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FCC’s new chair toes Clinton line

WASHINGTON — Just one hour after he was sworn in as chairman of the Federal Communications Commission, William Kennard announced Monday that he will continue the Clinton administration’s campaign to curb liquor ads on TV and to discourage further concentration in the broadcast industry.

In his first press conference as the agency’s topper, Kennard made it clear that when it comes to liquor ads, he is on the wagon. “I’ve talked to people on both sides of the issue, and not one person has told me that more distilled liquor advertising is a good thing for the country.”

Kennard also said Monday that he is worried about the growing ownership concentration in the industry. “As a general principal I am concerned about the rapid pace of consolidation in the broadcast marketplace. I believe the pace of consolidation was probably more dramatic than anyone anticipated,” he said.

Broadcast lobbyists are increasingly pessimistic about any further ownership deregulation emerging from the FCC. One broadcast rep said the issue is “dead.”

Kennard has a particular interest in media concentration as the FCC’s first African-American chairman. Less than 3% of the nation’s broadcast properties are minority-owned. Civil rights activists have argued that it is difficult, if not impossible, for minorities to compete for ownership in an environment that places no restrictions on the ability of large corporations to swallow up media properties.

Congress members frustrated

And it’s not just Kennard who is warning broadcast lobbyists that further deregulation is not in the cards. Many members of Congress are frustrated that the telephone and cable industries have failed to make good on their promise to lower consumers’ rates and are raising questions about deregulatory provisions of the Telecommunications Act of 1996. During debate over the legislation, lobbyists argued that deregulation would lead to more competition and lower rates for consumers.

The new chairman said it remains to be seen what the FCC can do about the ads. “The real question is … is there anything that we in government can do about it?” Kennard, who until this week was the FCC’s general counsel, acknowledged there were some “difficult legal and constitutional problems” in placing restrictions on hard liquor ads.

Despite a campaign by Seagram Americas directed at winning acceptance for their paid messages, most TV stations have steered away from the ads for political reasons. The commercials are particularly unpopular in Washington, where everyone from President Clinton to former FCC chairman Reed Hundt suggested that abstaining from the ads could save lives.

The liquor industry argues that any restriction on hard liquor should also apply to beer and wine. Broadcasters, including every major network, hope that their voluntary boycott of hard liquor ads will discourage efforts to regulate. The broadcasters’ major concern is that any restrictions on hard liquor advertising could lead to curbs on the $600 million beer marketplace.

Proposal fell in 2-2 deadlock

When Hundt tried to conduct an inquiry into hard liquor adverting last month, his proposal fell in a 2-2 deadlock. Kennard did not suggest Monday he had the support of colleagues, but he made it clear that he is going to take another run at an inquiry. “It’s too important an issue for America to put it in the closet and say that government can’t do anything about it.”

Joining Kennard on his first day at work as a voting member of the FCC are three other new commissioners: Gloria Tristani, Harold Furchtgott-Roth and Michael Powell. Unlike Kennard, the three are new to the FCC and are spending the next week hiring staffers and studying pending matters.

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