Senate Commerce Committee reverses FCC on media ownership

The Senate Commerce Committee, reacting to a public backlash over the FCC’s loosening of media ownership rules, voted last week to overturn the agency’s decision with a new law that restores the 35 percent network television ownership cap, and forbids most newspaper ownership by broadcasters in the same market.

The original 3-to-2 FCC vote gave way to a broadly bipartisan voice vote on the Senate committee on Thursday, June 19.

The Senate vote represented a major reversal in fortune for Republican FCC chairman Michael Powell, the key architect of the new rules. In fact, it was a Republican leader, Sen. Ted Stevens of Alaska, who joined Democratic Sen. Earnest Hollings (D-S.C.) to lead the push to reverse the FCC’s actions. Stevens is also chairman of the Senate Appropriations Committee, one of the Senate’s most powerful positions.

Even Powell’s leading Senate patron, Sen. John McCain, the Arizona Republican who heads the Commerce Committee, broke with the FCC chairman. McCain, who had wavered on the new legislation until the last minute, finally came down on the side of the reversing Powell’s policy.

Although the legislation was given a good chance of passing the full Senate, it faces obstacles in the House of Representatives. Rep. Billy Tauzin, the Louisiana Republican that heads the House Energy and Commerce Committee, supports Powell and his new rules. However, it is widely expected that Stevens will attempt to circumvent Tauzin by attaching the legislation to a high-priority appropriations bill to gain easier passage in the House.

Under the new bill passed by the Senate committee, most of the traditional ban on broadcast cross-ownership of newspapers in a city would be retained. However, the committee adopted an amendment by Stevens that would ease the restrictions in the nation’s 60 smallest markets, by permitting state regulators to approve newspaper-broadcast combinations if they find that “cross-ownership will enhance local news and information, promote the financial stability of a newspaper, radio station or television station, or otherwise promote the public interest.”

The legislation would fully reinstate the rule that has prohibited the television networks from owning stations that reach more than 35 percent of the nation’s households. It also requires two networks—Viacom’s CBS and News Corporation’s Fox—that now own TV stations reaching about 40 percent of households to sell some stations to come into compliance with the 35 percent cap.

The bill would also require the FCC to hold at least five public hearings on future ownership rule changes before voting. In another slap at Powell, the senators criticized the agency for not seeking more public comment before its June 2 decision.

It became clear by the Senate committee’s action that the FCC’s Republican majority under Powell had created a political firestorm. “The deregulatory express is leaving the station unless we take corrective action,” said Sen. Olympia J. Snowe, (R-Maine). “I fail to understand how the FCC’s action will enhance ‘diversity, localism and competition,’” she said, referring to the statutory requirements that the ownership rules are meant to uphold.

Sen. Byron Dorgan, (D-N.D.), and other lawmakers said they also will try other legislative methods to overturn the FCC changes. “The airwaves belong to the people,” Dorgan said. “The FCC ignores that requirement and advances corporate interests at the expense of the public’s interest.”

The broadcast industry is split over the national ownership cap. The networks want it raised even higher than 45 percent so they can own more stations. Individual station owners want to retain the 35 percent cap, fearing that the networks will gain too much market power with greater ownership.

The NAB, while supportive of rolling back the national ownership cap to 35 percent, said it would oppose the new legislation. “The bill also adopts provisions that reinstate the newspaper-broadcast cross-ownership ban and require radio companies to divest legally acquired stations,” said NAB chief Eddie Fritts. “Consequently, NAB will strongly oppose this legislation.”

On Thursday, June 26, the committee will consider the FCC’s reauthorization bill. Sponsored by McCain, it would extend the time period between media-ownership reviews as well clarify the FCC’s authority in such matters.

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