WASHINGTON (AP) – Federal regulators are considering an overhaul of media ownership rules that could prompt a flurry of mergers and takeovers among companies that own newspapers and TV and radio stations.

The Federal Communications Commission will decide whether decades-old restrictions intended to promote diverse viewpoints in the media are still needed in a market changed by satellite broadcasts, cable television and the Internet.

FCC staff were preparing a proposal for delivery Monday to the five commissioners. The commissioners have until June 2, when a vote is scheduled, to consider the proposal’s recommended changes.

FCC Chairman Michael Powell and the two other Republican commissioners support easing regulations and allowing individual companies to hold a greater stake in local and national media markets.

In particular, the three Republicans support easing a restriction preventing a company from owning a newspaper and a radio or television station in the same city.

The Newspaper Association of America and media companies such as Tribune Co. and Gannett Inc. oppose that “cross-ownership” rule, saying it limits combinations that can improve the quality and quantity of news.

Consumer groups said Monday that local newspaper and broadcast markets already are highly concentrated. They said more mergers will hurt competition and stifle diversity by leaving a few huge companies in control of what people see, hear and read.

“Merging the dominant local newspaper with a major local TV station is dangerous to our democracy because it combines the key watchdogs who keep an eye on each other,” said Gene Kimmelman, public policy director for Consumers Union, which publishes Consumer Reports.

magazine.

A 1996 law requires the FCC to study ownership rules every two years, but many proposed changes have remained unfinished or were sent back to the agency after court challenges. Last year, the FCC combined reviews of a half-dozen rules into the single effort now under way.

The current ownership rules, some dating from the 1940s, also limit the number of TV and radio stations a company can own in a market. In 2001, the FCC eased a restriction that prevents mergers between TV networks by allowing the four major networks – NBC, CBS, ABC and Fox – to combine with newer networks like WB or UPN.

The FCC’s Republican majority also favors raising a cap that prevents any single company from owning TV stations that reach more than 35 percent of U.S. households. The major networks would like the cap eliminated, but analysts say the majority likely will seek a cap close to 45 percent.

Viacom Inc., which owns CBS and UPN, and News Corp., owner of Fox, already exceed the 35 percent cap because of mergers. Those companies along with NBC convinced an appeals court last year to reject the current cap.

Smaller broadcasters and network affiliates worry that a higher cap will allow the networks to gobble up more stations and limit local control of programming.

Lawmakers, musicians, academics and consumer groups have asked Powell to delay the FCC’s vote to allow more public comment. Other lawmakers, mainly Republicans, and Commerce Secretary Donald Evans have urged Powell to stay on schedule.

The FCC’s two Democrats – Michael Copps and Jonathan Adelstein – say Powell is rushing through an important process that few in the public know about. Powell has said there is no need for more public comment, and he sees no reason to delay.

Copps and Adelstein traveled around the country in recent months to get public comment on the review. Powell refused their repeated requests to have more than one public FCC hearing.

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AP-ES-05-12-03 1632EDT