Ready, Aim, Re-Reg

The battle to reverse the FCC's dereg initiative opened on new fronts last week. While network GMs stormed Capitol Hill to show the flag, legislators elsewhere were voting to roll back the gains their network parents had made in the FCC's June 2 decision lifting the ownership cap to 45%.

It got messy—nasty enough that the White House weighed in with veto threats while a group of Senators marshaled their forces for a veto of their own.

Despite lobbying by House Commerce Committee Chairman Billy Tauzin (R-La.), a dereg defender, Appropriations Committee members last week voted 40-25 to reinstate the 35% cap on one company's TV-household reach, reversing one of the FCC's major deregulatory thrusts.

Faced with a growing re-regulation movement on Capitol Hill, White House aides were using the "V" word. "Members of Congress have been told that, if anti-deregulation legislation succeeds, the president's senior advisors will recommend a veto," said a White House spokeswoman.

The White House won't say when or whether President Bush is likely to take that advice, but a source with ties to the administration said it isn't his style to weigh in on a legislative battle in its early stages. "He's inclined to let them fight it out and then deal with it when it gets to his desk."

Last week's vote by the Appropriations Committee endorsed a back-door approach to re-regulating the media. Tauzin's panel typically would have jurisdiction over media regulation.

That move is a clear indication of the growing strength of the forces for rolling back new ownership rules imposed by the FCC. Recognizing the threat, an aide to Tauzin said it was time for the president to strongly condemn the re-regulation effort and announce an intention to veto any legislation that would overrule the FCC.

"The only one with the juice to pull the plug is the president," said Tauzin aide Ken Johnson.

In the meantime, the bipartisan effort to reinstate the cap, and possibly some other limits, is branching out.

The Senate Appropriations Committee is likely to tack some re-regulation amendments to FCC funding legislation. In addition, last week Sens. Byron Dorgan, Trent Lott and Russ Feingold unveiled their petition for a rarely used "legislative veto." The veto would allow Congress to nullify the FCC's June 2 decision to raise the cap to 45%, remove the ban on local broadcast/newspaper crossownership in all but the smallest markets, allow TV duopolies in smaller markets, and permit triopolies in the largest markets.

And the Senate Commerce Committee has approved two bills that, combined, would reinstate the 35% cap, renew the newspaper-crossownership ban, force radio-station divestitures in some small markets, and require some public-interest obligations.

The Appropriations route is considered the most likely because it doesn't have to pass Tauzin's committee and, so far, contains fewer regulatory provisions that could draw an array of enemies. "The Senate overreached," House Appropriations Committee ranking member David Obey (D-Wis.) said last week as he persuaded colleagues not to add other measures besides the 35% cap.

Johnson predicted that House leaders will now take up the fight to preserve the FCC's changes when legislation moves to a vote by the full House. "This is far from over," he said. "The leadership recognizes that this was more about settling old scores with network coverage than about setting a sound telecommunications policy for America."

As the House Appropriations Committee was voting to block big station groups from buying more stations, 70-plus general managers from network O&Os made the rounds, visiting as many as 160 legislators to prevent the 35%-rollback legislation from moving further. The station executives said they made headway with convincing members not on the Appropriations Committee.

The GMs are trying to make the argument that network-owned stations, which want to keep the new 45% cap, are just as committed to localism as affiliates pushing for the bill to push it back to 35% (which would put Fox and CBS above the limit).

As one example of local programming, KEYE-TV Austin, Texas, General Manager Gary Schneider said that, in May, his CBS O&O aired a special about depression, the latest of the station's monthly call-in shows. Local producers picked the topic in part, he said, because Austin has a huge supply of unemployed recent college graduates from the University of Texas, thanks to the Internet bust and bad economy. "We're free to do things relevant to our market," he said.

Schneider and other O&O managers have their work cut out for them if last week's Appropriations Committee debate is any indication. The decisive vote in favor of reining in the nets came after impassioned bipartisan attacks on what lawmakers said was a decline in localism and a rise in sleazy programming, particularly on the nets (see box).

The amendment—to an FCC-funding bill—was sponsored by Rep. David Obey (D-Wis.), the committee's ranking Democrat. If the 45% cap is allowed to stand, Obey said, "We're in danger of shutting off the blood supply of democracy and we are threatening local community standards."

He would prefer rolling back some of the FCC's other June 2 deregulatory moves. "If I had my way, I'd repeal it all, but we have to tackle it one piece at a time."

The vote was a victory for the Network Affiliated Stations Alliance, which backed the rollback, and a defeat for the major networks. It was something of both for the National Association of Broadcasters, which wants the clean 35% rollback Obey envisions but withdrew its support for legislation, fearing it would eventually be loaded down with other re-regulatory provisions.

The vote marks "the beginning of a long and torturous process," said NAB spokesman Dennis Wharton. "Given the actions already taken in the Senate, our concern remains that it is unlikely, if not impossible, to limit Congressional re-regulation of broadcasting to a 35% rollback."

But NASA Chairman and Post-Newsweek Stations President Alan Frank said the committee's defeat of another amendment that would have reinstated the newspaper-crossownership ban demonstrates that lawmakers can be disciplined enough to keep legislation free of the extra provisions broadcasters oppose. "We look forward to working with the House and Senate members to keep the 35% cap legislation clean and focused on preserving localism," he said.

The split between NAB and NASA's 600 stations, nearly all of which belong to the larger trade group, is sending a mixed message to lawmakers on what affiliate stations think is most important: reining in the nets or preserving crossownership and other regulatory gains.

Some NAB loyalists charge that NASA's leaders, particularly Cox Broadcasting and Post-Newsweek Stations, are motivated by what's best for the cable interests of their parent companies rather than what's best for broadcasting. They point to recent appeals by Cox Communications and Washington Post Co. officials to weaken networks' leverage of cable-retransmission consent negotiations as evidence of their "true" interests.

"It's about time the NAB's policies stopped being controlled by the cable agenda," said one backer of the group's decision to fight against a 35% cap rollback.