FCC Reverses 'Dual Ownership' Ban; Imposes 30% Cable Market Cap

The FCC reversed a 32-year ban on media companies owning a TV station and newspaper in the same media market, with both committee Republicans and Chairman Kevin Martin supporting the reversal, and both Democrats opposing it. The new ruling applies only to the nation’s 20 largest media markets; beyond those markets the FCC approved a new set of requirements for companies wanting to own both a TV station and newspaper. Martin, who is a Republican, called the loosening of the dual ownership ban "relatively minor” as it only allows companies to own a single major newspaper within a given market. The ruling was criticized as “not going far enough” by diversified media companies News Corp. (NWS) and Tribune Co. (TRB). The commission also allotted 42 permanent waivers for media companies that currently own a newspaper and TV stations.

Despite outcry from Democrats on Capitol Hill that the reversal would lead to a new round of consolidation in the media industry, Chairmen Martin sided with the FCC’s two Democrats in a second ruling Tuesday that will limit cable companies to a 30% national subscriber cap. As of now, such a ban poses a threat only to Comcast (CMCSA), the nation’s largest cable provider, which claims a 27% national market share. FCC commissioner Robert McDowell, a Republican who opposed the cable cap, believes it is “sure to be struck down by the court,” citing an appeals court’s dismissal of a similar restriction in 2001. Comcast Executive VP David Cohen also stated a high degree of confidence the cap would be struck down in the court system as “unconstitutional.”

Sources: Wall Street Journal, Bloomberg, TheStreet.com
Additional Reading: Industry Seethes As FCC's Martin Sets New Curbs ? FCC Planning New Cable Industry Regulations

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