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Media Ownership Rollback Mulled

The Senate Commerce Committee will consider a proposal to roll back a new regulation allowing companies to own television stations reaching nearly half the nation's viewers, Chairman John McCain, R-Ariz., said Wednesday.

FCC Chairman Michael Powell received a tongue-lashing Wednesday from congressional opponents of the commission's decision to relax ownership rules, reports CBS News Correspondent Peter Maer.

In the first Senate hearing on the FCC decision, Republicans and Democrats alike were attacking the ruling.

The Republican-controlled FCC voted 3-2 Monday to ease regulations governing how many newspapers and TV and radio stations a company can own and in what combinations. The party-line vote changed the national TV ownership limit so a company can reach 45 percent of the U.S. households instead of 35 percent.

McCain said he opposes proposed legislation to counter that change, but his committee still will consider it later this month.

"I have a long voting record in support of deregulation," McCain said. "But the business of media ownership, which can have such an immense effect on the nature and quality of our democracy, is too important to be dealt with so categorically."

McCain's committee was hearing testimony Wednesday from the five FCC commissioners.

Oregon Democrat Ron Wyden called it the "ringing of the dinner bell" for big media companies, saying the "fake localism of radio" will become the norm for television. North Dakota Democrat Byron Dorgan called the decision "wrongheaded and destructive." Republicans Kay Bailey Hutchison of Texas and Olympia Snowe of Maine fear over-consolidation.

Powell, however, told the Senators the U.S. media audience has "more choices" than ever before.

Many media companies said the changes were needed because the old restrictions hindered their ability to grow and compete in a market changed by cable TV, satellite broadcasts and the Internet.

Critics said the changes would lead to mergers that could ultimately put a few giant companies in control of what most people see, hear and read.

The FCC also allowed individual companies to own more TV stations in some cities and largely ended a ban on one company owning a newspaper and a broadcast station in a community.

Many committee members have criticized the FCC's decisions, with some threatening congressional action to roll back many of the changes. Committee Democrats repeatedly asked for Powell, the son of Secretary of State Colin Powell, to testify before the commission's vote, but McCain rejected those requests.

South Carolina Sen. Ernest Hollings, the committee's ranking Democrat, has proposed legislation setting the national TV ownership limit back to 35 percent.

Hollings said Powell has been engaged in "spin and fraud" in his defense of deregulation and the FCC has become "an instrument of corporate greed."

Powell defended his decision, saying in prepared testimony that the changes "achieve our public interest objectives of diversity, competition and localism for our nation's citizens."

Criticism of the FCC decision has come mainly from Democrats, but several Republicans, including Mississippi Sen. Trent Lott, the former majority leader, have expressed concerns.

Lott, who opposes the raised national TV cap, has said there are several ways to oppose the FCC's changes, including limiting how much money the agency can spend in support of the new rules.

Powell does have supporters in Congress, including Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee.

The government adopted the ownership rules between 1941 and 1975 to encourage competition and prevent monopoly control of the media.

A 1996 law requires the FCC to study ownership rules every two years and repeal or modify regulations determined to be no longer in the public interest. Many previous changes were sent back to the FCC after court challenges.

More legal actions are expected from consumer groups seeking stiffer restrictions and media companies wanting even more deregulation.

News Corp., owner of Fox, and Viacom Inc., which owns CBS and UPN, stand to benefit from the higher national TV ownership cap because mergers have left them above the 35 percent level.

The major networks wanted the cap eliminated, while smaller broadcasters said a higher cap would allow the networks to gobble up stations and take away local control of programming.

Others in the diverse circle of critics include media moguls Ted Turner and Barry Diller, consumer advocates, civil rights and religious groups, writers, musicians, unions and the National Rifle Association.