Senate Panel Votes to Reject New FCC Rules

A Senate committee Thursday called for a substantial tightening of media ownership rules that were eased only weeks ago by the Federal Communications Commission.

But the wide sweep of the proposed legislation sparked a storm of protest from industry representatives -- including some who had backed a partial rollback -- and may diminish chances for passage by Congress.

After two hours of debate, a bipartisan coalition on the Senate Commerce Committee voted to keep television broadcasters from owning stations that reach more than 35% of the nation’s viewers, reinstate a ban on owning a TV station and a newspaper in the same city and force a handful of radio giants such as Clear Channel Communications Inc. to sell some stations.

Initially, the senators were expected to address only the national TV ownership cap, which the FCC expanded to 45% in its far-reaching revision of media rules June 2. A series of amendments produced a measure even tougher, in some respects, than the rules.

Media watchdog groups immediately voiced approval. “This fight is alive,” said Chris Murray, legislative counsel for Consumers Union. “There is amazing bipartisan support.”

But the National Assn. of Broadcasters, which had lobbied in favor of the original bill, withdrew its backing in light of the changes. “NAB will strongly oppose this legislation,” said Eddie Fritts, president of the broadcast trade group.

The broad nature of the measure appeared only to stiffen the resolve of opponents in the House, including Rep. W.J. “Billy” Tauzin (R-La.), who is chairman of that chamber’s Energy and Commerce Committee. “This issue has become a political soap opera, and given the chance, Chairman Tauzin intends to cancel its run,” committee spokesman Ken Johnson said.

During Thursday’s session, several lawmakers on the Senate Commerce Committee -- which approved the measure on a voice vote -- expressed deep disapproval of what they described as a move by the FCC to unduly empower giant media corporations. In addition to expanding the national ownership cap, the agency made it easier for one company to own a newspaper and a TV station in the same city or to own multiple TV outlets in one market.

“What the FCC did was absolutely wrong,” said Sen. Kay Bailey Hutchison (R-Texas). “I would like for the FCC to start all over.”

Sen. Byron L. Dorgan (D-N.D.) called the agency’s vote “the fastest, most complete cave-in to big corporate interests” he’s ever seen.

A pileup of amendments to an original bill offered by Sens. Ted Stevens (R-Alaska) and Ernest F. Hollings (D-S.C.), quickly put those who supported some parts of the new measure at odds with other elements.

One particularly contentious amendment, offered by Dorgan, would reinstate the ban on broadcast-newspaper cross-ownership, which he said prevents a single company from dominating local news. But Dorgan opposed a revision, successfully proposed by Stevens, that would allow waivers to the ban in the 60 smallest markets.

Under Stevens’ proposal, a company could go before the state public utilities commission to show why a merger between a paper and a station might benefit the public in a small market. Dorgan, however, contended that such cross-ownership is especially dangerous in small markets, and he questioned the wisdom of involving state commissions in federal broadcast rules for the first time.

Calling the legislation “frustrating,” a lobbyist for Tribune Co. said, “It boggles the mind.” Tribune, which owns the Los Angeles Times and KTLA-TV Channel 5, among other newspaper and broadcast properties, has been a major advocate of eliminating the cross-ownership rule.

A lobbyist for Walt Disney Co., parent of ABC, blasted the NAB after the vote, blaming the trade group for pushing for the 35% cap and opening a Pandora’s box of re-regulation.

“The NAB’s wrongheaded and cynical advocacy has produced a disaster for the whole industry,” Disney lobbyist Preston Padden said.

This week, ABC became the latest major network to quit the NAB because of the dispute over media ownership rules. The NAB wants to keep the 35% cap because it fears the expansion of major networks, such as CBS and Fox, but it supports the FCC’s other reforms.

FCC Commissioner Michael J. Copps, a Democrat who voted against a Republican majority that approved the new rules, said the agency should stay its decision pending congressional action. An FCC spokesman said the commission doesn’t comment on pending legislation but would abide by any laws passed by Congress.

Senate Commerce Committee Chairman John McCain (R-Ariz.), who previously expressed skepticism about second-guessing the FCC, added one of the bill’s toughest amendments, which would force radio owners to sell stations to comply with the new market definitions set by the FCC.

In its June 2 vote, the FCC left local radio station caps unchanged but voted to revise the method it uses to define the boundaries of a local market. The change was intended to close a loophole that permitted a single company to own all radio stations in some cities.

At the same time, the FCC said it would not force companies that acquired their stations under the old rules to sell their holdings. McCain’s proposal would give those companies one year to come under compliance.

Some of McCain’s fellow Republicans said it was unfair to punish companies by retroactively changing the rules. “It’s disruptive to the business environment,” said Sen. Sam Brownback (R-Kan.).

McCain, who plans to hold a hearing on the issue next week, countered that rule changes were part of the price that broadcasters must pay in return for their free use of the public airwaves.

A Clear Channel lobbyist criticized the vote, which would subject the company to even tougher strictures than it faced before the FCC acted.

“The Senate Commerce Committee decided to ignore the Constitution and the best interests of radio listeners across the country,” said Andy Levin, senior vice president for government affairs. “This is an attempt to single out one company for being successful and punish them for playing by the rules.”

McCain also said Thursday that he and Tauzin planned to convene a series of talks between Hollywood producers and television networks to address complaints that independent production companies are being squeezed out of the industry, leading to less diverse programming on TV.