Manchester (CT) Journal Inquirer 2005
Is Big Media Above the Law
March 23, 2005
Five years ago Tribune Co., owner of Connecticut television stations WTIC-TV61 and WTXX-TV20, acquired the Times Mirror newspaper chain and, with it, Connecticut's largest newspaper, the Hartford Courant. The merger of TV stations with a newspaper in the same area violated the Federal Communications Commission's longstanding regulation against such combinations, but Tribune didn't mind. Indeed, Tribune acknowledged that its acquisition of Times Mirror had been largely intended to create such illegal combinations, in the expectation that Tribune and other media conglomerates could persuade the FCC or Congress to repeal the ban on cross-ownership.
At first the FCC told Tribune that the rules were the rules and ordered the company to sell either its Connecticut TV stations or the Courant. Tribune was given an extension of time but the extension for WTXX expired in 2002. In regard to WTIC, Tribune was told that it would have to divest either the station or the Courant by the end of the station's license period in 2007.
Then the great efforts by the media conglomerates began at the FCC. Sure enough, after dozens of private meetings with Big Media's lobbyists, the FCC approved new regulations to clear the way for concentration of ownership in the media, including repeal of the ban on cross-ownership. Tribune and the rest of Big Media thought they were in the clear.
But the FCC's procedure for approving the new regulations was rigged and the market data on which the regulations were based was phony, so a lawsuit against the regulations was successful in a federal appeals court in Philadelphia last year. The appeals court nullified the new rules and restored the old ones and the FCC gave up, declining to appeal the court's decision. While the media conglomerates may bring their own appeal to the U.S. Supreme Court, two of the three FCC commissioners who voted for the new rules have resigned and are yet to be replaced, and it seems that any further revision of the FCC's rules will take years.
So, U.S. District Judge Christopher F. Droney concluded the other day, the ban on cross-ownership of broadcasters and newspapers in the same area remains in effect, along with the FCC's 2001 order to Tribune to divest either its Connecticut TV stations or the Courant. Ruling in a lawsuit brought against Tribune by Neil H. Ellis of Manchester, founder of the Journal Inquirer, Judge Droney issued his own order that Tribune has to get rid of the Courant or WTXX - the third such order Tribune has received since 2001.
Tribune says it will appeal the Connecticut decision and scoffs at the idea of divestiture. "Cross-ownership restrictions will be relaxed," Courant Publisher Jack Davis says. "When the dust settles, perhaps years from now, Tribune will be allowed to keep the television stations and the newspaper."
Translation: No matter what the law was at the time and no matter what it is now, big companies like Tribune think that they can get it fixed to their satisfaction and, until they do, no matter how long it takes, they should be above the law. This is a stunning assertion of the arrogance of power.
Just hours before Judge Droney issued his decision that Tribune had been disregarding the law in Connecticut for four years, former Gov. John G. Rowland was sentenced to prison on a corruption charge, and the Courant editorially denounced him for "arrogance" and a "continued sense of entitlement." Yes, how dare someone besides a big media corporation think himself above the law?
Wonderful as this irony was, the great issue here is not the usual corporate hypocrisy but government's distribution of power in society. Broadcast licenses are regulated because they are grants of monopoly on the public airwaves, and those licenses can be awarded in only two ways: to diversify ownership of the media or to concentrate it. Why any individual or corporation should be allowed to have more than one broadcast license is a mystery of public policy, yet one company owns more than 1,000 radio stations.
Big media companies like Tribune still could grow while respecting the ban on cross-ownership; they could swap properties with each other in areas where their broadcast and newspaper properties overlapped too much. But Tribune and the others want overlapping properties precisely for the advantage they gain over competitors as access to the public forum is restricted. Big media companies are almost bigger than the government already, and if they get their way with the broadcast licensing rules they may not have to wait even a week to change it to their liking.
Judge orders Tribune Co. to sell WTXX-TV
March 23 2005
HARTFORD, Conn. -- The parent company of The Hartford Courant must comply with a federal mandate to sell WTXX-TV in Waterbury, a federal judge ruled.
The ruling is the latest that affects the Federal Communication Commission's cross-ownership rules, which the FCC has attempted to repeal because it says they are outdated. Proponents say the rules are valuable tools in keeping diverse voices on the nation's airwaves.
The FCC's rules limit giving a TV broadcast license to a company that operates a daily newspaper in the same community the station covers. Tribune, which owns WTXX and WTIC-TV in Hartford, purchased The Courant from Times Mirror Publications in 2000.
The FCC ordered Tribune to sell WTXX, a WB affiliate, in 2001, but granted extensions that expired in August 2002. The company has asked for a permanent waiver of the cross-ownership rules, but said it has not received a reply.
"The very nature of the waiver request indicates that Tribune views itself as being in violation of that order and in need of relief from its terms," U.S. District Judge Christopher F. Droney said in his ruling Monday. "Tribune has never claimed that its ownership of WTXX, in conjunction with its ownership of WTIC and The Hartford Courant, complied with the FCC's cross-ownership rule."
Real estate developer Neil Ellis asked the federal court in 2003 to force Tribune to comply with the 2001 order. Ellis is the husband of Elizabeth Ellis, publisher of the Journal Inquirer in Manchester, a Hartford suburb.
Also in 2003, the Republican-dominated FCC completed two years of study by voting to modify its rules to allow cross-ownership in many markets. The changes were overturned in 2004 by a federal court in Philadelphia because the FCC didn't explain how it arrived at its new rules.
The FCC did not appeal the Philadelphia court's ruling.
Tribune officials said the company would appeal and seek a stay to block Droney's ruling.
"This order was not a ruling on the merits of the cross-ownership rule, and we believe the decision is wrong and seriously flawed," the company said in a written statement.
Droney said Tribune also has until April 2007 - when WTIC's broadcast license is up for renewal - to resolve its ownership of that station, a Fox affiliate.
Ellis' attorney, Stanley Brand of the Washington, D.C.-based Brand Law Group, said the ruling highlights the power of individuals to compel compliance with a federal agency's orders.
"I think it's a good decision for consumers of the media, because it indicates there's a private remedy," Brand said.
Courant Publisher Jack Davis predicted that the FCC or a higher court will overrule Droney.
"Cross-ownership restrictions will be relaxed," he said. "When the dust settles, perhaps years from now, Tribune will be allowed to keep the television stations and the newspaper."
Chicago-based Tribune operates 26 television stations and 14 newspapers in the United States.
Tribune shares closed Tuesday at $38.97, down 41 cents, or 1 percent, on the New York Stock Exchange.
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