FOR IMMEDIATE RELEASE NEWS MEDIA CONTACT

December 18, 2007 Mary Diamond (202) 418-2388

> Email: mary.diamond@fcc.gov

**FCC Adopts Revision to Newspaper/Broadcast**

**Cross-Ownership Rule**

*Washington, DC* --The Federal Communications Commission (FCC) today
concluded its quadrennial review of the broadcast ownership rules. The
Commission amended the 32-year-old absolute ban on newspaper/broadcast
cross-ownership by crafting an approach that would presumptively allow a
newspaper to own one television station or one radio station in the 20
largest markets, subject to strict criteria and limitations.

The newspaper/broadcast cross-ownership rule currently prohibits common
ownership of a

broadcast station and a daily newspaper in the same market. The U.S.
Court of Appeals

for the Third Circuit (Court), affirmed the Commission's determination
that this blanket ban on

newspaper/broadcast cross-ownership was no longer in the public interest
while remanding the specific cross-media ownership limits drawn by the
Commission in 2003. The Court agreed that

"...reasoned analysis supports the Commission's determination that the
blanket ban on

newspaper/broadcast cross-ownership was no longer in the public
interest."

The media marketplace has changed considerably since 1975 when the
newspaper/broadcast cross ownership was put in place. At that time,
cable was a nascent service, satellite television did not exist and
there was no Internet. Consumers have benefited from the emergence of
new sources of news and information. But according to almost every
measure newspapers are struggling. For example, at least 300 daily
papers have stopped publishing over the past thirty years and
circulation and advertising revenues at approximately half of all U.S.
dailies has dropped precipitously in recent years. Permitting
cross-ownership can preserve the viability of newspapers by allowing
them to share their operational costs across multiple media platforms.

The rule adopted today would presumptively permit cross ownership only
in the largest markets where there exists competition and numerous
voices. The revised rule balances the need to

support the availability and sustainability of local news while not
significantly increasing local

concentration or harming diversity. Under the new approach, the
Commission presumes a

proposed newspaper/broadcast transaction is in the public interest if it
meets the following test:

\(1\) the market at issue is one of the 20 largest Nielsen Designated
Market Areas ("DMAs");

\(2\) the transaction involves the combination of only one major daily
newspaper and only one television or radio station;

\(3\) if the transaction involves a television station, at least eight
independently owned and

operating major media voices (defined to include major newspapers and
full-power

TV stations) would remain in the DMA following the transaction; and

\(4\) if the transaction involves a television station, that station is
not among the top four

ranked stations in the DMA.

All other proposed newspaper/broadcast transactions would continue to be
presumed not in the public interest. However, the Report and Order
addresses two limited circumstances in which this negative presumption
would be reversed:

-   First, it adapts the Commission's longstanding approach concerning
    failed or failing station waivers to newspaper/broadcast
    combinations, using the same criteria in defining whether an outlet
    is "failing" or has "failed." To be deemed "failed," the newspaper
    or broadcast station would have to have ceased publication or gone
    dark at least four months before the filing of an application, or be
    in bankruptcy proceedings. To be treated as "failing," the applicant
    must show that (a) the broadcast station has had an all-day audience
    share of 4 percent or lower, (b) the newspaper or broadcast station
    has had a negative cash flow for the previous three years, (c) the
    combination will produce public interest benefits, and (d) the
    in-market buyer is the only reasonably available candidate willing
    and able to acquire and operate the newspaper or station.

-   Second, the negative presumption against a newspaper/broadcast
    combination will be reversed when a proposed transaction results in
    a new source of local news in a market -- to be specific, when a
    combination would initiate at least seven hours of new local news
    programming per week on a broadcast station that previously has not
    aired local news.

Under the new rule, the Commission would consider these presumptions as
establishing a high hurdle as it reviews the transactions on a
case-by-case basis. In particular, applicants attempting to overcome a
negative presumption about a newspaper television combination will need
to demonstrate by clear and convincing evidence that post-merger, the
merged entity will increase the diversity of independent news outlets
(e.g., separate editorial and news coverage decisions) and increase
competition among independent news sources in the relevant market. The
Commission will use the following factors to inform its evaluation:

(1) the level of concentration in the DMA;

(2) a showing that the combined entity will significantly increase the
    amount of local news in the market;

(3) a showing that the newspaper and the broadcast outlets each will
    continue to employ its own news and editorial staff and that each
    will exercise its own independent news judgment; and

(4) the financial condition of the newspaper or broadcast station in the
    proposed combination, and if the newspaper or station is in
    financial distress, the proposed owner\'s commitment to invest
    significantly in newsroom operations.

This approach will permit the Commission to balance the needs of the
public for media and viewpoint diversity with its concerns about the
financial health of traditional media outlets in the context of each
particular transaction.

This rule change is notably more conservative in approach than the
remanded

newspaper/broadcast cross-ownership rule that the Commission adopted in
2003. That rule

would have allowed transactions in the top 170 markets. The rule adopted
today allows only a subset of transactions in only the top 20 markets,
which would still be subject to an individualized determination that the
transaction is in the public interest.

With respect to the remaining broadcast ownership rules currently under
review, the Commission determined that any further relaxation of
ownership rules in the radio or television broadcast markets should not
be allowed. The Commission will make no changes to the local television
"duopoly" rule, the local radio ownership rule, local radio-television
cross ownership rule and the dual network rule currently in effect.

Action by the Commission December 18, 2007, by Report and Order (FCC
07-216).

Chairman Martin, Commissioners Tate and McDowell with Commissioners
Copps and Adelstein dissenting. Separate statements issued by Chairman
Martin, Commissioners Copps, Adelstein, Tate, and McDowell.

News about the Federal Communications Commission can also be found on
the Commission's web site www.fcc.gov.

-FCC-

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