Senate Panel Guts FCC's New Rules

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Washington -- A Senate committee voted Thursday to overturn new media
ownership rules as part of bipartisan legislation that would require Viacom Inc.
and News Corp. to sell TV stations within one year of the bill's becoming law.

The bill (S. 1046) came less than three weeks after the Federal Communications Commission agreed to allow ABC, NBC, CBS and Fox to own more
stations and allow for greater consolidation among TV stations, newspapers
and radio stations within their local markets.

Although the bill passed by voice vote, it was clear the measure had the backing of Republicans and Democrats on the Senate Commerce Committee under
chairman John McCain (R-Ariz.)

Under the bill, no TV station group could own stations whose signals reached
more than 35% of TV households nationally.

The FCC had raised the cap to 45%.

The bill would bar grandfathering of any group currently over the 35% limit.

Viacom is at 41% and News Corp is at 39%.

'We continue to believe that the FCC decision was a step in the right
direction,' said News Corp. spokesman Andrew Butcher after the Senate panel's
vote.

The bill also eliminated the FCC's decision to relax crossownership rules,
including one that would allow a TV station and a newspaper to merge in any
market that has at least four TV stations after barring such combinations since
1975.

The FCC vote split along partisan lines, three
Republicans against two Democrats.

The Senate bill, cosponsored by Sen. Ted Stevens
(R-Alaska) and Sen. Fritz Hollings (D-S.C.) united Democrats and Republicans who
fear the FCC had gone too far and a wave of mergers reducing voices in dozens of
markets was gathering steam.

'The deregulation express is leaving the station unless
we take corrective action,' said Sen. Olympia Snowe (R-Maine).

'We are the culprits for letting this 3-2 decision to stand,' Hollings
added.

The committee adopted an amendment offered by Stevens
that would accommodate mergers among newspapers, TV stations, and radio stations
in the 60 smallest markets, with the approval of a state public utility commission and the
FCC.

It appears unlikely legislation reversing the FCC will reach the White House.

House Energy and Commerce Committee chairman Billy Tauzin (R-La.), who
endorsed the FCC's rulings, has announced his opposition to a House bill that
would mirror the Stevens-Hollings bill.

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