Broadcasters Back Rereg Lite

TV Board votes to support return to 35% cap—with a big caveat

The NAB last week threw its weight behind congressional efforts to overrule the FCC's decision to raise the ownership cap to 45%, but only so long as that rereg doesn't jeopardize their other dereg gains.

As the Senate Commerce Committee was gearing up for this week's vote to undo the FCC's new broadcast-ownership rules, the National Association of Broadcasters' TV board voted to support a rollback of the national broadcast-TV ownership cap to 35% of TV households.

That support will hold only if lawmakers don't vote to remove other deregulatory changes the NAB and the major TV station groups fought for and won, such as permission to own both daily newspapers and broadcast stations in the same town.

No easy task

"We want to make clear we very much support repealing the cap back to 35% but only if the legislation contains nothing that goes against our long-term principles," said Alan Frank, NAB TV Board member and president of Post-Newsweek stations.

Keeping the Commerce Committee bill free of other anti-deregulation provisions will be no easy task.

Committee Chairman John McCain (R-Ariz.) is apparently willing to open up the vote on the cap-rollback legislation, introduced by Sens. Ernest Hollings (D-S.C.), Ted Stevens (R-Alaska) and Trent Lott (R-Miss.), to a variety of amendments. Already, Sen. Byron Dorgan (D-N.D.) has vowed to push a measure that broadcasters oppose: reinstating the prohibition on newspaper crossownership. Other committee members were said to be readying similarly restrictive measures to ban triopolies and eliminate the "UHF discount" tallying the audience reach of UHF stations at half their actual value for purposes of the national ownership cap.

Even non-broadcast measures are rumored to be in the works. One lawmaker is said to be preparing an amendment that would allow individuals to keep the same cell-phone number when they switch services.

Besides loading up the committee's bill with regulatory moves broadcasters hate, an amendment-laden bill would be more controversial before the full Senate and almost impossible to pass in the House, where House Energy and Commerce Committee Chairman Billy Tauzin (R-La.) has vowed to block it.

"A clean bill reinstating the 35% cap would be a long shot, but it could get weighed down with even more controversial stuff," said an industry lobbyist.

McCain also will hold a second vote that day on a bill to reauthorize the FCC. An authorization bill gives a federal agency its right to exist and spells out its duties. The FCC is operating on an authorization that has not been modified since 1992. McCain unveiled details late Friday and, as promised, proposed to extend the time between congressionally mandated FCC reviews of ownership rules from two to five years. The biennial review instigated the FCC's controversial June 2 ownership changes.

If the committee's rollback bogs down, Stevens—who chairs the Senate Appropriations Committee—is raising the possibility of an appropriations bill that would prevent the FCC from using any resources to lift the 35% cap.

The appropriations route is given the best chance of passage because it would bypass both McCain and Tauzin. A spending restriction would be in effect for only 12 months, until the next appropriations bill.

The Tauzin factor

Although Tauzin appears determined to quash deregulatory legislation if it gets to the House, there is speculation that he may not remain in his job for long and the FCC could lose it protection. Speculation abounds that the 60-year-old veteran lawmaker is eyeing a leap to the private sector. One scenario has him replacing Motion Picture Association of America President Jack Valenti. Another sends him to an even more lucrative job as a rainmaker for a lobbying firm.

There's even an outside chance that Tauzin could get bogged down by an investigation into allegations that he and other senior House Republicans traded campaign donations from a Kansas energy company for legislative favors. Tauzin has denied the allegations, which were reported by The Washington Post.

There will be other avenues to tighten the ownership rules, if not return them to their previous incarnations.

Look at consolidation

At the FCC, where the commission will review a host of petitions to reconsider the changes, Capitol Broadcasting President and CEO Jim Goodmon is asking the agency to take a look at the consolidation the new rules could permit. In a "worst-case–scenario" analysis of all 210 TV markets, he found that the relaxed limits on TV duopolies and permission to establish triopolies in the six top markets, coupled with the preservation of the UHF discount would lead to unprecedented concentration of the TV industry—a level of concentration he says the FCC couldn't have contemplated (see table, page 2).

After the FCC entertains, and most likely rejects, the petitions to reconsider the changes, the challenges will move to the courts.

The ownership issue got a lot of attention at the cable industry's National Show in Chicago last week. Even tough the new rules don't directly affect cable operators, the outcome of the challenges could affect the final result of a separate FCC rulemaking to set a new cable-ownership cap.

FCC Media Bureau Chief Ken Ferree told conventioneers that a proposed new limit has been submitted to agency Chairman Michael Powell, who will circulate it to other commissioners soon.

Ferree wouldn't reveal what limit the proposal calls for, but it is believed to be a number now familiar to broadcast-rule followers: 45%, in this case of all multichannel subscribers.