Congress Overturns FCC’s Media Ownership Rules

24 July 2003

By an overwhelming majority of 400 votes to 21, the US House of Representatives on Wednesday overturned the Federal Communications Commission’s recent liberalization of the media ownership rules.

In June the Republican-dominated FCC voted 3-2 in favor of raising the ownership cap from 35% of national reach to 45%. But yesterday’s massive bipartisan rejection of the decision raises questions about the future of FCC chairman Michael Powell – an enthusiastic proponent of market forces.

The vote, although it does not yet sound the death knell for the 45% limit, is a major setback for Big Media, in particular Viacom (owner of CBS), General Electric (NBC) and News Corporation (Fox) – all of whom had lobbied relentlessly for raising the cap. Even 45% reportedly failed to satisfy their appetite to go forth and multiply.

NewsCorp and Viacom may now have to dispose of certain recently acquired TV assets, their respective national reach having already increased to 38% and 40% – courtesy of waivers granted by Powell in advance of the new rules’ implementation.

Although President George Bush has threatened to veto any attempt by Congress to overturn the FCC’s decision, the tsunami of opposition – including that of his own party – could make an interdiction politically inexpedient. The Democrats would gleefully exploit this as yet another example of the administration’s eagerness to appease big business.

Furthermore, a key Senate panel has already approved a separate measure almost certain to be endorsed by the full Senate later this year, when senators plan a strategy similar to that used in the House – the imposition of budget restrictions on the FCC measure.

NBC chairman/ceo Robert Wright was not euphoric over yesterday’s vote, calling it “a sad commentary”. He opined that lawmakers’ concept of the media business seemed rooted in the 1950s: “All other media has been deregulated,” he said wistfully.

Data sourced from: The Wall Street Journal Online; additional content by WARC staff