White House Weighs Moves to Slow Mergers : Media: Administration fears further consolidation will diminish competition. Government may challenge recent deals.

Amid mounting concern that the recent wave of media mergers will dangerously diminish competition in key segments of the communications industry, the Clinton Administration is considering a variety of tactics to slow the decade-long trend toward media consolidation.

It’s unclear whether any of the measures now being weighed would seriously threaten Walt Disney Co.’s proposed acquisition of Capital Cities / ABC Inc., Westinghouse Electric Corp.’s bid for CBS Inc., or Time Warner Inc.’s expected bid for Turner Broadcasting System Inc.

But a hotly contested effort to overhaul the nation’s telecommunications laws may fall victim to a political backlash against the mega-mergers, and officials at both the Federal Communications Commission and the Department of Justice have indicated that they may yet challenge one or more of the recent deals.

“This is an issue that everybody in the Administration, from the Commerce Department and Justice Department to the vice president and President have all become concerned about,” said Larry Irving, assistant secretary of commerce for telecommunications. “This is right in people’s faces on television and in [the] newspapers they read. . . . In a democracy, where the media is how people get information, I don’t think any of us wants to see all of these outlets owned by one or two people.”

At the White House, Vice President Al Gore, an influential voice on communications policy, is urging President Clinton to veto the long-awaited telecommunications bill, which has been passed in somewhat different forms by both the House and the Senate and now awaits reconciliation of the two versions. Among many other issues, the bill would loosen rules on media concentration.

At the Justice Department, antitrust chief Anne K. Bingaman this week cited “a level of unease in the country about the pace of telecommunications mergers.” While Bingaman’s record of reinvigorating the antitrust division is mixed--and most experts say she is unlikely to move against the media mergers--the department on Wednesday requested additional information from Disney and Capital Cities about their proposed transaction.

At the FCC, meanwhile, there are worries that the proposed Time Warner-Turner merger could be anti-competitive. One source said the agency was focusing on the tight relationship the deal would create between Time Warner and Tele-Communications Inc., a major Turner shareholder that would be converting its 21% stake in Turner into approximately 9% of Time Warner.

Together, Time Warner and TCI reach more than 40% of the nation’s cable television subscribers, and federal rules prohibit any one operator from reaching more than 30%. Even if TCI were to reduce its voting stake in Time Warner to less than 5%, as it has discussed, the FCC would still be concerned about the concentration of cable systems.

The agency is also said to be worried about the biggest cable carriers having control over the most popular programming, and possible granting one another preferential rates. Already, Malone is said to be demanding long-term contracts at favorable rates for Turner channels, including the Cable News Network.

Administration officials and industry sources say Clinton, who credits non-traditional outlets like talk radio, MTV and the Internet computer network with helping him reach the White House, is particularly concerned that media concentration could distort the nation’s political discourse, and raise entertainment and communications prices for all Americans.

Since 1983, the ownership of broadcast stations, cable outlets, newspapers and other mass media has become concentrated in the hands of fewer than two dozen companies, compared to more than 50 a decade ago, according to author and media expert Ben H. Bagdikianc. Not only are there fewer media owners, Bagdikian said, but “the magnitude of the mergers and the players in the mergers have changed . . . as even bigger players like the telephone companies become involved.”

Observers say it would probably be difficult even for a determined Administration to turn back the merger wave given the current anti-regulation, pro-business environment in Congress. Any antitrust challenge would be tricky, since even megaliths like Disney and ABC won’t be gaining obvious monopoly power in any of their markets.

Rep. Jack Fields, the Texas Republican who chairs the House Telecommunications subcommittee, fired back at Gore’s criticisms on Thursday, saying those who seek to regulate media ownership are living in the past.

“The media marketplace today is so diverse that it is difficult to create a scenario where anyone can buy up a controlling position. . . . We are moving into the 21st Century, and what you’ve got is a President and vice president who still want this to be the 1930s in terms of policy.”

Still, the telecommunications bill now looks vulnerable. The two measures scheduled be reconciled by lawmakers this fall aim to promote more competition by letting the telephone, television and cable industries into each others’ businesses. But they would also allow large broadcasters to buy more radio and TV stations, and strip away cable rate regulations imposed three years ago.

The House bill would also allow one person to own a newspaper, radio and TV station serving a single city as well as raise to 35% the national audience any one broadcaster could potentially reach. Similarly, the Senate bill would leave it up to the FCC to grant exemptions to current cross-ownership rules.

Further, the House bill in some instances would permit one person or company to own the newspapers, radio and television stations serving a single town or region. The Senate also relaxes so-called cross-ownership rules.

In a speech to communications industry executives on Tuesday, Gore lashed out at the proposed reforms as “a contract with 10 companies” that “promotes mergers and concentration of power.”

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Times staff writer Sallie Hofmeister in Los Angeles contributed to this report.