FCC Likely to Delay Vote on Fox Proposal : TV: A plan to force Murdoch to restructure the stations to comply with foreign-ownership laws has come under fire.

Stung by criticism from inside and outside the agency, the Federal Communications Commission will probably delay a vote on a controversial staff proposal that would force media mogul Rupert Murdoch to undertake a costly restructuring of his Fox TV stations to comply with foreign-ownership laws.

The five FCC commissioners were scheduled to vote Thursday on a proposal by the agency’s mass-media bureau that would require Murdoch’s Australian holding company, News Corp., to reduce to 25% its current 99% equity interest in eight stations that make up part of the Fox television network. Murdoch would be given three months to carry out the restructuring.

But the plan has stirred a storm of criticism, even though FCC Chairman Reed Hundt has considered allowing a longer restructuring period to ease the financial burden on Murdoch and to win more FCC support for the proposal. Commission sources said a vote is thus likely to be put off.

“My feeling is that if they (News Corp.) didn’t reveal their ownership interest, someone here didn’t ask the right question,” said one commissioner opposed to the staff recommendation. Fox’s ownership structure was cleared by the FCC when News Corp. bought the stations in 1985, but the agency reopened the issue in 1993 amid complaints by the National Assn. for the Advancement of Colored People and later NBC.

The latest stalemate at the agency comes after a key lawmaker broke Congress’ traditional silence on FCC investigations and criticized the staff proposal.

“This is something that had already been approved by the FCC,” Rep. Jack Fields (R.-Tex.), chairman of the House Telecommunications and Finance subcommittee, has said. “It seems to me that if there is a problem, it is with the agency, not Fox.”

The FCC has broad discretion to waive its rules on foreign ownership, and it could choose to allow a greater-than-25% equity interest in the eight TV stations even if it stuck to a finding that the stations are controlled by an Australian company rather than by Murdoch himself, who is a U.S. citizen. The agency could also impose a fine, although the amounts of such levies are severely limited by law.

Even in the face of an adverse FCC ruling, Murdoch, who is chairman of News Corp., could retain full control of the stations by changing the ownership structure so that he personally--or another American investor--would be the primary owner rather than News Corp. But such a change could produce a tax bill of more than $100 million, according to industry sources.

Because the exact tax impact is uncertain, some FCC commissioners have argued that the agency should determine precisely what it would be before voting.

The FCC allowed Murdoch to acquire six big-city television stations in 1985 to launch the Fox network, which airs shows such as “The Simpsons” and “Melrose Place.” But opponents of Fox have complained for nearly two years that the company misled officials by not disclosing that News Corp. owns almost all of the equity in the Fox TV stations, even though Murdoch controls a majority of the voting stock in News Corp. Their dogged complaints prompted the FCC to undertake a review of Fox.