By Paul Davidson USA TODAY
As federal regulators move closer to a sweeping overhaul of media ownership rules, they are backing away from a controversial proposal to rely on case-by-case analysis to judge mergers.
Instead, the Federal Communications Commission is poised to craft clearly defined limits similar to, though more lenient than, today's blanket rules, say people familiar with the matter.
The Federal Communications Commission is in the home stretch of an expected relaxation of decades-old rules limiting newspaper, TV and radio companies. A staff recommendation is to be given to the five commissioners in early May, with their vote slated for June 2.
FCC Chairman Michael Powell has said the current caps are outdated in an era of 200-channel cable TV and the Internet.
Consumer advocates say eased limits will leave a handful of companies controlling what people see, hear and read.
Powell has expressed interest in creating a ''diversity index,'' a formula to measure whether a proposed merger between, say, a newspaper owner and a broadcaster leaves too few media voices in a market. The index is said to appeal to Powell, an antitrust lawyer, partly because it would mirror a formula used by antitrust enforcers to determine if a proposed merger would hurt competition. But tests of the index showed it can be thorny to apply: Newspapers, for instance, must be weighed more heavily than radio stations or Web sites.
At a conference, Republican Commissioner Kevin Martin said, ''I think the commission would be better off to have simple rules that everyone can understand,'' Communications Daily reported.
Martin is a swing vote, because the FCC's two other Republicans, Powell and Kathleen Abernathy, favor eased limits, while Democrats Michael Copps and Jonathan Adelstein oppose them.
But some FCC officials say the diversity index was never meant to replace fixed rules or, at most, was just one option.
The FCC still plans to use the index as a legal basis for new limits. A federal appeals court struck down several of the FCC's media caps as lacking justification.
For example, the total ban on ownership of a newspaper and TV or radio station in a market would be replaced by rules allowing TV-newspaper linkups in top markets, and setting limits on newspaper-radio-TV marriages based on market size. Martin has said he favors lifting the ban completely.
FCC staffers believe the diversity index also shows that current limits on ownership of a TV station and one or more radio stations in a market are unnecessary. The staff is also expected to recommend:
* Raising from 35% to about 45% the cap on the national audience a TV broadcaster can reach with affiliates it owns.
* Easing a ban on owning two TV stations in smaller markets.
* Keeping a ban against mergers between the top four networks
From USA Today