US media ownership restrictions were yesterday relaxed by the country’s Republican-led Federal Communications Commission (FCC). In a 3-2 vote over the body’s Democrat contingent, rules governing cross media ownership and audience share limits were eased in a move that is similar to proposals in the UK’s pending Communications Bill (see Puttnam Threatens To Quash Communications Bill).
One of the major changes is a revision to the number of households that any one national broadcaster’s stations can reach. The cap was previously set at 35% of homes, but has now been raised to 45%. Those against the change fear that the higher household reach will be detrimental to localism in broadcasting. However, network owners like News Corp and Viacom see this as an opportunity to compete more effectively against cable and satellite operators.
The number of stations that one group can own in a given market has also been increased. Three stations are now permitted in markets with at least 18 other stations (essentially the top six markets), up from the previous two. In addition, two stations can now be owned by one group in markets with just five or more other stations; previously this was only allowed in markets with at least nine stations.
However, a prohibition remains on combining any of the market’s top four rated stations, according to Merrill Lynch analysts. This effectively halts any merger combining ABC, NBC, CBS or Fox stations, says the broker.
The prevention of newspaper companies owning broadcast stations has been lifted in virtually all the major markets of the US and this is expected to result in newspaper groups shuffling and building their TV station portfolios. After the broadcast networks, newspaper groups are the country’s largest owners of TV stations, according to Merrill Lynch.
Merger mania unlikely Despite representing the most substantial changes to the US’ media ownership regulations in decades, the FCC’s rulings are not likely to result in a wave of mergers, according to Merrill analysts. Instead, smaller-scale asset swapping and ‘tuck-in’ acquisitions are more likely in the television sector, it says.
Despite Merrill Lynch’s assessment, the FCC’s decisions have evoked a backlash from groups claiming that the rules will allow too few media corporations to control too great a share of the country’s news and entertainment output.
