McCain Expected to Fast-Track Dereg

[Gregg Lengling]

Todd Shields

NOVEMBER 11, 2002 -

Restrictions on media ownership are more likely to be relaxed or go away altogether, while cable system operators could feel new heat over price hikes to their customers. Those are among the most clearly anticipated effects of last week's national elections, which returned the Senate to the Republicans, giving the GOP control of both houses of Congress as well as the White House.

When the new 108th Congress convenes in January, the GOP will hold at least 51 seats in the 100-seat Senate, giving it control over committees and the ebb and flow of legislation. While rushed legislation will be slowed by rules that require 60 Senate votes for most major changes, the shift portends smoother progress for pro-business policies.

Sen. John McCain (R-Ariz.) will reclaim the Commerce, Science and Transportation Committee chairmanship he surrendered to Sen. Ernest Hollings (D-S.C.) after
Vermont Sen. Jim Jeffords left the Republican party in May 2001. The switch in chairs replaces an ardent critic of media concentration with a maverick senator who has been antagonistic to broadcasters on spectrum allocation and free airtime for political campaigns but is decidedly deregulatory in other areas.

Judging from his record, McCain will push the Federal Communications Commission toward loosening media ownership regulations. The agency is considering whether to retain or modify a broad range of rules, including those that limit the number of stations a TV network may own and that prohibit joint ownership of daily newspapers and nearby broadcast stations.

"[McCain] is going to be asking the FCC why they haven't moved on ownership. So that's helpful," said Shaun Sheehan, a lobbyist for Tribune Co., which holds several TV/newspaper combinations that could be at risk if the rules are not relaxed.

In 1997, McCain authored an unsuccessful bill that would have required the FCC to eliminate the cross-ownership ban. At a hearing last year, he was a vigorous critic of ownership restrictions and of the FCC, saying the agency had failed to remove "rules that arguably are the most anachronistic and anti-competitive."

Aside from questions of ownership, McCain is expected to offer a mixed bag for the TV industry. Networks eager to expand may appreciate his criticism of the ownership cap, while affiliates who want to maintain the rule think otherwise. McCain also wants to quickly auction spectrum that broadcasters were given to use during the transition to digital television. He has been a harsh critic of broadcasters' failure to meet federal deadlines for beginning digital broadcasts.

McCain is also a proponent of free airtime for candidates -- an issue that most broadcasters oppose. And in what has to be worrisome for the cable industry, McCain in April directed Congress' investigative arm, the General Accounting Office, to undertake a study of what he called "soaring cable rates."

McCain still is considering his agenda, and while specifics have yet to be determined, he expects to be a vigorous chairman, said Pia Pialorsi, one of his representatives. "He likes to keep a very active pace," Pialorsi said.

Elsewhere, Republicans could use their new control of the Senate to clear a backlog of judicial nominations contested by Democrats. That, in turn, could free the languishing nomination of Jonathan Adelstein as the fifth FCC commissioner, said Blair Levin, an analyst for Legg Mason. Adelstein, an aide to Sen. Tom Daschle (D-S.D.), was nominated by the White House last February and approved by the Commerce Committee in July, but his nomination stalled amid partisan rancor over the judicial appointments. Adelstein would become the second Democrat on the five-member FCC. "We don't think his presence would change the direction of FCC policy," said Levin. "But we think he could push the rural agenda and be a voice of caution against dramatic changes in media ownership rules."

Among developments that could signal smoother sailing for parties seeking to weaken ownership restrictions is the fact Hollings will no longer chair the commerce subcommittee of the Appropriations Committee. The post is likely to revert to Sen. Judd Gregg (R-N.H.).

Hollings used the subcommittee's power of the purse early this year to scuttle a plan to exclude the Federal Trade Commission from a role in reviewing media mergers. Earlier, he used the same power to forbid the FCC from moving toward changing the cross-ownership rule.

At the Senate Judiciary Committee, Sen. Orrin Hatch (R-Utah) takes over from Sen. Patrick Leahy (D-Vt.). Leahy opposed a Hollings bill mandating copy-protection technologies for digital content such as movies and TV programs, saying the measure went too far. Hatch has supported copyright protection.

Over at the Judiciary Committee, the chairmanship of the antitrust subcommittee, whose purview includes media mergers and copyright issues, moves from Sen. Herbert Kohl (D-Wis.) to Sen. Mike DeWine (R-Ohio).

"DeWine and Kohl work so closely together that which one is chair makes no difference," observed a DeWine representative.

In terms of how the Senate's shift will impact pending media-related bills, prospects have dimmed for a measure from Sen. Russ Feingold (D-Wis.) dealing with concentration of radio ownership. The bill would stem any loosening of ownership restrictions and threatens license revocation for companies unfairly using joint ownership of stations and concert venues.

The election means only minor changes in the composition of the House Commerce Committee, which is crafting a bill aimed at speeding the digital TV transition. Rep. Billy Tauzin (R-La.) is expected to continue as chairman, with Rep. John Dingell (D-Mich.) as ranking minority member.