Capital Watch


Bush Budget Could Be a Double Hit on TV

TV stations could face a double whammy under President's Bush's 2005 budget. The White House is again calling for commercial broadcasters to pay $500 million a year in user fees for their analog channels but also is calling for fees on other types of unauctioned spectrum. Whether this includes DTV channels isn't spelled out, but an FCC source says it's possible.

The user fee on unauctioned spectrum would begin in 2005 and generate $3.1 billion over the first 10 years. Both types of fees were pushed last year by the White House but rejected by Congress.

The analog fees would begin in 2007 and would apply only to stations that hadn't returned their old analog spectrum. The analog charges have the dual aims of helping fill federal coffers and pushing broadcasters to speed the switch to digital.

Variations of the user-fee idea have been proposed repeatedly by both the Clinton and Bush White Houses but failed after aggressive broadcaster lobbying. Still, demands for spectrum from the wireless industry and public-safety officials make defeating the fees an increasingly tough fight. Election-year politics are working in broadcasters' favor this year, however, and may bog down passage of any budget.

DTV Block to Illegal Streaming

The government should require digital TV to be aired in resolutions too high to resend over the Web rather than forcing TVs, PCs, and handheld devices to contain streaming safeguards, copying-rights activists say.

Public Knowledge and other consumer groups argue that, if all content were aired at 720 lines or higher, one hour of programming would take 30-50 hours to transmit over broadband. E-mailing a copy of the Super Bowl would take five days.

Rejecting some broadcasters' plans to offer 480-line pictures would ensure consumers true high-definition programming, they say. The broadcast flag, ordered by the FCC last fall, will require all products with DTV tuners to honor codes restricting retransmission over the Web. The groups are appealing it at the FCC and in court.

Activists: Numbers Fudged To Permit Crossownership

Newspapers' importance as a source of local news was played down in FCC studies that provided the rationale for loosening media-merger rules, say consumer groups. A survey by Consumers Union and the Consumer Federation of America found that newspapers are more than twice as important a source for local news than the FCC determined when it allowed mergers between TV stations and their local newspapers in June.

"Since newspapers are a much more important source for local news than the FCC gives them credit for, mergers between these two effectively eliminate diversity of viewpoints and competition of ideas in our local media," said CU Senior Policy Director Gene Kimmelman. The groups say their new data bolsters their case for overturning the new rules, which allow newspaper/TV-station combinations in roughly 90% of U.S. markets. The federal appeals court in Philadelphia hears oral argument in court challenges to the FCC's new broadcast-ownership rules this Wednesday.

To craft the new rules, the FCC gave newspapers a weight of 29% in its diversity index, a formula used to decide in what size markets broadcast/newspaper combos should be permitted. But the groups' survey shows that newspapers are actually the most important source of local news for about 61% of respondents. The groups said the FCC overweighted the Internet and radio, giving them a combined 37% when they deserved only 10%.

Barton Moves In

Texas Republican Joe Barton (above) quickly proclaimed his bid to chair the House Commerce Committee after Rep. Billy Tauzin last week said he'll step down Feb. 16 to become the top lobbyist for the pharmaceutical industry. Republicans must set a date for formally installing Barton as committee chief. On the Democratic side, Texan Charlie Gonzalez filled his party's open seat on the Telecommunications Subcommittee.