New FCC Guidelines Create Stir in Congress

A bipartisan coalition of lawmakers assailed the Federal Communications Commission’s decision to relax media ownership rules Monday, pledging an all-out legislative fight to overturn it.

Although the FCC’s decision split along party lines, with the board’s three Republican members supporting the rule changes and two Democrats opposing them, a number of GOP lawmakers joined Democrats in expressing concerns.

“A lot of Republicans -- in fact, probably most of the Republicans in Congress -- would not agree with this decision,” said Sen. Trent Lott of Mississippi, a former Senate GOP leader.

But some of the critics acknowledged that they face an uphill battle, largely due to support for the rule changes from Rep. W.J. “Billy” Tauzin (R-La.), the influential chairman of the House Energy and Commerce Committee.

Any bill to reverse the FCC action would have to come before Tauzin’s panel, and he vowed Monday to fight any such legislation.

“At the end of the day, there’s going to be a lot of shouting about the decision, but not much shooting,” said committee spokesman Ken Johnson. The old rules, Johnson said, “made sense in the 1960s when we had black-and-white television and three networks. But in a 500-cable-channel universe, they don’t make sense.”

An aide to House Majority Leader Tom DeLay (R-Texas) said, “I don’t think it’s realistic to expect that Congress would overturn the FCC decision.”

Still, the vehemence of the reaction on Capitol Hill showed that the debate is far from over. The five members of the FCC are scheduled to appear at a Senate Commerce Committee hearing on Wednesday. Some committee members say they plan to sharply question the commissioners.

“The FCC decision is not the final word,” said Sen. Byron L. Dorgan (D-N.D.), denouncing the rule changes, which include allowing media companies to own more than one television station as well as a newspaper in the same city in large markets.

Rep. Edward J. Markey (D-Mass.), in a reference to the fictional media tycoon of Orson Welles’ famed movie, said the new rules would make “Citizen Kane look like an underachiever.”

Critics contend that the rule changes will put more power in the hands of media conglomerates that will neglect local programming and reduce diversity in the broadcast industry.

Sen. Olympia J. Snowe (R-Maine) said the revisions -- which also permit companies to own TV stations that reach 45% of U.S. households, an increase from 35% -- would deny the public access to “a diversity of choices ... and limit freedom of expression and curtail discourse, which are the very tenets of freedom and democracy our nation is built on.”

Sen. Conrad R. Burns (R-Montana) said the higher cap would turn local broadcast affiliates into “mere passive distribution outlets for national programming.” He said the change was critical in rural communities, “where the absence of local broadcast television would mean only a choice between different national distribution networks.”

However, Sen. Larry E. Craig (R-Idaho) said in a statement that the FCC has tried to “balance the need for a diversity of voices while reflecting the reality of media markets today.... While only time will tell if the perfect balance has been struck, we need to take steps towards bringing these rules in line with 21st century media realities.”

A bipartisan group of senators is sponsoring legislation that would restore the rule prohibiting individual companies from owning TV stations that reach more than 35% of U.S. households.

Sen. John McCain (R-Ariz.), chairman of the Senate Commerce Committee, which oversees broadcasting issues, opposes the legislation and has expressed doubt that it would pass.

Opponents of the changes said they also might try to attach a rider to the FCC spending bill preventing the commission from implementing the new rules.

Sen. Ernest F. Hollings (D-S.C.), top Democrat on the Commerce Committee, said he saw no reason for the rule changes “other than greed.”

Sen. Dianne Feinstein (D-Calif.) said the changes could lead to a “new wave of media mergers and enable a few giant companies to control the airwaves.” California’s other senator, fellow Democrat Barbara Boxer, called the FCC decision a “blow to the free flow of ideas.”

One Democratic presidential contender, Sen. John Edwards of North Carolina, said the decision could result in fewer community-oriented programs that give his home state a “distinctive local accent,” from broadcasts of Billy Graham crusades to Atlantic Coast Conference basketball games.

But Tauzin said the FCC has done what “our free-speech society needs it to do.”

He said in a statement that the rule changes “recognize and reflect the explosive growth in the number and variety of media outlets in the market, as well as the significant efficiencies and public interest benefits that can be obtained from common ownership.”

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How media stocks fared

Shares of smaller media firms generally saw the biggest percentage gains Monday in the wake of the FCC decision opening the door to more media mergers. A sampling of stocks:

*--* Monday Monday % change: % change: Stock close change Mon YTD Beasley Broadcasting $12.99 +$1.02 +8.5 +8.6 Entravision 10.75 +0.70 +7.0 +7.7 Radio One 17.42 +0.78 +4.7 +20.7 Cox Radio 23.84 +1.05 +4.6 +4.5 Univision 30.90 +1.05 +3.5 +26.1 Clear Channel 42.09 +1.39 +3.4 +12.9 Walt Disney 20.07 +0.42 +2.1 +23.1 Hearst-Argyle TV 25.30 +0.45 +1.8 +4.9 Viacom Class B 46.27 +0.75 +1.7 +13.5 AOL Time Warner 15.44 +0.22 +1.5 +17.9 News Corp 31.21 +0.44 +1.4 +18.9 Tribune 49.70 -0.18 -0.4 +9.3 S&P; 500 index 967.00 +3.41 +0.4 +9.9

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Sources: Reuters, Bloomberg News