Truth, the new film about Dan Rather's report on former President George W. Bush's military service, takes some creative license with its description of the 39% ownership cap decision, which it bills as a favor to CBS owner Viacom. Some dramatic license is understandable since the movie is not a dissertation on communications regulatory policy, but I went back through the B&C archives and here's the real scoop compared with what the movie says.
“Do you know when the FCC repealed cross-ownership laws, a single company could own 45% of the national market share? 45% of the national market share? People f---in’ flipped," says Mike Smith (Topher Grace) as a member of the team investigating the Rather story. "They lost their s---. They actually sat down and wrote their local Congressman. So in the 2003 appropriations bill, guess what? Congress overturned it. Whoo-hoo! Hooray for democracy, right? Nope. The President wouldn’t sign it. Bush threatened to veto the entire bill unless a compromise was found at 39%. And why 39%, you ask? Because that’s the exact percentage at which Viacom wouldn’t have to sell off any of their stations. The President of the United States of America was prepared to take down the entire budget of the United States of America so that Viacom wouldn’t lose any money.”
Well, not for Viacom alone, and it was a bit more complicated.
The FCC did raise the national ownership cap from 35% to 45%, consolidation critics did complain, and Congress did step in to lower it to 39%.
But that figure left enough room for both Viacom, which was at 38.92%, and Fox, which was at 37.92%, to avoid having to spin off stations. The 39% also split the difference between the networks' push for 45% and the National Association of Broadcasters, which advocated holding the 35% line, given that most non-network members were concerned about the nets buying even more stations and getting even more powerful.
While the Bush story forced a split between Rather and CBS, the 39% vs. 45% split caused a lengthy rift between the network and non-network members of the National Association of Broadcasters, leading those networks, including CBS and Fox, to resign from NAB over the issue, though they ultimately returned.