UPDATE 2-Tribune Co gets temporary ownership rule waiver

(Adds byline and recasts with background, comments from FCC commissioners and comment from Tribune)

By Peter Kaplan

WASHINGTON Nov 30 (Reuters) - U.S. communications regulators on Friday cleared the way for media group Tribune Co TRB.N to proceed with its planned leveraged buy-out, agreeing to temporarily waive media ownership restrictions that could have stood in the way of the deal.

The U.S. Federal Communications Commission voted by a margin of 3-2 to temporarily exempt Tribune from rules in several U.S. cities that restrict the ownership of a newspaper and a television or radio station in the same market.

FCC Commissioner Robert McDowell, one of three Republicans on the commission, said the decision would allow Tribune to strengthen its news-gathering operations and allow it to compete against "a growing chorus of new media voices in the information, opinion and entertainment market place ...

"Approving this transaction allows the new owners to breathe new life into Tribune's newspapers and broadcast properties," McDowell said.

The FCC said it denied Tribune's request for a permanent exemption in a number of U.S. cities, but granted a permanent waiver in Chicago, where the company owns the Chicago Tribune newspaper, along with a radio and television station.

The temporary waivers will be in effect as the FCC considers a wider proposal by FCC Chairman Kevin Martin to relax the cross-ownership ban in the 20 biggest U.S. cities. Under Friday's FCC decision, they will extend for a period of two years, or until six months after the end of litigation over the ownership rules, the FCC said.

Martin has said the rule change he has proposed would help bolster the newspaper industry by allowing owners in the top markets to buy a television or radio station.

The commissioners are scheduled to vote on the overall media ownership changes proposed by Martin at the FCC's next meeting on Dec. 18.

Tribune is going private in a deal led by Chicago real estate magnate Sam Zell and needs FCC approval to transfer waivers that allow the company to operate television stations and newspapers in the same markets.

On Friday, the company issued a statement saying the FCC decision would allow it to proceed with the deal by year's end.

"We appreciate today's action by the FCC, which allows our transaction to move forward," Tribune Chief Executive Officer Dennis FitzSimons said in a statement.

Tribune owns a daily newspaper and a television station in four top-20 markets -- New York, Los Angeles, Chicago and Miami/Fort Lauderdale -- as well as the smaller market of Hartford, Connecticut.

Tribune and other publishers, including Media General Inc (MEG.N) and Gannett Co Inc (GCI.N), opposed Martin's plan, saying it does not go far enough to loosen the rules.

The dispute over the ownership rules goes back to 2003, when a federal appeals court in Philadelphia halted an earlier FCC plan to relax media ownership rules after concluding the agency failed to adequately justify the new rules.

Since then, the FCC has held public meetings in six cities to gather feedback about media ownership.

Consumer groups and Democrats on the FCC have expressed reservations about easing ownership rules, fearing that more consolidation in the industry would eliminate independent voices and degrade local news coverage.

Democrats on the commission and in Congress have accused Martin of rushing through the media ownership changes without enough public input.

Friday's decision again raised the ire of the two Democratic FCC commissioners. Commissioner Michael Copps said it was designed to open the door for Tribune to bypass the federal court in Philadelphia and challenge the entire media ownership rule in a different federal court.

"Publicly, the chairman claims to want only a "modest" relaxation of the cross-ownership ban. Privately, he enlists Tribune as an accomplice to try and get the ban overturned in court," Copps said in statement dissenting from the decision.

Democratic Commissioner Jonathan Adelstein said the decision amounted to "legal contortionism." (Reporting by Peter Kaplan; Editing by Andre Grenon)