CQ TODAY – TECHNOLOGY & COMMUNICATIONS
June 19, 2003 – 1:51 p.m.

Commerce Committee Wastes No Time Voting to Reverse Media Ownership Rule

By Art Brodsky, CQ Staff

Just 17 days after the Federal Communications Commission (FCC) ruled that media companies could expand their ownership of television stations, the Senate Commerce, Science and Transportation Committee has approved legislation to overturn the decision.

Passage by the full Senate is not assured, however, and the House has no similar action in mind. In fact, House Energy and Commerce Committee Chairman Billy Tauzin, R-La., has said he opposes the Senate bill and is unlikely to have his panel consider it.

The Senate committee's rebuke came so rapidly that the FCC has not even had time to issue the formal text of its June 2 ruling — a 3-2 decision by the commission's Republican majority. The two Democrats on the commission, Michael J. Copps and Jonathan S. Adelstein, said Thursday the commission should stay its ruling until Congress completes its deliberations on the ownership issues.

A spokesman for FCC Chairman Michael K. Powell had no comment on the committee vote.

The FCC decided to liberalize ownership rules so that any one media company could own television outlets that reach up to 45 percent of the national audience.

The current 35 percent cap was enacted in the 1996 telecommunications law (PL 104-104).

In addition, the commission lifted rules barring one company from owning a TV station and a newspaper in the same market — known as "cross-ownership." The FCC left in place caps on the ownership of large numbers of radio stations by one owner, but its ruling changed the definition of radio markets so that companies such as Clear Channel Communications Inc., the largest radio chain in the country, might have to sell some of their stations.

Members of the Senate committee from both parties roundly criticized the commission's actions.

"What the FCC did is absolutely wrong," said Republican Kay Bailey Hutchison of Texas. She pointed out that in Dallas, Belo Corp., one of the nation's largest media companies, owns the highly rated ABC TV affiliate WFAA as well as the Dallas Morning News and a Texas cable news channel. She said the FCC should "start over."

Sen. Ted Stevens, R-Alaska, had introduced the legislation (S 1046) on May 13 as details of the FCC deliberations on the media ownership issue began to emerge.

His bill has attracted 31 cosponsors, including the Commerce Committee's ranking Democrat, Ernest F. Hollings of South Carolina, and was approved by voice vote.

Hollings noted that media moguls Ted Turner and Barry Diller and ex-CBS anchorman Walter Cronkite said the FCC decision could lead to more concentration.

Costly Amendments

Though the committee's bipartisan response to the FCC action might give the bill momentum, two amendments the committee adopted — one by a close vote — has cost it important support from the National Association of Broadcasters.

The committee adopted by voice vote an amendment by Byron L. Dorgan, D-N.D., backed by Hutchison and Olympia J. Snowe, R-Maine, that would reverse the FCC's new cross-ownership rules.

Dorgan said "competition, localism and diversity" of media were threatened by the FCC decision.

Hutchison said the FCC had not done "what Congress intended."

The most controversial amendment was offered by John McCain, R-Ariz., and would reverse the FCC ruling redefining radio markets, a change that could require media companies that own many radio stations to sell some of their holdings.

McCain noted that the one item on which all five FCC commissioners agreed is that some radio markets have been hurt by consolidation.

John B. Breaux, D-La., argued that all the stations had been acquired legally, under current FCC rules. McCain's response was swift: "If there's a problem, there's a problem."

McCain's amendment was adopted, 12-11.

Local Regulation

The committee provided a potentially new area of authority for state regulators by adopting an amendment from Stevens that would put decisions about newspaper and television cross-ownership in the 60 smallest markets largely in the hands of local public utility regulators.

Such public utility commissions now generally exercise state authority over telecommunications, electricity and other utility services.

The Stevens amendment was adopted, 14-9, as a second-degree amendment to Dorgan's.

The panel defeated by voice vote a number of amendments offered by Breaux, backed by broadcasters, to try to adjust the 35 percent cap. One would have set the limit at 5 percent of prime time viewership; another would have allowed the FCC's 45 percent limit if the commission found that a network-owned station provided better local news and community programming than a non-network-owned station.

An amendment by McCain to give the FCC more flexibility in ownership issues was adopted by voice vote.

The committee also approved several other bills Thursday, including one aimed at junk e-mail known as "spam." Discussion of media issues will continue June 26 when the panel marks up an FCC authorization bill (S 1264).