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FCC eases ownership restrictions for television and radio companies

Critics say loosening the rules could leave a few conglomerates in charge of the airwaves. Broadcasters say they need to compete against new alternatives.

Federal regulators Thursday eased restrictions on the number of local radio and television stations that a broadcasting company can control.

With a 4-1 vote, the Federal Communications Commission relaxed a rule that currently forbids a single company from owning more than one local TV station in a given market. Under the changes, a company could own two TV stations in the same market if there were at least eight other competitors after the deal and if one of the stations is not among the market's top four.

Common ownership also could be permitted if one of the stations was failing or was not yet operating.

Critics have argued against loosening the rules too much for fear it could shrink editorial diversity and concentrate ownership of the airwaves in the hands of a few big media conglomerates. Broadcasters say they need to compete against new media alternatives.

The vote also provided leeway on a rule that prohibited ownership of radio and TV stations in the same market. The amended rules allow a company to own up to two TV stations and six radio stations in a market as long as there are at least 20 independent media voices _ including broadcast stations, daily newspapers and cable services.

Broadcasters had benefited from a lenient policy that waived the restrictions, and the commission said companies would be protected by such waivers until 2004.

Commissioners backing the changes said they would allow broadcasters to compete more effectively in a changing media marketplace while preserving the diversity of ownership.

"Our ownership rules have always reflected core values of competition, diversity and localism," said FCC chairman Bill Kennard.

Commissioner Harold Furchtgott-Roth dissented, saying the FCC could not adequately define how the regulations would preserve diversity.

The decision received the praise of the National Association of Broadcasters and members of the industry. Bud Paxson, chairman of Paxson Communications Corp., which owns or operates 73 television stations nationwide, said the changes were needed for broadcasters to face new competitors.

"In the '80s we were all alone, but now we have cable, direct satellite, and now the Internet is coming into play," Paxson said.

Analysts predicted that broadcasters would combine facilities where possible to save money.

"The biggest and most competitive markets will be the most affected, and it won't be the highest-ranked stations," said Vinton A.G. Vickers, a broadcast industry analyst with ING Barings in New York. "One of the goals of these decisions is to help out the most struggling stations who can't afford top-notch programming."

Victor B. Miller IV, a broadcast industry analyst at Bear Stearns, said large cities like Chicago, New York, Los Angeles and San Francisco _ which have 15 or more voices in them _ are likely to see the most activity. A medium-sized city like Detroit has only nine voices, leaving room for only one deal, he said.

Miller predicted that large network operators would benefit from the decision, "but this will also be very helpful to companies like USA Networks because they could buy network affiliated stations."

The FCC also more clearly defined ownership by clamping down on local marketing agreements that allow one TV station to operate another TV station in the same market but not actually own it. Such agreements from before November 1996 would be respected until 2004. Other stations with such agreements would have two years to comply with new ownership rules or would be forced to terminate them.

The commissioners said the new rules help clarify a system riddled with waivers and exceptions.

"I have long felt that our rules were susceptible to "gaming,' " commissioner Susan Ness said. "We have been too willing to permit through the back door what we would not countenance through the front."

Andy Schwartzman, president of the Media Access Project, a public-interest law firm, said he was glad to see the FCC closing some of its loopholes.