Opponents of Ownership Consolidation Also Plan Legal Strategy

By Frank Ahrens

Several lawmakers and advocacy groups vowed yesterday to fight in the courts and on Capitol Hill to overturn the Federal Communications Commission's new media ownership rules, saying they give big newspapers and broadcasters too much influence over public opinion and hurt smaller media companies.

On Monday, the FCC voted 3 to 2 along party lines to relax or eliminate some ownership restrictions, such as a rule barring media companies from owning television stations in markets where they publish daily newspapers. The commission's three Republicans, led by Chairman Michael K. Powell, voted for the changes, while the two Democrats dissented.

Sen. John F. Kerry (D-Mass.) said he would file a "resolution of disapproval" to block what he called the "wrongheaded vote." Such a resolution can overturn rules set by regulatory agencies and requires a simple majority of each house of Congress to pass. In March 2001, a resolution of disapproval was used to strike down an ergonomics standard set by the Occupational Safety and Health Administration.

Even if the resolution were to pass both Republican-majority houses, it would require President Bush's signature.

Kerry, a presidential candidate and ranking member of the Senate Committee on Small Business and Entrepreneurship, said Monday's rule changes favor big media companies at the expense of small ones.

Identical bills have been introduced in both houses to overturn Monday's decision on television-station ownership. The old rule said a network cannot own a group of stations that combine to reach more than 35 percent of the national viewing audience. Monday's vote raises that threshold to 45 percent. Bills introduced in the Senate by Ernest F. Hollings (D-S.C.) and Ted Stevens (R-Alaska) and in the House by Rep. Richard Burr (R-N.C.) would return the cap to 35 percent.

On Monday, Sen. Byron L. Dorgan (D-N.D.), who fought for a 25-percent cap in 1996, said Congress could overturn the FCC's rules by passing the Senate version of the revision or by adding a rider to an appropriations bill that would prohibit the use of federal money to pay for the rules changes.

In the Senate, such a rider would have a sympathetic ear: Stevens is chairman of the Appropriations Committee. But the House Appropriations Committee typically resists attaching legislative riders to spending bills, said committee spokesman John Scofield. Committee Chairman C.W. "Bill" Young (R-Fla.) is "more interested in moving 13 [pending] appropriations bills forward in a timely manner," Scofield said.

Challenges to Monday's rules are likely at the U.S. Court of Appeals for the D.C. Circuit from consumer-advocacy groups, which say the FCC deregulated too much, and media companies, which say the agency did not go far enough.

Consumers Union, the nonprofit group that publishes Consumer Reports magazine, said yesterday that it will join other groups in a lawsuit to overturn the rules, which are "riddled with inconsistencies," said Gene Kimmelman, its Washington director. For example, market share of television stations is taken account of in some rules but not in others, he said.

While acknowledging that they might sue, most opponents to the rule changes said yesterday that they were not prepared to move ahead until they read the complete text of Monday's rule changes, which Powell promised to produce by next week. After the rules are entered in the Federal Register, complainants have 30 days to ask the FCC to reconsider them and 60 days to challenge them in court.

Most of the four major networks -- ABC, CBS, NBC and Fox -- indicated that they are unlikely to sue to raise the 45 percent national station ownership cap, even though they all would like to see the cap eradicated. "If we sue, it would be on principle," said one network executive.

Two of the networks are over the current ownership cap. News Corp.'s Fox is at 37 percent; Viacom Inc.'s CBS is around 40 percent. General Electric Co.'s NBC is at 34 percent and Walt Disney Co.'s ABC is at 24 percent.

Radio giant Clear Channel Communications, which will be subject to new limits by the new rules, hinted it would sue.

Currently, no company is allowed to own more than eight radio stations in one city. Clear Channel wanted that limit raised in the nation's largest markets. Andrew Levin, vice president of government affairs for Clear Channel, said it makes "absolutely no sense" that the cap is set at the same number in Memphis, which has fewer than 50 stations, as it is in New York, which has nearly 100.

"Based on what we know now, it appears the most legally suspect portion of the order will be the part in which the FCC completely ignored the largest U.S. radio markets in determining whether or not rules changes were necessary," Levin said.