FCC SUSPENDS ATTRIBUTION RULE FOR BROADCASTERS
Broadcasters now can buy 49% stake in other TV companies without stake’s counting as attributable interest under FCC rules. Commission ruled this week in 3-1 vote that broadcasters should be granted exemption to single majority shareholder rule. That rule said broadcasters or cable companies that owned 5% or more of other companies were considered owners of those companies for purposes of calculating their audience reach and/or subscriber share. Broadcasters and cable operators have long opposed rule, contending 5% didn’t amount to corporate control.
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Majority of Commission indicated cable effectively had won similar exemption in March when U.S. Appeals Court, D.C., struck down FCC’s cable ownership caps (CD March 5 p1) and remanded them back to Commission. Weeks earlier, FCC had eliminated cable’s exemption and court questioned why, although it didn’t explicitly overturn exemption. Reacting to D.C. Circuit ruling, broadcasters sought parity on attribution in April filing to FCC seeking reconsideration of its plight. Commission said this week that it was suspending rule for both broadcasters and cable MSOs until it resolved ownership issues outlined in its pending rulemaking (CD Sept 14 p5), which contemplates new ownership limits on cable. NCTA Pres. Robert Sachs said recently that his group’s strategy for 2002 focused in part on seeking FCC review and elimination of 5% attribution rule in favor of attribution standard that contained other measures (CD Dec 12 p3).
Effective immediately, Commission said, no minority voting interest will count if there is single holder of more than 50% of outstanding voting stock of corporate broadcast licensee, cable TV system or daily newspaper in question. Commission said suspending rule while ownership questions were pending was “in the public interest” and would enable it to consider “all evidence” in rulemaking.
In 1999, Commission had eliminated exemption for cable, reasoning that regardless of whether companies held controlling interest, they should be considered owners with 5% or more stock “because they potentially have the ability to exert influence over a licensee’s core operations.” Broadcasters’ exemption was eliminated earlier this year. Public interest groups, including Media Access Project (MAP), have supported enforcement of 5% attribution rule. MAP Deputy Dir. Cheryl Leanza criticized Commission for making ruling without seeking public comments first, calling decision “egregious.”
Comr. Copps, sole Democrat and dissenting voter, said suspending rule was “tantamount to its elimination.” He pointed out that D.C. Circuit ruled only in cable context, not broadcast. He said other commissioners were taking notion of convergence too far: “No one would assert that broadcast stations and cable television systems have converged to the point that they are subject to the same regulatory scheme.”