Day in court to cap lobbying over ownership

WASHINGTON — For the next wave of media consolidation, D-Day is finally drawing near.

On Sept. 7, three of the Big Four and AOL Time Warner will wrap up months of preparation and urge a federal appeals court to tear down crucial roadblocks on the way to further growth.

The Eye, Fox and Peacock want the appellate panel to strike down a Federal Communications Commission cap prohibiting a broadcaster from reaching more than 35% of the national audience. Nets say the regulation is arbitrary and violates their First Amendment rights.

Independent station groups, backed by the National Assn. of Broadcasters, will argue that the cap is their only armor against aggressive attempts by networks to buy up more and more stations, thus dominating the airwaves in every way possible.

Come its turn to make oral arguments, AOL Time Warner will ask the three appellate judges to overturn another FCC ownership reg that essentially blocks a cabler from owning a TV station in the same market. Conglom also is expected to invoke the First Amendment.

Consumer advocates aren’t feeling too good about the hearing, predicting that the big guns will ultimately prevail. (After digesting oral arguments, appeals court could rule as early as this fall.)

Several months ago, the very same court struck down the FCC’s cable ownership cap, which stopped a cabler from reaching more than 30% of the national audience.

“I fear this is the beginning of dismantling the remaining rules which have promoted greater diversity of ownership and content,” says Center for Digital Democracy exec director Jeffrey Chester.

“What companies like AOL are saying is that their First Amendment rights trump everyone else’s.”

Arguing against the nets and AOL Time Warner will be the FCC itself, as well as the NAB and the Network Affiliated Stations Alliance (NASA).

The fierce battle over the cap has been a defining moment for the broadcast biz, fanning further animosity between nets and affils.

It has fractured the NAB, with CBS, Fox and NBC all resigning from the lobbying org after the NAB sided with smaller station groups. (The Alphabet is the only one of the Big Four to still carry an NAB membership card.)

When making its pitch, the FCC will state that there is a solid record showing why retention of the ownership rules is important in ensuring diversity.

Chester and other consumer advocates worry that FCC topper Michael Powell won’t go the extra mile in the event that the court strikes down the 35% cap, but gives the FCC the option of setting the cap at a new level, such as 50%.

Powell has been an outspoken advocate of deregulation.

But Sen. Ernest Hollings (D-S.C.), chair of the powerful Senate Commerce Committee, could pose problems for the Republican FCC topper. The politico has let it be known that he wants the remaining ownership rules left on the books, period.

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