[Congressional Record (Bound Edition), Volume 149 (2003), Part 16]
[Senate]
[Pages 21974-21976]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          FCC MEDIA OWNERSHIP

  Mr. HOLLINGS. Mr. President, let me address the particular resolution 
for disapproval of the Federal Communication Commission's order 
relative to not only increasing media ownership from 35 percent to 45 
percent but, more particularly, also eliminating cross-ownership rules 
so you can own everything. You can own the cable, you can own the 
television, you can own the newspaper, you can own the satellite and 
many stations and what have you, and, in the main, the networks own 
them.
  I hasten to add that I hold no brief for or difference with any of 
the 10 particular Federal Communications Commission Chairmen with whom 
I have served. I have served, it will be almost 37 years, beginning 
with Rosel Hyde back in 1966, to Dean Burch, to Richard Wiley, to 
Charles Ferris, to Mark Fowler, to Dennis Patrick, to Alfred Sikes, to 
James Quello, to Reed Hundt, to William Kennard. Ask any one of them.
  I got on the Commerce Committee and on the Subcommittee on 
Communications, when John Pastore of Rhode Island was the chairman of 
the subcommittee. For over 20-some years I have served as either 
chairman of that subcommittee or ranking member.
  Right to the point, I want to try to agree with our distinguished FCC 
chairman, Michael Powell. I tried my best to sit down and talk with 
him. I realized from the get-go that he was off on a toot because he 
was asked, just as he was coming into office, about the public 
interest. He was asked, at his maiden news conference, for his 
definition of the public interest.
  Powell joked:

       I have no idea. The term can mean whatever people want it 
     to mean. It's an empty vessel in which people pour in 
     whatever their preconceived views or biases are.

  I could see we would have trouble because here is a regulatory body 
to carry out the rules and regulations and the intent of the Congress 
to regulate, and here he is coming in and saying: No, no--market 
forces. The public interest is just something fanciful. It is an 
``empty vessel,'' to use his characterization.
  Free market analysis does not apply to the broadcasting industry 
because of spectrum scarcity; that is, the primary local broadcast is 
the primary source for local news, weather, public affairs programming, 
and emergency information.
  When we had the 1996 act, it actually was a bill that I had worked on 
2 years as chairman of the Commerce Committee. I can see George 
Mitchell, the majority leader, trying to get it up because we passed it 
out of the committee unanimously. We worked in a bipartisan fashion. He 
could not get it up. In desperation and frustration, he said: The first 
thing I am going to do when we convene next year is call up the 
Telecommunications Act.
  Of course we Democrats were beat. The Republicans took over. Senator 
Larry Pressler, the distinguished Senator, took over as chairman of the 
Commerce Committee and he put in the Republican version. But in 
conference--you can ask Tom Bliley, who was the Republican chairman in 
the House and I was working on the Senate side--that we more or less 
reconciled it to a bill that we had worked on literally for 4 years to 
promote competition.
  We realized we were into a dynamic environment, changing each day. We 
worded the language in there so it would not only deregulate but 
reregulate.
  Of course the distinguished Chairman Powell went along with every 
gimmick in the book, such as it didn't refer to data, and various other 
things that my colleague over on the House side, Billy Tauzin, put in, 
but we held up.
  Finally, the other day they put out an order relative to the 
ownership cap and the cross-ownership. Let's take 1 second with respect 
to the ownership cap.
  What happens is that we were really trying to hold it to the 25 
percent. There were some in violation, in excess of that. They wanted 
to be able to reconcile themselves and come into conformance with the 
law itself and the rule. We got down to the base wire and everything 
else of that kind. There was not any question in our own minds that the 
25 percent was enough ownership, because we could see how the radio was 
going at the particular time.
  We all know how radio has gone, where they can own 1,200 stations. 
When you get that kind of ownership, they can't just give numbers, you 
have to get control.
  I can't get any kind of local thing. It is all foreign. In fact, you 
are liable to get the weather out of India at your local hometown 
station. They are reading from some kind of report.
  We had a system that was actually checks and balances at the Federal 
Government level. In other words, in broadcasting, the content was 
provided by producers. The networks served as wholesalers and the local 
affiliates as distributors. Now the networks have come in and gotten 
their own programming. They have done away with the financial 
syndication rule. They have gotten into their own programming in 
vertical integration.
  The networks have been allowed to buy up stations, and they are 
buying them up like gangbusters. What we are going to have here is 
almost one branch of government trying to preserve localism in the 
public interest. It is not going to happen if this continues. It just 
threw everyone into turmoil.
  There isn't any question. On the House side, even though Chairman 
Tauzin opposed it vigorously, a bipartisan group put in the State, 
Justice, Commerce appropriations bill that the 45-percent rule of the 
Federal Communications Commission be reversed and go back to 35 
percent. We considered the same thing over at the markup of the State, 
Justice, Commerce appropriations bill, and we included that same 
provision word for word.
  I ask unanimous consent that an article entitled ``How Michael Powell 
Could Have the Last Laugh,'' in this week's BusinessWeek, which goes 
right to the cross-ownership, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                  [From BusinessWeek, Sept. 22, 2003]

              How Michael Powell Could Have the Last Laugh

                          (By Catherine Yang)

       Federal Communications Commission Chairman Michael K. 
     Powell looks like a man on the run. Since he passed sweeping 
     rules in June enabling greater media consolidation, an angry 
     public has ignited a fast-burning backlash against his 
     deregulatory agenda. On Sept. 3, at the urging of public 
     interest groups, the U.S. Court of Appeals in Philadelphia 
     stayed the rules until it could finish reviewing them. The 
     next day, the Senate Appropriations Committee voted to bar 
     the FCC from implementing a new rule allowing TV networks to 
     own stations covering up to 45% of the U.S. audience.

[[Page 21975]]

       But while the opponents of media consolidation seem to be 
     gaining ground fast, they shouldn't be too quick to declare 
     victory. In fact, Capitol Hill's expected repudiation of the 
     networks' 45 percent limit risks letting the steam out of the 
     debate--and leaving Powell's laissez-faire legacy intact. 
     Until now, lawmakers and the anti-Big Media insurgents have 
     focused on gutting this one rule. The 45 percent cap has 
     become a rallying symbol, but the regulations that would 
     truly reorder America's media landscape and affect local 
     communities have flown under the radar. These would allow 
     companies to snap up not only two to three local TV stations 
     in a market but also a newspaper and up to eight radio 
     stations. If the courts and Congress are worried about the 
     dangers of media consolidation, they'll have to resist 
     calling it a day after dispensing with the network cap and go 
     after the rule with real bite.
       As it stands now, TV's Big Four networks will be losers 
     among media outlets--thanks mostly to vociferous lobbying by 
     independent TV affiliates. With strong ties to lawmakers who 
     depend on them for campaign coverage, the affiliates have 
     succeeded in getting a House vote against the 45 percent rule 
     and will likely see a rerun of that episode when the Senate 
     votes by October. But with Fox and CBS already each owning 
     stations that cover about 40 percent of the nation's 
     audience, ``going up another 5 percent isn't going to make a 
     dramatic difference,'' says Scott A. Stawski, a media 
     consultant at Inforte in Chicago.
       In contrast, opening the floodgates to allow local 
     behemoths to combine newspapers, TV, and radio stations under 
     one roof would change media ownership in towns and cities, 
     concentrating it in the hands of a few. Even in midsize 
     cities, such as San Antonio, for instance, one company might 
     own the leading newspaper, two TV stations, eight radio 
     stations, and several cable channels. Powell argues the 
     explosion of cable networks and the Internet brings a wide 
     choice of media to communities, even if there's a spate of 
     mergers. And--no surprise here--most media companies agree.
       Yet there's little doubt that, once given the go-ahead, 
     these rules would spur local consolidation. Owning a second 
     or third station in a market is irresistible for TV station 
     owners, which can splash expenses by a third by ditching 
     duplicate cameramen, studio technicians, and reporters. The 
     economies of newspaper-broadcast crossownership may be 
     dicier, but publishers such as Tribune Co., Gannett, and 
     Media General want stations where they publish--if for 
     nothing more than to cut costs in back-office operations.
       True, the new media giants could conceivably plow their 
     savings back into improving local news coverage. But public 
     companies are more likely to use them to boost returns to 
     shareholders. ``If they can downsize the operational budget 
     through having fewer people cover the news, they'll do it,'' 
     says Jill Geisler, head of the leadership program at the 
     Poynter Institute, which promotes journalism standards.
       But even asking whether TV duopolicies and newspaper TV 
     combos can produce better news may be beside the point. ``The 
     test is how many different voices we have,'' says James F. 
     Goodmon, CEO of Capitol Broadcasting Co., a Raleigh (NC)-
     based TV station group that is opposed to the FCC's rules. 
     ``What's good news to you is bad news to me. I'm really 
     worried about someone deciding what good news is.'' The 
     courts and Congress, too, should guard against a Powell 
     doctrine that could end up muffling more voices than it adds.

  Mr. HOLLINGS. Mr. President, we had the support of the National 
Association of Broadcasters with respect to the overall check of the 45 
percent being turned back to the 35 percent and not go up to 45 
percent. However, the station owners realized that money could control 
and they could be in a position where cross-ownership would be done 
away with. There is a lot of big money with these oligopolies coming in 
and buying up their stations, which would position them monetarily and 
enhance the value of their station.
  We don't have the support of the National Association of Broadcasters 
on that cross-ownership. But the Senator from North Dakota, Mr. Dorgan, 
has it in as a resolution of disapproval. I am a cosponsor. Senator 
Lott and many of our Republican colleagues are also cosponsors. We 
discharged that one out from the Commerce Committee.
  The Stevens-Hollings authorization bill on the return of 45 percent 
from the 35 percent has been reported and is pending at the desk for 
consideration. I think the appropriations process is the only way that 
we can proceed.
  I ask unanimous consent to have printed in the Record an article from 
USA Today from this morning entitled ``FCC's Powell keeps chin up as 
regulation storm rages.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    [From USA Today, Sept. 15, 2003]

          FCC's Powell Keeps Chin Up as Regulation Storm Rages

                           (By Paul Davidson)

       Washington.--Federal Communications Commission Chairman 
     Michael Powell is unbowed by a string of rebukes from 
     Congress, the courts and the public to his agency's ruling 
     allowing media giants to get bigger.
       ``In hindsight, maybe I would have done a little more of 
     this, a little less of that,'' Powell, a Republican, said 
     last week in an interview in his corner office. ``But I don't 
     believe what we did in the mainstream was incorrect.''
       Powell has endured an unusually punishing year for an FCC 
     chairman. He lost his bid early this year to deregulate the 
     regional Bells' phone service when fellow Republican Kevin 
     Martin sided with the agency's two Democrats. He has come to 
     personify a much-maligned push by the Bush administration to 
     give ``big media'' too much influence. And each move against 
     his media plan by Congress or the courts is portrayed as a 
     personal defeat that further erodes Powell's status as the 
     USA's top communications regulator.
       In an interview, Powell was calmly defiant, exuding little 
     sense that he is at the epicenter of a national firestorm. 
     ``It does not faze me one bit that you're going to talk about 
     me, because I don't think I'm the story,'' says Powell. ``The 
     story should be (what is the best) policy for the American 
     people.''
       The newest and potentially most far-reaching setback could 
     come Tuesday, when the Senate considers a rare resolution to 
     reverse all the FCC's new media ownership rules. Backers of 
     the measure expect it to pass, though it faces a battle in 
     the House from Republican leaders and a veto threat from 
     President Bush.
       The FCC rules, approved by the commission in a party-line 
     3-2 vote in June, would let TV networks own local stations 
     reaching, in total, 45% of the national audience, up from 
     35%. The rules also would allow ownership of a newspaper and 
     a TV or radio station in the same market and up to three TV 
     stations in the largest cities.
       A diverse coalition, from the National Rifle Association to 
     Common Cause, argues the overhaul would give a handful of 
     conglomerates too much control over what people see, hear and 
     read.
       Powell downplays concerns as ``melodramatic.'' Noting that 
     a 1996 law and a federal appeals court ordered the FCC to 
     justify its old rules or scrap them, he said the resolution 
     to be voted on Tuesday would spawn ``chaos.''
       ``Why is it better for this country to reinstate rules that 
     have been overturned by a court? Under the terms of the 
     (resolution), we're not even allowed to replace them.''
       But Sen. Byron Dorgan, D-N.D., who launched the resolution 
     push, disagrees. ``The court did not overturn the rules. The 
     court told the FCC that they must justify the rules. Instead, 
     the FCC decided to take a high dive on behalf of the biggest 
     corporate interests.''
       Dorgan says his measure would simply reinstate the old 
     media limits, adding nothing would stop the FCC from issuing 
     revised rules that make more tempered changes.
       The resolution is the latest blow to Powell's media 
     deregulation plan. The House in July voted to reinstate the 
     35% cap, and the Senate is expected to follow suit. That more 
     limited measure stands the best chance of withstanding a 
     White House veto because it's attached to a spending bill.
       Powell says the tighter rules are outmoded as cable 
     threatens free broadcast TV, but, ``(Congress) makes the 
     rules, and we implement them. I think that's completely 
     fine.'' Yet he ripped the legislative proposals as hollow 
     because they don't offer guidance on ownership regulation. 
     ``It is, in some ways, an anti-vote.'' he says.
       And when critics rail against big media, ``I'm not sure 
     what problem people are trying to solve. I don't have the 
     sense I don't hear every viewpoint from the left to the right 
     on Fox, MSNBC and CNBC.''
       Powell says he can ``absolutely see the argument'' that 
     easing media limits further could give too much influence to 
     a handful of behemoths, but insists his changes are moderate. 
     ``It's an amazingly gradual, modest package. The difference 
     between 35 and 45 (percent) is the network might own five 
     more stations in the United States. So no, I do not think 
     that's the end of democracy.''
       But Andrew Schwartzman of the Media Access Project notes 
     the national cap was 25% before Congress raised it in 1996. 
     ``This is a very substantial increase. Chairman Powell 
     persistently trivializes the heartfelt concerns of the 
     public.''
       Schwartzman, some say dealt Powell his most stinging defeat 
     when he persuaded a U.S. appeals court this month to block 
     all the FCC's new regulations from talking effect until it 
     rules on a broader challenge to them. Washington media lawyer 
     Christy Kunin says the stay indicates the court believes the 
     challenge has at least ``some merit.''
       But Powell contends: ``The court's decision has been 
     radically exaggerated. It has merely said, `Let's chill out,' 
     and gives us a fair change to consider'' the case.

[[Page 21976]]

       He also dismisses complaints that he could have handled the 
     media ruling with more sensitivity, perhaps heeding calls to 
     delay the vote another 30 days to give the public a chance to 
     comment.
       ``The commissioners who asked for the 30 days weren't going 
     to change their vote in any way.''
       Powell concedes the drumbeat of protest against his media 
     plan ``is intense. I'm a human being.'' But, ``I don't 
     personalize policy.''
       The son of Secretary of State Colin Powell, Michael Powell 
     is a former Army officer, Justice Department official and 
     antitrust lawyer who is deemed a rigorous intellectual 
     analyst but short on the political skills required of an FCC 
     chairman. He admits discomfort with the swirl of politics. 
     ``I like to think of the agency as more judicial than 
     legislative. And when it gets infected with whose 
     constituency is going to win, I don't like that. It's very 
     unsatisfying when you realize somebody's voting a certain way 
     for political reasons.''
       Powell cites deregulation of the wireless industry and 
     promotion of high-definition TV among his biggest successes. 
     He denies rumors he's poised to step down. There's nothing 
     imminent. The criticism, he adds, ``is not fun. But it's what 
     you're forced to endure to be successful in this job.''

  Mr. HOLLINGS. Mr. President, you can see, as they say in this 
article, that Chairman Powell is defiant. He says that it would spawn 
chaos. It wasn't chaos. We had some competition. In fact, Senator 
McCain and I are trying to reregulate the radio stations, bring them 
back and do away with the ownership and make them divest to a certain 
number. But he says the commissioners now ought to have the views of 
the public. That is very interesting.
  Mr. President, now Michael Powell is going to have a task force 
designed to prevent any media company from having excess power over 
competition or viewpoints.
  He does that after two of the commissioners begged for public 
hearings. They literally begged. They were told they did not have money 
enough, and they could only hold one hearing. That hearing was held in 
Richmond.
  From their own particular little budget, they had 13 hearings. Now a 
firestorm has erupted. You not only have the National Rifle Association 
and consumer groups, but you have the people of authority and respect 
such as Walter Cronkite and Barry Diller. You can go right on down the 
list all saying this is the worst thing that could possibly happen.
  The interesting thing is that Commissioner Powell says they have 
``produced a balanced structural rule faithful to the directors of 
Congress.'' Total, total applesauce--applesauce and baloney. I can tell 
you that we begged and we coached. I thought maybe it was a personality 
difference.
  I get along with his father, Secretary Powell. In fact, he and I 
received honorary degrees at Tuskeegee together. He calls me Dr. 
Hollings. I call him Dr. Powell. I have provided him every red cent he 
has ever wanted for State Department appropriations as Secretary of 
State. I have that particular appropriations.
  But Michael Powell is a different character entirely. He is very 
competent, very smart, and very intelligent, but not a regulator. He 
just believes that the public interest is an empty vessel and the 
market forces should control. When he says ``faithful to the directors 
of Congress,'' that is exactly what he has not been. He has been 
totally unfaithful. We begged him to hold up the order.
  This particular reference in the order itself shows that he thinks 
they need big hearings on localism. Why didn't he hold up the order 
before he had the task force, before he had the hearings? The task 
force will make legislative recommendations to Congress to strengthen 
localism. We fought like tigers to try to get him to listen, and he 
just absolutely would not listen.
  Mr. President, quoting from this morning's Wall Street Journal:

       Entertainment giants such as Viacom, NBC parent General 
     Electric Co. and Walt Disney Co., which owns ABC, now reach 
     more than 50 percent of the prime-time television audience 
     through their combined broadcast and cable outlets. The total 
     rises to 80 percent, if you include the parents of newer 
     networks--such as News Corp.'s FOX and AOL, Time-Warner, 
     Inc.'s WB--and NBC's pending acquisition of Vivendi Universal 
     SA's cable assets, estimates Tom Wolzien, an analyst at 
     Sanford C. Bernstein & Co.
       The big media companies are quietly re-creating the ``old 
     programming oligopoly'' of the pre-cable era, notes Mr. 
     Wolzien, a former executive of NBC. Of the top 25 cable 
     channels, 20 are now owned by 1 of the big 5 media companies.

  They own each other. You talk to Chairman Powell, and he says, Look, 
cable is going to be taken over and there won't be any free broadcast. 
The free broadcaster is the one who owns the cable. He is totally off 
base. He just will not regulate. An order for localism is a sham and a 
farce. The American people ought to understand it and they ought to 
understand why we do not have the support of the National Association 
of Broadcasters. They want to enhance the value of their individual 
stations. They see if you can get the cross-ownership, the value of 
their station locally. One of the big oligarchies will give an 
inordinate price and they can go to Virginia Beach, the sun, take it 
easy, and will not have to worry.
  I appreciate the indulgence of the Senate at this late hour. I only 
ask that you give close attention to the bipartisan Dorgan-Lott 
resolution, that we disapprove it, and put us back to where we were 
before they started a feeding frenzy, according to all the stockbrokers 
in the market in New York, ready to buy up all the rest of the stations 
as soon as it becomes effective. It has been stayed by the court. 
Rather than causing chaos, it will bring us back and maybe we can find 
out from the task force of localism, of Chairman Powell, what really 
needs to be done, what the public interest is.
  I yield the floor.

                          ____________________