Your Money or Your License - Broadcasting & Cable

Your Money or Your License

Activists on the left and the right plan to challenge TV license renewals, and the fight will cost owners millions
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Since going to work for media watchdog Parents Television Council (PTC)
five years ago, Aubree Rankin has logged more than 7,000 hours scouring prime
time shows for violent and sexual scenes.

She can't stand many shows she tracks in meticulous scene-by-scene
detail, particularly the edgiest hits on CBS, her assigned network:
CSI, Big Brother
4
, Two and a Half Men and
Cold Case. Nearly every week, she urges PTC
members to complain to station managers, network chiefs, advertisers and the
FCC.

Now, the group is turning up the heat. PTC, along with a handful of
activist groups and individuals, is gearing up to challenge perhaps hundreds of
local TV license renewals coming due for FCC review over the next three years.
Such intervention reflects a bold new tactic by special-interest groups to make
their voices heard by lawmakers in Washington.

The TV industry will collectively spend millions defending shows in
staff-level FCC renewal proceedings, and any FCC action could have greater
repercussions in the industry—from which shows are chosen by stations to how
the shows are sold or written.

"I really like television, but I think it's out of control," Rankin
says. "As a culture, we need to protect our children." PTC has already asked
the FCC to revoke the license of two Washington, D.C., stations—the first of
many planned challenges, promise the group's leaders.

The FCC is now reviewing six petitions to deny licenses for the
Mid-Atlantic area, covering stations in Maryland, Virginia, West Virginia and
the District of Columbia—the first group of 18 renewal "windows" through
2007. The United Church of Christ, which recently hired former FCC Commissioner
Gloria Tristani as executive director of its Office of Communications, recently
filed petitions to revoke the licenses of two Washington-area stations for
failing to meet their children's-programming obligations.

The Alliance for Better Campaigns is also preparing challenges.

The FCC is bracing for a crush of requests to deny renewals. "It's plain
this is an important moment," says Chairman Michael Powell.

Democratic Commissioner Michael Copps predicts activists' efforts will
end what he sees as a renewal process that requires broadcasters to do little
more than mail in a postcard asking to stay in business another eight years.
"The FCC can do something about licensing by reinstituting a serious,
honest-to-God license-renewal process," he told Congress after the FCC relaxed
broadcast rules in 2003.

Although the FCC has rarely denied renewals, the threats raise the
specter of costly legal battles to defend station holdings. Because top TV
stations in big markets are worth hundreds of millions of dollars, even the
most long-shot denial requests must be taken seriously.

At a minimum, defending against one would cost tens of thousands of
dollars in lawyers' fees and probably delay license renewal about three months.
"All challenges create havoc," says Kathleen Kirby, partner at Wiley, Rein
& Fielding, a firm representing major broadcast groups. "No matter what the
allegation, you have to huddle with your lawyers. My clients get very stressed
out."

Besides the financial impact, FCC denials could have a chilling affect,
say stations. To avoid offending indecency watchdogs, stations will avoid shows
that push the envelope in prime time. Rather than take a risk on new children's
and news shows in the future, stations will likely stick with programs that win
an FCC thumbs-up in the current renewal cycle.

Next month, the agency will rule on the first set of license renewals to
come due since 1996, when Congress greatly deregulated broadcasting and more
than doubled the length of a license term from three to eight years.

The activists hope to take advantage of the FCC's obligation to judge
each station's performance serving their communities' local-programming needs,
including educational shows and local-news and campaign coverage. Since media
conglomerates have spent millions assembling national station groups, a growing
chorus of critics charge they're boosting profits by airing reality shows,
celebrity journalism, and prime time shows laden with sex and violence.

At the same time, critics say, the networks are abandoning their
obligation to serve communities' programming needs.

For Washington attorneys, license renewals were big business in the
1970s and 1980s, particularly because license terms lasted only three years.
"The fees were pretty substantial," says veteran broadcast attorney Gary
Smithwick. "It was complex litigation, and it took a lot of preparation."

Broadcasters also complained that many of the petitioners were simply
shakedown artists seeking money to make the legal challenges disappear.
Interest groups flooded the FCC trying to block renewals. Often, the challenges
alleged that stations failed to follow federal minority-hiring requirements and
could be resolved by hiring more minorities—or pay a settlement to the group
filing the challenge. In 1989, FCC Chairman Dennis Patrick derided such tactics
as "sham applications" and "frivolous petitions" filed in bad faith.

Pappas Broadcasting, which once fought such a challenge, says the FCC
shouldn't resurrect those practices. While Pappas is happy to abide by its
obligation to the public and the FCC, "any effort to use the license-renewal
process to pressure broadcasters to do something that they're not required to
do would be inappropriate," says Executive Vice President Peter Pappas.

The FCC didn't even permit outside parties to request revocations until
federal appeals judges ordered it to do so in 1969. Nevertheless, since then,
outside groups have persuaded the agency to deny renewal to roughly a dozen TV
licenses based on stations' failure to serve the public interest.

Owners of another 20 or so have agreed to sell their stations rather
than risk a likely revocation. Since the Reagan Administration launched
broadcast-ownership deregulation, the FCC's willingness to revoke licenses has
steadily waned.

The biggest blow came in 1996 when the Congress eliminated one threat to
licenses known as "comparative challenges," which allowed outside parties to
have a license transferred to them by arguing that they could do a better job
than the current holder.

These days, license challengers have no interest in seeing licenses
simply transferred from one big media company to another.

Rather, says Lara Mahaney, PTC's director of entertainment affairs, "We
want broadcasters who break the law held accountable."

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