Down to the Wire on Telecom Reform : News analysis: Lawmakers have resolved some issues, but media concentration remains a thorny problem.

As House and Senate conferees gather today to try to complete work on a sweeping telecommunications reform measure, perhaps no group is rooting harder for them to finish the bill than broadcasters.

They’ve already made $6.7 billion in radio and television deals this year, and they would be able to buy even more properties under the measure being considered by lawmakers--even though many consumer advocates fear such deals are leading to a dangerous concentration in the media.

The telecom reform effort appeared headed for an explosive showdown late Monday after Sen. Larry Pressler’s chief of staff proposed a 214-page bill, which legislators are to debate today. But sources said staff members were furious that Pressler, the South Dakota Republican who chairs the conference committee, was apparently assuming that members would want to use the draft as a reference document.

Conference committee aides trying to reconcile the differences between the House and Senate telecom bills have resolved a number of controversial issues so far, including cable TV rate regulation, universal telephone service and telephone accounting rules. But media concentration, along with rules governing local phone company entry into the long-distance business, remains a thorny problem. President Clinton has even indicated that he might veto a telecommunications bill that allowed newspapers, cable TV and television and radio stations to be concentrated in too few hands.

Consumer advocates fear the emergence of “electronic company towns” as media firms now straining at the regulatory leash prepare for a buying frenzy. Indeed, this summer’s string of media mega-mergers--Time Warner Inc. with Turner Broadcasting System Inc., Walt Disney Co. with Capital Cities/ABC Inc., and CBS Inc. with Westinghouse Electric Corp.--are viewed by many as precursors to the high-stakes deal making that will take place if restrictions are further relaxed.

“Right now a lot of people are holding back because they don’t know if there will be telecom reform,” said Brian E. Cobb, a broker in the McClain, Va., office of Media Venture Partners, a major radio and TV station broker. “I expect there will be many more [stations] changing hands once a bill is passed.”

Added a prominent media investor: “Once the restrictions are lifted, no one’s going to wait.”

In 1984, the Federal Communications Commission raised the number of TV and AM and FM radio stations an individual media firm could own from seven of each to 12 of each, as long as the TV stations did not reach more than 25% of the national audience. The House and Senate telecom bills would raise the audience limit figure to 35%, and the House wants the FCC to have the authority to raise those limits even further.

Conferees are also working on a compromise on radio station ownership limits, which both the House and Senate bills repeal entirely. Clinton and some other lawmakers want limits kept, lest over-concentration of radio ownership limit diversity of discourse and breed unresponsive absentee ownership. Rules that limit cross-ownership of cable networks, broadcast stations and newspapers in the same market are also at issue.

Advocates of looser ownership rules argue that times have changed dramatically since the 1980s, when broadcast television controlled 90% of the market. Now 65% of American households have cable, which poses significant competition to broadcasters.

“Congress established the basic standard in the Communications Act in 1934, and it stands to reason there should be new standards set in this--the communications act of 1996,” said Dick Wiley, former chairman of the Federal Communications Commission who now serves as an FCC advisor.

Shaun Sheehan, vice president of Tribune Co., owners of WGN-TV and the Chicago Tribune newspaper in the Windy City, argued that the existing media ownership limits are a relic of a bygone era when lawmakers feared newspaper barons such as William Randolph Hearst.

But that kind of media control, Sheehan said, “is not going to happen in this new video environment,” because of the plethora of media outlets. “If Time Warner can put on 8 gazillion channels in Orlando, then the Orlando Sentinel ought to be able to buy one television station” in the same town.

“To me, bigger is not necessarily bad; big can be very efficient,” said FCC Commissioner James Quello. “Look, you don’t go to a local market anymore, you go to a big supermarket. The communications industry is going to be big too. It’s only a problem if you have one dominating.”

But critics say the media industry, which traffics in ideas and values, is different from a supermarket that traffics in cereal and soda pop. They raise the specter of a monopoly culture controlled by a few gargantuan Big Brothers.

“Culture is more than a commodity,” said sociologist Todd Gitlin. “It’s amazing to me that in all these deals what is talked about is the business angle and not the effect on people’s lives.”

“The threat to the democratic process is very real,” said Andrew Schwartzman of the Media Access Project. “As the technologies create the possibility for many voices, Congress is creating a regulatory scheme that will likely result in fewer and fewer editors over more and more voices, with single companies controlling scores of information pipelines.”

Critics not only fear that broadcasters will grow too big and influential but that, as absentee owners, they will be out of touch with the local communities that the nation’s system of 12,000 radio and 1,500 commercial TV stations was originally set up to serve.

Already, broadcasters have been freed from federal rules that had required them to meet with local leaders in order to “ascertain” the programming and information needs of a community. Although supporters of eliminating ownership restrictions say market forces will ensure that station owners stay responsive to local communities, critics disagree.

“If a local broadcaster is part of a large conglomerate that also includes a television network, cable companies and a chain of telephone companies with a bottom-line interest in providing entertainment and communications for a profit . . the provision of news and other kinds of information will have very little to do with local events,” said Gene Kimmelman, co-director of the Washington office of Consumers Union.

But broadcasters and regulators say the rapid proliferation of new forms of media pipes such as wireless technology, digital satellites and online services means that after 60 years under the 1934 Communications Act, it’s time for a new one.

“This is a terribly important issue,” said Martin Franks, a senior vice president at the CBS television network. “People are not going to make investments until there is some certainty on what federal policy is going to be.”

Pressler has scheduled a conference committee meeting for this afternoon. And the House has reserved floor time for a vote on telecom legislation.

But because many lawmakers and key administration officials have been out of town, many have not seen the latest proposals, and it is unclear whether the principals would be satisfied with any accord the staff might present. Most observers believe the conference committee must reach agreement today if the bill is to be passed before Congress’ Christmas recess.

And if he doesn’t consider the final compromises acceptable, Clinton may yet veto the entire measure. In part, the president’s strong feelings are said to stem from clashes with the closely controlled media in his home state.

“The fact is that privately, most politicians distrust media, particularly in their own communities, and resent their power,” said Schwartzman. “Many would like to stick it to them, but it breaks down on ideological grounds--and it’s dangerous to poke a stick at them.”