Senate reverses FCC

Editor and Publisher reports that the U.S. Senate has passed a resolution opposing the Federal Communication Commission's decision to ease the restrictions on media ownership.

The new FCC rules would open a "gaping loophole for more mergers of newspapers and television stations across the country," according to Sen. Byron Dorgan, sponsor of the resolution. Senator Daniel Inouye from Hawaii cited the decline of local news and investigative journalism as evidence against greater media consolidation.

According to the article, all that representative government will be for naught however, because President Bush is expected to veto the action anyways.

Commerce Secretary Carlos Gutierrez said he was "disappointed with the Senate's action" and would recommend to the president that he veto the bill.

"The FCC's approach modernizes a 30-year-old rule in a way that improves the financial viability of the newspaper industry, which faces an increasingly competitive media market," he said.

Of course, this doesn't answer one nagging question: If news is so bad, why are some folks trying to buy their way in?

That's exactly what Gatehouse Media CEO Michael Reed wants to do. Reed believes the downward valuations of the larger media players is unfairly depressing the value of smaller market dailies.

"What that means is there's a fantastic buying opportunity in that space."

In an era where everyone is decrying the loss of revenues and laying off employees, it's strange to hear about plans to buy more newspapers, but that's exactly what Reed claims to have in mind.

Of course, it sounds less strange once you realize that for the most part, small market dailies aren't losing money - they just aren't making as much as they did before the internet took classified advertising away.