Compromise: Republicans Agree to 39% Ownership Cap - Broadcasting & Cable

Compromise: Republicans Agree to 39% Ownership Cap

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Senate Republican leaders and the Bush administration Monday night reached a surprise agreement to raise the national TV-ownership cap to 39% of television households.

The compromise splits the difference between the 45% limit set by the FCC in June and the previous 35% level that rank-and-file lawmakers on both sides of Capitol Hill had been pushing to reinstate. The agreement is part of a gigantic catch-all spending bill that funds the FCC and many other agencies in fiscal 2004.

Despite the "must pass" nature of the package, Bush aides convinced Senate negotiators to back away from the rollback, agreed to in House/Senate talks last week, by threatening to veto the entire legislation.

If the bill is passed-by no means a certainty-it would eliminate the immediate threat CBS and Fox face from resurrection of the 35% cap. Each would be forced to sell one or two stations to get under the old cap.

The House is scheduled to vote on the measure Dec. 8 Senate Appropriations Committee Chairman Ted Stevens said the Senate’s timetable will be decided then.

The broadcast industry, already split over the cap, reacted unenthusiastically to the compromise. "So much for broad deregulation," said one network source.

Network affiliates, which have fought just as furiously to retain the 35% level, are disappointed that a higher number would be set but are willing to trade the increase for the security of knowing the FCC won’t be considering a hike in the limit every two years. "It’s a tough compromise for us," said Alan Frank, president of Post-Newsweek Stations and chairman of the Network Affiliated Stations Alliance.

The last minute deal with the White House infuriated Sen. Byron Dorgan, the North Dakota Democrat who led the fight to reinstate the 35% cap. Dorgan charged that the White House brokered deal will "undermine" lawmakers’ authority to craft legislation. "It will provoke a major battle, at least here in the United States Senate," he wrote in a letter to Stevens and Rep. Bill Young, Chairman of the House Appropriations Committee.

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