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NAB Sounds Retreat

Industry group will now work with networks to defeat rollback of the 35% ownership cap 7/13/2003 08:00:00 PM Eastern

In a move that shocked Capitol Hill, the National Association of Broadcasters last week agreed to work with the major networks to kill legislation that would reinstate the 35% cap on one company's national TV-household reach.

The move especially stunned the lawmakers that, only weeks before, the NAB had persuaded to sponsor the 35% rollback, which was intended to hem in the growth of network-owned stations. NAB President Eddie Fritts, however, insisted that the trade group had no choice but to back off from what had been its legislative priority, because any bill is increasingly likely to contain additional restrictions that most of his members despise.

"The snowball was rolling downhill and becoming more difficult to stop," Fritts told reporters last week.

Clearly, not everybody thought so. "The NAB's decision to reverse itself on the issue of the national television-ownership cap is an unfortunate retreat from its proud history of support for localism, diversity and competition in the broadcast marketplace," said Rep. John Dingell (D-Mich.), who sponsored legislation to reinstate the 35% cap. The FCC raised the cap to 45% on June 2.

Lawmakers feel betrayed

Fritts rejected assertions NAB had flip-flopped, noting that the trade group had announced June 11 that it would oppose 35% legislation if it also contained unacceptable provisions, such as a ban on local broadcast/newspaper crossownership or forced divestiture of some radio stations. After the Senate Commerce Committee added those restrictions and others to the 35% legislation, NAB lobbyists decided that there was no way to ensure that objectionable measures could be stripped from those bills or blocked from being included if the 35% rollback was tacked on to separate bills.

Still, lawmakers friendly to the NAB were shocked by the reversal, and Fritts dutifully marched to Capitol Hill several times last week to try to patch the damage.

Lawmakers already backing legislation, however, vowed to push forward despite the NAB's new stance. "This battle is being fought for the American people and diversity of expression, not the NAB," said Sen. Ernest Hollings (D-S.C.), ranking member of the Commerce Committee. "Americans from widely differing perspectives have made it quite clear that they want the FCC's ruling reversed."

No peace yet

Despite joining sides for the Capitol Hill fight, both NAB and network officials stressed they have not put aside differences that led all major nets to leave the trade group in recent years. "It's way premature to get into that," said Disney/ABC lobbyist Preston Padden. ABC was the last network to exit the NAB, on June 16.

Making good on Padden's pledge to organize a lobbying group for the nets, the Big Four broadcast networks are sending their TV-station general managers to Washington this week to meet with lawmakers and defend their record as local broadcasters after concluding that they had been maligned by some NAB members.

Inside the NAB, there were obvious fractures. "Cox has not changed its position," said Cox Enterprises lobbyist Alexander Netchvolodoff. Cox is an NAB member but, along with Hearst-Argyle, has pushed particularly hard for 35% legislation. Both groups have said they will oppose bills that contain measures the industry opposes. The lobbyist said the NAB kept board members in the dark, but Fritts said last week's announcement was simply the logical next step to the June 11 position and no board vote was necessary beyond an informal polling of the group's executive committee. He admitted that communications could have been better.

The next opportunity for legislation is a vote on FCC spending this Wednesday in a House Appropriations Subcommittee, where a 35% rollback and other media-related provisions could be attached. A Senate Appropriations vote is scheduled for July 21.

Anti-media wave

Many lawmakers believe a "clean" attachment containing only a 35% rollback would be likely, but Fritts said there's too much anti-media emotion mounting in Congress to put faith in that strategy.

Last month's Senate Commerce Committee votes that would saddle broadcasters with a renewed ban on local broadcast/newspaper crossownership, forced radio divestitures and renewed public-interest obligations was a "harbinger of things to come" if any legislation is pursued, Fritts said. "This creates a nightmarish vision of turning back the clock and reversing the gains broadcasters have made in the past 20 years."

He said broadcasters, traditionally viewed as local, grassroots favorites on Capitol Hill, have been sucked into the rising discontent with networks and cable companies that accompanied the FCC's June 2 vote to relax media-ownership rules.

"The FCC action clearly spawned a great deal more anti-media sentiment than anybody would have estimated," he said. "Never before has the broadcast industry had such a list of challenges on the table at one time."

The next step for NAB is to decide whether to challenge the new ownership cap at the FCC or in court. Strategy on those options will be decided at the group's July 28 board meeting.

The other NAB strategy sessions may be internal. Network officials have heard reports from Capitol Hill that die-hard supporters of 35%-cap legislation have attributed NAB's reversal to a "sleazy deal" that would call for CBS to return to NAB's fold as a reward for fighting the 35% cap legislation.

"There's no truth to this whatsoever," said a CBS spokesman.

"There's no quid pro quo," Fritts insisted.

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