Members of Congress continued Thurs. to look for ways to undo the FCC’s media ownership rule changes. Rep. Sanders (I-Vt.) said he would introduce legislation that would codify all of the previous ownership rules, including the 35% broadcast ownership cap and the newspaper-broadcast cross- ownership restrictions. Several senators joined Sen. Pryor (D-Ark.) on a resolution (S.Res.-159) calling for the FCC to rescind the media ownership changes. A bill in the House (HR-2052) that would codify just the 35% broadcast ownership cap had 33 co-sponsors added since Mon. and 5 more senators have joined a bill (S-1046) by Senate Appropriations Committee Chmn. Stevens (R-Alaska) that would codify the 35% cap.
Notable CROSS rulings
The National Transportation Safety Board (NTSB) recommended Tues. that states pass laws barring novice drivers from using wireless devices on the road. In a report on a crash in suburban Washington that killed 5 persons last year, the board ruled for the first time that a driver’s distraction due to a cellphone conversation “contributed to her loss of control of the vehicle.” The NTSB also urged the National Highway Traffic Safety Administration (NHTSA) to develop a media campaign on the risks of distracted driving.
On the day after the FCC established new broadcast ownership regulations, companies, Wall St. analysts, consumer groups and others were picking apart the decision, and while some said they saw opportunities for deal-making, others said legal challenges to the decision might threaten those deals. All predicted increased consolidation, but there was some debate over whether the deal-making would begin immediately or would happen over time. Meanwhile, all 5 FCC commissioners were preparing to answer questions before the Senate Commerce Committee today (Wed.), where ranking Democrat Sen. Hollings (S.C.) was expected to be especially tough on the FCC’s 3-Republican majority.
The Senate is likely to address the broadcast ownership cap, although it remains unclear whether there is enough support to reverse the FCC’s decision Mon. to ease ownership rules, congressional leaders said after the FCC meeting. Senate Commerce Committee ranking Democrat Hollings (S.C.) said he believed Committee Chmn. McCain (R-Ariz.) would let the committee vote on legislation (S-1046) that would preserve the 35% cap, even though there were indications that McCain himself didn’t support retaining the cap. “I'm convinced we can get a majority vote” in the Commerce Committee, said Hollings, who informally surveyed the panel’s members. The FCC commissioners will appear before the committee Wed. to answer questions about the media ownership ruling.
The 3-2 vote by the FCC Mon. to ease some of its media ownership rules lay bare a deep ideological split at the Commission, evoking strong emotions and lofty rhetoric on both sides of the debate. Although Chmn. Powell described the Commission’s action as resulting from the most exhaustive and comprehensive review of broadcast ownership rules ever undertaken, he said the end product was a modest, though “very significant” change. On the other side, Comr. Adelstein called the decision “the most sweeping and destructive rollback of consumer protection rules in the history of American broadcasting.” As expected (CD June 2 p1) Republicans Powell, Abernathy and Martin voted for the changes in the Report and Order, and Democrats Copps and Adelstein voted against them.
At our deadline, it appeared nothing would stop the FCC from holding an historic vote today (Mon.) to broadly loosen broadcast ownership regulations. Despite calls for delay from many members of Congress, 2 members of the Commission, consumer groups and other public interest groups, FCC Chmn. Powell said he would call for a vote June 2. Given that some of the broadcast rules had not been significantly updated in 40 years, he said reform was long overdue and delay wouldn’t make the decisions any easier. Last-min. meetings Fri. between commissioners’ aides on the 8th floor produced little change in the original plan sent to the commissioners, we were told.
Holding out little hope that the Republican majority of the FCC will have a sudden conversion on June 2, activists in favor of retaining limits on media ownership are formulating new strategies on how to challenge the FCC’s expected vote. Meanwhile, Commission sources said those activists probably were accurate in their assumptions that the Commission would adopt the proposals sent to the 8th floor in their original form. “All the cuts that [FCC Chmn.] Powell wanted are sticking,” one source said. Our sources say the Commission is likely to push the national ownership cap to 45% from 35%, that duopoly rules will be loosened considerably, that the newspaper-broadcast cross-ownership ban will be eliminated in most markets and that the TV/radio cross-ownership rule will be similarly loosened.
Analyzing all the various leaks to the media about the FCC’s plans to relax media ownership rules (CD May 13 p1), the Consumer Federation of America (CFA) and Consumers Union (CU) said the new rules would lead to consolidation of the 2 most important sources of news -- newspapers and local TV -- for as many as 70 million U.S. households. CFA and CU argued that the FCC proposal effectively would gut the public interest standard of the Communications Act and would afford less protection for media mergers than the antitrust laws traditionally did for other kinds of mergers. “The Justice Department doesn’t do democracy, they do commerce,” CFA Research Dir. Mark Cooper said. The FCC is set to vote June 2 on the draft proposal. CFA and CU said their own sources within the FCC confirmed the media reports on which they based their analysis. “Unfortunately, the proposed rules circulated by the FCC are driven by political deals and deregulatory ideology, not rigorous analysis or First Amendment principles,” said Gene Kimmelman, CU senior dir.- public policy. Cooper, who wrote the analysis, said the FCC draft order ignored audience size, actual patterns of media use and the dramatic difference between entertainment and the dissemination of news and information. The analysis said mergers would be allowed in 140 concentrated local markets and in as many as 100 of the local markets representing nearly half the national population there already was one dominant newspaper. Allowing a merger between a dominant newspaper and a large TV station would create a local news giant that would threaten alternative news viewpoints, Cooper and Kimmelman said. In those markets, Cooper said, one company would have half of the total audience and half of the reporters. They criticized the idea of allowing cross- ownership in places other than small rural areas, such as Atlanta, Louisville, New Orleans and San Antonio, where one newspaper would have a 90% or larger share of the newspaper circulation and a merger typically would attract 1/3 of the TV audience. CFA and CU said the FCC proposal failed to properly define markets by ignoring the fact that almost half of all broadcast stations did not provide news and would set a “dangerously low standard” for competition in local media markets by allowing the count of major news media voices to decline to as low as 3 or 4 in many markets. The groups also charged that the draft appeared to be driven by a “results- oriented political agenda.” One example they cited is that UHF stations appear to be discounted for purposes of the national cap on network ownership of local stations, but not for purposes of the cross-ownership and the duopoly rule. CFA and CU proposed that no mergers between TV stations and newspapers be allowed if the market was or would become concentrated because of the merger, that no mergers involving TV stations be allowed if the same conditions existed. At the beginning of a news conference discussing the analysis, Kimmelman wryly noted that none of the major TV networks were covering the event. Cooper later said he didn’t expect that the new analysis would necessarily sway the Republican members of the Commission. “The battle over media ownership doesn’t end on June 2. It begins on June 2” when people and communities react to a wave of consolidation, he said.
The FCC opened a proceeding at its agenda meeting Thurs. to consider how it should regulate long distance services offered by the Bells and independent local phone companies. The further notice seeks comment on whether those companies should be regulated as dominant carriers, requiring heavier regulation such as the filing of tariffs, or whether the regulatory approach could be eased, either by classifying them as nondominant or as something in between.
The delivery of local content was a central theme in the Senate Commerce Committee’s hearing on media ownership Tues., with some panelists and senators questioning how the FCC’s proposed rule changes June 2 could affect the nation’s democracy. While the effects of media consolidation on local content were debated, it appeared clear that a majority of committee members, including several Republicans, had at least some reservations about the FCC’s direction.