Controversy flares over deregulation legislation Talks to reconcile House, Senate versions spark partisan fight


NEW YORK -- Protracted debate over the details of telecommunications overhaul legislation took a partisan turn over the weekend, making passage of a bill this year look increasingly unlikely, industry officials and observers say.

"This has been apolitical legislation, but that changed over the weekend," said Lehman Brothers analyst Kim Wallace.

The problem arose when Republican House leaders of a panel forging one bill from separate House and Senate versions proposed to ease restrictions on media ownership further than either bill required. Democrats on the panel and the Clinton administration balked.

Sen. Ernest F. Hollings of South Carolina, the key Democrat and administration voice on the committee, chose not to attend Friday's conference meeting on the subject and left the capital in the late afternoon.

Mr. Hollings was not around for the weekend meetings, either.

"We're now officially in deadlock on this," one broadcast industry official said yesterday.

The bill, rewriting 1934 U.S. communications law, would let single media companies control TV and radio stations reaching more U.S. homes than they currently do. It would allow regional phone companies to enter the $70 billion-a-year long-distance market and permit AT&T; Corp. and other long-distance companies to offer local phone and cable television services.

It would also repeal most cable TV rate controls about three years after passage.

Last week's House Republican proposal on media ownership rules would lighten some media ownership restrictions further and tighten others by expanding the number of properties one company could own in a market to two UHF TV stations, or a UHF and a VHF, and, in exceptional cases, two VHF TV stations.

Current laws permit a single company to own only one television station in a community.

The current 12 TV-station limit would be expanded if a broadcaster did not have a voting stake in those stations above 12, Capitol Hill staffers said. Further, the proposal would keep plans in both the House and Senate bills to let broadcasters own TV stations reaching 35 percent of the nation's TV-viewing population instead of the current 25 percent.

But radio ownership rules might get stricter controls than the complete repeal of all radio restrictions in both bills, according to broadcast industry officials.

Nevertheless, the latest Republican proposal goes too far for the administration, which has repeatedly threatened to veto the legislation if the media ownership rules were not made stricter, among other things.

"We continue to have substantial concerns with several aspects of the legislation," one administration official said.

"The Democrats are poised to point the finger at [the Republicans] for favoring a sweetheart deal" for big broadcasters like Rupert Murdoch's News Corp., Mr. Wallace said.

Hill staffers say that there is some talk of a conference meeting tomorrow, where votes on remaining outstanding issues -- including media ownership and rules governing how quickly the Baby Bell companies could enter the long-distance business could be held.

That would theoretically enable a report to be filed by tomorrow night, in time for final votes in both chambers before the end of the week, when Congress is scheduled to recess.

Still, "Unless this political dynamic is solved in the next 24 hours, it will be very difficult to get this bill resolved this year," Mr. Wallace said.

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