Senate committee vote targets media ownership rule

WASHINGTON Thu Apr 24, 2008 3:13pm EDT

WASHINGTON (Reuters) - A U.S. senate committee moved a step closer on Thursday to overturning a decision by regulators that loosened media ownership restrictions in the 20 biggest U.S. cities, even as Rupert Murdoch's News Corp moved closer to expanding media ownership in the New York region.

"We really do literally have five or six major corporations in this country that determine for the most part what Americans see, hear and read every day. I don't think that's healthy for our country," said the bill's chief sponsor, Democratic Sen. Byron Dorgan of North Dakota.

The Senate Commerce Committee voted on Thursday to endorse a resolution that would nullify rules approved by the Federal Communications Commission (FCC) in December that eased a 32-year-old ban on ownership of a newspaper and broadcast outlet in a single market.

Dorgan expressed concern about further consolidation of the media, including reports that News Corp was trying to buy Newsday, a newspaper serving Long Island, New York.

Last December, News Corp bought Dow Jones & Co Inc, thereby acquiring The Wall Street Journal newspaper based in New York City. The WSJ is not subject to local ownership restrictions because it is considered a national newspaper.

News Corp also owns TV stations in the tri-state area (New York, New Jersey and Connecticut) including WNYW (Fox 5) in New York City and WWOR (My9), which is based in Northern Jersey but also serves the New York market.

The company has waivers from the FCC that let it own the New York Post newspaper, WNYW-TV and WWOR-TV.

Tribune Co is close to a deal to sell Newsday to News Corp for about $580 million and put Newsday into a joint venture with News Corp's New York Post, sources familiar with the matter have said. News Corp likely would have to seek a waiver of ownership restrictions, even under the FCC's new rules.

Dorgan predicted a resolution disapproving the new ownership rules would pass both chambers of Congress.

"My hope is that the House and Senate decide that this is a rule we should veto," Dorgan said.

Similar legislation has been introduced in the House but has yet to be taken up for a committee vote.

The FCC's Republican chairman, Kevin Martin, has said the rule was a minimal loosening of the ban aimed at helping struggling newspapers in big cities by spreading local news-gathering costs across multiple media platforms.

However, the rule has been sharply criticized by consumer groups and some lawmakers, as well as by the FCC's two Democratic commissioners.

Critics say further consolidation of the media industry would eliminate independent voices and degrade local news coverage.

They also contend that the FCC rule contains loopholes that would let media owners combine newspapers and broadcast outlets in many smaller markets around the United States, not just the top 20 cities.

The resolution must be passed by both chambers to overturn the FCC rule.

(Editing by Jeffrey Benkoe, Toni Reinhold)