Why 39%Ownership cap is a child of compromise 4/18/2004 08:00:00 PM Eastern
How big can a station group get? That is a question that occupied the FCC, broadcasters, Congress, and even consumers through much of 2003. It even became a political football.
The final score: One group can own stations that cover 39% of the nation.
Why that odd number? It happens to benefit two media giants: Viacom's holdings cover 38.92%; Fox's, 37.92%. Now each one just fits neatly under the cap.
Noting the snugness of that fit, Sen. John McCain (R-Ariz.), an opponent of raising the limit, railed against the Senate's 39% decision, reached in January. The House had passed a bill with the same percentage a month before, as a part of an omnibus spending bill that, if not addressed, would have left government operations unfunded.
It was a classic compromise between factions. If there is ever to be movement from 39%, it will be Congress, not the FCC, that will set the new limit. That's a new wrinkle in the law, too.
Last June, after a long debate, the FCC actually raised the ownership cap to 45% from the previous 35%. But the process divided the commissioners and angered the public over media concentration, which in turn raised congressional eyebrows, as well.
Even in approving the 39% cap, some on Capitol Hill vowed to renew their fight to lower the limit. "If anyone thinks we're going to fold our tent and go home, they can think again," says Sen. Byron Dorgan (D-N.D.), who wants to lower the cap.
The broadcast networks favor the 45% figure. But many station groups fear that it would give the networks huge power over affiliates. The issue so divided broadcasters that NBC, CBS, and finally ABC quit the National Association of Broadcasters because the group wouldn't support the higher limit.
The flap led to public hearings about "localism"—held in New York; Richmond, Va.; Charlotte, N.C.; and San Antonio. Commissioners were surprised by the turnout and the passion of those who showed up.
In fact, though, the public was mainly concerned about radio shock jocks and the pronounced ownership concentration in that medium.