Broadcast Ownership Caps

Four major U.S. television networks for years had been constrained in their direct ownership of local market television broadcasting stations by federal rules. Through the late 1990’s and up into 2003, they had pursued a change in regulations that would permit them to acquire local stations allowing them to reach more than 35% of the marketplace viewers (the cap). Three of the networks had received temporary waivers allowing them to exceed the cap in anticipation of a rule change.

The Federal Communications Commission proposed a rule that would raise the cap to 45%. Based on years of cultivating support among Members of Congress, the networks expected this regulatory change to be met with general concurrence on the Hill. However, there was immediate vehement, negative reaction from legislators driven by independent broadcasters, affiliates of the networks, and public interest groups. The political expediency of being for the “smaller, local players” over “big, national corporate” entities was too good to pass up.

On a bipartisan basis, almost two-thirds of the House and Senate either signed onto a letter asking the FCC to reverse its course, or signed onto proposed legislation that would statutorily set the cap at 35%.

Hartley, already representing one major network, subsequently was retained by the other three top networks to lead a coalition response to these developments. Despite overwhelming opposition, with Hartley’s coordination, in conjunction with the White House Office of Legislative Affairs, supportive Congressional Offices, the networks, and other consultants, an intense defensive initiative and firewall was developed.

The coalition included the internal lobbyists for each network’s Washington office, its outside government affairs and public affairs consultants, representatives of vendors and other allies. An intensive educational effort was directed at Congressional offices that had not yet or would not abandon the networks position. Outreach was focused on those Members who had signed onto either the anti-rule letter or the pending legislation, trying to ensure they had the facts not just the misconceptions being fed from the opposition. Many Members were surprised to learn how few stations the networks actually owned. Over a six-month period, Hartley coordinated the daily activities of the coalition. Reaching out to a White House that was keen to protect the prerogatives of an independent commission of the Administration acting within its statutory authority was the key to the strategic response. Tapping essential and powerful White House staff to drive the message proved successful.

A compromise solution was negotiated at a cap of 39%. The coalition then helped insert the compromise into an Appropriations Omnibus bill and move it to passage as the legislative vehicle. These efforts prevented any of the networks from being forced to divest stations acquired under temporary waivers, and given the political circumstances, provided a reasonable outcome.