• by John Gaffney , October 3, 2002

A leading New York-based media consolidation specialist says agency planners and buyers should be concerned about the direction the FCC is taking on new ownership rules.

Owen Kurtin, chairman of the Information Technology and Communication Group at legal firm Salans, says the FCC has already taken most of the barriers to cross-ownership of local media, and will most likely remove any remaining barriers. This will lead, he says, to new round of mega-deals and media consolidation. That means fewer media choices for the consumer, and less leverage for buyers in media campaigns.

“From an ad agency perspective I would think more consolidation of media will mean fewer media outlets and more power for the media owners. The FCC under Michael Powell is much more interested in the free market. Under his leadership, the commission has replaced the need for regulation with a need for competition.”

But that competition will eventually be limited to the media conglomerates that have the money to buy up more media outlets. The FCCs slew of reports that were issued Wednesday, shows the agency leaning toward relaxing rules that restrain TV networks from buying local newspapers (or vice versa) and rules that restrain media companies from owning more than more than one local station. The reports have been criticized for being light on consumer and ad business input.

“The re is no compelling consumer-based argument for dismantling the media ownership rules,” Kurtin said.

The next round of media consolidation, if the FCC changes media ownership rules, could take place at a grand scale. In theory, a company such as Viacom could look at national and local newspaper company like The New York Times ass an acquisition. Kurtin said the talk of merging news operations at CNN and ABC, is the result of media ownership rules regarding cross-ownership of broadcast and cable operation that were relaxed in February of this year.