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Disney Quits Broadcasters Trade Group

Parent of ABC television bolts in protest over 'network bashing' and aggressive lobbying.

June 18, 2003|Edmund Sanders | Times Staff Writer

WASHINGTON — Walt Disney Co., parent of ABC television network, abruptly quit the National Assn. of Broadcasters on Tuesday in protest over what it called the trade group's "network bashing" and its aggressive lobbying in the media ownership battle.

In resigning from the NAB, Disney joins other major networks -- including Viacom Inc.'s CBS, General Electric Co.'s NBC and News Corp.'s Fox -- which had bolted several years ago after complaining that the trade group had been hijacked by rival TV station groups such as Hearst-Argyle Television Inc. and Post-Newsweek Stations Inc.

The networks are considering forming a lobbying alliance to counteract the NAB, which historically has been the leading voice of U.S. broadcasters.

The fracture comes in the aftermath of the Federal Communications Commission's June 2 vote to relax many media-ownership rules. Though broadcasters supported most reforms, the industry was sharply split over a rule that limits how many potential TV viewers one company may reach nationwide through stations it owns.

Networks supported raising the cap to 45% from 35%, and they prevailed before the FCC. But rival TV chains, which own stations that affiliate with the networks, fought to retain the lower cap, fearing networks would increase their clout by purchasing more stations and reducing the amount they pay to affiliates to run programs.

Disney executives hoped the rift would mend after the FCC vote, according to Disney lobbyist Preston Padden, who spoke with reporters Tuesday.

At an NAB board meeting last week, Padden contended that it was improper for the NAB to take formal positions on issues that divide its members. But he said it was evident that affiliate station groups -- which dominate the NAB -- would continue to use the trade group to lobby against the higher cap and to take positions against the networks.

At last week's meeting, the NAB's TV board decided it would endorse efforts in Congress to reinstate the 35% cap.

In addition, Disney officials have been offended by recent NAB filings that questioned the quality of local TV news produced by stations owned by the networks, including ABC.

"Can we really stay in a trade association that is being driven by interests that have a business animosity toward us?" Padden said. He noted that Disney's 10 TV stations reach only 24% of potential viewers nationwide, so the company is not as close to exceeding the cap as are other networks.

An NAB spokesman said the departure of ABC was unfortunate but would not hinder the association's work.

"We regret they chose to leave," NAB spokesman Dennis Wharton said. He noted that ABC resigned previously in the mid-1990s over a separate dispute but rejoined a year later.

"Beyond the perception, this won't cost us any support on Capitol Hill," Wharton said. "NAB's effectiveness has always been related to the fact that we have local radio and television stations in every city, in every county and in every congressional district in the country."

NAB's clout will face its next big test Thursday when the Senate Commerce Committee is expected to vote on a bill that would reinstate the 35% cap. The legislation is expected to pass the committee but faces uncertain prospects before the full Senate and in the House, where some powerful lawmakers have vowed to oppose it.

In addition, Sen. Barbara Boxer (D-Calif.) plans to introduce an amendment Thursday that would require the FCC to hold a certain number of public hearings around the country before it decides "major issues of public importance," according to a spokesman.

A number of other amendments are under consideration, including one that would overturn the FCC's decision to eliminate the newspaper and TV station cross-ownership rule.



National Assn. of Broadcasters

Headquarters: Washington

Membership: Owners of 1,110 television stations and 6,300 radio stations

President: Edward O. Fritts

Clout: With influential members in every congressional district, the NAB is one of Washington's most effective lobbying groups. It contributes about $1 million to lawmakers every election.

Recent activity: A strong voice in the FCC's review of media ownership rules, pushing to win new rights for its members to merge TV stations in the same market. But a rift among broadcasters over one rule has led to the defection of CBS, NBC and Fox. On Tuesday, ABC became the latest network to quit the group.

Challenge: Major networks may form a rival lobbying alliance, threatening to divide the industry's voice in Washington.

Sources: NAB and the Center for Responsive Politics

Times staff writer Jube Shiver Jr. contributed to this report.

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