Riches to Regs?

Rereg fever rises; nets, stations may have themselves to blame this time
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Broadcasters are wondering what they've gotten themselves into. Just weeks after some network affiliates persuaded lawmakers from both houses of Congress to launch preemptive strikes on the FCC's plan to raise the national TV-ownership cap, the resulting legislation is now larded with provisions the industry opposes. Consequently, broadcasters must fight to kill the legislation immediately or go along for now, gambling that parts they hate can be surgically struck on the Senate floor or elsewhere.

A week after voting to roll back the national cap on TV ownership to 35% of television households with a bill that also would sting some of the biggest affiliates by reinstating a ban on local newspaper/TV crossownership, the Senate Commerce Committee kept the momentum going. On June 26, it passed a second bill that would saddle the industry with bigger fines for indecency violations, stricter oversight of political advertising and possible forced station sales by eliminating the 50% discount used when tallying UHF stations' compliance with the national cap. Even increased FCC scrutiny of stations' public interest and local programming is a possibility if the bill makes it to the Senate floor.

"Too many renewals are done on post cards, and the public doesn't even know about it," said Sen. Ted Stevens (R-Alaska), sympathizing with colleagues' call for tougher license reviews. Stevens is an author of the 35% rollback legislation.

That notion troubles many in the industry, who fear that the increased scrutiny will lead to the renewed meddling in programming that once led the FCC to conduct lengthy license renewal hearings and might even prompt a resurrection of the Fairness Doctrine, which required stations to offer a right of reply to individuals who had been criticized on the air.

ABC lobbyist Preston Padden raised that prospect at the National Association of Broadcasters' board meeting shortly before his company quit the group.

Changed minds

Prospects that newspaper/TV crossownership will remain banned and calls for other reregulation has pushed Hearst-Argyle, one of the most ardent supporters of the 35% cap, to oppose the current Senate bill.

Belo Corp. Chairman Robert Decherd also has called on Senate Commerce Committee Chairman John McCain (R-Ariz.) to kill the bill. "Concerns about the quality and type of news and information broadcast via television cannot be 'solved' by government intervening in one dimension of our complex media marketplace," he wrote in a June 16 letter.

Cox Television, another of the affiliate groups that pushed for 35% legislation, is a little more cagey. Cox President Andrew Fisher downplayed concerns about public-interest obligations and the Fairness Doctrine during Padden's outburst. "It would not change the operation of Cox stations one iota," Fisher said, adding that his company's stations are strong in local programming and dedicated to sound journalistic ethics.

Hostile to broadcast

Does that mean Cox would support the 35% cap bill if it permitted newspaper crossownership but added public-interest obligations? Fisher wouldn't say. "I can't predict Cox television's position on speculative legislative provisions," he said.

Publicly, broadcasters are blaming lawmakers' hostile attitudes towards the industry. "It is clear that a number of senators don't fully appreciate the unique role played by local radio and television stations all over America," said National Association of Broadcasters' President Eddie Fritts. "From AMBER Alerts to life-saving weather warnings, from anti–drunk-driving PSAs to charitable fundraisers, broadcasters are fulfilling our commitment to community on a daily basis."

Behind the scenes, though, various sectors of the broadcasting business are pointing fingers at each other for igniting what is sure to be a tough lobbying fight.

Chief among the critics is Padden, who persuaded his bosses to exit the NAB because of attacks on networks during the battle over the cap. (Networks won a partial victory by persuading the FCC to lift the cap to 45%. The affiliates fear that networks will carry too much weight in affiliation contract negotiations if they are allowed to bulk up.)

The nets' lust for more stations is the real cause of lawmakers' ire, counters Fisher. "The debate that has erupted is not due to our fight to retain the 35% cap but to the unfortunate degree to which the nets have been given extremely wide opportunity
to expand and dominate the television business."

Padden e-mailed Web coverage of last week's vote to fellow lobbyists with the accompanying message, "More great work by our colleagues who have spent much time and money seeking government regulation of their fellow broadcasters."

Even supporters of the 35% rollback concede that the measure and other reregulatory provisions have gained unexpected momentum. Whether legislation the entire industry opposes results remains an open question.

Rereg support

"That will partly depend on the extent of a bipartisan groundswell against lifting the cap, and the reaction of congressional leadership," said Cox lobbyist Alex Netchvolodoff.

If leadership of the Senate Commerce Committee is any indication, there is support for new broadcast regulations of some sort, although opinions vary widely on the final product.

McCain opposes a rollback to 35%. "The rules the FCC adopted appear to preserve important restrictions on media ownership," he said, "but I'm not sure even an expert agency can predict with precision where the lines should be drawn."

He has voiced interest in new public-interest obligations and toughening indecency rules and has introduced legislation that would force station divestitures by Clear Channel and some other owners that used legal loopholes to gain more stations in some small markets.

McCain has also pledged to hold hearings on radio and new public-interest obligations in July, in part as a way to ease the withdrawal of those amendments from last week's vote.

And he is friendlier to the FCC's recent deregulation than most on his committee.

Sen. Byron Dorgan (D-N.D.), for instance, took aim at the industry's commitment to local programming. Using Sinclair Broadcasting's centralcasting practice as an example, he said the FCC should do more to insist that stations offer "some semblance" of localism.

Fed up with Infinity Broadcasting's repeated indecency violations in the wake of a call-in show on extreme and violent sex acts by the group's WKRK-FM Detroit, Sen. Fritz Hollings (D-S.C.) won passage of his amendment to treat individual indecent passages during a program as separate violations, increasing the potential fines and the likelihood of license revocation hearings. "I'm trying to wake up the commission," he said.

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