Capital Watch


Warp Speed

The information superhighway is today's version of a chicken in every pot. Once upon a time, White House hopefuls promised a healthy dinner for everybody. Today, President Bush promises to bring video and other super-fast Internet services to every American by 2007. Bush repeated the promise at a campaign stop in Appleton, Wis. He first broached the idea in Albuquerque, N.M., on March 26. Not to be outdone, presumptive Democratic nominee Sen. John Kerry promises to pump big money into high-speed Internet and will unveil his plan "in coming weeks."

Radio Days

TV stations aren't the only outfits planning to offer more than one channel after they go digital. Radio stations also want to get into the act, at least those signed up with National Public Radio. The network wants the FCC to let digital radio stations offer a second signal. NPR says early tests in New York, Los Angeles, San Francisco, and Washington demonstrate that the sound on the second channel is good enough to use for music. "We are thinking about this in realistic and creative ways," says VP of National Affairs Michael Riksen. The FCC will propose digital radio multicasting at its April 15 meeting.

Target: Big Media

Longtime dereg foe Rep. Maurice Hinchey (D-N.Y.) is taking his best shot at bringing down Big Media. In a sweeping new bill, he proposes to roll back the FCC's June 2 ownership deregulation, shrink the 39% station-ownership cap Congress enacted two months ago, and break up TV production/network combos. Washington's current hostility to media conglomerates improves his chances, insists spokesman Kevin O'Donnell. Not surprisingly, National Association of Broadcasters' Dennis Wharton says the group does not support the bill.

Pay to Play

Owners of UHF stations will notice a hefty hike in this year's FCC bill. The commission is proposing annual fees for all telecom licensees it regulates, including broadcast stations, cable systems, and DBS operators. While fees drop for most VHF stations, UHF fees would rise across the board. For UHF stations in top-10 markets, the fee would climb to $17,775, up 12% from fiscal 2003. In other markets, hikes range from 12% to 25%. For VHF stations, only those in top-10 markets would pay more, a 5% increase to $60,350. The rest would enjoy declines of 3% to 9%. The UHF hikes are the result of the FCC's culling its roster of stations exempt from fees, a staffer explains.

Because each station category is supposed to generate a targeted revenue amount, a drop in the number of paying outlets would cause the remaining ones to pay more. Before weeding out those that don't pay, the FCC fell below its revenue targets for a couple of years. Fee waivers are granted for financial hardship or other reasons, and UHF stations are more likely to win exemptions than VHF. A similar culling led to higher fees for some radio stations. On orders from Congress, the FCC aims to take in $273 million from regulatory fees, up 1.5% from 2003.

Digital Defense

The latest tax spin: Republican anti-tax activist Grover Norquist (above) is backing DBS providers' bid to drop as many local broadcasters as they can in favor of digital network superstations. "This is a win-win for taxpayers," explains the head of Americans for Tax Reform. Norquist says his aim isn't to hurt local stations, only to cut the deficit and bring digital to more viewers who can't get local digital.

Here's how his logic works. Consumers help the DTV transition by getting extra digital programming. As they do, it hastens the day when analog channels can be auctioned and the cash used to cut the deficit. DBS providers are asking Congress to make customers eligible for digital superstations if they can't receive local digital signals.