Deal on TV Cap Fractures Coalition

A last-minute deal between the White House and congressional Republicans over a new national television ownership cap has fractured an unusual bipartisan coalition of lawmakers who joined forces this year to oppose increased media consolidation.

The split has left leading Democrats and several consumer groups feeling betrayed. On Tuesday, they lambasted the compromise and vowed to step up their efforts to roll back a slate of media-ownership rules passed this summer by the Federal Communications Commission. The rules -- which have been temporarily blocked by a federal court in Philadelphia -- would permit increased mergers and consolidation of television stations.

“This is not the end of it,” said Andy Schwartzman, head of Media Access Project, which is leading the legal challenge to vacate the FCC rules. “This is not going to be acceptable to a lot of people.”

Sen. Byron L. Dorgan (D-N.D.), a leading critic of the FCC rules, pledged Tuesday to fight the compromise “any way I can.”

In June, the FCC raised the national ownership cap, allowing a single broadcasting network to reach 45% of the nation’s TV viewers, up from the previous 35%. Last week, House and Senate negotiators agreed to reinstate the 35% cap by inserting a provision into a one-year spending bill.

But then, in the face of a threatened presidential veto, Senate Appropriations Committee Chairman Ted Stevens (R-Alaska) cut a deal Monday night with White House negotiators to set the cap at 39%. They also agreed to prevent the FCC from raising it as part of its biennial reviews.

“Thirty-nine is a lot better than 45%,” said Stevens, who had been a leading supporter of the 35% threshold. “The more I think about it, the more I am satisfied.”

Some of Stevens’ former allies on the issue were angry. “The Republicans went into a closet, met with themselves and announced a ‘compromise,’ ” Sen. Ernest F. Hollings (D-S.C.) said.

If Congress approves the 39% cap, some experts predict efforts to roll back other FCC rules -- including one that permits cross-ownership of newspapers and TV stations in the same market -- could be undermined.

“By taking one of the most contentious issues off the table you significantly reduce the long-term risk of overturning the other rules,” said media analyst Paul Glenchur of Schwab Capital Markets in Washington. “If they put the TV cap issue to bed, I don’t think [opponents of cross-ownership and other provisions] will be able to get the same traction next year.”

With final votes not expected until next month or later, lobbyists and congressional aides said it was too early to predict whether the 39% cap would survive.

The FCC’s raising of the national cap was critical for big TV networks, such as News Corp.’s Fox, which owns TV stations reaching 38% of viewers nationwide, and Viacom Inc.’s CBS, which owns stations reaching 39%.

The change spawned the coalition of bipartisan lawmakers and disparate advocacy groups -- from the National Rifle Assn. to Common Cause -- that feared the relaxed rules would give big media companies too much control over what Americans watch on television.

Major networks appeared satisfied with the 39% compromise. It would allow Fox and CBS to avoid selling off TV stations to come under the 35% limit, but would also effectively freeze their ability to expand into new markets.

At a shareholder meeting in New York on Tuesday, News Corp. Chief Executive Rupert Murdoch said he would support a 39% cap. With his pending purchase of satellite TV giant DirecTV, analysts doubted whether Fox would be interested in expanding its reach in the broadcast market.

A Viacom spokesman declined to comment.

ABC, a unit of Walt Disney Co., and NBC, part of General Electric Co., are below the 35% cap and would have room for growth.

Local broadcasters appear divided over the issue.

Edward Fritts, president of the National Assn. of Broadcasters, said the organization supported the 39% compromise. “While a 35% cap would have been preferable,” he said, “we recognize the political realities surrounding this issue.”

But executives at Raleigh, N.C.-based Capitol Broadcasting, a small, independently owned broadcaster that has been a vocal critic of media consolidation, said they were “stunned” by the last-minute compromise.

“This just energizes us,” Capitol Broadcasting lobbyist Dianne Smith said. “The fact that these large media companies can go to the White House and get this kind of change just shows us the power they have.”

A move by Congress to set a new permanent national cap probably would remove that issue from the ongoing court challenge in Philadelphia.

But a variety of other issues are expected to be debated at oral arguments in February, including how many TV stations one company may own in a local market and whether TV-newspaper mergers should be permitted.

Tribune Co., parent of the Los Angeles Times and KTLA-TV Channel 5, is lobbying to permit cross-ownership.

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Times staff writer Nick Anderson contributed to this report.