Showdown Over Media Ownership Rule Is Likely

Rules aimed at preventing concentration of media ownership appeared headed for a showdown Wednesday as the head of the Federal Communications Commission said he opposed a powerful senator’s bid to delay relaxing current restrictions.

FCC Chairman Michael K. Powell, declaring he planned to push ahead with reforms this year, said the agency’s options would be unduly limited by a measure proposed Tuesday by Senate Commerce Committee Chairman Ernest F. Hollings (D-S.C.).

Hollings would slap at least an 18-month moratorium on the FCC’s efforts to relax restrictions on media ownership, including an FCC rule that prohibits a single company from owning a newspaper and a television station in the same locale.

“Eighteen months is a lifetime in a regulatory sense,” Powell told reporters after speaking to a group of African telecommunications ministers. “I certainly like to work with Sen. Hollings on different ways to do things, but I find that to be a pretty long period of time.”

Powell’s remarks are certain to sharpen the high-stakes political battle over how the federal government regulates ownership of the powerful media companies that deliver news, information and entertainment to the nation.

Hollings, upon introducing his moratorium legislation Tuesday, said the nation faced a choice between “an erosion of diversity in our local markets” and “maintenance of rational ownership restrictions to allow local media outlets to retain some ability to control and disseminate locally relevant news and information.”

Media corporations--among them the owners of the four major networks and Tribune Co., which owns the Los Angeles Times and KTLA-TV--contend that a proliferation of Web pages, cable TV channels and other media outlets has guaranteed diversity and made current rules obsolete.

But media watchdog groups and independent broadcasters reply that without federal restrictions, a handful of media companies will become as dominant in their field as their counterparts are in the heavily consolidated airline and banking industries. Advertisers also oppose media consolidation because they fear it will bring higher ad rates.

The views of the big media companies had held sway for most of this year as a new mood of deregulation gripped Washington when the Bush administration took office and the federal courts struck down some constraints on media ownership.

The movement was dealt a setback this spring when Democrats seized control of the Senate. Now Powell, who has enjoyed an extended honeymoon with Congress since taking office in January, appears headed for his first political donnybrook.

“I think many elected officials have a real uneasiness about media concentration because many believe they haven’t been fairly covered . . . [and] they’re afraid if media becomes any more concentrated they won’t be able to get on the front page or on television,” said Philip L. Verveer, a widely respected Washington communications and antitrust lawyer who held numerous administrative posts at the FCC.

The FCC limits media ownership in three areas:

* A 26-year-old FCC rule bars a company from owning a television station and daily newspaper in the same market.

* The so-called duopoly rule prohibits a company from owning more than one television station in a market, unless there are more than eight stations serving the area.

* A third rule bars companies from reaching more than 35% of U.S. television households.

The newspaper-broadcast cross-ownership rule is likely to be the first to receive Powell’s attention. The FCC chairman said Wednesday that his agency would begin a review of the rule within two months.

In May, the FCC chairman appeared to have marshaled a consensus to support his reform of the newspaper cross-ownership rule. However, FCC commissioners argued so long over wording changes that two commissioners left office before a deal could be struck.

Tribune Co.--which last year acquired newspaper and TV stations that gave it one of each in New York and Hartford, Conn., as well as Los Angeles--has petitioned the FCC to waive or eliminate a rule that bars companies from owning a newspaper and television station in the same market. On Wednesday, the company’s Washington lobbyist said he would redouble efforts to get the FCC to drop the decades-old restriction.

“My job is to hold everybody’s feet to the fire and get this rule-making going. I think we are going to see some movement here,” said Shaun Sheehan, a lobbyist for Tribune Co.

Reform of the other two media concentration rules are a longer shot.

Experts say Powell is likely to wait until a federal court this fall resolves a legal challenge to the 35% audience cap rules brought by Viacom and others. And review of the duopoly rule, they say, could be even further down the road.