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Mark Your Calendars for Media Rules

June 2 is hard date: Ferree; hard date to meet: Copps 4/13/2003 08:00:00 PM Eastern

The road to reviewed and revised media-ownership rules by June 2 may not be smooth if commission divisions evident at NAB last week are any indication. But it will be traveled nonetheless, says FCC's Media Bureau Chief Ken Ferree.

At the National Association of Broadcasters convention in Las Vegas, Commissioners Kathleen Abernathy and Michael Copps took strong and opposite positions on Chairman Michael Powell's deadline for the already delayed 2002 biennial review of broadcast-ownership rules. Commissioners Kevin Martin and Jonathan Adelstein staked out some middle ground.

Copps is adamant that not enough time has been spent answering key questions on the effects of relaxing the ownership rules: "We need to study this more. I don't think we have all the regularity of data that we need." Abernathy, on the other hand, argued that, with 15,000 comments gathered, "we do possess the knowledge to make these decisions."

That sentiment was seconded by Nancy Victory, head of the National Telecommunications and Information Administration, the telco-policy arm of the administration: "At this point, there is a very voluminous record. It is time to make a decision."

During another panel session, Ferree put an exclamation point on it: "There will be no delay. June 2 is the final date." He also said that all the rules will be dealt with at that time.

The FCC has been under pressure from some in Congress to stick to its timetable and to either revise or throw out the rules. It has also been under pressure from others in Congress to loosen the deadline to allow for more public comment on the rules or on a new "diversity index" the commission wants to use to determine which markets can be deregulated.

Diversity index divide

The commission is divided over the diversity index, which would use a mathematical formula to determine whether there is enough media diversity in any given market.

On yet another panel, Powell said the index concept was "not that sophisticated or complex. I don't think there should be a freak-out about using data methodology to make sense of data," But Martin, who has bucked Powell before, said later that the commission should be moving toward "simple rules that everyone can understand and then creating tools that everyone can use."

Adelstein and Abernathy stepped into the fray, opining that a diversity index would be used to give the rules across-the-board consistency and an ability to provide case-by-case analysis on media mergers.

The most contentious ownership decision the commission faces is what to do with the 35% cap on TV-station household reach. Networks want it raised or eliminated so that they can grow; stations want it to remain as a check on network power.

A federal court has ruled that 35% is an arbitrary number, so the commission must justify whatever new—or old—number it comes up with.

Cap predictions vary

Blair Levin, former FCC chief of staff and now with investment firm Legg Mason, predicted the commission will raise the 35% cap and would create some "metric" for loosening TV-duopoly rules, allowing ownership of two TV stations in a market, on a case-by-case basis.

Levin also predicted that the dual-network rule will remain intact and that the FCC will not deal with the 50% discount it gives to UHF stations in calculating national household reach. The discount policy will be decided by the courts, he said.

Communications attorney Wade Hargrove, who represents the ABC TV affiliates on Washington issues, predicted the cap will remain, as he and the affiliates have urged. Like Levin and numerous others, Hargrove expects the newspaper/broadcast-crossownership rule to go and foresees "some modification" of duopoly rules. He predicted that the UHF discount and rules barring big networks from buying each other will be retained.

No wholesale reg scrapping

Washington attorney Brian Madden predicted a redefinition of the term "local market" as it applies to radio ownership. LIN Television's Greg Schmidt expects "major revisions or repeal" of just about all the ownership rules, "except perhaps the national cap."

One NAB participant said flatly there will not be a wholesale scrapping of the regulations. Powell told interviewer Sam Donaldson at NAB's Chairman's Breakfast, "You should not look for the elimination of all the rules." He also said not to look for a revival of the fin-syn rules, which checked the networks' ability to profit from the shows on their air. Technically, the rules are not a part of the proceeding since they are no longer in effect, although arguably they could be part of a modification of another rule.

"Those issues are bigger than what is in this ownership proceeding," Powell said of fin-syn. He did say he would review the issue, just as he is obligated to review all issues that come across his desk.

Some independent producers have been asking the FCC to set aside 25% of network prime time for independently produced programming. Since the scrapping of the rules, they argue, the networks have dominated the airwaves with programs in which they have a financial interest.

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