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New Ownership Cap Fits Fox, CBS Perfectly

CBS and Fox officials can finally rest easy. A new national TV-ownership cap will be set at 39% of television homes, thanks to the Senate's 65-28 approval of a huge omnibus spending bill last week.

The new limit at last eliminates any imminent threat that the companies will be forced to sell TV stations to stay within federal limits on the number of stations one company can own.

Senate Democrats vowed to revisit their effort to set a lower cap and tackle other FCC ownership rules in future legislative battles.

"If anyone thinks we're going to fold our tent and go home, they can think again," said Sen. Byron Dorgan (D-N.D.). He vowed to push on with a "legislative veto" that would reverse broadcast-ownership deregulation approved by the FCC June 2.

"We'll be back," said Senate Minority Leader Tom Daschle from the Senate floor shortly before the Senate approved the omnibus bill.

Disputes over the cap and other issues had stymied passage since early December. The $375 billion bill also funds operations for many major federal agencies as well as the FCC.

Under the new TV cap, the number of stations one company could own would be limited to a national reach of 39% of television households. Two other new features: Only Congress (not the FCC) can change the limit; and the measure extends the time between FCC review of other broadcast-ownership rules from two to four years. The House passed the omnibus bill in December.

Democratic leaders blocked Senate Majority Leader Bill Frist's initial effort to end debate on Jan. 20, the first day of the 2004 congressional session. But the looming threat of unfunded government operations forced them to back down.

Before adjournment of the 2003 session, they vowed to force the bill to be renegotiated. Democrats and a few Republicans are mad that veto threats led congressional leaders to accept White House rewrites of major provisions, including a higher cap than the 35% limit lawmakers agreed to previously.

In June, the FCC voted to lift the cap from 35% to 45%.

President Bush said he is "pleased" with the Senate's vote, but the formal statement released by his office didn't mention the ownership limit.

Sen. John McCain, one of the Republicans opposing the package, spent nearly an hour Jan. 21 attacking the bill as a pork-laden budget buster. He said the new ownership cap is a prize for CBS and Fox, which would have had to sell stations if the original 35% limit were enacted. "Why did they pick 39%? So these two conglomerates could be grandfathered."

Both CBS and Fox had bought stations that took them over the old 35% limit but received waivers while the issue was being debated. Not coincidentally, McCain was implying, the 39% cap protects both.

NAB President Eddie Fritts said he is glad " the national television-ownership cap issue appears to be resolved." He also thanked his members for lobbying against the FCC's higher cap. NAB and the Network Affiliated Stations Alliance lobbied aggressively against the 45% cap. Affiliates charge that expanding networks' station reach will give the networks more leverage to dictate programming lineups.

The next step for the ownership fight is the federal appeals court in Philadelphia, which is hearing oral argument in challenges to the FCC's other ownership-rule revisions, including relaxed restrictions on same-market TV/newspaper crossownership, local caps on TV duopolies, and TV/radio combos.