In a stinging rebuke to the Federal Communications Commission, the Senate Commerce Committee voted today to overturn an agency ruling raising the cap on national broadcast ownership to 45 percent. In addition, the committee axed the FCC's decision to relax a rule that barred broadcasters from acquiring daily newspapers in their markets.
Under the ruling approved by the committee, the ownership cap would be rolled back to bar broadcasters from acquiring TV stations reaching more than 35 percent of the nation's TV homes.
The committee's vote would resurrect the ban on newspaper-broadcast cross-ownership, but would provide for waivers for combinations in the nation's 60 smallest markets when those are in the public interest.
The rulings were a particularly harsh swat at the major TV networks, which led the charge to raise the national ownership cap. If the legislation becomes law, Viacom and Fox could be especially hard hit because they're the only companies that own stations reaching more than 35 percent of TV homes. The committee rejected an amendment that would have spared them the necessity of divesting enough stations to comply with the cap's ceiling.
In another development that could impact the networks, Senate Commerce Committee Chairman John McCain, R-Ariz., announced that he and House Energy and Commerce Committee Chairman Rep. Billy Tauzin, R-La., have agreed to broker talks with industry representatives to consider the demands of independent producers for more representation on the prime-time schedules of the major TV networks.
The Commerce Committee's vote also came as a slap at the National Association of Broadcasters, which had been lobbying committee members to roll back the national ownership cap but to leave unmolested other deregulation the FCC provided.
"Today's votes show that cynical and wrongheaded NAB advocacy driven by a few newspaper-owned affiliates has produced a disaster for all broadcasters -- TV, radio, networks and affiliates," said Preston Padden, executive VP, government relations, The Walt Disney Co. "It is past time for NAB to change course and stop attacking broadcasters."
One of the more unusual provisions included in the legislation came in the form of an amendment from Sen. Ted Stevens, R-Alaska, carving out an exception in the newspaper-broadcast cross-ownership rule to provide for waivers in markets ranked No. 150 and smaller.
As the legislation was approved, an interested party in one of those markets would first seek clearance for a deal from the state public utilities commission. Under the provision, the FCC is then supposed to approve the merger within 60 days "unless there is compelling evidence that such transaction would be contrary to the public interest."
In the wake of the committee vote, some industry lobbyists were predicting that the legislation would fall of its own weight because it is loaded down with a variety of provisions. But one well-placed industry source said the initiative appeared to be gaining momentum and could prove to be particularly dangerous for the industry now because Sen. Stevens voiced support for the provision resurrecting the newspaper-broadcast cross-ownership rule.
As chairman of the Senate Appropriations Committee, Sen. Stevens can always attempt to attach the legislation as a rider to an appropriations bill, assuming the measure is otherwise stymied. "Given our momentum, even Billy Tauzin may not be able to save the industry," said Jeff Chester, executive director of the watchdog Center for Digital Democracy. (http://www.tvweek.com)