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The Federal Communications Commission’s proposed plan to loosen federal rules restricting media industry mergers could have dire effects, new commissioner Jonathan Adelstein warned in his first public address. “The FCC must proceed very cautiously because if we permit further media consolidation and it turns out to be a mistake, we will find it difficult, if not impossible, to put the toothpaste back in the tube,” he told attendees Monday at a policy summit at Georgetown University sponsored by the Future of Music Coalition, a Washington, D.C.-based advocacy group. The FCC is widely expected to relax caps on cross-ownership of media assets, which many observers believe would spur radio, print and television company mergers. Among the rules under review, the FCC will examine restrictions on media companies owning a newspaper and broadcast outlet in the same market and on owning TV stations that reach more than 35 percent of the national viewing audience. The commission also is expected to take steps to ease radio industry consolidation. According to existing FCC rules, in markets where there are 45 or more radio stations, one company can own or control up to eight stations, only five of which may be AM or FM broadcasters. Similar restrictions apply to markets with fewer than 45 radio stations. In his speech, Adelstein said that further radio station consolidation likely would reduce programming diversity, which the FCC has pledged to uphold. He also criticized an agency study issued this fall that challenged the view that mergers would diminish the variety of radio formats. Many stations, regardless of their format, offer the same songs and other content, which suggest diversity is narrowing, he said. “Shania Twain, for example, may show up on a Top 40 or a country and western station, not to mention any host of adult contemporary formats,” Adelstein said. Adelstein added, however, that some radio mergers can benefit consumers because they produce economies of scale that lead to the introduction of new services. The FCC’s media bureau has commissioned 12 studies as part of its biannual review of its broadcast ownership rules. The reports explore how consumers use the media and how industry consolidation affects programming diversity and competition. Adelstein cited the Telecommunications Act of 1996 as a catalyst for consolidation, noting that it eliminated a rule restricting how many radio stations a single company can own nationwide. For example, in 1996 the two largest radio companies owned fewer than 65 radio stations each. In 2003, the largest radio company, Clear Channel Communications Inc. in San Antonio, owns 1,200 stations. Adelstein, a longtime aide to Senate Democratic Leader Tom Daschle, D-S.D., was sworn in at the FCC last month. Copyright �2003 TDD, LLC. All rights reserved.

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