Chairman Kevin J. Martin proposes that the Commission conclude its review of the broadcast ownership rules by adopting the regulatory changes set forth in Attachment A. Chairman Martin proposes the Commission amend the 32-year-old absolute ban on newspaper/broadcast cross-ownership by crafting an approach that would allow a newspaper to own one television station or one radio station but only in the very largest markets and subject to certain criteria and limitations. Chairman Martin also proposes that the Commission make no changes to the other media ownership rules currently under review.

The newspaper/broadcast cross-ownership rule currently prohibits common ownership of a broadcast station and a daily newspaper in the same market. Although the U.S. Court of Appeals for the Third Circuit (Court) remanded the specific cross-media ownership limits drawn by the Commission in 2003, it affirmed the Commission's determination that this blanket ban on newspaper/broadcast cross-ownership was no longer in the public interest. 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 the newspaper/broadcast cross ownership was put in place more than thirty years ago. Back then, cable was a nascent service,

satellite television did not exist and there was no Internet. Consumers have benefited from the explosion of new sources of news and information. But according to almost every measure

newspapers are struggling. At least 300 daily papers have stopped publishing over the past thirty years. Their circulation is down, their advertising revenue is shrinking and their stock prices are falling. Permitting cross-ownership can preserve the viability of newspapers by allowing them to share their operational costs across multiple media platforms.

Chairman Martin's proposal would permit cross ownership only in the largest markets where there exists competition and numerous voices. The revised rule would balance 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 would presume 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 a major daily newspaper and one television or radio station;

(3) if the transaction involves a television station, at least 8 independently owned and operating major media voices (defined to include major newspapers and full-power commercial 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.

Moreover, notwithstanding the presumption under the new approach, the Commission would consider the following factors in evaluating whether a particular transaction was in the public interest:

(1) the level of concentration in the DMA;

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

(3) a commitment that both the newspaper and the broadcast outlet will continue to exercise its own independent news judgment; and

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

This proposed 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 Chairman Martin proposes today would allow 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 Chairman delieves that any further relaxation in the radio or television broadcast markets should not be allowed. He therefore proposes to make no changes to the local television "duopoly" rule, the local radio ownership rule, and the local radio-television cross ownership rule currently in force.

The Chairman invites public comment on his proposals. Comments should be filed in MB Docket No. 06-121 by Dec. 11, 2007.

Proposed Change

§ 73.3555 Multiple Ownership.

(d) Daily newspaper cross-ownership rule.

(1) No license for an AM, FM or TV broadcast station shall be granted to any party (including all parties under common control) if such party directly or indirectly owns, operates or controls a daily newspaper and the grant of such license will result in:

(i) The predicted or measured 2 mV/m contour of an AM station, computed in accordance with § 73.183 or § 73.186, encompassing the entire community in which such newspaper is published; or

(ii) The predicted 1 mV/m contour for an FM station, computed in accordance with § 73.313, encompassing the entire community in which such newspaper is published; or

(iii) The Grade A contour of a TV station, computed in accordance with § 73.684, encompassing the entire community in which such newspaper is published.

(2) Paragraph (1) shall not apply in cases where the Commission makes a finding pursuant to Section 310(d) of the Communications Act that the public interest, convenience, and necessity would be served permitting an entity that owns, operates or controls a daily newspaper to own, operate or control an AM, FM, or TV broadcast station whose relevant contour encompasses the entire community in which such newspaper is published as set forth in paragraph (1).

(3) In making a finding under paragraph (2), the Commission shall consider, among other factors:

(i) whether the cross-ownership will increase the amount of local news disseminated through the affected media outlets in the combination;

(ii) whether each affected media outlet in the combination will exercise its own independent news judgment;

(iii) the level of concentration in the Nielsen Designated Market Area (DMA); and

(iv) the financial condition of the newspaper, and if the newspaper is in financial distress, the owner's commitment to invest significantly in newsroom operations.

(4) In making a finding under paragraph (2), there shall be a presumption that it is not inconsistent with the public interest, convenience, and necessity for an entity to own, operate or control a daily newspaper in a top 20 Nielsen DMA and one commercial AM, FM or TV broadcast station whose relevant contour encompasses the entire community in which such newspaper is published as set forth in paragraph (1), provided that, with

respect to a combination including a commercial TV station,

(i) The station is not ranked among the top four TV stations in the DMA, based on the most recent all-day (9 a.m.-midnight) audience share, as measured by Nielsen Media Research or by any comparable professional, accepted audience ratings service; and

(ii) At least 8 independently owned and operating major media voices would remain in the DMA in which the community of license of the TV station in question is located (for purposes of this provision major media voices include full-power commercial TV

broadcast stations and major newspapers).

(5) In making a finding under paragraph (2), there shall be a presumption that it is inconsistent with the public interest, convenience, and necessity for an entity to own, operate or control a daily newspaper and an AM, FM or TV broadcast station whose

relevant contour encompasses the entire community in which such newspaper is published as set forth in paragraph (1) in a DMA other than the top 20 Nielsen DMAs or in any circumstance not covered under paragraph (4).