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FCC Finds Itself Up to Its Neck in Hot Issues

Powell's successor will join a panel that must make key decisions on ownership, indecency, digital TV and telecom.

January 24, 2005|James S. Granelli, Sallie Hofmeister and Jon Healey | Times Staff Writers

Michael K. Powell, the outgoing chairman of the Federal Communications Commission, didn't make it easy for his successor.

Powell, who said last week that he would step down by the end of March, pushed more hot-button issues to the forefront at the FCC than he was able to resolve.

For the telecommunications and media companies the agency regulates, billions of dollars in revenue are on the line. For the American people, what's at stake is how much choice they'll have in content and carriers, and how much they'll have to pay.

Commissioner Kevin J. Martin, who sometimes clashed with Powell, is the leading prospect to replace him. The Bush administration will have another opportunity to fine-tune the commission if, as some observers have predicted, Powell supporter Kathleen Q. Abernathy resigns from the five-member commission.

A look at some key issues facing the new FCC:

Media Ownership

The media ownership rules that created problems for Powell are likely to test his successor as well, according to industry pundits.

In 2003, the FCC loosened federal rules to allow companies to own more TV stations in a single market and to enable them to control both a newspaper and a TV or radio station in the same city. That was positive for News Corp. and Viacom Inc., which were in violation of ownership limits because of aggressive TV station acquisitions, and Los Angeles Times owner Tribune Co., which, in anticipation of further deregulation, had purchased newspapers in markets where it already owned TV stations, such as Los Angeles.

But the new rules never went into effect. After criticism by consumer groups and by a Congress that worried about reducing the diversity of voices in the marketplace, the courts blocked the rules and ordered the FCC to provide better justification for having drafted them.

The commission is expected to ask the Supreme Court to review the case at the end of the month. If the high court takes the case and sides with the lower courts, the FCC could once again find itself caught between the media industry and Congress, which, emboldened by public interest groups, wants to put the brakes on consolidation.

"It could potentially be Powell's term revisited," said one executive in the broadcast industry.

Indecency

Under Powell, the FCC issued more fines for the airing of indecent material, and the indecency debate will no doubt continue. "We're watching very carefully," said Leslie Moonves, co-president of Viacom, the owner of CBS, Paramount Pictures and cable channels such as MTV and Comedy Central.

Viacom took significant indecency hits. CBS stations were fined a record $550,000 for airing singer Janet Jackson's "wardrobe malfunction" during the 2004 Super Bowl football half-time show -- a penalty Moonves said the network would continue to fight -- and Viacom agreed to pay a record $3.5-million settlement in November for off-color remarks by radio shock jock Howard Stern and others.

Moonves said this issue was one that "has nothing to do with politics." Indeed, Commissioner Michael Copps, a Democrat, has been one of the FCC's most outspoken critics of indecency. Powell, a Republican, was a staunch 1st Amendment proponent when he first became chairman but changed direction under pressure from the White House, Congress and the public. Many broadcasters have been loath to complain about the tightening of indecency enforcement for fear of inflaming tensions at a time when radio and TV stations are up for renewal in 30 states, including California, New York and Texas.

Yet many of them complain that the process is rigged. They say that many of the complaints that trigger FCC indecency inquiries are the products of organized campaigns by advocacy groups. One group in particular, the Parents Television Council, routinely complains to the FCC.

Other critics say enforcement is inconsistent. For instance, Spanish-language indecency is relatively unchecked because the FCC doesn't have enough Spanish-language investigators.

Adam Thierer, director of telecommunications studies at the libertarian Cato Institute in Washington, said the effect of the FCC's indecency actions were unwelcome to free-speech advocates.

"We live in defining times for media," Thierer said, with regulators and lawmakers "on the cusp of a historic change in 1st Amendment law."

Digital Television

The federally mandated shift to digital TV sped up significantly during Powell's tenure, with manufacturers expecting to sell more than 10 million digital sets this year alone. Local stations across the country are broadcasting on both digital and analog channels, and hundreds of hours of digital programming are being pumped out weekly by broadcasters, cable operators and satellite services.

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