De-reg roadblock

Senate panel guts FCC ownership decree

WASHINGTON — Stinging the big media biz, the Senate Commerce Committee voted Thursday to send the FCC back to the drawing board on its ownership deregulation ruling.

The powerful Senate panel Thursday voted to gut major portions of the broadcast rules rewrite — a wholesale rejection of the FCC’s June 2 decision to relax limits on major media companies’ ability to gobble up more outlets.

Chances of the legislation passing the full Congress appear slim, but no one is relishing the battle ahead to make sure that’s the case.

“It was worse than anyone thought it was going to be,” said a lobbyist for one of the entertainment congloms. NBC, Viacom, and News Corp.  have led the battle to relax some of the key FCC rules.

The commerce committee restored the 35% cap on the percentage of TV households one company can serve (the FCC raised it to 45%), as well as the ban on one company owning a major newspaper and TV station in most markets. An effort by Sen. John McCain (R-Ariz.) to force radio giants such as Clear Channel to sell off some of its existing properties also passed, by just one vote.

In a particularly personal blow to Fox and CBS, both of which currerntly surpass the 35% limit, the companies would be forced to sell off enough stations to fall below the cap within a year of the bill’s enactment. Fox and CBS declined official comment on the Commerce Committee vote.

The Senate panel left intact one change that would allow companies to own multiple media outlets — minus newspapers — in one market.

NAB fingered

Several blamed the results of the day on the National Assn. of Broadcasters, which has continued to oppose lifting the 35% cap and allowing the big broadcasting guns to buy up more TV stations.

“Today’s vote shows that the cynical and wrongheaded NAB, driven by a few newspaper-owned affiliates, has produced a disaster for all broadcasters,” Walt Disney lobbyist Preston Padden said.

The Disney-owned ABC pulled out of the NAB earlier this week over frayed tensions between nets and affiliates and stations owned by other major companies such as Cox Communications, during the media ownership debate.

While NAB prexy-CEO Eddie Fritts was pleased that the Senate panel returned the national cap to the 35% mark, he wasn’t so happy with other portions of the legislation.

“The bill also adopts provisions that reinstate the newspaper-broadcast cross-ownership ban and require radio companies to divest legally acquired stations. Consequently, NAB will strongly oppose this legislation,” Fritts said.

The NAB has fought for years to overturn the newspaper cross-ownership ban.

House action doubtful

After the vote, Rep. Billy Tauzin (R-La.), who chairs the House Commerce panel, repeated his vow to block the bill on that side of the Capitol.

“We have absolutely no intention of taking up the Senate bill,” Tauzin spokesman Ken Johnson said Thursday. “Unfortunately, this has become a political soap opera and given the chance, Chairman Tauzin intends to cancel its run.”

Sen. Byron Dorgan (D-N.D.) authored the language to restore the ban on companies owning both a newspaper and TV station in the same market. He urged swift action by the full Senate and repeated his promise to push ahead on another front to roll back the FCC rules changes, invoking the Congressional Review Act which would allow Congress to, in effect, veto the FCC’s June 2 decision.

“This is an enormous rebuke to the FCC,” Gene Kimmelman, head of the Consumers’ Union, said after the final vote. “Before the ink is dry on the FCC order, (Senators are) rewriting every aspect of the order. This ought to be a wake up call over there.”

Kimmelman, along with a wide array of activist groups and watchdog orgs ranging from the National Rifle Association to the National Organization for Women, crusaded against the FCC Chairman Michael Powell’s drive to ease the rules, predicting they would lead to a rash of new mergers and further media consolidation.

Language by Sen. Barbara Boxer (D-Calif.) that would force the FCC to hold at least five public hearings in different areas around the country during any media ownership review also passed Thursday.

Dereg defenders

Powell and the networks, the major beneficiaries of the FCC’s sweeping changes, had a group of five GOP defenders, as well as Sen. John Breaux (D-La.).

“More is being made of this than is reflected on my TV set,” said Sen. Gordon Smith (R-Ore.), arguing that the plethora of cable channels obviates the need for regulation against media monopolies.

After a long debate, Sen. Ted Stevens (R-Alaska) convinced a majority of his colleagues to make an exception to the cross-ownership ban in rural areas. His effort would allow a state public utility commission to recommend that the FCC give a waiver and allow one company to own both a newspaper and TV or radio station if it would enhance local news, promote financial stability or promote the public interest.

In respect to radio, the panel voted 12 to 11 to take a step further the FCC cap on the amount of radio companies one entity can own. The measure would force any company that exceeds the current cap to sell off stations within a year of the bill’s passage to come into compliance. Usually, Congress allows businesses to keep what they already have when new laws are written.

The future of the Senate’s actions is far from certain. With Tauzin impeding any legislation on the House side, Stevens and Sens. Fritz Hollings (D-S.C.), two influential members who sit on both the Commerce and the Appropriations committees, have an ace up their sleeves. They could decide to add language to a spending bill that would prohibit the FCC from spending any money to act on the 45 percent cap for one year.

“Senators are creative folks. We don’t expect them to take no for an answer,” Tauzin spokesman Johnson said. “But we have a few tricks of our own.”

(Pamela McClintock in New York contributed to this report.)