FCC to Rule on Media Caps

The Federal Communications Commission (FCC) will likely raise limits on ownership of television stations when it releases new regulatory proposals on Tuesday June 2, according to reports from Washington.

Among probable changes will be a loosening of restrictions on controlling more than two stations in any one major market. The new limit could be three in very large markets, such as New York or Los Angeles. Another significant change would be to allow ownership of two stations in midsize markets, now prohibited. The current 35% cap on market share for any one broadcasting company may be raised to 45%. Prohibitions against cross-ownership of newspapers and television stations may be loosened, as well as blocks against mergers between television and radio operators.

Mergers between major television networks probably won't be addressed, primarily because none of them have requested an exemption from current rules. NBC, ABC, CBS, and Fox are owned by General Electric Co., The Walt Disney Company, Viacom, and News Corp., respectively, with all but GE owning many television stations. Changes in FCC regulations could affect as much as 80% of the national market, according to analysts.

The expected new limits are the latest development in "free-market" de-regulation that began with the Telecommunications Act of 1996, ushered into law by then Vice President Al Gore. That act set the stage for a wave of mergers and acquisitions in the radio industry that many people blame for the homogenous state of broadcasting today, with a few major players dominating the airwaves. FCC Chairman Michael Powell and other agency commissioners have received a tremendous amount of correspondence on the radio problem, from music fans, musicians, and music industry executives. As a result, the new proposals aren't expected to offer the radio industry much wiggle room for new mergers.

The situation for television broadcasters may be quite the opposite, however. News Corp. and Viacom, the two largest, with 38% and 39% of the market, respectively (and in excess of the present 35% cap), have already identified acquisition targets. Some liberalization opponents believe that lifting the caps could result in the television equivalent of Clear Channel Communications, which has over 1200 stations nationwide.

Last week, Senate Commerce Committee Chairman John McCain (R-AZ) held hearings on television ownership rules, entertaining testimony from Capitol Broadcast Company CEO Jim Goodmon, Seattle Times publisher Frank Blethen, Media News Group (Denver Post and Salt Lake Tribune) CEO William Singleton, and Viacom chairman Mel Karmazin.

In mid-May, a group of US Senators introduced a bill intended to maintain current limits on media concentration. Co-sponsored by Ernest F. Hollings (D-SC) and Ted Stevens (R-AK), the bill parallels one in the House of Representatives intended to block FCC deregulation. "Radical rule changes in the existing national and local ownership limits could seriously, and perhaps irreparably, alter the fabric of American culture and civic discourse," Senator Hollings said in introducing the bill. Controls on media ownership date back to the 1930s, and were initiated to insure a diversity of viewpoints available to the public.