Senate Panel Votes to Overturn Parts of FCC Decision

WASHINGTON – The Senate Commerce Committee voted Thursday to overturn parts of a Federal Communications Commission (search) decision freeing media companies from decades-old ownership limits and allowing them to buy more outlets and merge in new ways.

The proposal, which faces an uncertain future in the full Senate and a tough road in the House, would roll back changes that allowed individual companies to own television stations reaching nearly half the nation's viewers and combinations of newspapers and broadcast stations in the same city.

"I would like the FCC to start all over," said Sen. Kay Bailey Hutchison, R-Texas, who opposes the changed rules. She said they are "potentially dangerous to media diversity in this country."

Many media companies wanted relaxed rules, saying the old restrictions limited their ability to grow and provide better services in a market changed by cable TV, satellite broadcasts and the Internet. The broadcast networks say the changes will aid in keeping free TV alive by helping them compete with pay services for quality programming.

The rules, originally adopted between 1941 and 1975, were created to promote diversity of opinion in the media, encourage competition and prevent a few big companies from controlling what people see, hear and read.

The Republican-controlled FCC relaxed those rules on June 2 with a 3-2 party-line vote.

The bill, sponsored by Sens. Ted Stevens, R-Alaska, and Ernest Hollings, D-S.C., would roll back the national ownership limit so a company can own TV stations reaching only 35 percent of U.S. households instead of 45 percent. The bill passed by a voice vote.

The proposed legislation also would reinstate a ban on newspaper-broadcast cross-ownership. However, it would allow state regulators to recommend to the FCC exemptions for small communities where a merger may be needed to support media outlets in financial trouble.

The bill also would clarify the FCC's authority to strengthen as well as relax media ownership restrictions, a question raised by courts that have rejected past rule changes.

Another component of the bill would require the FCC to hold at least five public hearings on future ownership rule changes before voting. Lawmakers criticized the agency for not seeking more public comment before its June 2 decision.

An amendment narrowly approved 12-11 would expand new, stricter radio ownership rules so they apply to existing and future deals. If made into law, the change could force companies like Clear Channel, the country's largest radio chain with 1,200 stations, to sell stations in markets where they exceed ownership limits.

Sen. Byron Dorgan, D-N.D., and other lawmakers say they also will try other legislative methods to overturn the changes.

"The airwaves belong to the people," Dorgan said. "The FCC ignores that requirement and advances corporate interests at the expense of the public's interest."

It's unclear how far these proposals will get beyond the Senate Commerce Committee (search). Challenges to the FCC rules face stiffer opposition in the House, where Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, supports the changes.

FCC Chairman Michael Powell (search) and the two other Republicans on the five-member commission pushed through the changes despite opposition from two Democratic commissioners and a diverse circle of critics that included media moguls Ted Turner and Barry Diller, consumer advocates, civil rights and religious groups, writers, musicians, unions and the National Rifle Association.

Even without new legislation, legal challenges to the rules 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, benefit from the higher national TV ownership cap because mergers have pushed the media giant above the 35 percent level. The companies could be forced to sell stations if a new law is enacted and upheld in court.

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.