Eddie went a-courtin'

At NAB 2001, Fritts puts best face on a divided industry

One year ago, Eddie Fritts stood before a convention crowd and railed against the FCC's "fuzzy" support of low-power radio and demanded that the government do more to help TV stations with the transition to digital.

This year, however, the National Association of Broadcasters president shed the combative hyperbole at the group's annual convention in Las Vegas, even as competitive threats against his members intensify.

Fritts has good reason to strike an accommodating tone. The tide appears to have gone against it on the NAB's lobbying priorities, retaining today's TV ownership cap and convincing regulators to require dual must-carry and mandate DTV tuners for nearly all TV sets.

A handful of policymakers last week urged broadcasters to face reality and work for a compromise that would couple an ownership- cap increase with something many NAB members want: freedom to operate newspapers and TV stations in the same town. "The more broadcasters push to eliminate newspaper crossownership restrictions, the more pressure there will be to raise the cap," Rep. Greg Walden (R-Ore.) told conventioneers in Las Vegas. "An increase is inevitable," added New York Democrat Eliot Engel. "We raised the ownership cap with radio, and it wasn't necessarily the end of the world."

At the moment, Fritts is working on keeping the bitter debate over TV affiliate/network relations from erupting into an embarrassing conflagration. "Never before in our industry's history have tensions between the two been so high," Fritts acknowledged as he opened the NAB's meeting.

A toned-down NAB also can better court Michael Powell, despite dramatic disagreements with the new FCC chairman over the government's role in helping broadcasters shift to DTV. Unlike last year, when the battle was joined against the "social engineering" goals of Democrat William Kennard and his low-power–FM plan, Fritts this year was downright conciliatory.

First, he courted ABC, the trade group's sole remaining major network. "We want to acknowledge your independence, your larger vision, your commitment to the long-term good of the broadcasting industry," he said. Then, he tried to console the rank and file over the loss of NBC, Fox, and CBS and the nets' political and financial clout. "We are neither diminished nor demoralized," he continued.

The three networks quit the trade group during the past year, frustrated over the NAB's support for the 35% limit on one company's TV-household reach. TV affiliates fear their already eroding negotiating leverage with the networks will wash away completely if the Big Four are allowed to add more O&Os.

Following Fritts' cue, NAB officials, convention speakers and even congressmen delicately tiptoed around the debate. Honoring a Capitol Hill tradition, several key lawmakers played to the crowd rather than anger anyone. "Put me down as being friendly to both sides," said Rep. Joe Barton (R-Texas), a member of the House Telecommunications Subcommittee. "I'm with Joe—ambivalent," followed Rep. Rick Boucher (D-Va.).

Even Rep.Cliff Stearns (R-Ohio), who has sponsored pro-network legislation that would raise the 35% cap on one company's TV household reach, played down his own bill by characterizing it as a mere starting point for debate. "The compromise might be something everybody can work with," proffered Stearns.

Real pressure to bargain will fall on the NAB May 10, when the FCC begins a review of newspaper and perhaps cable crossownership restrictions. Revaluation of the ownership cap is expected to start later this summer when the agency launches its biennial review of ownership rules, Powell said across town at the A.G. Edwards investment conference.

FCC Chairman Michael Powell, never shy about voicing his own distaste for the ownership cap, also hedged when predicting at an NAB breakfast what action the FCC ultimately will take. "At the moment, we're in a holding pattern" he said, noting that CBS, NBC and Fox have challenged the rule in Washington's federal appeals court. "Any review we might do needs to fit within the confines of the court situation." With that diplomatic nicety out of the way, he rattled off reasons to hate the cap.

Powell's comments came at the urging of ABC newsman Sam Donaldson, who earnestly plugged along through the morning's one-on-one despite conceding a lack of knowledge of broadcast regulatory arcana. "I don't know enough to ask a follow-up," said Donaldson.

Powell acknowledged that the broadcast cap is likely to face judicial scrutiny similar to cable ownership limits thrown out by the same court in March. Also, he noted, the judges signaled the networks stand a good chance of winning on the merits of their case by staying a previous FCC order requiring CBS to shed some stations next month. "Many see that as a grave sign for caps."

Additional reporting by Steve McClellan


The Fritts Years

After an awesome 23-year run, NAB chief Eddie Fritts is about to step down. His record is awesome—but not flawless. He helped the industry shed onerous rules limiting the size and power of radio- and TV-station owners. At the end, however, he couldn't repair fissures that have divided broadcasters in fundamental ways.