House Votes to Restore Media Ownership Cap

By Jube Shiver Jr. and Nick Anderson

July 24, 2003 12 AM PT

Times Staff Writers

WASHINGTON —

The House of Representatives, in a sharp rebuke to the Federal Communications Commission, passed a measure Wednesday that would keep television broadcasters from owning stations that reach more than 35% of the nation’s viewers.

The 400-21 vote on a spending bill showed growing discontent with a recent move by the FCC to relax decades-old restrictions on media conglomerates such as News Corp. and Viacom Inc.

“The public furor is totally understandable,” Rep. Edward J. Markey (D-Mass.) said during the debate. Referring to moviedom’s famous fictional press lord, he added: “No one should have that kind of power. It will make Citizen Kane look like an underachiever.”

Political play around the FCC rules has pitted the nation’s biggest broadcasters, which generally favor change, against smaller brethren, many of which see the current rules as a welcome bulwark against major chains. At the same time, hundreds of thousands of citizen complaints about the growing power of big media outlets found a ready ear among politicians, who often rely on the local broadcasters for crucial campaign coverage.

White House officials have said President Bush would veto the spending bill if the TV provision remained intact, and some congressional insiders predicted that GOP lawmakers would remove it rather than force the administration’s first veto.

“It’s just not likely the Republican Congress is going to send the Republican president a bill to be vetoed,” said John Scofield, spokesman for the GOP majority on the House Appropriations Committee.

On June 2, the FCC approved regulations that expanded the ownership cap to 45% from the current 35% and revised a host of other restrictions, including a ban on owning a newspaper and a TV station in the same market. Many companies lobbied vigorously for the changes, including Tribune Co., which owns both the Los Angeles Times and KTLA-TV in Los Angeles. Without the new rules, Tribune might eventually have to divest one of those properties.

Amid an outpouring of public protest, the Senate Commerce Committee quickly introduced legislation that would undo virtually all of the FCC’s actions. Whether that much broader effort can ultimately be matched with the narrower House action remains to be seen -- particularly in the face of opposition by a deregulation-minded White House.

Key congressional champions of the FCC’s deregulatory policy, such as House Commerce Committee Chairman W.J. “Billy” Tauzin (R-La.), also have vowed to defeat any attempt to reinstate stricter TV ownership limits.

On Wednesday, an administration source said, “The veto is real.” That threat will be tested when House and Senate versions of the appropriations measure enter conference negotiations.

The roughly $40-billion House bill is packed with money for agencies that enjoy broad bipartisan support -- the Commerce, State and Justice departments. The Justice Department spending, for example, is needed for federal law enforcement and anti-terrorism initiatives.

No comparable spending bill has yet cleared the Senate Appropriations Committee. That committee’s chairman, Sen. Ted Stevens (R-Alaska), is a sharp critic of the new FCC rules and helped push through the Commerce Committee’s rollback provision. But it isn’t clear that Stevens would try to force the FCC changes through a must-pass spending bill.

Wednesday’s House action was a stinging rebuke for expansion-minded conglomerates and for FCC Chairman Michael K. Powell, who has championed deregulation of the media. Powell has noted that even Viacom and News Corp. each own fewer than 3% of the nation’s 1,300 commercial TV stations. He has argued that old limitations are unneeded in an era when cable and satellite TV channels number in the hundreds, newspapers and magazines in the thousands and Internet sites in the millions.

In a statement issued Wednesday, Powell defended the FCC’s ownership rules, saying they “reflect the realities of today’s media marketplace.” He added: “The FCC based its judgments on evidence that the new rules would benefit Americans.”

Yet smaller broadcasters and populist critics as politically diverse as the National Rifle Assn. and the National Organization for Women found politicians receptive. Many lawmakers are leery of media power over their own campaigns and careers.

“The level of support against these rules is cutting across ideological views in a way we haven’t seen in a long time,” said Andy Davis, a spokesman for Sen. Ernest Hollings (D-S.C.), who co-sponsored the rollback measure now before the Senate. Hollings and others have argued that the liberalized ownership rules would have a chilling effect on political discourse by inhibiting a diversity of viewpoints.

Despite the political jockeying yet to come, some analysts are predicting that at least some of the FCC rules will be dropped.

“We recognize that the White House has issued a veto threat and that there is much remaining uncertainty regarding this legislation, but our best guess at this point is that the 35% language will ultimately be enacted,” declared a report issued by Legg Mason Wood Walker Inc. after Wednesday’s vote.

The lower ownership cap might pose a particular problem for Viacom, parent of the CBS network, and News Corp., parent of Fox, because both of those companies already own stations in excess of the limit. It isn’t yet clear whether any bill ultimately passed into law would require such companies to divest present holdings.

But the lower limit might be a boon for others, such as Walt Disney Co., parent of the ABC TV network. Disney owns just 10 TV stations, which don’t exceed the 35% limit, and executives close to the company say the rollback actually might allow it to purchase additional stations with less bidding pressure from competitors.

In warning of a presidential veto, the White House budget office said in a memo on the eve of the House vote: “The administration believes that the new FCC media ownership rules more accurately reflect the changing media landscape and the current state of network station ownership, while still guarding against undue concentration in the marketplace.”

At least one FCC official, speaking on condition of anonymity, saw the vote as saying less about policy points than about the legislators’ resentment of Big Media.

“This thing has momentum that is manifesting itself in the fact that the members don’t care about the substance anymore,” the official said. “It is pure politics now, and less about what the agency did and more about how they feel about broadcasters.”

Times staff writer Richard Simon contributed to this report. Recent Times coverage of FCC media regulations is available at www.latimes.com/fcc.

(BEGIN TEXT OF INFOBOX)

Attacking the FCC rules

House and Senate bills seek to overturn provisions of the Federal Communications Commission’s relaxed media ownership rules.

House bill

Bill number: HR 2799

Scope of bill: Funding for Cabinet departments and agencies, including the FCC

Bill status: Passed 400 to 21 in the House on Wednesday

FCC provisions

* Prohibit funding that would let any broadcast company’s TV stations reach more than 35% of U.S. households

Senate bills

Bill numbers: S 1046 and S 1264