Cap Fight in Temporary Truce

Dec 22, 2003  •  Post A Comment

With the prospect of at least a temporary break from their long-pending regulatory battles, the networks and their affiliates are ending 2003 on a compromise note, thanks to a last-minute legislative deal that would permanently cap national TV ownership at 39 percent of the nation’s TV homes.
At least some of the networks had been pressing to ax the Federal Communications Commission’s cap altogether. And, true, the new cap represents a significant rollback from 45 percent-the level to which the FCC’s Republican majority raised it with its controversial June 2 vote.
But at same time, setting the bar at 39 percent gives two of the major networks-ABC and NBC-room to grow. In addition, it will preclude CBS, which currently owns stations reaching 38.8 percent of homes, and Fox, at 37.8 percent, from having to divest any stations, something they might have had to do if the cap were lowered any further.
It’s also true that the affiliates have long been pressing to roll back the cap to 35 percent, and they persuaded lawmakers to adopt appropriations riders that would have accomplished their mission.
But even assuming they were approved, the riders would have been effective only until Oct. 31, 2004, the end of the federal government’s fiscal year. The 39 percent cap, which is expected to be approved by the Senate in January, is permanent.
In addition, while the White House had been threatening to veto any legislation that would roll back the cap to 35 percent, it endorsed setting the cap at 39 percent permanently as part of a compromise forged by Sen. Ted Stevens, R-Alaska.
Said Eddie Fritts, president and CEO of the National Association of Broadcasters: “While a 35 percent cap would have been preferable, we recognize the political realities surrounding the issue.”
The battle over the cap consumed much of the industry’s energy and political capital in Washington this year, and resolving the issue could clear the way for the industry to move its focus to other important priorities.
But sources warned that the cap battle could be renewed in the courts, if the networks decide to launch a new round of legal challenges on the issue.
Additional FCC deregulation-including the agency’s substantial relaxation of a rule that barred broadcasters from acquiring daily newspapers in their markets-is already under challenge in the U.S. Court of Appeals in Philadelphia, with oral arguments in the case slated for Feb. 11.
In one of the big ironies in the battle, Republican FCC Chairman Michael Powell emerged as one of the biggest losers in the cap deal.
Under the new cap, Mr. Powell lost not only on the issue of where the ownership bar should be set but he also lost the right to change it permanently-all with the blessing of the White House, which had been threatening a veto in his defense.
Meanwhile, one of the bigger inside-the-Beltway winners was Democratic FCC Commissioner Michael Copps, who voted against the deregulation.
Though in the minority at the agency, Mr. Copps raised a hue and cry about the deregulatory plans of his GOP colleagues. That the FCC and Congress received millions of complaints about the deregulation from the public and a broad coalition of groups ranging from the National Rifle Association to MoveOn.org.
“Michael Copps completely undermined what Powell intended to do,” said Jeff Chester, executive director of the Center for Digital Democracy.
Despite the cap resolution, the legislative battle over the FCC’s media ownership deregulation promises to continue next year, with Sen. Byron Dorgan, D-N.D., and Rep. Maurice Hinchey, D-N.Y., leading the campaign to overturn all of the media ownership restrictions relaxed by the FCC’s Republicans.