

Ironically, in order to make this point, the filing cites the proliferation of Web based social networking sites like MySpace.com, which is owned by Fox's owner, News Corporation.

Within this context, Fox argues for these policy changes:

• Dump the local TV ownership rule.
  Present FCC rules say that companies can't create TV "duopolies"—two TV stations owned in the same market—if the stations overlap each other's "Grade B" contours (think imaginary 100 mile circle around a TV transmitter), if neither station is below the top four ranked stations in terms of audience share, and if the buyout deprives the region of eight independently owned TV stations.

  Get rid of it, Fox says: "[I]it is more obvious now than it was four years ago that local TV stations hold no monopoly on contributing to the marketplace of ideas. From broadcast and satellite radio to hundreds of cable channels to the virtually limitless font of information available via the Internet, consumers for several years now have had a multitude of choices for information and content in addition to local television."

• Out with the newspaper/TV station cross-ownership rule and the TV/radio station cross ownership rule
  Perhaps the media ownership rule big media hates most, the newspaper/TV rule prohibits the common ownership of a full service TV station and a daily newspapers "when the broadcast station's service contour encompasses the newspaper's city of publication." The TV/radio station rule puts a varying cap on the number of radio stations a TV owner can buy, depending on the size and diversity of the market.

  Kill them, Fox recommends: "Proper application of the antitrust laws will ensure adequate levels of competition in markets of all sizes. Given that common ownership of different types of media in a single market can enhance localism, without any harm to diversity, there should not be cross-ownership limits in any market."

  Oddly, Fox cites the FCC's 2003 media ownership decisions as the legal basis for this argument, despite the fact that these decisions were struck down a year later by the Third Circuit Court of Appeals in Prometheus v. FCC. Fox's statement argues that the FCC should focus on its Congressionally mandated responsibility to review its media ownership rules (Section 202(h)), rather than Prometheus; easy for Fox to say, they don't have to answer to the Third Circuit.

But having urged the FCC to dump its key ownership rules, Fox's filing warns the FCC not to mess with the UHF discount on the national TV ownership cap rule. Mandated by Congress in 2004, the national cap rule proscribes an entity from owning enough TV stations to reach more than 39% of U.S. households. But because UHF stations have weaker signals than VHF stations, the FCC gives them a 50% "discount" when calculating an entity's national household reach.

"Fox believes that the Commission is without power to modify or eliminate the national television ownership cap as part of this quadrennial review," its filing states. The FCC has already conceded that the cap percentage, set by Congress two years ago, is in cement. But its Notice on broadcast ownership rules asks the public to comment on various issues related to the discount rate.

Hands off, Fox insists. The corporation doesn't like the national cap, but absent its repeal, "the FCC should recognize that the UHF discount continues to serve the public interest by helping to ensure viability of UHF stations that face technological and financial obstacles in their ability to compete against VHF stations."

More stories:

• Media Ownership Fight Gets Red Hot
• Clear Channel Tells FCC It Wants More Radio Stations
• FCC extends TV/newspaper cross-ownership waiver to Rupert Murdoch's New York Post