FCC Chief Reassures Panel on Media Limits

The government’s chief communications regulator told lawmakers Tuesday that he shares their concerns about growing media consolidation and hinted that he’s unlikely to completely eliminate existing broadcast ownership rules, as some have suggested he might.

Eager to show that he still has an open mind on the issue, Federal Communications Commission Chairman Michael K. Powell -- a past critic of the FCC’s media ownership restrictions -- assured members of the Senate Commerce Committee that he wouldn’t permit media giants to dominate local television and radio markets.

“I am concerned about media concentration, particularly in radio,” Powell told the committee, which heard testimony from all five FCC commissioners for the first time in nearly five years.

He acknowledged that his agency “has to start looking at the media marketplace through the eyes and ears of consumers.”

The scheduled topic of Tuesday’s hearing was the nation’s telecommunications crisis, but lawmakers took the opportunity to quiz Powell about the FCC’s review of media ownership rules.

Powell’s comments echoed similar statements he has made in recent months in an attempt to ease fears that he might throw out the rules entirely. Before he took the helm of the FCC, Powell, as a commissioner, questioned the legality of the rules and called them outdated.

Among other things, FCC regulations bar a company from owning TV stations and newspapers in the same market, prevent TV station owners from reaching more than 35% of U.S. television households and limit the ownership of local radio stations.

Over the last two years, media conglomerates have won a string of court victories to either kill the rules or have them remanded to the FCC. In addition, Congress in 1996 ordered the FCC to either justify the continuing need for the restrictions or abandon them.

“If I really didn’t care about media concentration, I would do nothing and let the courts vacate all the commission’s rules,” Powell said.

Despite his assurances, Powell and other Republican commissioners still are expected to make substantial changes to the rules when the agency completes its review this spring.

Experts have speculated for months that the FCC will, at a minimum, allow a company or individual to own a newspaper and a radio or television station in the same market without a federal waiver.

But consumer advocates and many lawmakers worry that public discourse could suffer if the FCC allows a handful of media giants to control what is seen on television and heard on the airwaves.

They note that even though the number of cable TV channels has exploded in recent years, most networks are controlled by the same six entertainment giants.

“When you talk about more voices, are you talking about more voices by one ventriloquist?” quipped Sen. Byron L. Dorgan (D-N.D.).

Critics point to the recent consolidation in the radio market, where ownership caps were relaxed in 1996. As a result, one company, Texas-based Clear Channel Communications Inc., has gobbled up 1,200 stations and been accused of using its clout to bully record labels and competitors.

Powell reminded lawmakers that even if the rules are relaxed, most media mergers still would be subject to a government antitrust review and a separate “public interest” test by the FCC, giving the agency the power to block deals that would stifle diversity.

Tribune Co., parent of the Los Angeles Times and KTLA-TV Channel 5, has been a leading critic of media ownership rules, particularly the one prohibiting control of newspapers and television stations in the same market.

The FCC also is under the gun to act on telephone competition rules that could have significant effects on local phone rates as well as the availability of high-speed Internet access.

Nearly seven years after the passage of the federal Telecommunications Act, concern has increased on Capitol Hill that government measures aimed at stimulating competition in local phone service have failed to break the Baby Bells’ monopoly.

Prices for local phone service have increased 23% since the act was passed in 1996, compared with a 17% rise in overall consumer prices during the period, according to Consumers Union, publisher of Consumer Reports magazine.

The FCC is expected to decide before Feb. 20 whether to ease a rule requiring SBC Communications Inc. and the other three Baby Bells to lease their switching equipment at heavily discounted rates to competitors such as WorldCom Inc. and AT&T; Corp.

Powell, who has long believed that local phone competitors should build their own communications facilities and not rely on existing networks, was sharply questioned about his views by several lawmakers, including a skeptical Senate Commerce Committee chairman, Sen. Ernest F. Hollings (D-S.C.).

After recounting the recent trend of rising phone prices and dwindling competition in the telecommunications industry, Hollings stared at Powell and asked, “Are you on the side of higher prices and less competition?”

“Absolutely not,” said Powell, who added that he intended to “be faithful” to Congress’ intent of spurring competition when it passed the Telecommunications Act.