SPECTER OF FCC RULES CHANGE BRINGS PREDICTED RESULTS Politicians call hearings in DC while Milwaukee's Journal floats IPO.As more and more Democrats and more and more consumer groups became more and more nervous about the potential loosening of the rules regarding broadcast and newspaper ownership, the federal government and Milwaukee's Journal Communications Journal Communications, Inc. NYSE: JRN is a a publicly traded media company based in Milwaukee, Wisconsin. It publishes the Milwaukee Journal Sentinel, a daily newspaper, and it also owns television stations, radio stations and weekly newspapers, among other Inc. acted in somewhat predictable ways. The parent company of the Milwaukee Journal Sentinel The Milwaukee Journal Sentinel is a daily morning broadsheet printed in Milwaukee, Wisconsin, USA. It is the primary newspaper in Milwaukee, the largest newspaper in Wisconsin and is distributed widely throughout the state. , six TV and 36 radio stations filed papers last week with the Securities and Exchange Commission to make an initial public offering, which would turn the employee-owned company into a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. . The Journal Sentinel said in a story on Wednesday that the company would offer up to $250 million worth of stock, which it estimated to be less than 20 percent of the company's value. While Journal Communications officials said that the rationale stemmed from trying to get out from under a heavy debt load and away from a complex ownership structure, analysts pointed out that should the FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. relax either the rules regarding the total number of broadcast outlets one company can own or the rules regarding the cross-ownership of newspapers and broadcasters in the same market, a publicly traded Journal Communications becomes either a small acquirer of more properties or -- more likely -- a mid-size acquisition for a much larger media conglomerate. Back in Washington, the chairman of the Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. , Michael Powell, told reporters on Thursday that despite pleas from Congress and Democratic FCC commissioners, he still intends to bring the ownership rules changes to a vote on June 2. Citing appellate court A court having jurisdiction to review decisions of a trial-level or other lower court. An unsuccessful party in a lawsuit must file an appeal with an appellate court in order to have the decision reviewed. orders to explain its ownership rules better, Powell told the Democrats that a one-month delay was out of the question. "When the judiciary reverses our rules, especially ones intended to promote core First Amendment values, it is incumbent on us to repair the shortcomings A shortcoming is a character flaw. Shortcomings may also be:
Earlier that day 93 members of Congress wrote a letter to Powell requesting that he and the commission publicly justify the agency's plans for ownership rule changes. Though the plans have not been made public, those who have seen the FCC staff draft indicate that it would increase the percentage of total U.S. households over which a single company could have television coverage to 45 percent, up from the current 35 percent. In addition, the draft rule changes apparently would allow a single company to own two TV stations in more markets and three TV stations in the largest markets. The proposal also apparently does away with the rule forbidding the same company from owning a newspaper and a broadcaster in the same market, but only in the larger markets; smaller markets would keep the existing cross-ownership ban. Earlier in the week a number of media industry executives testified before the U.S. Senate's Commerce Committee regarding the rule changes. Of the four speakers, two were for the changes and two against and two were broadcasters and two were newspaper publishers. William Dean Singleton William Dean Singleton is the chairman of the board of directors of the Associated Press, on which he has sat since 1999. He is also the founder, vice chairman and chief executive officer of MediaNews Group, the fourth-largest newspaper company in the United States in terms of , vice chairman and chief executive of Denver's MediaNews Group Inc., spoke on behalf of the Newspaper Association of America The Newspaper Association of America is a United States trade association that represents the country's largest daily newspapers and provides services including market research, technology education and support, minority hiring and representing publishers in Washington, D.C. (Singleton is the on-going chairman of the group). "The ban plainly is not needed," Singleton's written testimony said. "Quite to the contrary, the extensive record before the agency demonstrates beyond question that the prohibition frustrates the achievement of significant and vitally needed operating efficiencies, and deprives the public of enhanced local news and other new and innovative informational services." Frank Blethen, publisher of six newspapers including the Seattle Times, warned the panel that while he didn't want to be dramatic, should the rule changes go into effect, "I think we would see the beginning of the end of our democracy." Blethen was quoted by the Associated Press as saying that, "There is no business justification that I'm aware of -- other than monopolization mo·nop·o·lize tr.v. mo·nop·o·lized, mo·nop·o·liz·ing, mo·nop·o·liz·es 1. To acquire or maintain a monopoly of. 2. To dominate by excluding others: monopolized the conversation. -- for lifting any of the current rules. Just wait for the monopolization feeding frenzy if cross ownership is repealed." Blethen's editorial competitor in the Seattle market is the Post-Intelligencer, which is owned by The Hearst Corp., a privately held New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of multimedia firm that controls more than 20 TV stations nationwide. Blethen and Hearst are in a business dispute regarding the joint operating agreement Any contract, agreement, Joint Venture, or other arrangement entered into by two or more businesses in which the operations and the physical facilities of a failing business are merged, although each business retains its status as a separate entity in terms of profits and between their two newspapers. There are a number of things you can take away from last week's events, not the least of which is that all of Washington believes that anything can be fixed if there's just a hearing and testimony. Governmental cynicism aside, Democrats, consumer groups and maverick media moguls are circling the wagons in an attempt to make a last-ditch effort to derail de·rail intr. & tr.v. de·railed, de·rail·ing, de·rails 1. To run or cause to run off the rails. 2. media ownership changes. Chairman Powell is willing to face them down and make the changes (though his fear of the U.S. District Court of Appeals may be driving this more than anybody understands). And Journal Communications is freeing itself of certain shackles that will make it either a soaring eagle or a sitting duck. |
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