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Capitol Critics Dig In

With a barrage of letters and a handful of bills, members of Congress are ratcheting up pressure on the FCC to either step up or step away from the agency's imminent deregulation of the broadcast industry.

No doubt the messages on both sides of the issue are an attempt to sway Chairman Michael Powell and his fellow commissioners, but members of Congress are also staking out starting points for their own fight to rewrite the FCC's new rules. That fight begins shortly after the FCC's vote and may heat up when lawmakers return from summer break.

"This battle continues in Congress. The FCC won't have the last word," said one industry lobbyist.

Sen. Ted Stevens (R-Ark.), chairman of the powerful Appropriations Committee, signaled last week that he's going to captain a battle over what will be the most contested issue: reinstating the 35% cap on a broadcaster's national TV-household reach if the FCC lifts it to 45% as expected.

The issue has bitterly divided broadcast networks and their affiliates: There's nothing like a conflict between two favorite business constituencies to break up GOP unity.

The tensions created by the industry split were made apparent to the Senate Commerce Committee last week when Viacom President Mel Karmazin faced off against small-group owner Jim Goodmon of Capitol Broadcasting.

Karmazin downplayed the prospects for his CBS network, saying owning stations is where the profits are. "When I die, I want to come pack as a network affiliate," he quipped. If networks can't build more-profitable O&O stables that reach most of the country, high-value content like the NFL will migrate to cable, where nets earn dual revenue streams of both advertising and programming fees from operators.

Goodmon, on the other hand, warned that networks will make it harder for local owners to reject network programming in favor of local shows if a larger pool of O&Os gives them the upper hand in contract talks with remaining affiliates. "There isn't any way you can suggest allowing these large companies to own more stations improves localism and diversity."

Stevens, joined by Commerce Committee ranking member Ernest Hollings (D-S.C.), last week introduced legislation—not expected to go anywhere—that would enshrine the 35% cap and leave future changes to the sole discretion of Congress.

"While many of us in Congress had hoped that the FCC would recognize the serious consequences that could result from a laissez-faire approach to media ownership, it appears the message is not getting through," Hollings said.

Fellow Commerce Committee Republican Trent Lott (Miss.), one of four on the panel to call for keeping the 35% cap, said the FCC should leave ownership rules as they are.

Another hot issue in Congress is likely to be the UHF discount, which counts only half of a UHF station's audience toward an owner's audience-reach total. The FCC has chosen to retain the discount. Critics say it makes no sense today because cable carriage has mooted most of the technical disadvantages of a UHF signal. "The frustration many in Congress feel over the FCC lifting the 45% cap is compounded by continuation of the UHF discount," said longtime deregulation foe Andrew Schwarztman, president of Media Access Project.

Others are simply frustrated by Powell's unwillingness to reveal details of the plan publicly or delay the June 2 vote.

Hollings last week asked Commerce Committee Chairman John McCain (R-Ariz.) to march Powell and his fellow commissioners up the Hill to make his proposal public and explain why a delay was not granted. His sentiments were echoed by 93 House Democrats, who asked in a letter that Powell delay the June 2 vote. Powell politely declined. McCain denied the request but will hold another in a series of ownership hearings Thursday with News Corp. Chairman Rupert Murdoch among those testifying.

The crowd pushing the FCC to move forward is just as determined. House Commerce Committee Chairman Billy Tauzin (R-La.), seeking to keep the FCC on track, has matched letter for letter his Democratic counterpart Rep. John Dingell (Mich.).