At stake in the media-ownership debate, depending on how far Powell's FCC goes, are revolutionary changes in the way Americans receive much of their news and entertainment.

Currently, a single media company is not allowed to own a newspaper and a TV station in the same market. Some do, but only through grandfather clauses and waivers. For instance, News Corp. owns both the New York Post and WNYW-TV in New York.

But if caps are lifted it would be possible for competing television networks to merge, and just one company could own newspaper, radio, television and cable TV properties in the same market. In this world, theoretically, Disney could buy the Gannett chain and become the nation's largest newspaper publisher.

"I hope commissioners understand the significance, for decades to come, of what they're talking about doing," says Reed Hundt, the former FCC chairman under President Clinton. "Once they open the Pandora's box will they be able to control it?"

With the White House taking a hands-off approach, Powell enjoys extraordinary latitude in crafting the ownership rules. The plan has been to issue the new rules this spring, as long as he can get two of the other four FCC commissioners to vote his way. Until recently this was considered to be something of a fait accompli: There are three Republicans and only two Democrats on the commission.

The surprising news in 2003, however, has been that one Republican commissioner, Kevin Martin, has been staking out a much more cautious approach to cross-ownership than Powell. His vote will be crucial since both Democratic commissioners are adamantly opposed to drastically relaxing the ownership rules. One in particular, Michael Copps, has been battling Powell every step of the way. According to Copps, Powell must choose "whether to visit upon the rest of the broadcast media that which has already been visited upon radio -- and perhaps much, much more."

Copps has taken his anti-deregulation show on the road, sponsoring public forums across the country to gin up support. Miffed that he wasn't consulted about the moves, and arguing that only the FCC chairman can officially schedule meetings to debate ownership limits, Powell forced the agency to put out a corrected press release noting Copps' hearings were merely "field" meetings.

The FCC will sponsor just a single night of public debate on the ownership caps issue, Feb. 27, in Richmond, Va. That's actually an improvement over what happened with the '96 Telecom Act, which was passed without any public debate, either by Congress or the FCC, on the question of how sweeping deregulation would affect America's radio industry. That's because, riding high on its Contract With America victory, Republicans, particularly in the House, were adamant about passing the Telecom Act.

Many of their truly radical proposals, such as allowing one company to own every radio station in a market, were eliminated from the Telecom Act by the White House. But in the end, all national caps were lifted and broadcasters were allowed to own as many as eight stations in the larger markets.

Today, the question is whether media players in other industries will get their turn in the deregulation sun.

"I think Powell sees the green light and is churning ahead towards deregulation," says Gene Kimmelman, senior director of public policy for the Consumers Union.

Powell is probably training most of his congressional attention on the Commerce Committee chairman, Sen. McCain, with whom he enjoys very close relations. Back in the '90s, McCain, an old family friend, recommended Powell to fill a Republican vacancy and become one of the FCC's five commissioners. There was no vacancy per se; McCain, in an unusual move, simply urged that a sitting Republican commissioner not be reappointed for another term in order to make room for Powell. In November 1997, Powell officially became a commissioner.

"McCain's the most important player in this [deregulation] story, he holds the linchpin, but his views are unknown," notes Hundt. Following the Democrats' midterm defeat last year, McCain took over the Commerce Committee chairmanship from Sen. Hollings. In real terms, Congress cannot tell Powell what to do at the FCC. But it can certainly make its views known, and any sitting FCC chairman would disregard those views at his own peril.

"I don't believe Michael Powell would ignore the combined weight of Hollings and McCain" on the question of media deregulation, says Hundt. "But if McCain is in favor of huge media conglomerates merging, Powell will happily get out the eraser and erase restrictions that stop it."

"It's difficult to read how McCain will finally act on this," adds one congressional aide involved in the media ownership debate. "Traditionally he takes the deregulation road, but for a Republican he has this weird populist, consumerism streak. Still, if I had to bet I'd say he'll be for loosening regulation."

McCain's trademark maverick style was on display during the recent Clear Channel hearings. CEO Mays came in for some tough questioning from the chairman, who at times badgered the billionaire ("Do you have any plans to obtain more radio stations? I'd like to ask the question for the third time.") The testy exchange surprised some D.C. observers, although some simply chalked it up to McCain's occasionally abrasive style. But perhaps the former presidential candidate was still smarting at the thrashing that Clear Channel's showcase syndicated talker, Rush Limbaugh, gave the senator during the 2000 presidential primaries. Following McCain's surprising 19-point victory in New Hampshire, Limbaugh rushed to candidate George Bush's aid, undressing McCain on the air for weeks on end, ridiculing the senator's integrity and credentials.

McCain might, then, have a personal beef with Clear Channel. But the larger problem signified by Clear Channel's deregulation adventures should be more worrisome to the senator. When one company dominates an industry, it can leverage its monopoly power in all kinds of unpleasant ways, both politically and economically. Does anyone really want what happened to radio to happen to TV, or newspapers, or cable television?

Recent Stories