Senate committee vote targets media ownership rule

By Peter Kaplan

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.