D.C. Heat Freezes Market

If the Federal Register makes good on plans to publish the FCC's controversial June 2 ownership changes tomorrow, industry trade groups, public advocates and company lawyers can pencil in Sept. 4 as the effective day of the rules, but that pencil better have a big eraser.

The publication of the relaxed rules also triggers a countdown to a spate of lawsuits and petitions for commission reconsideration, not to mention various legislative efforts attacking the rules, that should keep broadcast dealmakers cooling their heals well into the fall.

For anyone looking for guidance on what they can and cannot own going forward, the watchwords are: Buyer beware. "Any station owner contemplating buying something else should keep that [uncertainty] in mind until Congress disposes of this," advised one congressional aide last week.

Last week, the National Association of Broadcasters was the first to announce its plans. The industry group's joint board voted to take the FCC to court to loosen duopoly limits even more than the agency already has. The FCC let more owners in smaller markets operate paired TV stations, but many broadcasters say it didn't go far enough.

NAB also will take the lead in a challenge to a change in radio-market measurement that could reduce the size of radio clusters permitted in some smaller markets.

The Network Affiliated Stations Alliance, which wants to keep the broadcast nets from buying more stations, agreed to take the lead in a suit attacking the FCC decision to lift the national TV-ownership cap to 45% of TV households.

The networks weren't ready to reveal their plans last week. Fox and CBS, however, are the only station groups now exceeding the 35% cap.

Public-advocacy groups are still mulling their options but are likely to divide the duties, with some going to court and others asking for technical clarifications of the FCC's changes. All are expected to lobby hard for legislative rollbacks. "There are likely to be requests for reconsideration and appeals by different groups," said Media Access Project President Andrew Schwartzman.

Generally, parties don't file both petitions for reconsideration and court appeals because judges won't go forward with a case when the complainant has a related proceeding pending at the commission.

While the FCC and court reviews are being teed up, Congress is going forward with several legislative options to rewrite the commission's rules.

The most likely to pass is a House appropriations bill containing an amendment that would reinstate the 35% cap. The measure has wide support in the House, despite the opposition of GOP leaders. The Senate is expected to pass similar legislation in October.

The White House has threatened to veto the measure and is trying to line up enough lawmakers sustain a veto; one-third of either the House or Senate would be sufficient. With those commitments, House Republican chiefs would have more power to strike the broadcast-cap provision from the bill when House and Senate negotiators meet to resolve differences between their two versions.

The Senate Commerce Committee has approved broader legislation that also would reinstate the ban on local broadcast/newspaper crossownership and force roughly 200 radio-station divestitures across the country. Even if that legislation passes the Senate, there is little chance House leaders would let a companion bill get a floor vote.

Sen. Byron Dorgan (D-N.D.) said that he will bring his "legislative veto," which would nullify the FCC's rule changes, to the Senate floor in September. Thirty-five senators have signed on so far, he said last week.

There's little chance that the House would follow suit because, unlike the Senate veto, there's no option for bringing the measure to a full vote if the leadership is opposed. The veto is still valuable because it will give the full Senate a chance to express its displeasure with media deregulation.

"I expect these issues are going to ricochet around the Senate for some while," Dorgan said.