[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4069 Introduced in House (IH)]






108th CONGRESS
  2d Session
                                H. R. 4069

     To amend the Communications Act of 1934 to prevent excessive 
 concentration of ownership of the nation's media outlets, to restore 
     fairness in broadcasting, and to foster and promote localism, 
                diversity, and competition in the media.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 30, 2004

 Mr. Hinchey introduced the following bill; which was referred to the 
                    Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL


 
     To amend the Communications Act of 1934 to prevent excessive 
 concentration of ownership of the nation's media outlets, to restore 
     fairness in broadcasting, and to foster and promote localism, 
                diversity, and competition in the media.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Media Ownership 
Reform Act of 2004''.
    (b) Table of Contents.--

Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Fairness in broadcasting.
Sec. 4. Broadcasting ownership limitations.
Sec. 5. Invalidation of media ownership deregulation.
Sec. 6. Review process for media ownership.
Sec. 7. Public interest reports.
Sec. 8. Prevention of programming vertical integration.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds the following:
            (1) The Communications Act of 1934 requires the Federal 
        Communications Commission and broadcast licensees to promote 
        the public interest. The Commission has long had rules in place 
        to promote the goals of localism, diversity, and competition.
            (2) The Supreme Court, on numerous occasions, has upheld 
        the Commission's and Congress's right to establish media 
        protections because a monopolization of ideas is antithetical 
        to our democracy.
            (3) In 1945, the Supreme Court declared, ``the widest 
        possible dissemination of information from diverse and 
        antagonistic sources is essential to the welfare of the public, 
        that a free press is a condition of a free society''.
            (4) In 1969, the Supreme Court declared, ``it is the 
        purpose of the First Amendment to preserve an uninhibited 
        marketplace of ideas in which truth will ultimately prevail, 
        rather than to countenance monopolization of that market, 
        whether it be by the Government itself or a private licensee''.
            (5) Over the past two decades there has been a gradual 
        shift of control in the public's airwaves into the hands of 
        fewer private entities.
            (6) Private entities can exert control over the public's 
        access to information as many of the rules designed to foster 
        diversity, competition, localism, and production of independent 
        news and entertainment have been weakened or repealed.
            (7) The past two decades have produced technological 
        advances. Approximately 80 percent of U.S. households subscribe 
        to cable or satellite systems offering multiple channels of 
        video programming. The rapid growth of the Internet added 
        another source of information to traditional media outlets. 
        Over 71 percent of Americans have some form of online access.
            (8) These advances have dramatically increased the number 
        of information pipelines into Americans' homes. Despite the 
        increase in information outlets, ownership and control of those 
        is shrinking. A handful of companies control a large portion of 
        both programming and distribution. Five companies now own the 
        broadcast networks, 90 percent of the top 50 cable networks, 
        produce three-quarters of all prime time programming, and 
        control 70 percent of the prime time television market share. 
        The same companies that own the nation's most popular 
        newspapers and networks also own over 85 percent of the top 20 
        Internet news sites.
            (9) While the Internet has become a new source of 
        information, the vast majority of Americans continue to rely on 
        television, newspaper, and radio as their primary sources of 
        news information. Ownership of traditional news sources has 
        been consolidated over the past 25 years. Two-thirds of 
        America's independent newspapers have been lost since 1975 and 
        according to the Department of Justice's Merger Guidelines 
        every local newspaper market in the U.S. is highly 
        concentrated.
            (10) One-third of America's independent TV stations have 
        vanished since 1975 and there has been a 34 percent decline in 
        the number of radio station owners since the Telecommunications 
        Act of 1996. There has been a severe decline in the number of 
        minority owned broadcast stations. At the end of the 1990's, 
        minorities owned just 1.9 percent of the U.S. television 
        stations and 4 percent of the nation's AM and FM radio 
        stations.
            (11) As the major networks have been allowed greater 
        vertical integration, the percentage of independently produced 
        pilots and new series on the four national broadcast networks 
        has declined from 87.5 percent in 1990 to 22.5 percent in 2002.
            (12) The media ownership rules adopted by the FCC on June 
        2, 2003 as part of its 2002 Biennial Regulatory Review will 
        allow further consolidation of the media industry. Under the 
        June 2, 2003, ruling--
                    (A) in the largest metropolitan areas one company 
                is allowed to own three television stations, eight 
                radio stations, the daily newspaper, even if it is the 
                only daily newspaper, the cable system, the all-news 
                channel on that cable system, and the Internet news 
                sites associated with each of those enterprises;
                    (B) networks are able to purchase additional TV 
                stations, further nationalizing broadcast TV and 
                limiting local communities' ability to influence what 
                programming it will see;
                    (C) over 80 percent of U.S. markets where TV 
                mergers are permitted will qualify as highly 
                concentrated, according to the anti-trust market 
                definitions contained in the Department of Justice's 
                merger guidelines;
                    (D) the cross-media ownership that is permitted 
                would reduce the number of independent daily news 
                sources in many markets to a level 20 times above the 
                threshold used by the Department of Justice to trigger 
                antitrust investigations in other industries; and
                    (E) in one-newspaper towns and cities, the new 
                cross-media ownership regulations would permit one 
                company to have a 90 percent market share of the 
                newspaper circulation, one-third of the TV audience, 
                and one-third of the radio audience.
            (13) The weakening of media protections, and subsequent 
        consolidation of the media industry, has allowed companies to 
        ignore their obligations to serve the public interest and 
        severely reduce localism, diversity, and competition in today's 
        media.
            (14) The current state of today's media threatens the 
        ability of our democracy to function because it does not allow 
        for ``the widest possible dissemination of information from 
        diverse and antagonistic sources'' and shrinks the marketplace 
        of ideas.
    (b) Purposes.--The purposes of this Act are--
            (1) to inform the public of the scope of media rules and 
        regulations that have been weakened and lost over the past two 
        decades;
            (2) to restore fairness in broadcasting;
            (3) to reduce media concentration;
            (4) to ensure that broadcasters meet their public interest 
        requirements; and
            (5) to promote diversity, localism, and competition in 
        American media

SEC. 3. FAIRNESS IN BROADCASTING.

    Section 315 of the Communications Act of 1934 (47 U.S.C. 315) is 
amended--
            (1) by redesignating subsections (a) through (d) as 
        subsections (b) through (e), respectively; and
            (2) by inserting before subsection (b) the following new 
        subsection:
    ``(a) Public Interest Obligation to Cover Publicly Important 
Issues.--A broadcast licensee shall afford reasonable opportunity for 
the discussion of conflicting views on issues of public importance. The 
enforcement and application of the requirement imposed by this 
subsection shall be consistent with the rules and policies of the 
Commission in effect on January 1, 1987.''.

SEC. 4. BROADCASTING OWNERSHIP LIMITATIONS.

    (a) Establishment of Broadcasting Multiple Ownership Limitations.--
Part I of title III of the Communications Act of 1934 is amended by 
inserting after section 339 (47 U.S.C. 339) the following new section:

``SEC. 340. BROADCASTING MULTIPLE OWNERSHIP LIMITATIONS.

    ``(a) National Television Audience Reach Limitation.--The 
Commission shall not permit any license for a commercial television 
broadcast station to be granted, transferred, or assigned to any party 
(including all parties under common control) if the grant, transfer, or 
assignment of such license would result in such party or any of its 
stockholders, partners, or members, officers, or directors, directly or 
indirectly, owning, operating or controlling, or having a cognizable 
interest in television stations which have an aggregate national 
audience reach exceeding 35 percent.
    ``(b) Radio Ownership Limitations.--
            ``(1) National radio ownership limitations.--The Commission 
        shall modify section 73.3555 of its regulations (47 C.F.R. 
        73.3555) to establish provisions limiting the number of AM or 
        FM broadcast stations which may be owned or controlled by one 
        entity nationally. Such limitation shall not exceed 5 percent 
        of the total number of AM and FM broadcast stations.
            ``(2) Local radio ownership limitations.--The Commission 
        shall revise section 73.3555(a) of its regulations (47 C.F.R. 
        73.3555) to provide that--
                    ``(A) in a radio market with 45 or more commercial 
                radio stations, a party may own, operate, or control up 
                to 6 commercial radio stations, not more than 4 of 
                which are in the same service (AM or FM);
                    ``(B) in a radio market with between 30 and 44 
                (inclusive) commercial radio stations, a party may own, 
                operate, or control up to 5 commercial radio stations, 
                not more than 3 of which are in the same service (AM or 
                FM);
                    ``(C) in a radio market with between 15 and 29 
                (inclusive) commercial radio stations, a party may own, 
                operate, or control up to 4 commercial radio stations, 
                not more than 2 of which are in the same service (AM or 
                FM), except that a party may not own, operate, or 
                control more than 25 percent of the stations in such 
                market; and
                    ``(D) in a radio market with 14 or fewer commercial 
                radio stations, a party may own, operate, or control up 
                to 3 commercial radio stations, not more than 2 of 
                which are in the same service (AM or FM), except that a 
                party may not own, operate, or control more than 40 
                percent of the stations in such market.
    ``(c) Cable/Broadcasting Ownership Restrictions.--The Commission 
shall not permit any license for a commercial television broadcast 
station to be granted, transferred, or assigned to any party (including 
all parties under common control) if the grant, transfer, or assignment 
of such license would result in such party or any of its stockholders, 
partners, or members, officers, or directors, directly or indirectly, 
owning, operating or controlling, or having a cognizable interest in 
such station and directly or indirectly owning or controlling a cable 
television system whose service area overlaps in whole or in part with 
such television broadcast station's predicted Grade B contour, computed 
in accordance with section 73.684 of the Commission's regulations (47 
C.F.R. 73.684).
    ``(d) No Grandfathering.--The Commission shall require any party 
(including all parties under common control) that holds licenses for 
commercial broadcast stations in excess of the limitations contained in 
subsection (a), (b), or (c) to divest itself of such licenses as may be 
necessary to come into compliance with such limitation within one year 
after the date of enactment of this section.
    ``(e) Section not Subject to Forbearance.--Section 10 of this Act 
shall not apply to the requirements of this section.
    ``(f) Definitions.--
            ``(1) National audience reach.--The term `national audience 
        reach' means--
                    ``(A) the total number of television households in 
                the Nielsen Designated Market Area (DMA) markets in 
                which the relevant stations are located, or as 
                determined under a successor measure adopted by the 
                Commission to delineate television markets for purposes 
                of this section; divided by
                    ``(B) the total national television households as 
                measured by such DMA data (or such successor measure) 
                at the time of a grant, transfer, or assignment of a 
                license.
        No market shall be counted more than once in making this 
        calculation. The Commission shall not provide any discount in 
        the measurement of national audience reach for UHF stations, or 
        on the basis of any other class or category of television 
        station.
            ``(2) Cognizable interest.--Except as may otherwise be 
        provided by regulation by the Commission, the term `cognizable 
        interest' means any partnership or direct ownership interest 
        and any voting stock interest amounting to 5 percent or more of 
        the outstanding voting stock of a licensee.''.
    (b) Conforming Amendments.--
            (1) Section 629 of the Departments of Commerce, Justice, 
        and State, the Judiciary, and Related Agencies Appropriations 
        Act, 2004, is repealed. Subject to the amendments made by this 
        subsection, section 202 of the Telecommunications Act of 1996 
        shall be applied as if such section 629 had not been enacted. 
        This paragraph shall be effective as if enacted on the day 
        after the date of enactment of Departments of Commerce, 
        Justice, and State, the Judiciary, and Related Agencies 
        Appropriations Act, 2004.
            (2) Subsections (a) and (b) of section 202 of the 
        Telecommunications Act of 1996 (Public Law 104-104; 110 Stat. 
        110) are repealed
            (3) Section 202(c)(1) of such Act is amended--
                    (A) by striking ``its regulations'' and all that 
                follows through ``by eliminating'' and inserting ``its 
                regulations (47 C.F.R. 73.3555) by eliminating'';
                    (B) by striking ``; and'' at the end of 
                subparagraph (A) and inserting a period; and
                    (C) by striking subparagraph (B).

SEC. 5. INVALIDATION OF MEDIA OWNERSHIP DEREGULATION.

    (a) Definition.--For purposes of this section, the term ``media 
ownership proceeding'' means the Federal Communications Commission 
proceeding on broadcast media ownership rules (MB Docket No. 02-277, MM 
Docket No. 01-235, MM Docket No. 01-317, and MM Docket No. 00-244).
    (b) New Rules Invalidated.--Except as provided in subsection (d), 
the final rules adopted by the Federal Communications Commission 
pursuant to its media ownership proceeding, and announced by the 
Commission on June 2, 2003, shall be invalid and without legal effect.
    (c) Reinstatement of Previous Rules.--Except as provided in 
subsection (d), any rule of the Federal Communications Commission that 
was in effect on June 1, 2003, and that was amended, repealed, or 
otherwise modified by the Commission pursuant to the media ownership 
proceeding is hereby reinstated as it was in effect on June 1, 2003. 
Any such rule shall be applied and enforced both prospectively after 
the date of enactment of this Act and retroactively to June 2, 2003, as 
if the media ownership proceeding had not occurred.
    (d) Exception.--This section shall not apply to the limitations 
required by section 340 of the Communications Act of 1934, as added by 
section 4 of this Act.
    (e) Use of Biennial Review Prohibited.--The Federal Communications 
Commission shall not apply section 202(h) of the Telecommunications Act 
of 1996 or section 11(b) of the Communications Act of 1934 (47 U.S.C. 
161(b)) to any review of broadcast media ownership rules after the date 
of enactment of this Act.

SEC. 6. REVIEW PROCESS FOR MEDIA OWNERSHIP.

    (a) Five-Year Review Process.--The Commission shall, once each 5 
years beginning in 2006, conduct a review of--
            (1) how the Commission's regulations concerning media 
        ownership promote and protect localism, competition, diversity 
        of voices in the media, diversity in broadcast ownership, 
        children's programming, small and local broadcasters, 
        technological advancement; and
            (2) what regulations should be strengthened, added, 
        eliminated, or altered, consistent with the priorities 
        described in paragraph (1).
    (b) Report to Congress.--The Commission shall, promptly after the 
conclusion of each review under subsection (a), submit a report thereon 
to Congress.
    (c) Publication of Final Rules Prior to Comment; Hearings.--Before 
issuing any final rule concerning limitations on media ownership, the 
Commission shall--
            (1) publish such rule in the Federal Register;
            (2) conduct not less than 5 public hearings in various 
        regions of the country to afford the public a reasonable 
        opportunity to comment on such rule; and
            (3) widely advertise the time and place of such hearings in 
        advance.

SEC. 7. PUBLIC INTEREST REPORTS.

    Section 309(k) of the Communications Act of 1934 (47 U.S.C. 309(k)) 
is amended by adding at the end the following new paragraph:
            ``(5) Public interest service reports required.--For the 
        purposes of enabling the Commission to render the 
        determinations required by paragraph (1)(A), each broadcast 
        licensee, at least one every 2 years, shall submit to the 
        Commission and publish, or otherwise make broadly available to 
        the public at no cost, a report on how the broadcast station is 
        meeting the requirement to serve the public interest. The 
        information in such report shall include--
                    ``(A) the broadcaster's attempts to ascertain and 
                satisfy local community needs;
                    ``(B) the broadcaster's use of public service 
                announcements;
                    ``(C) the level and variety of the broadcaster's 
                children's programming and the extent of the 
                broadcaster's restraint from improper commercial 
                advertising during children's programming; and
                    ``(D) the level and variety of the broadcaster's 
                nonentertainment programming, particularly public 
                affairs programming; and
                    ``(E) the broadcaster's proposals for future 
                programming.''.

SEC. 8. PREVENTION OF PROGRAMMING VERTICAL INTEGRATION.

    Part I of title III of the Communications Act of 1934 is amended by 
inserting after section 340 (as added by section 3) the following new 
section:

``SEC. 341. PREVENTION OF PROGRAMMING VERTICAL INTEGRATION.

    ``(a) Limitations on Vertical Integration in the Acquisition of 
Programming.--The Commission shall, in accordance with subsection (b), 
prescribe rules to prevent the persons controlling the distribution of 
video programming over network distribution systems from acquiring 
unreasonable proportions of such programming from subsidiaries or 
affiliates contrary to the public interest in the goals of diversity 
and competition in the media marketplace.
    ``(b) Minimum Standards.--The rules required by subsection (a) 
shall, at a minimum--
            ``(1) for any of the four largest national television 
        networks, prohibit such network from distributing network 
        produced programming over such network in an amount that 
        exceeds, for any month, more than 60 percent of their primetime 
        programming;
            ``(2) for any other national television network, other than 
        a network described in paragraph (3), prohibit such network 
        from distributing network produced programming over such 
        network in an amount that exceeds, for any month, more than 70 
        percent of their primetime programming;
            ``(3) for a national television network that has been in 
        operation for less than 3 years, prohibit such network from 
        distributing network produced programming over such network in 
        an amount that exceeds, for any month, more than 90 percent of 
        their primetime programming;
            ``(4) for a cable network that is owned or controlled by a 
        large cable operator or by a national television network, 
        prohibit such network from distributing network produced 
        programming over such networks in an amount that exceeds, for 
        any month, more than 65 percent of their primetime programming; 
        and
            ``(5) for any other cable networks, prohibit such network 
        from distributing network produced programming over such 
        network in an amount that exceeds, for any month, more than 75 
        percent of their primetime programming.
    ``(c) Definitions.--As used in this section:
            ``(1) Network produced programming.--The term `network 
        produced programming' means programming that is owned or 
        produced by an entity controlled by or affiliated with the same 
        entity owning or controlling the network, or one over which the 
        network has sole or joint creative control, acts as the 
        distributor, or has a financial interest, but does not include 
        programming that is owned or produced, or under the sole 
        creative control, by an affiliated television broadcast station 
        that is not owned or controlled by such network.
            ``(2) Primetime programming.--The term `primetime 
        programming' means programming broadcast during the hours of 8 
        p.m. to 11 p.m., Monday through Sunday, but does not include 
        newscasts, sports programs, or telecasts of feature films.
            ``(3) Cable network.--The term `cable network' means a 
        cable channel that broadcasts video programming which is 
        primarily intended for the direct receipt by a cable operator 
        or a satellite operator for their retransmission to cable or 
        satellite subscribers, but does not include a cable channel 
        that reaches less than 16 million cable households.
            ``(4) Large cable operator.--The term `large cable 
        operator' means a cable operator, as such term is defined in 
        section 602, that has 3,000,000 or more subscribers in the 
        aggregate nationwide.''.
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