 favor. Other Regulatory Activity On May 12, 2003, the FCC commissioners were presented with a pro- posal to modify the existing rules that govern media ownership. On the surface, this does not appear to affect the technology sector per se, but in fact it potentially has a significant impact because of a blurring of the lines between the sectors. Under the terms of the proposal, ownership of broadcast rights could change dramatically. Among the changes are the following. Downloaded from Digital Engineering Library @ McGraw-Hill (www.digitalengineeringlibrary.com) Copyright © 2004 The McGraw-Hill Companies. All rights reserved. Any use is subject to the Terms of Use as given at the website. The Byzantine World of Telecom Regulation Chapter 4 FEDERAL COMMUNICATIONS The proposal plans to allow a single company to own television stations that reach as many as 45 percent of U.S. households, today capped at 35 percent. Needless to say, the major networks are in favor of eliminating the existing 35 percent cap. This decision would favor companies like News Corporation (the owner of Fox) and Viacom (the owner of CBS and UPN), which are already in violation of the 35 percent limit because of merger and acquisition activity that put them (slightly) over the top. There are some inviolable restrictions to the decision: The four major networks (CBS, NBC, ABC, and Fox) are prohibited from merging, and ownership of more than eight broadcasting stations in a single market remains prohibited. Two cross-ownership rules are under scrutiny and proposals to mod- ify them are included in the proposal. One prevents a company from owning a newspaper and a radio or television station in the same city; the other limits ownership of both radio and television stations in the same market. Under the terms of the proposal, these two rules would be combined into a single rule that eliminates most of the existing restric- tions. Cross-ownership would be allowed in large and medium-size mar- kets, but would be restricted or perhaps even banned in