Review, relax, relieve
Broadcasters lobby Congress to allow greater duopoly latitude in smaller markets
By Bill McConnell -- Broadcasting & Cable, 2/4/2001 7:00:00 PM
Two summers ago the government dropped the long-standing ban on owning two TV stations in the same market, so long as the market maintained at least eight independently operating stations. But broadcasters say the relief didn't help the stations most in need-those in small markets with too little ad revenue to support more than a handful of outlets.
Now broadcasters are mounting a push to further relax TV duopoly restrictions.
"The need to generate economic efficiencies is greatest in small markets," said David Donovan, lobbyist for the Association of Local Television Stations. "If you want quality owners in those areas, it makes no sense to prevent duopolies."
Lifting the restrictions, the argument goes, is especially important now because all stations are required to offer digital signals by May 2002 and many lower-rated stations in smaller markets can't afford to construct digital operations. "Combining physical plants of small-market TV stations will allow you to speed the DTV buildout," says Greg Schmidt, lobbyist for LIN Television. "Otherwise stations may be forced off the air. You can't artificially keep people in business."
Broadcasters recently lobbied House Commerce Committee Chairman Billy Tauzin (R-La.) on the issue. And since the duopoly restriction was initially relaxed, a steady stream of station groups has pushed the FCC unsuccessfully for further loosening, including Lin Television, Sinclair Broadcasting, Pegasus Broadcasting, Paxson Communications and Allbritton Communications.
Broadcasters haven't settled on a specific formula for new duopoly restrictions, but are floating several ideas. One would simply relax the voice test enough so that a decreasing number of independently operating stations would be required in progressively smaller markets. Another idea would allow a new duopoly category based on the number of all media outlets in a market, including cable radio and newspaper, as well as the total amount of ad dollars spent in the market.
Most of the markets affected by a change would be those smaller than the top 100, beginning with Baton Rouge, La. Although a handful of medium-sized cities have enough TV stations to permit duopoly, a surprising number of big markets have too few independent outlets (according to BIA Financial), including Detroit (ranked 9th) and Greenville, S.C. (35th) Minneapolis (13th), Baltimore (24th), Memphis (40th), Harrisburg, Pa. (46th), and Winston-Salem, N.C. (47th).
Republican lawmakers and new FCC Chairman Michael Powell have repeatedly criticized most of the FCC's ownership limits and have pledged a fight to remove them. Other restrictions under scrutiny include the 35% cap on one company's national audience reach and bans on crossownership of TV stations and local newspapers and cable systems.
The broadcast industry is still smarting from the FCC's decision, announced on William Kennard's last day as agency chairman, to reject some additional duopoly relief. The agency turned down an industry request to increase chances for forming duopolies by counting nearby stations in a voice test even when those stations' coverage areas do not overlap the signals of outlets seeking dual ownership.
"With giant superliners like AOL Time Warner cruising by, the amount of time the FCC spends analyzing voices in these small markets is amazing," Schmidt said.
Easing up on duopolies may be one of the least controversial of FCC policymakers' deregulatory efforts. The network affiliates and independent stations vehemently oppose removal of the national station ownership cap, whereas the networks themselves have made an increase in the limit a top priority. Public advocacy groups, although they want to preserve duopoly restrictions, are more concerned about attacks on the local crossownership bans.
Lawmakers are just beginning to plan legislation for the new session and haven't decided whether to push telecommunications deregulation piecemeal or in a comprehensive package. We're hoping to have a top-to-bottom review of these rules to see if the justification still exists," Tauzin aide Jessica Wallace said.
The FCC, for its part, isn't scheduled to finish its next biennial review of broadcasting until 2002, but Powell has indicted he may be willing to relax specific rules before then.
Both Powell and Commissioner Harold Furchtgott-Roth have criticized the duopoly limitation as an arbitrary number.
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