U.S. government likely to keep media rules strict

By Robert MacMillan and John Poirier - Analysis

NEW YORK/WASHINGTON (Reuters) - Newspaper publishers and other struggling media companies want the U.S. government to help them survive the toughest times they have ever known, mainly by easing rules on how big they can get.

They will be lucky if they get any aid at all.

The Federal Communications Commission held meetings this week with policy experts and consumer groups to see if it should change rules that define how many people newspapers, television and radio stations can reach and that limit their size to protect free speech and allow for healthy competition.

But other more pressing concerns on Capitol Hill and in the Obama administration, and the threat of lawsuits to thwart any changes to the rules, are muffling enthusiasm.

"Nobody cares," said Jonathan Knee, a media banker at investment firm Evercore Partners Inc (EVR.N). "Nobody is willing to spend political capital over it."

As advertising sales shrink and more people get information and entertainment online, media companies want the government to let them operate more freely. Sentiment also is growing that the Internet and other technology advances have rendered media regulation debates obsolete, media industry observers say.

The FCC rules have come up for review before, but the stakes are higher now, with broadcasters and publishers like Tribune Co (TRBCQ.PK) going bankrupt.

But lawmakers and the White House are dealing with multiple problems that loom larger, from health care and climate change to financial industry overhaul, so little might get done.