Some good news from the Wall Street Journal--for a change

Posted by Mitchell - September 2, 2003 (entry 81)

Don't fret. The headline and the article have this peculiar spin to it, but do read the entire article.

TV Networks Join Forces to Fight Backlash Over Station Ownership


The unexpected political backlash against plans to ease media-ownership rules has prompted the nation's major television networks to band together in a high-profile lobbying campaign to defend the changes.

The networks' push, which comes as Congress returns to work this week, represents the opening salvo in what is likely to be one of the most bitter fights in Washington this fall. Armed with fresh data provided by a top Republican pollster, lobbyists for Viacom Inc.'s CBS, General Electric Co.'s NBC and News Corp.'s Fox are seeking to convince lawmakers that voters don't care who owns their local television station and also don't want the government regulating who can.

Walt Disney Co.'s ABC supports the other networks, but it wasn't clear how involved that network will be in the lobbying effort. "America Says: Don't Get Between Me And My TV," is the slogan the four networks are using in ads running this week in two Washington political publications, The Hill and Roll Call.

The networks are seeking to drum up support for a key part of the Federal Communications Commission's recent changes to a series of decades-old media regulations. The new rules, passed by the commission in a party-line vote in June, would allow the nation's networks to acquire more of their local affiliates. The changes, among other things, also would make it easier for companies to own both newspapers and TV stations in the same markets.

The new FCC rules, which are due to take effect this month or in October, were greeted with vociferous opposition from Democratic presidential candidates, a raft of special-interest groups from both ends of the political spectrum and a significant number of lawmakers on both sides of the aisle. Opponents fear the FCC move would leave a small number of companies with undue influence over the media.

The next skirmish is scheduled for Wednesday at a federal court building in Philadelphia, where the court will hear a request for an emergency stay of the new rules filed by consumer advocacy groups.

The counterattack by the TV networks is focused on winning support for the new FCC rule that raises to 45% from 35% the limit on how much of the national television audience one company can reach through its ownership of local TV stations. Owning more stations would give broadcasters greater leverage in negotiating with advertisers and program suppliers. While the television industry is already concentrated, the higher ownership limit is expected to prompt mostly smaller transactions that would allow the major players to further consolidate power in specific markets.

The networks face a steep challenge, as Congressional opposition to loosened media-ownership rules is especially broad and bipartisan. In part, this is because what was once a backroom debate about arcane regulatory details has become a popular political issue, fused with more general and emotional complaints about the media industry.

The debate has moved beyond the technicalities of regulatory reform, says Adam Thierer, director of telecommunications studies at the Cato Institute, a libertarian Washington think tank. "A lot of people have an ax to grind against the media, both on the right and the left: The left say, 'I hate Rush Limbaugh and those guys on Fox,' and the right whine endlessly about the liberal media," he says.

It's possible the networks' push has come too late. Democratic presidential candidates have jumped on the issue to argue that President Bush favors big business over the concerns of ordinary Americans. In Congress, an unusually large number of Republicans have bucked the FCC and the president -- who has threatened to veto legislation that would scale back the loosened regulations -- and lent their support to various attempts to reverse the FCC's proposals.

In late July, the House inserted an amendment into a spending bill that would effectively scuttle the higher TV-ownership limit. In the Senate, lawmakers are considering a parallel spending bill, with a similar amendment on TV ownership. Some Senators also are considering use of the Congressional Review Act, a rarely used tool, to strike down the FCC rules.

In another move, the Senate Commerce Committee in June passed a measure that would reinstate the previous FCC rules. But the chairman of the House Energy and Commerce Committee has refused to bring a similar measure to a vote.

If Congress does restore the older media-ownership rules, the matter could very likely end up in court. Last year, a federal appeals court in Washington ruled that the 35% TV-ownership limit was arbitrary and remanded it back to the FCC for reconsideration. That move was one in a series of court decisions that went against the FCC in challenges to various media-ownership rules.

Some network lobbyists privately concede they should have ramped up their offensive earlier. They say they worried that a concerted public effort would give ammunition to opponents to argue that the networks do indeed have too much power to get their point of view across.

Bob Okun, NBC's Washington lobbyist, says there's still time to influence the outcome of the debate because most lawmakers have been distracted by other issues and don't have firm opinions on the matter. "I think members, without exception, are willing to hear both sides of the issue and make a decision," he says. "It's not really too late."

In addition to the ads, the networks are planning to trumpet their public-opinion research as the House and Senate leaderships start planning their agendas this week. Frank Luntz, the pollster who was commissioned to prepare data, will be publicizing a survey suggesting that, for example, 87% of those polled think they have an adequate number of choices for receiving news. The survey also shows that only 11% believe network ownership of their local station is a bad thing and 68% think the market should decide whether that should happen or not. One argument the networks are pushing: Loosened regulations would help preserve free TV for the 15% to 20% of households who rely on it by bolstering the networks' financial health.

"I have never seen a situation where politicians have a greater disconnect from the people they represent," Mr. Luntz says.

Opponents of the new FCC rules scoff at the notion that the brouhaha is a Beltway phenomenon, noting that voters, many spurred by special-interest groups, deluged the FCC with more than two million letters, e-mails and faxes this spring. Groups opposing the loosened ownership rules, ranging from the National Rifle Association to the liberal National Organization for Women, fear that media dominance by a small number of companies would deprive special interests of air time for their points of view. Christian groups raise the point that further concentration of ownership could lead to more sex and violence on network TV.

Another reason the issue has gained widespread attention is that the industry itself is split, with locally owned TV-station groups opposing moves that could give the networks more control. As a result, the four networks have abandoned the National Association of Broadcasters, one of Washington's most influential lobbying groups, over the organization's opposition to raising the ownership cap.

"While everyone was caught asleep thinking this is an esoteric issue no one would pay attention to, what we all missed was this visceral reaction to people's local newspapers and local TV stations that is very negative," says Gene Kimmelman, senior director of public policy at Consumers Union, an advocacy group. Mr. Kimmelman says it doesn't matter whether viewers know who owns the channels they watch; they don't want a few players to dominate.

The networks' lobbying drive comes as the FCC's embattled chairman, Michael Powell, announced steps last month intended to increase the amount of localized television and radio programming, a move aimed at quelling some of the criticism of the new media ownership rules. However, Mr. Powell has not backed down on the planned rule changes.

Reinstating the old media-ownership rules would be a significant blow to Fox, NBC and CBS, which had lobbied aggressively behind the scenes to get the 35% ownership cap relaxed. Both Viacom, CBS's parent, and News Corp., which owns Fox, are already over the 35% limit thanks to FCC waivers granted in advance of the new rules taking effect.

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