US Media Ownership Rules – The Fight Begins for Real

05 June 2003

Michael K Powell, Republican chairman of the Federal Communications Commission, knows how to duck, weave, even take a dive. Or should – given his former trade as a litigation lawyer specializing in regulatory matters involving telecommunications, antitrust and employment law.

He will need all his skills following the FCC’s half-baked decision Monday to raise the cap on broadcast media ownership to 45% of any geographic market [WAMN: 03-Jun--03]. This result pleased no-one. Not growth-frenzied Big Media; not the ‘bind-their-hand-feet-and-toes’ brigade; nor those in favor of the status quo.

In the Senate, presidential candidate Senator John F Kerry (Democrat, Massachusetts) intends to file a “resolution of disapproval” to overturn what he deems “a wrongheaded vote” to favor big media companies at the expense of small ones.

Such a resolution can block rules set by regulatory agencies by a straight majority vote of each House of Congress - a stratagem used in the past to torpedo similarly unpopular decisions. Although both houses have a Republican majority, a number of GOP members have already voiced concerns and it is by no means certain that the resolutions would be defeated.

In addition, two bills to overturn the FCC’s decision have recently been introduced, one in the Senate, the other in the House of Representatives. The former is sponsored by Senators Ernest F Hollings (Democrat, South Carolina) and Ted Stevens (Republican, Alaska), the latter by Representative Richard Burr (Republican, North Carolina)

A fourth stratagem has been unleashed by Senator Byron L Dorgan (Democrat, North Dakota), who fought for a 25% cap in 1996. He argues that Congress could overturn the FCC's decision by passing the Senate version of the 1996 revision, or by adding a rider to an appropriations bill that would prohibit the use of federal money to fund the rules changes.

There’s yet more to tax the FCC chairman’s legal wiles.

In the blue corner, a challenge to Monday’s rules is likely in the US Court of Appeals from consumer groups, which contend the FCC deregulated too much. In the red corner, the media mammoths which argue it deregulated too little.

The four major networks – ABC, CBS, Fox, and NBC – have implied they are unlikely to sue to raise the 45% national station ownership limit, even though all want the cap eradicated. “If we sue, it would be on principle,” said one network executive.

On the radio front, US market leader Clear Channel Communications is in gung-ho mode. Along with other radio giants, it is debarred from owning more than eight radio stations in any one city – and wants that limit raised in America’s largest markets.

Clear Channel’s vp of government affairs Andrew Levin believes it makes “absolutely no sense” that the cap is set at the same number in Memphis (which has fewer than fifty stations) as it is in New York (almost 100).

“It appears the most legally suspect portion of the [FCC] order will be the part in which [it] completely ignored the largest US radio markets in determining whether or not rules changes were necessary.”

Most axe-grinders, however, await the full text of the new rules, due to be published next week. After these are entered in the Federal Register, plaintiffs have thirty days to ask the FCC to reconsider them and 60 days to challenge them in court.

Data sourced from: The Washington Post Online; additional content by WARC staff