Fight looms at FCC

Adelstein warns of consumer backlash

WASHINGTON — With the Federal Communications Commission poised to radically redefine the rules governing media ownership, Democratic commissioner Jonathan Adelstein Tuesday warned against “McDonaldizing” the media, predicting that supersizing companies will result in widespread consumer heartburn.

“Once we place our order . . . we’ll all have to digest what comes our way. And the public may be about to experience a giant Maalox moment,” he said during a Media Institute-sponsored luncheon at D.C.’s Four Seasons.

With the FCC skedded to vote on the issue June 2, the opposition rhetoric has intensified this week, with critics practically pleading with FCC chairman Michael Powell to put off the decision and alter his proposal.

Not backing down

Powell, however, has shown no sign of backing down. He appears to have the support of his two GOP colleagues at the FCC, and recently rebuffed a request by Adelstein and the other Democratic commissioner, Michael Copps, to postpone the vote by a month and release the full plan to the public.

Technically the document, which has been circulating among the commissioners for more than a week, is secret, but major components have leaked out in recent days.

According to FCC sources, the plan will lift the 28-year-old ban on a company owning a broadcast station and daily newspaper in the same market, except the smallest markets. It also is expected to raise the bar limiting the national audience any one TV station owner can reach from 35% to 45%.

That limit could increase dramatically for companies that own many UHF stations, because a current rule discounts UHF viewership by half.

‘Extremist’ proposal

Adelstein spoke in apocalyptic terms about what he condemned as Powell’s “extremist proposal” Tuesday, predicting a “tsunami of mergers” that could threaten the First Amendment and democracy itself.

“We’re on the eve of the most sweeping and potentially destructive overhaul of the FCC’s media rules in the history of American broadcasting,” he said. “But I’m not sure we really know what we’re about to unleash.”

While Adelstein said he preferred to keep the national cap at 35%, he indicated he could accept 40%, a point he said some major media companies have already reached, if the FCC also abolishes the 50% discount UHF stations receive.

Backlash foreseen

After touring the country and attending several public hearings on the proposed changes to media regs, Adelstein is convinced the public has “zero interest” in allowing media companies to grow bigger. He also warned of a public backlash that could demand “more intrusive content regulation,” such as more rigid standards for broadcast decency.

Many members of the crowd represented the very companies pushing for deregulation. Throughout the speech, they shook their heads in quiet disagreement.

Richard Wiley, a partner at communications powerhouse Wiley, Rein & Fielding, could not have disagreed more with the dire picture Adelstein painted. Wiley repeated a familiar argument for lifting the ban on a company owning both a major daily newspaper and a TV station in the same market, citing studies that show local consumers receive more news after such mergers.

‘So many choices’

“There’s so many more choices available in the media today, like the Internet and cable,” he added. “Cable is a very powerful force to its own credit. We’ve got to realize that some consolidation, some growth is needed.”

Proponents of most aspects of Powell’s plans also denounced Adelstein for calling on the FCC to address a pet cause of Hollywood independent producers, writers and guilds. Adelstein said if the FCC does not address the issue on June 2, as many expect it will not, Powell should agree to take it up later this summer and issue what is called a “Notice of Proposed Rulemaking.”

The showbiz crowd wants the FCC to mandate that major nets set aside at least 25% of their programming for independently produced fare, what opponents argue is a return to the financial-syndication rules of the past.

“The fin-syn argument is so lacking in merit that it is unfathomable for any government official to be flirting with it,” said Preston Padden, Disney’s chief lobbyist in Washington. “The court was so clear in 1993 that there was no basis for these rules then. And today’s marketplace is more competitive.”

Padden argued that 85% of all shows fail and that financial risk is too high for the nets.

“Anybody who wants to take the financing risk, we’ll welcome them with open arms,” he said.

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