Congress Won't Undo FCC Rules, But Courts May

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Congress is unlikely to roll back the new FCC media-ownership rules, despite loud protests from Capitol Hill. Instead, Congress may pass legislation that would space out reviews of ownership regulations the commission is now obligated to conduct every two years and give it a little more authority to tighten rules when the regulators' see fit.

Less predicable is the outcome of legal challenges of the new rules that are expected from those who think the FCC went too far in relaxing its ownership restriction and those who think it didn't go far enough.

Just two days after the FCC voted to increase the national cap on TV-station ownership and to permit more broadcast concentration in media markets, Sen. John McCain's Commerce Committee called the FCC commissioner to the Hill to explain the agency's actions.

Although he personally opposes rewriting the new rules, McCain scheduled a June 19 vote on a bill that would reinstate the 35% cap on one company's TV-household reach. The proposal is backed by key leaders of his committee, including ranking Democrat Ernest Hollings and Republicans Ted Stevens and Trent Lott.

If passed by the committee, such legislation would face uncertain chances in the full Senate and very long odds in the House.

McCain said he will push for alternatives to the FCC plan, such as keeping the commission's new 45% limit but rewriting a law that requires the FCC to review media ownership rules every two years. That provision prompted last week's FCC vote. The biennial-review mandate has been widely panned by commissioners and lawmakers alike as a nearly impossible obligation. FCC Chairman Michael Powell has suggested reviews be required every five years instead. The two-year review was mandated by the 1996 Telecommunications Act.

At last week's hearing, all five FCC commissioners told McCain the two-year review cycle is burdensome and also asked for clearer authority to tighten ownership rules.

"These issues need to be addressed," McCain said. If standalone legislation fails, he said, a later bill to reauthorize the FCC's spending might be a better vehicle for revising the review process.

McCain admonished the Hollings-Stevens-Lott triumvirate for threatening to attach a rider to larger government-appropriations bills or using a "legislative veto" to block implementation of regulators' decisions.

Hollings said he would exercise either option if his bill fails. "I would still attempt to do it because I believe it's that serious a problem."

On the House side, Telecommunications Subcommittee Chairman Fred Upton is planning a hearing on the new rules soon. House Energy and Commerce Committee member Richard Burr and ranking Democrat John Dingell have introduced a bill to reinstate the 35% cap. Chairman Billy Tauzin, however, opposes reimposition of the 35% cap and could bog down House consideration.

The real action is likely to be at the federal appeals court in Washington, which will be deluged with lawsuits attacking the new rules as soon as the FCC reviews petitions to reconsider the changes.

Legal challenges are certain from both supporters and opponents of media deregulation. Affiliates and small-market broadcasters are gearing up to win greater leeway to form duopolies in small markets but also to corral growth of network O&Os by returning the national cap to 35%. Fox and CBS are expected to demand the cap go higher.

Clear Channel is said to be planning to fight the slight tightening of radio-ownership limits.

Consumer groups are expected to exploit inconsistencies in the new rules as a way to roll back deregulation. One point of attack: The FCC continues to count UHF-station reach at half for the national cap but values them the same as VHF outlets for local caps.

Powell warned the National Association of Broadcasters and public advocates that the national cap, regardless of the level, might not survive legal challenges. "This is a rule I'm quite concerned about in the court," he conceded to lawmakers.

Although federal judges ordered another review of the ownership cap after finding the previous number poorly reasoned, Powell admitted that the new 45% limit is based a little on guesswork, too. He said he hopes the court will defer to the commission's judgment as long the agency proves that the cap was set within a reasonable range.

FCC Media Bureau Chief Ken Ferree expressed similar reservations when the new rules were approved June 2. "I bet we win, but I wouldn't bet a lot."

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