Sound and Senate fury
Lowest unit-rate revision passes, but long-term fate seen highly questionable
By Paige Albiniak -- Broadcasting & Cable, 3/25/2001 7:00:00 PM
The Senate spoke loudly and rattled a small stick at broadcasters last week, and while there was the requisite yelping from the National Association of Broadcasters, there may have also been a realization: This too, shall probably (not) pass.
Around Washington, broadcasters have always had clout and yet recently, even some stalwart defenders were wondering if the NAB had layered on a few too many coats of Teflon. To some, broadcasters are now getting much better than they're giving.
At least that was the tone in the Senate, where Robert Torricelli (D-N.J.) led the charge to adopt an amendment that would require broadcast, cable and satellite TV outlets to give steep discounts to politicians during their campaigns (see sidebar, page 7). The measure would hit local broadcasters the hardest, because they received most of the nearly $800 million the politicians spent on TV ads in 2000.
"Television stations have developed a dependency on, indeed an addiction to, political advertising that is not in the public interest," Torricelli said in his impassioned argument for the measure.
The provision, passed by a surprisingly large margin, 70-30, now awaits approval as part of a larger campaign finance reform bill sponsored by Sens. John McCain (R-Ariz.), Russell Feingold (D-Wis.) and Thad Cochran (R-Miss.). It aims to get unlimited donations to political parties, known as "soft money," out of the election process.
Legislators last week used terms like "killing fields," "rip off," and "price gouging" in arguing for the Torricelli amendment, so at least on the rhetorical field, the Senate action suggests broadcasters may be losing their touch on Capitol Hill. To be sure, some members of Congress may indeed be growing weary of broadcasters constantly asking for help with one hand and pocketing politicians' cash with another.
"When the election comes along, this industry wraps itself in the public interest and then spikes up ad rates, profiteering on politics," said Paul Taylor, a leader in the movement to get broadcasters to give free air time to politicians. "I think they are in big trouble on this issue."
Don't bet on it.
Back in their offices, broadcast lobbyists were barely breaking a sweat. They know other forces are in play-the desire of Sen. Mitch McConnell (R-Ky.) to defeat campaign finance reform altogether, for one-and that any number of amendments such as Torricelli's could be the poison pill that kills the reform package.
Even if McCain-Feingold-Cochran somehow gets past McConnell and other Republican opponents, it still would have to wend its way through the House of Representatives, and that's where broadcasters can likely breathe easier. There's a broadcaster in almost every member's district, and no congressman wants to incur the wrath of the folks in the home district who carry the really big (transmitting) sticks.
Andrew Schwartzman, president of the nonprofit Washington law firm, Media Access Project, noted, "Broadcasters get their clout from lawmakers' fear."
Unlike the Senate's McCain, House Energy and Commerce Committee Chairman Billy Tauzin (R-La.), opposes the Torricelli amendment on principle. "Philosophically, he is against our government mandating special deals for members of Congress," said Tauzin spokesman Ken Johnson. "Why should a politician pay a lower rate for an advertisement than the local Ford dealer?"
If a bill did manage to get through the House, it then would have to go through a conference meeting between both houses. After all that negotiating, chances of passage for any bill broadcasters oppose is virtually nil.
Broadcasters' opponents-and McCain chief among them-don't intend to drop the issue. After the campaign finance reform debate is over, McCain plans to introduce a bill that would require broadcasters to pay hundreds of millions of dollars in lease fees for sitting on the analog spectrum and then use those fees to fund airtime for candidates. That bill is unlikely to pass, but just by introducing it, McCain will keep the issue on a front burner.
Of course, broadcasters have reason to believe they can avoid serious new obligations or costs as a result of campaign finance reform. They've dodged many governmental bullets so far, and gotten some sweetheart treatment along the way.
Broadcasters still labor under government regulations that limit their size and what they put on the air. Some rules are explicit, some implicit, but for the past quarter century or so, the obligations have gradually diminished. At the same time broadcasters have gotten free use of spectrum and must-carry aid (and they want lots more), the NAB has also managed to avoid spectrum or transfer fees and free time for political discourse during elections.
But now, maybe it is a trickier terrain. With broadcasters' digital transition at stake, they have real need for government intervention. That means they can't blow off people like McCain and Torricelli who want something in return for government favors-giving broadcasters a fat six megahertz chunk of spectrum for digital television, for starters.
"Broadcasters got this huge giveaway and the broadcasters aren't doing a very impressive job of going along with the joke," said Schwartzman. "They should at least look like they are doing something. Some of the members who understand this stuff are a little pissed."
Not only does having the spectrum make broadcasters a target for some politicians, it also makes them a target for others who want the spectrum-namely the wireless industry.
"That's a real threat," said one broadcast industry source. "Having the spectrum poses a risk to broadcasters and so does holding onto it. Now there is a real opponent who wants spectrum, has plans for it and has the muscle to flex to get it.
"In the past we had a fight against people with arrows; now they have tanks."
So, while broadcasters try to fend off the oncoming wireless industry-or at least profit from wireless' desire to get broadcasters' analog spectrum-they also are trying to convince the government to help them make the transition to digital (see sidebar, page TKTKTK). And they are trying to do all of this while keeping such proposals as spectrum fees and free or reduced airtime at bay.
And it doesn't end with digital TV.
Broadcasters also want to rebroadcast their radio signals over the Internet without having to pay royalty fees to record producers and music publishers.
They want deregulation in some parts of the TV industry: more duopolies in more markets and no crossownership ban on TV stations and newspapers, and maintenance of regulation in other parts; keeping the 35% national ownership cap on audience share.
There's no reason for broadcasters to panic. For now, observers say broadcasters still have a lot of good will on Capitol Hill and that members respect the relationship they have with their local broadcaster. "They've got a lot of good feeling up there and they win a lot of matters," said Washington attorney and former FCC Chairman Dick Wiley.
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