Fox Bolts NAB Over Ownership Rules

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Washington -- Fox Broadcasting Co., owner of 22 local
television stations, bolted the National Association of Broadcasters last week in the wake
of the lobbying group's refusal to support looser station-ownership limits.

"Deregulation of broadcasting is Fox's No. 1
legislative priority. The board of the [NAB] has taken a position in direct conflict with
this priority," said Peggy Binzel, Fox's top Washington lobbyist, in a prepared

The NAB has lost a key member in the past -- ABC in the
early 1990s -- only to see the network rejoin the fold within 18 months.

"We have experienced this before," NAB spokesman
Dennis Wharton said, downplaying the loss of one of the "Big Four" networks.

The ownership debate wasn't the only reason why Fox decided
to part company with the NAB.

Almost as important was Fox's opposition to the NAB's
ongoing campaign to force cable operators to carry the signals -- analog and digital -- of
local TV stations. Fox does not support mandatory carriage. "We never have,"
Binzel said in an interview.

Fox and the other networks want the Federal Communications
Commission to relax the cap that bars a network from owning stations capable of reaching
more than 35 percent of U.S. households.

Although House legislation (H.R. 942) sponsored by Rep.
Cliff Stearns (R-Fla.) would raise the cap to 45 percent, Fox wants no cap at all.

The networks argued that they need to broaden horizontally
because stations are profitable and additional station profits could offset losses at the
network level.

Network affiliates refuse to support a higher limit because
they fear that the networks would dominate the business and use that clout to take back
advertising time or reduce affiliate-compensation deals.

Because the affiliates have more votes than the networks
within the NAB, they have used their muscle to keep the association firmly in support of
the 35 percent limit. The NAB board last reaffirmed the 35 percent cap at a January
meeting in Naples, Fla.

Fox officials were troubled by the vote, and they made no
secret of the fact that it might trigger the company's departure from the NAB. NBC is also
considering heading for the NAB exit, but it hasn't announced a final decision.

"This was not unexpected," Wharton said.
"For more than six months, Fox has expressed its disappointment over [the NAB's] 35
percent ownership-cap-preservation decision."

Binzel said TV-station-ownership limits should not be
enshrined in communications law or FCC rules. Instead, TV-station owners should be subject
to antitrust laws designed to protect consumers and businesses from anti-competitive

She indicated that the 35 percent cap is nonsensical in the
current communications revolution.