Senate Hears FCC Testimony on Rule Changes

The Senate Commerce Committee (search) will consider a proposal to roll back a new regulation allowing companies to own television stations reaching nearly half the nation's viewers, Chairman John McCain, R-Ariz., said Wednesday.

The Federal Communications Commission (search) voted 3-2 Monday to ease regulations governing how many newspapers and TV and radio stations a company can own and in what combinations. The party-line vote changed the national TV ownership limit so a company can reach 45 percent of the U.S. households instead of 35 percent.

McCain said he opposes proposed legislation to counter that change, but his committee still will consider it this month.

"I have a long voting record in support of deregulation," McCain said. "But the business of media ownership, which can have such an immense effect on the nature and quality of our democracy, is too important to be dealt with so categorically."

McCain said he would put language in an upcoming bill to clarify that the FCC should have the authority to strengthen as well as relax ownership restrictions if that serves the public interest.

The five FCC commissioners testified Wednesday before McCain's committee.

Many media companies said the changes were needed because the old restrictions hindered their ability to grow and compete in a market changed by cable TV, satellite broadcasts and the Internet.

Critics said the changes would lead to mergers that could ultimately put a few giant companies in control of what most people see, hear and read.

The FCC also allowed individual companies to own more TV stations in some cities and largely ended a ban on one company owning a newspaper and a broadcast station in a community.

Most committee members criticized the FCC's decisions, with some threatening congressional action to roll back many of the changes.

South Carolina Sen. Ernest Hollings (search), the committee's ranking Democrat, has proposed legislation setting the national TV ownership limit back to 35 percent.

Hollings said FCC Chairman Michael Powell has been engaged in "spin and fraud" in his defense of deregulation and the FCC has become "an instrument of corporate greed."

Powell said the new rules will improve competition and diversity in the media industry. He said the FCC was required by Congress to update the rules.

"The commission does not have the luxury of always doing what is popular," Powell said. "We did our job and I believe we did it well."

Criticism of the FCC decision came mainly from Democrats, but several Republicans expressed concerns.

Sen. Kay Bailey Hutchinson, R-Texas, said lifting the newspaper-broadcast joint ownership ban was an "alarming development."

But Sen. John Breaux, D-La., defended the FCC, saying "I'm probably the only person that congratulates the FCC for acting."

"We may not like the product, but without some action by the FCC there would be no ownership restrictions at all," he said, referring to the potential for court challenges to sweep away the rules.

The government adopted the ownership rules between 1941 and 1975 to encourage competition and prevent monopoly control of the media.

A 1996 law requires the FCC to study ownership rules every two years and repeal or modify regulations determined to be no longer in the public interest. Many previous changes were sent back to the FCC after court challenges.

More legal actions are expected from consumer groups seeking stiffer restrictions and media companies wanting even more deregulation.

News Corp., owner of Fox, and Viacom Inc., which owns CBS and UPN, stand to benefit from the higher national TV ownership cap because mergers have left them above the 35 percent level.

The major networks wanted the cap eliminated, while smaller broadcasters said a higher cap would allow the networks to gobble up stations and take away local control of programming.

Others in the diverse circle of critics include media moguls Ted Turner and Barry Diller, consumer advocates, civil rights and religious groups, writers, musicians, unions and the National Rifle Association.