Clear Channel is the real loser in this.
Senate Panel OKs Bill on Media Ownership
Thu Jun 19, 6:39 PM ET Add Politics - U. S. Congress to My Yahoo!
By DAVID HO, Associated Press Writer
WASHINGTON - The Senate Commerce Committee voted Thursday to restore ownership restrictions that limit how media companies can merge and grow, aiming to counter a Federal Communications Commission (news - web sites) decision to relax the rules earlier this month.
The proposed legislation would roll back changes allowing individual companies to own television stations reaching nearly half the nation's viewers and combinations of newspapers and broadcast stations in the same city. The bill also would change radio ownership rules in a way that could force companies to sell stations.
"I would like the FCC (news - web sites) to start all over," said Sen. Kay Bailey Hutchison (news, bio, voting record), R-Texas, who supported reversing the rules. She said they are "potentially dangerous to media diversity in this country."
While passed by a bipartisan majority on the committee, the bill faces an uncertain future in the full Senate and a big obstacle in the House, where Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, supports the changed media rules.
"We have no intentions of taking up that bill," Tauzin spokesman Ken Johnson said. "This has become a political soap opera and given the chance Chairman Tauzin intends to cancel its run."
Many media companies say the old restrictions limited their ability to grow and provide better services in a market changed by cable TV, satellite broadcasts and the Internet. The broadcast networks say the changes will aid in keeping free TV alive by helping them compete with pay services for quality programming.
The rules, originally adopted between 1941 and 1975, were created to promote diversity of opinion in the media, encourage competition and prevent a few big companies from controlling what people see, hear and read.
FCC Chairman Michael Powell and the two other Republicans on the five-member FCC relaxed those rules on June 2 in a 3-2 party-line vote.
Lawmakers are planning other congressional tactics to overturn the changes.
Even without new legislation, legal challenges to the rules are expected from consumer groups seeking stiffer restrictions and media companies wanting even more deregulation.
Gene Kimmelman of Consumers Union, which publishes Consumer Reports magazine, called the Senate committee's decision "an enormous victory for consumers."
"The entire Senate and House will now have to confront an angry public that wants something done to prevent the FCC from allowing greater monopolization of media," he said.
The bill, sponsored by Sens. Ted Stevens, R-Alaska, and Ernest Hollings, D-S.C., would roll back the national ownership limit so a company can own TV stations reaching only 35 percent of U.S. households instead of 45 percent. The bill passed by a voice vote.
News Corp., owner of Fox, and Viacom Inc., which owns CBS and UPN, benefits from the higher cap because mergers have pushed the media giant above the 35 percent level. The News Corp. companies could be forced to sell stations if a new law is enacted and upheld in court.
News Corp. spokesman Andrew Butcher had no comment on the bill, but said the FCC decision to raise the cap was "a step in the right direction."
While reinstating a ban on newspaper-broadcast cross-ownership, the bill would allow state regulators to recommend that the FCC exempt particular mergers that help media outlets in financial trouble in small communities.
John Sturm, president of the Newspaper Association of America, said the industry was disappointed with the committee's decision and "there will certainly be a very determined effort by the industry to get the government off the backs of newspapers once and for all."
The amendment involving radio passed 12-11 and would expand the FCC's new, stricter radio ownership rules so they apply to stations a company already owns. If enacted, the change could force companies like Clear Channel, the country's largest radio chain with 1,200 stations, to sell stations in markets where they exceed ownership limits.
"This is an attempt to single out one company for being successful and punish them for playing by the rules," said Andy Levin, a Clear Channel vice president, predicting the measure will be defeated later.
The National Association of Broadcasters, which represents smaller broadcasters and favored the bill when it only rolled back the national TV cap, said that because of the amendments it now opposes the measure.