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Wednesday January 15, 09:30 AM
FCC's Powell Concerned by Media Concentration
U.S. officials will probably not radically lift ownership limits on television stations, newspapers and other media when they take up the issue this year, the top telecommunications regulator told Congress on Tuesday. Federal Communications Commission Chairman Michael Powell said the agency would not allow one company to dominate local airwaves or other media outlets when it revisits the long-standing rules under court order.
"I am skeptical that some of the more melodramatic versions of what's likely to come out of the commission are actually an accurate reflection of what the majority of the commission thinks," Powell told the Senate Commerce Committee.
Many expect the FCC to allow a company to own both a newspaper and a radio or television station in the same market. In some markets this has already occurred under FCC waivers.
Consumer advocates and many lawmakers worry that news operations at television and other media outlets could suffer if the FCC allows them to be bought up by a few large companies.
"When you talk about more voices, are you talking about more voices by one ventriloquist?" asked North Dakota Democratic Sen. Byron Dorgan.
RADIO CONCENTRATION A CONCERN
But Powell and at least two other commissioners said they hoped to avoid the example of the radio business, which is now dominated by a few large companies, notably Clear Channel Communications Inc. (NYSE: CCU - news), after Congress lifted ownership limits in 1996.
"I am concerned about the concentration, particularly in radio," Powell testified to the Senate Commerce Committee.
Powell said the agency could revamp the way it measures ownership levels in local markets, as the importance of the "big four" television networks has waned in the face of cable and satellite television in many markets.
Media mergers would also still have to pass antitrust and public-interest reviews, he said.
The FCC has over the past year scheduled public-interest reviews for seven proposed radio mergers, including six involving Clear Channel, an agency staffer said. No radio mergers had been subjected to such scrutiny under the previous chairman, the staffer said.
Media-ownership limits are just one of the big rulemaking tasks facing the FCC in the next six months.
The FCC is expected to decide next month whether to ease a rule requiring local telephone giants such as Verizon Communications (NYSE: VZ - news) and BellSouth Corp. (NYSE: BLS - news) to rent their local network equipment to competitors like AT&T Corp. (NYSE: T - news) and smaller upstarts.
Powell, who has long held that local phone competitors should use their own equipment and not piggyback on existing networks, faced sharp criticism from South Carolina Democrat Sen. Ernest Hollings and other lawmakers who predicted that his philosophy could allow the local giants to crush competitors looking to share their networks.
LIMITED ALTERNATIVES
Consumers would only be left with cable-TV networks as an alternative for high-speed Internet access and phone service, Hollings said.
"I have never heard of such shenanigans since I've been up here," Hollings said.
But Powell said that the new rules would not freeze out competitors entirely.
"Nothing being contemplated by the commission is going to result in absolutely no access to the incumbent's network," he said.
The effect of the new rules will likely be limited somewhat as the other four commissioners said they would be reluctant to override state regulators who currently set rates and determine which parts of the network should be shared.
"I don't envision any preemption in the sense of the FCC reaching out and taking authority away from states," said Commissioner Kathleen Abernathy, a Republican appointee.
Arizona Republican Sen. John McCain, incoming chairman of the Commerce Committee, griped about increasing prices, noting that since the beginning of 1996 cable television rates have increased by 43 percent and local phone rates are up 23 percent, while wireless and long-distance rates have fallen.
Powell said cable companies were facing more and more competition from satellite broadcasters, but acknowledged prices had yet to respond.
McCain said after the hearing that Powell showed a nuanced understanding of the issues in front of him.
"I think he was less than a complete deregulator," McCain said.
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