Old Rules, New Alliances

By Drew Clark
National Journal's Technology Daily

July 31, 2006

http://www.drewclark.com/wiredinwashington/20060731.htm


For at least a generation, the Washington Post Co. has had a cameo role in 
the drama over FCC licenses. So it's not surprising that its newest media 
venture -- Washington Post Radio -- poses new questions about media rules.

By the summer of 1972, the Washington Post had begun publishing stories 
linking the Watergate burglars to President Nixon's re-election campaign. 
Among the tools for retaliation at the White House's disposal was FCC 
license renewal.

"The main thing is the Post is going to have damnable, damnable problems 
out of this one. They have a television station," Nixon said on Sept. 15, 
1972, according to a transcript of the Watergate tapes.

"That's right, they do," said John Dean.

"And they're going to have to get it renewed," said Nixon.

"They've got a radio station, too," offered up H.R. Haldeman.

Thus begins the remarkable saga of the newspaper-broadcast cross-ownership 
ban -- a rule that was put in place by FCC Chairman Dick Wiley in January 
1975. The rule is one of several changes being considered for relaxation by 
the current FCC, and the foremost advocate for eliminating the rule is none 
other than Dick Wiley, now an influential telecommunications lobbyist.

But we're getting ahead of the story.

In the 1970s, the Post owned WTOP-TV Channel 9, a CBS affiliate. Its radio 
station was also called WTOP. It broadcast on both the AM and FM bands.

In addition, the Post owned television stations in Miami and in 
Jacksonville. "Of all the threats to the company during Watergate," Post 
owner Katharine Graham wrote in her memoirs, "the most effective were the 
challenges to the licenses of our two Florida television stations."

Those challenges failed. But then the White House went after WTOP, the TV 
station in the Post's hometown. The FCC began drafting regulations that 
would bar a newspaper from owning radio or television stations in its home 
city. Other major newspapers owned TV stations in their towns, including 
the Atlanta Journal-Constitution, the Chicago Tribune, and the Tampa 
Tribune. They got exemptions in a "grandfather" clause. The Post got cold feet.

"Nixon was going after them," says Shaun Sheehan, the Tribune Co.'s top 
lobbyist and a bitter critic of the cross-ownership ban. "He thought he was 
going to force Katharine Graham into fire sale." As a result, the Post 
swapped its Washington television license for the Detroit station then 
owned by the Detroit Evening News.

But the Post need not have sold -- at least if it had stuck it out and 
finagled a grandfather waiver. Instead, the company's Post-Newsweek 
Stations built up business in the 1980s and 1990s using out-of-market TV 
licenses.

Pressure to revise media ownership rules built in recent years. But when 
former FCC Chairman Michael Powell proposed major changes in 2003, 
newspaper companies couldn't agree on a common stance.

The Washington Post Co. and its out-of-market local stations wanted to keep 
the networks from encroaching on their turf, and lobbied against the FCC 
package. For the Tribune Co., the New York Times Co., and smaller players 
such as Media General -- which owns the newspaper and television station in 
Tampa, Fla. -- the big issue was lifting the cross-ownership ban.

These latter companies have been pushing a synergy strategy of integrating 
print and broadcast newsrooms. Tribune Co.'s Sheehen says that "stations 
owned by newspapers broadcast more news and public affairs" because of 
their large staffs of journalists. The existing rule blocked a new venture 
in Hartford, Conn.

FCC Chairman Kevin Martin agrees that the ban is unfair. "In the largest 
markets, two broadcast televisions can combine and own up to six radio 
stations and the local cable system," Martin told the Newspaper Association 
of America this spring. "Yet newspapers remain prohibited from owning even 
a single radio station."

Including the Washington Post.

But the Post has gotten creative. This year it struck a licensing agreement 
with Bonneville Communications, which owns the Washington radio station 
that the Post once had. In a three-way swap, Bonneville moved its flagship 
news channel WTOP to its best frequency, 103.5 FM, put classical music 
station WGMS on 104.1 FM, and introduced Washington Post Radio on 1500 AM 
-- the old WTOP frequency.

The new arrangement doesn't violate the cross-ownership ban because 
Bonneville owns and controls the station, advertisements and content -- 
even if the vast bulk comes straight from the newspaper's newsroom, say 
Post attorneys.

Supporters of the cross-ownership ban call it the best of both worlds. "You 
don't need to own the TV and radio station" to exploit synergies, says 
Andrew Jay Schwartzman, President of the Media Access Project. The 
Bonneville-Post collaboration means "you have the diversity advantages of 
different viewpoints."

Critics call that hairsplitting. "Do we continue to need unique rules for 
old media sectors, instead of a general competition policy standard for the 
entire media industry?" questions Adam Thierer, senior fellow at the 
Progress and Freedom Foundation.

Indeed, the biggest irony of the media ownership debate is the old media's 
embrace of the new. "They know they cannot make investments in the old 
sector and are turning their attention to the Internet as a way to 
diversify their media operations," said Thierer.


================================
George Antunes, Political Science Dept
University of Houston; Houston, TX 77204
Voice: 713-743-3923  Fax: 713-743-3927
antunes at uh dot edu



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