Congress Moves to Restore Ownership Cap

Federal Communications Commission (FCC) Chairman Michael Powell and his Republican-dominated agency have gotten their hands slapped by a year-end move by Congress to block proposed changes to rules limiting ownership of broadcast media by any single company.

Provisions of a spending bill agreed to by both the Senate and House of Representatives on Wednesday November 19 would restore the limit to 35% of the total market and prevent the new limit of 45% from taking effect for a least a year. On June 2 of this year, the FCC instituted the new liberalized regulations after a brief but contentious period of public discussion.

What followed was a groundswell of opposition from citizens of all political persuasions, who believed that raising the limit could consolidate too much control of the media in too few hands. Members of Congress reacted likewise and promised to rescind the new rules. The spending bill that would do so is a $285 billion package that determines funding for government agencies, including the FCC.

Large media conglomerates had pushed for the higher market limit, claiming that it would enable them to achieve better efficiency. Two such companies, Fox Broadcasting Company, and Viacom, Inc. are already over the 35% ownership limit. Remaining in place will be new rules permitting ownership of TV stations and newspapers in the same communities and a limit of three TV stations per company in the largest markets. President Bush has threatened to veto the spending bill, but Washington insiders speculated that was unlikely. The June 2 FCC decision has been blocked from implementation due to being stalled in federal court pending review.

In other FCC news, the agency will probably approve a proposed $6.6 billion acquisition of Hughes Electronics Corp.'s DirecTV unit by News Corporation's Fox Network. Unlike the unsuccessful DirecTV/EchoStar merger attempt blocked earlier this year, this one doesn't appear to face serious opposition from regulators, whose concerns are pricing for consumers and fair play for competitors, in particular cable providers to whom Fox provides programming. DirecTV is the nation's largest satellite-television provider, with more than 11 million subscribers. Company president and chief operating officer Roxanne Austin announced last week that she would resign once the deal is complete, possibly late this year.