Prospects for broadcast ownership deregulation have suddenly diminished now that Sen. Ernest Hollings, D-S.C., heads the Senate Commerce Committee and the Democrats control the upper chamber.
That reality was clear last week at a Senate Commerce hearing in which Sen. Hollings and other majority members expressed strong opposition to relaxing the existing limits.
Network television executives are now looking to the Federal Communications Commission and the courts to remove the 35 percent ownership cap, which the affiliates want maintained.
Tribune and other companies that own newspapers are pinning their hopes on the FCC to provide relief from the newspaper-broadcast cross-ownership restrictions.
“The FCC has the ability to change the ownership rules within its own authority, and the other thing that’s out there is the courts,” Viacom President and Chief Operating Officer Mel Karmazin told reporters last week. He wants the 35 percent threshold and the dual-network rule eliminated.
But the GOP-controlled FCC, which plans to review its ownership rules this summer or fall and remove those that can no longer be justified, is already facing pressure from Senate Democrats.
Sen. Hollings’ panel oversees the FCC, and an appropriations subcommittee he heads doles out its funding. The senator, who has used appropriations riders in the past to block FCC actions, could use his authority to prevent the agency from relaxing the rules.
Even a court victory might have a downside for broadcasters, because the courts often remand cases to the FCC with instructions to craft new rules, creating an opportunity for Congress to step in and influence the process.
Oral arguments are scheduled for Sept. 7 in a suit that Fox, NBC and CBS have filed against the FCC in the U.S. Court of Appeals in Washington challenging the ownership limit. A decision could come by year-end.
Meanwhile, the House subcommittee on telecommunications and the Internet, headed by Rep. Fred Upton, R-Mich., is keeping open the possibility of hearings on media ownership, a spokesman said. Rep. John Dingell, R-Mich., expressing concern about media consolidation during a floor speech last Thursday, urged his House colleagues to explore the issue.
Late last week Sen. Hollings, Sen. Daniel Inouye, D-Hawaii, and Sen. Byron Dorgan, D-N.D., introduced legislation requiring the FCC to notify Congress of any plans to relax or remove the existing ownership limits.
Broadcasters would be required to tell the agency they have entered into cross-ownership situations with newspapers. The FCC would review such deals and decide whether to take action to ensure the companies comply with the cross-ownership ban.
The bill is likely to face an uphill battle, and observers privately said they doubt it will go anywhere.
Nevertheless, the measure is a far cry from legislation championed in recent years by former Senate Commerce Chairman John McCain,
R-Ariz., that would raise the broadcast ownership cap to 50 percent and end the broadcast-newspaper prohibition.
Mr. Karmazin said Viacom would probably try to buy more television stations in major markets-mostly in the top 50-if the ownership cap were raised or eliminated.
And if the dual-network rule were repealed, he would consider purchasing another Big 4 network if one were for sale.
Meanwhile, Rep. David Obey of Wisconsin, ranking Democrat on the House Appropriations Committee, dropped plans last week to amend a pending budget bill with provisions barring the FCC from altering its ownership rules for the rest of the year. The amendment was intended to derail the FCC’s upcoming review.
“The fear was that the industry is so strong that we would lose by a large enough margin that it would seem like it was a hopeless cause,” panel spokesman Dave Sirota said. But Rep. Obey isn’t giving up. He plans to offer the amendment later this session after striving to build a coalition of members to support it.
“The battle is not over,” Mr. Sirota said.
Rep. Dingell opposed the amendment because he thinks the FCC should regularly review its ownership rules and should not have its hands tied if a court asks the agency to rewrite them.
“It will be my intent to work with my good friend from Wisconsin [Rep. Obey] to assure that existing constraints on excessive media concentration are maintained,” Rep. Dingell said. “We need a diversity of media expression in this country, and I hope that the FCC does not contribute to the exact opposite, as I fear they may be planning.”