HOUSE DEMOCRATS AND REPUBLICANS EYEING POSSIBLE DTV SOLUTION

Tauzin also told NAB that support for broadband deregulation bill (HR-5142) would aide industry in realizing “the potential for digital broadcasting.” Successful mass distribution of digital music and TV programming “all depends on America being connected” to high-speed Internet infrastructure, which currently isn’t available to most U.S. consumers, he said. Tauzin-Dingell bill, which moves to House floor Wed., will aid deployment and bring broadcasters further into computer age, Tauzin said. He predicted victory in House, “then a fight in the Senate, as you know” (see separate story, this issue). He later told reporters that current restrictions on Bell companies’ providing Internet access across interLATA map lines wasn’t appropriate in today’s global communications market. Senate Commerce Committee Chmn. Hollings (D-S.C.), one of staunchest opponents of Tauzin-Dingell, is mistaken in wanting to preserve LATAs, which artificially regulate service based on distance, Tauzin said: “If Mr. Hollings wants to keep those lines on the map, then he wants to regulate the Internet.”

Congressional staffers also alluded to possibility of legislative solution to DTV transition and said they were hopeful that NAB, CEA and cable industry could reach agreement without further govt. intervention. Jane Terry, aide to Sen. Cleland (D-Ga.), said “if a private sector agreement is not reached, we may have to consider” legislative remedy. If industries show good faith that they're working toward amicable solution, Congress will delay action, she said. Patrick Woehrle, aide to Rep. Green (D- Texas), said Congress “is going to give [industry] a little more time.” He told audience to “hammer it out amongst yourselves so we don’t have to do it.”

Congressional review of recent U.S. Appeals Court, D.C., remand to FCC of broadcast-cable cross-ownership rules is likely to occur this session, perhaps in near future, some panelists said. Staffers recommended broadcasters provide hard data to FCC on 35% ownership cap to help agency bolster its case in maintaining cross-ownership restrictions. Terry said court decision was “very troubling,” and there were “rumblings” on Hill that case eventually would make it to Supreme Court: “I'd be surprised if we didn’t have something scheduled on this in the next few months.” Johanna Mikes, aide to Rep. Boucher (D-Va.), said “real lesson in that case” is that stakeholders must provide specific “hard evidence” to support their position on cap, rather than basic data or opinions on matter. Sen. Lott (R-Miss.) said in separate speech that “there’s still merit for the cap” and Congress “may want to” address issue.

Tauzin said cap was designed in era of few broadcasters and was imposed to ensure that no one entity controlled flow of information. Now that mass media are pervasive and are in hands of diverse entities, restrictions no longer are necessary, he said. Tauzin said court’s remand to FCC showed “it was time for someone to say, ‘You've been arbitrary and capricious… We don’t need those rules,'” He said he would leave it to House Telecom Subcommittee Chmn. Upton (R-Mich.) to decide whether to schedule hearings. Tauzin predicted broadcast-newspaper cross-ownership rules would be struck down next.

One of biggest question that needs to be answered before proposed EchoStar acquisition of DirecTV could be approved is whether local DBS coverage can be provided without deal, said Senate Judiciary Antitrust Subcommittee Counsel Seth Bloom. Antitrust review of EchoStar-DirecTV and additional industry consolidation also will focus on impact on “specific discernable markets” such as advertising sector, he said. Bloom said proposal “does raise some antitrust concerns,” but subcommittee understood companies’ position that deal would enable new entity to compete more effectively against cable operators: “We'll give that careful study.” Govt. also must decide whether fewer available media markets will result in higher rates for ad purchasers. He said that if Congress saw wave of merger proposals, “you can expect another wave of hearings.” Meanwhile, Bloom said subcommittee hadn’t taken position on proposal to give Dept. of Justice greater oversight authority in communications industry mergers in general. However, he said subcommittee was sympathetic to goal of DoJ and FTC “to make their work more efficient.”

Lott said he was “looking very closely” at proposed EchoStar takeover of DirecTV: “I think you do need competition at the local level… I want to make sure service is there, and ethics in service.” He said if deal made good business sense without causing consumers to pay higher prices and lose local content, then he feasibly could support it: “I'm not prepared to come down and say, ‘No merger,’ but I have a lot of reservations about it. I'm inclined to think it’s not healthy for competition.”

Lott also raised issue of campaign finance reform, specifically efforts to place mandate on broadcasters to give federal candidates preferential treatment in ad time and pricing. Although House passed reform bill (HR-2356) by Reps. Shays (R-Conn. ) and Meehan (D-Mass.), it rejected so- called Torricelli amendment, named after Sen. Torricelli (D- N.J.). Senate passed bill containing provision by Torricelli that would require broadcasters to give candidates sharply discounted, nonpreemptible lowest unit charge (LUC) for campaign ads. Lott said Torricelli was likely to attempt to amend voting rights bill, which is unrelated to campaign bill, with LUC amendment: “We're going about [reform] all wrong. I prefer a fundamental approach… It’s called freedom.” He said Senate had passed reform bill with LUC provision because members “got caught up in the title,” rather than in details of bill: “I voted against it, and I will fight it if it comes up” in election bill. He said supporters of LUC obligations “still think that there’s a free lunch, or a free broadcast ad.” He said cheaper alternatives existed for candidates that wouldn’t burden local broadcasters, such as use of phone banks or billboards to get out campaign messages.

As of Mon. morning, there were 79 requests from TV stations for extension of DTV deadlines -- most of them for technical and equipment reasons, FCC officials said on another panel. Cable Bureau Chief Kenneth Ferree, who is to become chief of merged Media Bureau when it becomes reality, said Commission currently was holding series of “what we call ‘hoedowns'” to moderate efforts at voluntary clearances of high-band analog channels.

Mass Media Bureau Chief Roy Stewart -- who is to be chief of Office of Bcst. License Policy in new bureau -- said many more applications for extension of deadline were expected and “we'll act on them as they come in… rapidly.” He said new form provided several reasons for broadcasters to seek extension but not: “Sept. 11. We're not going to accept that as a reason… I suspect we're going to be reasonable in our approach.”

Combined bureau, which also will take over satellite functions of International Bureau (CD Aug 29 p1), still hasn’t been finalized, but it will be “shortly,” Ferree said. He said it would make agency more effective in handling broadcast and cable matters. One phase of merger still is awaiting final approval from Congress and such delay “is not unusual,” Gen. Counsel Jane Mago said. Stewart (who has been chief of Mass Media for 20 years and received sustained standing ovation when introduced by moderator Karen Kirsch, NAB vp-regulator affairs) said his Office would continue to handle all analog and digital matters, licenses, AM-FM, translators, etc. He said he already had Powell’s approval to continue as agency’s point-man at broadcaster meetings (having participated in state association conventions in Okla., Tenn. and Mich. last week) to “find out what is on your mind.”

Susan Eid, mass media adviser to Powell, said Commission planned en banc hearing in spring or early summer on agency’s 3rd attempt to devise EEO rules that courts would accept. She urged broadcasters to “outline for us some of the burdens” earlier rules -- which were declared unconstitutional by U.S. Appeals Court, D.C., 13 months ago - - put on licensees, as claimed by NAB and individual stations.

Stewart and Mago made same appeal for broadcasters’ input into agency’s reconsideration of 35% ownership cap following remand by same court (CD Feb 20 p1). On Comr. Copps’ call for FCC to appeal remand to U.S. Supreme Court (CD Feb 22 p1), Mago said: “The answer is that we have given it [possible appeal] some thought and continue to give it some thought.” She said Commission task force was “examining all the foundations” of agency’s ownership restrictions.

Enforcement Bureau Chief Richard Solomon said agency hadn’t changed its policy on indecency complaints and “burden of proof” of violation still rested on complainant.

Broadcasters were briefed by NAB lobbyists on pilgrimage to lobby Congress today (Tues.) on broadcast issues. High on their list, we're told, will be efforts to: (1) Retain cap on number of U.S. viewers TV stations owned by single licensee could cover -- whether that figure be 35% or something else. (2) Urge Senate not to reinstate Toricelli amendment to campaign finance reform bill on lowest unit rate charge for candidates -- provision deleted in House vote (CD Feb 15 p7).