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UPDATE 1-U.S. FCC withdraws proposal to relax media ownership rules

Alina Selyukh
Tuesday, 17 Dec 2013 | 10:57 AM ET

WASHINGTON, Dec 17 (Reuters) - The U.S. Federal Communications Commission has withdrawn a proposal to relax the ban on owning several media outlets in the same media market, an FCC official said on Tuesday.

For decades, U.S. media markets have operated under rules that prohibit one owner from controlling both a newspaper and a television or radio station in a single market.

More than a year ago, the previous FCC chairman, Julius Genachowski, circulated a proposal that would have eliminated those restrictions.

The current chairman, Tom Wheeler, took Genachowski's proposal off circulation on Dec. 6, an FCC official said, adding that the agency would soon follow up with further actions on the matter.

Congress requires the FCC to reassess its media ownership rules every four years to make sure they are in the public interest. That means the ongoing 2010 quadrennial review is now butting into the new 2014 one.

Wheeler had been expected to close the current proceeding or merge it with the new one on his own terms. Many FCC staff and industry insiders have long said they had given up on any major change coming from the ongoing 2010 quadrennial review.

The details of Genachowski's proposal were never made fully public and, according to sources familiar with the proceeding, Genachowski left the FCC without even casting his own vote on the proposal after failing to corral the unanimous support of the other two Democratic commissioners.

The matter has become a hot and sensitive topic.

Those who favor relaxed rules argue they are necessary to let big media companies with TV-driven profits invest in and revitalize the struggling newspaper industry. Those who support current or tighter rules say that without restrictions, corporations might marginalize women and minorities.

Both the broadcasting and the ailing newspaper industry have been urging a relaxation of the rules in hopes of spurring investment. Several previous chairmen had made such proposals, but courts told the FCC it did not properly study the impact of the rules on diversity of viewpoints and diversity of media owners.

The U.S. media marketplace, in the meantime, has relied on the waivers the FCC has issued in some of the biggest markets, allowing consolidation to continue among newspaper and broadcast companies.

This year, Los Angeles Times and Chicago Tribune publisher Tribune Co announced plans to buy 19 TV stations, and the largest newspaper chain, Gannett Co Inc, announced a deal to buy Belo Corp and its 20 local TV stations.

The FCC in February delayed its vote on the Genachowski proposal to wait for an outside study that looked at how female and minority broadcasters were affected by cross-ownership.

In May, the study from the Minority Media and Telecommunications Council found female and minority broadcasters did not appear concerned about one owner controlling newspapers, radio and TV stations in the same market.

But the study faced an outcry from public interest groups, and the review of FCC's rules was paused as Genachowski left.