TAUZIN DOESN'T FORESEE LEGISLATIVE RESPONSE TO FCC MEDIA RULING

House Commerce Committee Chmn. Tauzin (R-La.) said Tues. he didn’t believe the House would approve legislation to reverse or weaken the FCC’s new media ownership rules. While he acknowledged there was bipartisan support in the Senate that could lead to some legislative action to undo the FCC’s ruling, he said he didn’t sense the same level of support in the House.

Tauzin said any appropriations riders from the Senate would be opposed strenuously in the House, in response to suggestions from senators Mon. that the appropriations process could be used to scuttle the FCC’s ruling. House Appropriations Chmn. Young (R-Fla.) won’t allow any ownership-related riders to House spending bills, a spokesman told us. Tauzin also said the Telecom Subcommittee would hold a hearing to examine the new ownership rules.

Efforts to undo the FCC’s decision could have a “perverse” effect and lead to no ownership cap at all, Tauzin said. Since the U.S. Appeals Court, D.C. ruled that the FCC hadn’t justified it’s 35% broadcast ownership cap, a legislative effort to return to that cap could lead the court to completely overturn the cap, Tauzin said. “If Congress were to go back to 35%, I think the courts would throw it out,” he said. “There’s no justification for Congress to set such a low limit.” He said by taking action to address the court’s concern, the FCC in effect saved the ownership cap by attempting to justify a reasonable level of 45%. “The FCC attempted to save ownership caps from constitutional attacks,” Tauzin said.

The media ownership rules approved Mon. by the FCC were misunderstood by many, including colleagues in the Senate, Tauzin said. He said many people believed the 35% ownership cap was a limit on the number of affiliate stations a network could own, when it actually was a limit only on the percentage of audience reach one network could control. One could own just 3% of the stations to reach the 35% ownership cap, he said, if the stations were in the largest markets. “No one ever talked about this as an audience share,” Tauzin said. “It was described as an ownership cap.” It was opponents of the plan, and not the FCC’s decision not to release the order before the vote, that led to the confusion, Tauzin said. “It was a terribly misunderstood rule,” he said.

Sen. Dorgan (D-N.D.) said he would continue to pursue a “legislative veto” of the FCC’s media ownership ruling and believed he could get the necessary 30 votes to start the process. The 30-vote endorsement would be enough to bring it to the Senate floor for a vote. He said that under language in the Congressional Review Act, Congress would have 45 days to veto the agency’s vote. One of the most vocal opponents of the FCC’s action, Sen. Snowe (R-Me.), said she hoped the Commission would grant requests to reconsider the rule, which would have to be done in 30 days. “If the FCC doesn’t grant reconsideration, Congress will have to examine this more closely,” she said. There are 2 bills that would codify the 35% cap: (1) S-1046, by Senate Appropriations Chmn. Stevens (R-Alaska). (2) HR-2052, by House Commerce Committee Vice Chmn. Burr (R-N.C.).

While some Senate Republicans have opposed relaxing the 35% ownership cap, Senate Judiciary Committee Chmn. Hatch (R- Utah) said he wouldn’t oppose the FCC’s ruling. While he said he had some concerns about the agency’s direction, he described the previous media ownership rules as “ridiculous.” “I'm not sure the rules adopted yesterday will work any better,” he said, but said the new rules should be “given a try.” On Mon., the Judiciary Antitrust Subcommittee leadership said it also had concerns and would hold a hearing to examine the vote.

Tauzin said he didn’t believe there would be a “rush to merge” as a result of the FCC ruling. While there will be some sale opportunities, particularly with the repeal of the duopoly rule, he said the economic landscape was different from that of the radio market in 1996, where several mergers occurred after the Telecom Act relaxed radio ownership rules. He said 60% of radio stations were losing money at that time and the rule change helped revive the radio market. Tauzin said he had confidence in both the FCC and Justice Dept. to review proposed mergers properly.

Tauzin also defended Clear Channel, which owns 1,200 radio stations, saying it wasn’t the monopoly power that it often was portrayed as being. The company has just 9% of the radio market, he said. However, he said he was in support of the FCC’s ruling to tighten radio ownership in small markets. The FCC should have balanced that decision by loosening the rule for larger markets. “It’s a minor complaint,” he said.