POWELL CRITICIZED FOR DECISION TO GO FORWARD WITH VOTE

Comr. Adelstein said Powell not only cast aside his and Copps’ request, but “he has ignored requests from Congress, industry participants, and the public for more time and more information.” Copps and Adelstein said they were disappointed that Powell also declined to release at least the broad outlines of the proposed rules, so members of the public and Congress might have a chance to comment before the vote. Adelstein said the sheer volume of the record warranted more time for review, that he needed time to consider the rationales behind the rule changes to determine “the soundness of the complete package,” and that more than 3 weeks are needed to determine how the rules will interact with one another. Copps is scheduled to appear at an open forum in Detroit on Mon. and in Atlanta on Wed.

Center for Digital Democracy Executive Dir. Jeffrey Chester said Powell’s action demonstrates that “he is not interested in a serious informed national debate on media policy… He has shown ultimate disrespect for the public’s First Amendment rights.” Media Access Project Pres. Andrew Schwartzman called Powell’s decision disappointing: “Chairman Powell seems more concerned about proving he can get it done quickly than he is about getting it done correctly.” He also said Powell should have shown a similar concern for responding to a 2-year-old directive by the D.C. Court of Appeals to adopt a limit on cable ownership.

As word of the Media Bureau’s proposals has leaked out, interest groups and companies involved have had a variety of responses. A representative of the Network Affiliated Stations Alliance (NASA) said the organization’s strategy in the coming weeks would be to try to demonstrate to the commissioners why an incremental increase in the national audience reach cap, from 35% to 45% would risk localism. Since the commissioners appear to recognize the value of the balance of power between affiliates and networks, it’s hard to justify any change, the NASA representative said. Meanwhile, FCC sources confirmed that the Media Bureau’s recommendations would allow triopolies only in markets that have 18 separate voices, or in other words, only the largest of markets.

Clear Channel responded to comments made by Comr. Abernathy earlier in the week. She had told reporters that the agency intended to change the radio market definitions -- perhaps leaning toward using Arbitron ratings -- and that the commissioners were discussing how to deal with Clear Channel having more stations than some would like in some markets (CD May 15 p1). On Fri., Clear Channel Senior Vp-Govt. Affairs Andrew Levin said the existing rule has resulted in some anomalies, particularly in small markets. “But it’s important the FCC doesn’t let the baby out with the bath water. It’s not in anybody’s interest to turn back the clock to a time when radio stations were gasping for breath, cutting local news departments and laying off their employees,” he said. As for the idea that Clear Channel might be directed to sell some stations, he said, that would make no sense. “I believe it would be a major public policy gaffe, apart from the serious Constitutional questions involved, and just can’t imagine the FCC going that route,” Levin said.

Also Fri., Merrill Lynch analysts released a 78-page report called “The Gold Rush Begins,” referring to what they believe will be a rush of consolidation in the media industry once the new rules are adopted. The report said, among other things, that they expect companies like Viacom, News Corp. and Disney would look to make targeted acquisitions, most likely radio or TV stations in larger markets, rather than wholesale, transforming acquisitions. The analysts said an increase in the national audience reach cap to 45% would benefit the networks, but relaxation of the duopoly rules would also strengthen affiliate groups. And, the Merrill Lynch analysts said, an FCC move to allow triopolies in major markets would open the door for one of the major media companies to acquire Spanish operator Univision.