WASHINGTON — In his first major public pronouncement, Federal Communications Commission chair Michael Powell on Thursday told Congress that he will soon launch a review of a regulation preventing broadcasters from owning a station and newspaper in the same major market.
Media congloms have been waiting patiently for Powell to prove that he’ll come through on his promises to deregulate. It was widely expected that the first ownership rule to come up would be the one regarding TV stations and newspapers, since Powell opposed it while serving previously as an FCC commissioner.
Testifying before the House Telecommunications Committee, Powell said it is indeed time to determine whether the original purpose of this and other ownership rules and caps are still in the best interest of the American people.
“We will validate regulations that constrain market activity that are necessary to protect consumers, or we will eliminate them,” Powell.
Most members of the telecom subcommittee roundly praised Powell for his calculated approach during his first visit to Capitol Hill since he was named FCC topper by President Bush in January.
Rep. Edward Markey (D-Mass.), however, said that ownership rules have served a critical function in stopping monopolies from taking over the marketplace.
“You’d better be careful about all this,” Markey said.
The review of the cross-ownership reg will commence within the next month, Powell said.
The timing couldn’t be better for News Corp., whose application to acquire Chris-Craft is pending before the FCC. The purchase would give the conglom, which owns the New York Post, a second major TV station in New York.
In 1995, the FCC issued News Corp. a waiver allowing it to own a New York TV station and the Post.
Other regs eyed
Powell assured lawmakers that his administration will study other ownership regs as well, including a duopoly rule that limits the number of stations major nets can own in one market and another cross-ownership rule regulating TV stations owned by cablers.
In recent weeks, some of the heat on Powell to deregulate has been diffused by a landmark appeals court ruling striking down an FCC cap prohibiting one cabler from reaching more than 30% of the national market.
Media congloms are hopeful that this same court will soon strike down another FCC cap barring broadcasters from reaching more than 35% of the national market.
On Thursday, Powell told lawmakers that he doesn’t entirely agree with the court’s reasoning that the 30% cap was arbitrary. At the same time, it’s the FCC’s legal duty to abide by the judicial decision.
Powell wouldn’t say whether he favors repeal of the 35% cap. As long as it remains on FCC ledgers, he said, it’s the rule.
Seeks fine climb
In other testimony, Powell said Congress may well need to give the FCC greater enforcement power — i.e., the authority to raise fines, which he said are often “trivial.”
Also Thursday, the FCC proposed higher fees for some TV and radio stations.
In the top 10 markets, VHF stations could see a hike in reg fees as high as 13%, meaning a total bill of $45,000. Stations operating in markets 51 through 100 could see an increase of 8%, meaning a fee of $13,750.
Fees for radio stations could be increased 4%-25%.