Senate Panel Backs 35% Cap - Multichannel

Senate Panel Backs 35% Cap

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The Senate Appropriations Committee adopted a spending bill Thursday that
would overturn the Federal Communications Commission rule allowing the "Big
Four" TV networks to own stations covering 45% of homes, up from 35%.

The vote was the second setback in as many days for FCC chairman Michael
Powell, who pushed the agency to adopt the rules in early June only to be met by
harsh bipartisan resistance on Capitol Hill and in court.

Late Wednesday, a federal court in Philadelphia issued a stay that
indefinitely blocked the FCC from implementing not just the new 45% cap, but the
entire package of broadcast-ownership rules that promised more ownership
consolidation both nationally and locally.

Appropriations Committee chairman Ted Stevens (R-Alaska) said he supported
keeping the FCC rollback to just the 35% cap because it would mesh with an
identical provision approved by the House in July that would be difficult to
remove when a House-Senate panel convened to produce a uniform bill.

In a surprise development, Stevens said he would oppose Sen. Byron Dorgan's
(D-N.D.) resolution that would nullify the FCC's entire June 2 vote, saying that
35% cap legislation and the court stay were sufficient.

Under the House and Senate spending bills, the FCC would be required to
enforce the 35% cap for one year. It is unclear whether Viacom Inc. and News
Corp., both of which slightly exceed the cap, would have to divest stations
during that period.

After Thursday's vote, Sen. John McCain (R-Ariz.), chairman of the Senate
Commerce Committee, said the Stevens panel usurped power over the FCC from his
panel in an apparent attempt to placate the National Association of
Broadcasters, which supports the 35% cap but opposes rolling back new FCC rules
that allow TV stations to own newspapers in their local markets for first time
since 1975.

"With respect to the substance of today's action, I continue to be mystified
by the inconsistency of separating the national television broadcast-ownership
cap from the local broadcast limits in legislation -- an action that seems only
to serve the members of the NAB," McCain said in a prepared
statement.

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