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FCC, TV conglomerates battle over limits

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Sep 10, 2001 | 10:42am EDT

The major networks and the companies that own them want to keep getting stronger--and bigger. And it looks like the court system might let them.

In a federal appeals court, the giant media companies, such as Viacom, Inc. and AOL/Time Warner, are battling the Federal Communications Commission primarily over the caps instituted by the FCC, which allow a broadcaster to reach no more than 35% of the national audience.

Counsel for the networks told the U.S. Court of Appeals for the District of Columbia that the FCC regulation is "oppressive" and a violation of the free-speech rights under the First Amendment, according to a report in Variety. They are also challenging the way the FCC conducted a review of its media ownership rules, a step that is required every two years.

"Every day this rule is in effect, we are being deprived of reaching 65% of the nation's households," Edward Warren, attorney for CBS, Fox and NBC said during oral arguments.

"We strongly believe that that the 35% broadcast ownership cap serves no rational purpose in today's highly competitive television marketplace,'' Viacom spokeswoman Susan Duffy told Reuters. "We hope the court will agree."

The FCC, the National Affiliated Stations Alliance (NASA) and the National Association of Broadcasters (NAB) are primarily protecting the rights of affiliates and independent station owners, who would most certainly be dominated by the networks in both programming and distribution if the limits were released.

Basically, the little guys might get swept into the mass conglomerates.

Attorney Bob Long, representing NASA and the NBA, said it was a "gross overstatement" for networks to argue they are being cut off from reaching 65% of the American audience, considering that networks reach virtually everyone through broadcast programming alone.

However, after Friday's hearings, it was clear the FCC would have to come up with a stronger defense than simply stating that overturning the rules would have "enormous adverse consequences." The three appellate judges focused most of their questioning towards the FCC general counsel, Grey Pash, trying to pinpoint the merits and constitutionality of the FCC rules.

"You're in a jam," Judge Harry Edwards told Pash, according to Variety.

But the judges did stipulate that if they overturned the ownership rules, they would allow the FCC to draw up new limits--with adequate justification.

FCC chairman and Republican Michael Powell will launch a public probe into whether the cap should be kept in some fashion and has made it clear he favors and will work towards deregulation.

The ruling by the three-judge panel could come later this year.

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