Stearns Bill Could Remove Cable-TV Station Ban

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Washington -- Cable operators would be able to buy local TV
stations under House legislation introduced last Tuesday by Rep. Cliff Stearns (R-Fla.)
that could dramatically reshape the mass-media-ownership landscape.

Stearns -- a member of the House Commerce Committee who has
been pushing for ownership deregulation for years -- said changes in the marketplace
justify liberalization of communications laws and Federal Communications Commission rules.

Since 1970, the FCC has refused to allow the common
ownership of a cable system and a TV station in the same market, on the theory that the
cable operator would discriminate against stations in which it does not have a financial
interest.

The FCC has kept its rule on the books even though Congress
used the Telecommunications Act of 1996 to remove the statutory ban. The commission is
reviewing the cable-TV station cross-ownership ban in two proceedings.

The cable industry claims that the FCC rule is unnecessary
because must-carry rules eliminate the possibility that a cable operator can deny carriage
to stations under different ownership.

Stearns' bill would also require the FCC to
discontinue treating a minority-voting stock interest as a cognizable interest if there is
a single majority shareholder of a cable-television system.

This provision could be of use to AT&T Corp. when it
inherits Tele-Communications Inc.'s 32.7 percent equity stake in Cablevision Systems
Corp.

Stearns' bill could mean that AT&T could hold the
Cablevision stake without fear of running afoul of FCC rules that cap the number of cable
households that one MSO may serve.

In other provisions, the Stearns bill would allow:

• One company to own a TV station and an
English-language newspaper in the same market, or a radio station and an English-language
newspaper in the same market;

• One company to own TV stations reaching 45 percent
of households, up from 35 percent;

• One company to own a TV station and a radio station
in the same market, ending the FCC's "one-to-a-market" rule; and

• One company to own two UHF TV stations in the same
market and two UHF stations in separate markets, but with overlapping coverage contours.

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