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Steinman: Crossownership Rule Should Go If Sinclair/Tribune Proceeds

Broadcaster/publisher files petition to deny

Steinman Communications, a broadcast group owner and publisher of a Lancaster, Pa., daily newspaper, has petitioned the FCC to deny the Sinclair-Tribune deal, but has a bigger bone to pick with the commission.

It says that if the FCC does grant the deal, it shouldn’t do so without first eliminating the newspaper-broadcast crossownership rule, which was the main focus of its appeal.

The Republican-majority commission is widely expected to take a weed whacker to the crossownership rule later this year given that both Chairman Ajit Pai and Commissioner Michael O’Rielly are on the books supporting elimination and even at least one past FCC Democratic FCC chair — Reed Hundt — has admitted it is an anachronism that should have been excised long ago except for fear of congressional ire.

But Steinman Communications is taking no chances.

The company owns newspapers and the Delmarva Broadcasting group of nine East Coast radio stations, but not in the same markets thanks to the “outmoded” crossownership ban, said the company in its petition to deny the deal. It pointed out that the FCC would have to issue waivers and change rules (which it has already done in restoring the UHF discount), or require divestitures, to allow Sinclair to buy the stations, “while newspaper publishers such as Steinman continue to be hampered in the competitive marketplace by the outdated [crossownership] rule” that gives them no similar avenue for growth.

That newspaper-broadcast crossownership rule prevents the ownership of a daily newspaper and broadcast station in the same market, except some grandfathered existing combos.

“If a new television station duopoly were authorized by the commission in the Harrisburg-Lancaster-Lebanon-York DMA, Steinman’s publications would face a strengthened, consolidated media competitor for audience and advertisers, while Steinman would be barred from similar market efficiencies,” the publisher said.

And even if the FCC were to require divestitures and maintain the prohibition on small-market duopolies, which the FCC under Pai also plans to review, Steinman would still be harmed by being excluded from bidding on that “rare broadcast acquisition” — either WPMT(TV) York, Pa., or WHP Harrisburg, Pa. — by the crossownership rule.

“The Commission cannot, in fairness, on the one hand rule on the various multiple ownership issues presented by the Tribune-Sinclair Transfer Applications [duopolies and the 39% national ownership cap among them], while on the other hand continuing to tie the hands of newspaper publishers to effectively compete in the media marketplace,” said Steinman. “No action should be taken on the Tribune-Sinclair transaction, which conceivably could relieve the parties from the restrictions of the current rules impacting national and local television ownership, unless and until the commission provides global relief from the restrictions of NBCO rule.”

Comments on the proposed $3.9 billion purchase of Tribune’s 42 stations by Sinclair were due Aug. 7. Sinclair has until Aug. 22 to respond to the several petitions to deny, which include from Dish, the American Cable Association and Common Cause.

Broadcasting & Cable