Murdoch’s bid for Newsday draws opposition

From the regulatory point of view, the biggest hurdle would be likely to come from the Federal Communications Commission, which is still considering the renewal of the broadcast licenses of News Corp.’s two New York-area TV stations.

Andrew Jay Schwartzman, head of the Washington-based public interest law firm Media Access Project, already petitioned the FCC to deny the renewal of those licenses last year, and says there is sure to be even greater opposition if Murdoch buys Newsday.

The FCC wouldn’t have to sign off on News Corp.’s purchase of Newsday, Schwartzman said, but it could hold up or deny the renewal of the broadcast licenses.

An FCC rule passed last December expanded the conditions under which the same company can own a newspaper and TV station in the same market, but News Corp. would still need a waiver for its TV licenses since it would own both two TV stations and two newspapers all in New York.

Getting a waiver is still possible, although there are several conditions that would have to be met — conditions that FCC chairman Kevin Martin has said represent a “very high hurdle.”

The FCC’s new cross-ownership rule is currently being challenged in court, by News Corp. and other media companies on one side who say it didn’t go far enough, and by advocacy groups who say it went too far.

The rule is also facing a political challenge. On Thursday a Senate committee passed a bill from Sen. Byron Dorgan, D-N.D., that would overturn it altogether.

Even if the bill eventually gets blocked by a veto from President Bush, there is growing bipartisan support in Congress for measures to curb the further expansion of media ownership, Schwartzman said. That could present “greater political barriers to obtaining relief from the FCC,” he said.

On the antitrust front, Murdoch’s ownership of Newsday would be less likely to present significant regulatory hurdles, even though it operates in an adjacent area to the New York Post, said Eleanor Fox, a law professor at New York University and expert in antitrust law.

“Antitrust is generally not concerned with media concentration when there are a lot of players in the market,” Fox said. “Antitrust used to be concerned about diversity and point of view, but that hasn’t been true since the Reagan administration in 1980s.”

Of greater concern to antitrust regulators at the Department of Justice would be whether a business combination would be likely to result in higher prices, in this case for either advertisers or consumers who buy the papers, Fox said.

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