FCC Creates Dimmer Picture for TV Stocks

Except for a myriad of exceptions, the FCC bars owners of newspapers from buying TV stations in the same market in an effort to prevent one company from gaining disproportionate influence over the local population. The media industry argues that such rules are antiquated, since the rise of the Internet and other media has provided a platform for so many competing voices.

Last week, FCC Chairman Kevin Martin -- a Republican -- said he wants to allow companies to own both one newspaper and a radio or TV station in the top 20 media markets, and he urged the FCC to quickly wrap up its public-comment process and vote on the new rules by Dec. 18.

Democrats and media activists cried foul, accusing Martin of offering an early Christmas present to "Big Media" aimed at pushing through the buyout of Tribune(TRB Quote). But the industry is hardly celebrating the proposal either, because there are some pesky conditions attached to Martin's rule change.

For one, the proposal requires that there be at least eight other "media voices," including newspapers and major commercial TV stations, in a market for it to qualify for the rule change.

Also, the TV station can't be one of the four largest channels in the market. Typically, that leaves out local affiliates of the four major broadcast networks, and those are the stations that offer value for media conglomerates seeking synergies for their newsgathering operations.