FCC OWNERSHIP CAP REVIEW TO FOCUS ON COMPETITION PLUS DIVERSITY
FCC review of broadcast station ownership caps won’t focus solely on market concentration rule, but also will take programming diversity into consideration, Chmn. Powell said March 29. He told House Telecom Subcommittee that Commission in May also would review broadcast-newspaper cross-ownership restrictions. NAB spokesman said it was “delighted that the FCC is going to expeditiously review” cross-ownership issue.
Commerce Committee Chmn. Tauzin (R-La.) asked Powell whether FCC’s biennial review “would provide opportunity under the law” to review national broadcast ownership cap, which prevents broadcasters from owning stations that reach more than 35% of nationwide households. “I would say it’s more than an opportunity, but a legal obligation” he said. Powell said FCC either must “validate or eliminate” broadcast ownership rules. “The 35% ownership rule was promulgated, if I remember correctly, in the 1970s in an entirely different media environment than the present one and should be validated if it has any merit at all in the current context,” he said. “The biennial review will provide a vehicle for that.”
Rep. Stearns (R-Fla.) asked what principles would guide FCC in weighing merits of cross-ownership rules. Powell said basic tenet of communications policy was to assess competition in or effects of concentration on markets, approach used historically in antitrust cases. “[But] the trickiest one is the notion of diversity of programming that may or may not bear resemblance to concentration levels,” he said. “The horizontal cable rule is a perfect example that the 30% cap, in all likelihood, can’t be justified as the national cap for purely competitive purposes.”
“It’s also difficult because when it involves diversity it usually means it involves media, which usually means you have to defend your rules against First Amendment scrutiny, which is higher than when our rules would be defended in a [market] concentration context,” he said.
On another broadcast-related issue, Stearns asked Powell what impact FCC’s rulemaking on carriage of DTV signals would have on “small, independent broadcasters, Christian broadcasters, Spanish- language and emerging network broadcasters.” FCC tentatively concluded (CD Jan 20 p1) that cable companies didn’t have to carry both analog and digital signals of TV stations during transition to DTV. Powell told Stearns that ruling could indeed make it difficult for some digital broadcasters to obtain cable carriage, but that companies weren’t without options.
“It is important to emphasize that nothing we said [in ruling] precludes any broadcaster from reaching a negotiated carriage agreement for those kinds of services,” he said. “It’s only that we can’t interpret the must-carry statute to provide a government-preferred, absolute right to that carriage because of the statute’s definition of primary digital signal.”