SENATE TO OVERTURN FCC MEDIA OWNERSHIP CHANGES

Legislation Favors Old Rules, Forces Radio Station Divestiture

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WASHINGTON (AdAge.com) -- In a stunning rebuke to the Federal Communications Commission, the Senate Commerce Committee today sent to the Senate floor legislation to overturn most of the media ownership changes the FCC approved two weeks ago.

The Commerce Committee vote to overturn the FCC's changes had been expected. The FCC had approved to allow a single media company to own TV stations reaching 45% of the nation's households, up from 35%. That increase had been opposed not only by consumer groups afraid it would create monolithic media empires but also by local TV station owners who feared networks would get too much power.

Bipartisan concern
Senators of both parties had

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questioned the wisdom of the FCC's changes.

"It's clear that the deregulation express is leaving the station unless we take action," said Sen. Olympia Snowe, R-Maine.

Sen. Trent Lott, R-Miss., said he was "very disturbed" about the new FCC rules. "I think it is a very dangerous thing."

There was no immediate reaction from the FCC. Though the FCC approved the changes on June 2, it has yet to issue its final rules.

Blocking cross-ownership
The committee also voted to overturn changes to the FCC's cross-ownership rules that would allow newspaper companies to buy broadcast stations in their markets, and part of the rules that define how much cross-ownership of newspapers, TV stations and radio stations one company can have in a market.

The Senate legislation effectively forces some media companies to divest radio stations in some smaller markets, where the old FCC definition of "local" markets had allowed companies such as Clear channel Communications to own most or all of a small market's radio stations. The FCC, which changed its rule to prevent that from happening again, had planned to grandfather in current ownership.

Consumer groups were gleeful, but also warned that the committee vote is just a first step.

'Encouraging'
"We have a long way to go, but this is more encouraging than anyone could have expected," said Gene Kimmelman, senior director of public policy at Consumer's Union.

Preston Padden executive vice president of worldwide government relations for The Walt Disney Co., meanwhile, blamed the National Association of Broadcasters for initiating the fight over the 45% rule.

"Today's vote shows that cynical and wrongheaded NAB advocacy, driven by a few newspaper affiliates, has produced a disaster for all broadcasters," he said.

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