McCain bill raises O&O cap to 50%

Ban on owning TV stations and newspapers proposed

WASHINGTON — Networks would be able to increase their owned-and-operated station coverage to 50% of the country under a bill introduced Monday by Senate Commerce Committee Chairman John McCain (R-Ariz.).

The measure would give the major webs, which now face a 35% national audience collar, significant room to grow. In addition, the bill would eliminate the ban on owning TV stations and newspapers in the same market.

Although a similar bill has been introduced in the House, broadcast lobbyists are not optimistic that Congress will act on the legislation this year. Even if the House and Senate did vote to relax ownership limits, the Clinton administration has indicated in the past that it would veto similar measures.

One broadcast lobbyist called the bill a “place marker” which may provide a basis for debate in the next presidential administration.

The networks insist that the business of creating programming for a distribution system that it does not own is no longer profitable. All the major webs have told Congress and the FCC that they need to own more stations in order to stay in business in the 21st century.

The combined stations of CBS and Viacom would give the soon-to-be-merged companies’ combined stations a 41% national audience reach. Unless the law is changed in time, which is highly unlikely, CBS and Viacom will be spinning off outlets to meet the 35% cap.

Today ABC, CBS and Fox will release a study conducted by former FCC chief economist Michael Katz which will show that the current model of the network-affiliate business relations cannot survive competition from cable where one company can own dozens of channels which are distributed to every market in the United States.

On Wednesday, Fox topper Peter Chernin will testify on the importance of relaxing ownership limits during testimony in front of the House Telecommunications Subcommittee.