House affirms 35% TV ownership cap

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The House of Representatives Wednesday voted to reinstate the 35% cap on
one broadcast company’s national TV-household reach.

The measure -- which effectively bars the Federal Communications Commission from implementing a new 45% cap
approved June 2 -- was included in a bill authorizing funds for the FCC, as well as
the Commerce, Justice and State Departments, and it would be effective only during
fiscal 2004, which begins in October.

The bill allows the FCC to spend $279 million for salaries and expenses
during the year.

Attention now moves to the Senate, which is scheduled to take up
appropriations bills for the federal government after Labor Day.

The Senate Appropriations Committee was initially expected to vote on FCC
funding this week, but Senate leaders asked the panel to delay votes on all
spending bills until after the August break to allow them time to clear a
crowded docket of votes on bills.

Now that the House has rejected amendments that would have also banned local
broadcast/newspaper cross-ownership and tightened TV-duopoly limits, the Senate
will face a similar battle.

Although Senate Appropriations Committee chairman Ted Stevens (R-Alaska) supports a
clean 35% bill, other appropriations members, such as Sens. Ernest Hollings
(D-S.C.) and Kay Bailey Hutchison (R-Texas), have strongly endorsed a ban on
newspaper cross-ownership.

FCC chairman Michael Powell defended
the 45% cap and other broadcast-ownership deregulation approved last month.

"We created
enforceable rules that reflect the realities of today’s media
marketplace. The rules will benefit Americans by protecting localism, competition and
diversity," he said.

"The FCC based its judgments on evidence that the new rules would benefit
Americans," Powell added.

He noted that the new cap would allow Fox and CBS, the only companies already
exceeding the old 35% cap, to purchase a handful of additional stations --
approximately half a percent of stations nationwide.

"Our democracy is strong," Powell said. "It is not threatened by half a
percent."

Alan Frank, chairman of the Network Affiliated Stations Alliance, praised the
House for passing the cap rollback free of extra reregulatory moves.

"We also are encouraged that the House defeated an amendment that would have
been a setback to localism," he said.

The NASA is continuing to fight for 35% legislation
while the National Association of Broadcasters dropped its support for any bill
out of fear that it can’t be safely protected from other cross-ownership,
duopoly and other reregulatory moves broadcasters hate.

Both groups say retaining the 35% level
is necessary to prevent the major networks from getting too much leverage over
affiliation contracts.

An NBC spokesman voiced disappointment
in the House vote, calling it a  "huge step backwards in giving
broadcasters the regulatory relief needed to compete with
cable."

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