FCC Approves CBS-Viacom Merger

The FCC Wednesday approved the merger of CBS and Viacom, creating a media giant of 38 television stations and 162 radio stations.

The commission granted the two companies additional time to comply with FCC ownership rules. The two companies have 12 months to resolve the issue of ownership of UPN as the commission's Dual Network Rule prohibits one company from owning two broadcast networks.

CBS and Viacom also have a year to meet the 35% national television ownership cap – the combined company's audience reach will stand above 41%. In addition, the two companies have six months to conform to local Radio-Television Cross Ownership rules in Los Angeles, Dallas/Ft. Worth, Baltimore and Sacramento.

According to one analyst, the approval bodes well for FCC approval of the AOL/Time Warner Inc. merger, an issue that is getting added attention this week in light of Time Warner's battle with ABC. "The FCC's review covered many of the same issues, primarily concentration of market power," says Mike Goodman, media analyst with Boston-based The Yankee Group. "This indicates that they might be more lenient toward the actual approval of AOL and Time Warner."

By Tom Butts