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BIA: Cross-Ownership Change May Not Be Big Deal

Study concludes that relaxation of ownership rules “is not sufficiently material” to justify retaining them

A proposed slight relaxation of the FCC’s cross-ownership rules “is not sufficiently material” to justify tightening or retaining them.

That conclusion is contained in a draft of a study that BIA conducted at the behest of the Minority Media Telecommunications Council on how the FCC’s proposals to slightly relax its media ownership rules could possibly affect minority and women station ownership.

In the BIA survey of 14 GMs representing 31 stations, executives “expressed general business concerns that all radio and television stations have in all markets — strong broadcast station competitors especially in the genre of programming they provide and the emergence of new competitors from new sources,” said MMTC President David Honig.

As far as their ability to sell advertising time, respondents were more concerned about market conditions, pricing and ratings as well as “the perception of radio,” according to BIA. Competition from the Internet (including Pandora) and satellite radio for audience was also cited.

Honig offered two caveats. Most notably, there was one market that three respondents mentioned cross-media interests “as having a competitive impact on their stations, referring to a local combo of one daily newspaper, a full-power television station and radio stations.”

“We interpret this finding as an indication that an especially extensive cross-media combination, although lawful under the rules, could materially inhibit ‘singleton station’ operations in the advertising marketplace,” according to Honig, who adds: “Inasmuch as minority owned stations are more likely than others to be singleton stations, we recommend that the commission be alert to the possibility that a cross-media combination, with strong newspaper, television and radio outlets in a medium (or small) market, can have sufficient market power to operate as a material detriment to minority and women ownership.”

In general, though, BIA was stuck by “the lack of any large concern by almost all of the respondents to these cross-media operations,” stated BIA VP/Chief Economist Mark Fratrik.

The other caveat was that the study was limited to the impact on minority and women’s ownership and didn’t attempt to cover other issues involving cross-ownership.

Should the agency consider the study to make a decision, Honig recommended that the agency invite the public to comment.

Earlier in the year, then Chairman Julius Genachowski postponed a vote on dropping the cross-ownership bans, to allow time for the study. He had previously circulated a draft order that would keep the bulk of existing ownership rules in place, including the existing local radio limits. He proposed eliminating the radio-newspaper and TV-radio cross-ownership bans.

Broadcasters and the newspaper industry consider the bans anachronistic in an age where consumers can get their news from a variety of sources, while some public interest and minority groups fear relaxing the bans could lead to more media consolidation.

Since the ownership vote was postponed, two commissioners have left the FCC, including Genachowski. And while Commissioner Mignon Clyburn is now interim chair, media ownership has always been such a lightning rod-topic, it’s anybody’s guess on when the agency might actually vote on media ownership, new study or not.

Honig told the FCC he hoped to have the study to commissioners soon in a recent meeting concerning ownership and AM.