AFFILIATES SEEK BIPARTISAN LETTER FROM HILL SUPPORTING 35% CAP

Media lobbyists were active on Capitol Hill last week as members of Network Affiliated Stations Alliance (NASA) made rounds of congressional leaders seeking support in their fight with Big 4 TV networks to retain 35% TV station ownership cap. One of NASA’s main goals is seeking bipartisan letter from several lawmakers (and perhaps legislation on issue) to FCC Chmn. Powell telling Commission not to “disturb” -- as one lobbyist put it -- cap or increase it to 50% or higher, as sought by networks. Broadcasters were calling on many of same members of Congress also lobbied last week by cable industry in opposition to DTV must-carry (CD May 17 p3). Networks, meanwhile, continued to press for relaxed ownership limits.

NASA lobbyists told us they generally were encouraged by their reception on Hill, although we're told they didn’t come away with any firm commitments from members. “They were very attentive and listened to our pitch,” we were told. Part of NASA argument is that 35% cap is included in 1996 Telecom Act in compromise from earlier 25% cap imposed by FCC and 50% sought by networks. Although Commission is specifically authorized to increase cap, broadcasters said it shouldn’t do so since cap was set by Congress.

Meanwhile, NBC is lobbying for compromise of its own that involves basing any cap on actual viewers (as measured by Nielsen) instead of on number of homes in station’s coverage area, as now is case. Officials said it was unfair, with slipping network audience share, to assume nets actually reached all homes. Based on Nielsen, NBC-owned stations reach only 1.7% of U.S. viewers at any given point in prime time, according to network figures. Highest among networks is CBS with 2.37%. Under compromise, networks should be allowed to own stations reaching 10-20% of viewers, instead of 35% of potential audience, according to Robert Okun, NBC vp-Washington.

Allowing 10% of actual viewers would allow NBC, for example, to increase its station ownership fivefold, officials acknowledged, but Okun said that never would happen. He said network economics required profits from more local stations to allow networks to keep spending as much on programming, but it wouldn’t make economic sense to add large number of stations. Switching from potential audience to actual viewership is “how you get out of the box” of current deadlock, Okun said: “The only way to get something done is to change the terms of the debate.”

However, NBC isn’t getting much support from other networks. “Early on, we thought it was a good idea… but we aren’t considering any compromises,” CBS’s Martin Franks told us. He said network was optimistic that U.S. Appeals Court, D.C., would rule in favor of Big 4 in their appeals of cap. Argument before court in that case is scheduled Sept. 7. While not commenting directly on NBC position, ABC official said his network “has always been supportive of any effort to relax restrictions on broadcast ownership.” Fox affiliates aren’t members of NASA, but that network also is very much involved in seeking repeal of 35% cap. Of NBC’s idea, Fox official told us: “That is just a piece of our argument, but the issue is much broader.”

NBC remains hopeful station group owners will reconsider compromise based on actual viewership, saying political dynamics have changed in favor of loosening caps. Okun said, for example, that several station groups may be willing to accept change as part of package that would include loosening newspaper-broadcast cross-ownership restriction. FCC recently failed to open rulemaking on that issue (CD May 9 p3). Courts also are considering loosening cap, and Okun said administration of President Bush and FCC Chmn. Powell was likely to be more receptive.

FCC still hasn’t decided whether ex parte presentations will be permitted in NASA petition asking Commission to institute broad inquiry on network practices (CD March 9 p2). “We've gotten a number of other pleadings in this case” (CD May 15 p8, May 4 p9), Gen. Counsel Jane Mago said. She said she “anticipated” ruling in “very near future” as to whether parties would be permitted to make off-the-record presentations to commissioners and staff, “but as of the moment, we are treating [NASA petition] as a restricted proceeding.” Also still to be decided by FCC is whether to seek additional comments on NASA filing. NASA has said it would be “a disservice… to America’s television viewers” not to give public opportunity to comment on its petition.