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CNN Live At Daybreak
House Rejects FCC Cap on Media Companies
Aired July 24, 2003 - 06:18 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Now it's time, though, for a little business buzz. A big decision by the Federal Communications Commission has been rejected in the House, and this could mean a very big headache for a few large media companies.
Let's check in with Carrie Lee live in New York at the Nasdaq site.
Good morning -- Carrie.
CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Hello, Carol.
This is a story with very wide implications. Yesterday, the U.S. House of Representatives voted yes on a bill that rejects a decision by the FCC that extends the limits on the market ownership of media companies. And the Senate also is expected to pass a similar amendment in September.
Let me give you a little background here. Now last month, the FCC had raised the percentage of ownership that one media can have in a television market from 35 percent to 45 percent. This had been one of the largest deregulation cases on Capitol Hill. Representatives then rejected it with a 400 to 21 vote.
Now critics of this FCC decision say that the higher cap would give media companies too much control and could crunch out smaller firms. However, there were some critics, and no surprise, companies like General Electric, Viacom and NewsCorp all lobbied before the FCC's moves, saying that owning more television stations was really their only chance to defend themselves against competing cable channels.
Well Viacom now has a 40 percent share in the nation's television groups, NewsCorp owns 38 percent, both well above that lower 35 percent. So if this comes to pass, they may have to slim down. They may have to sell some assets to comply.
This all puts the Bush administration in a pretty tough position, Carol. Remember President Bush has been a supporter of deregulation all along. Now he can veto if the House bill becomes law and anger many Republicans in the House or he can sign it into law and that means media companies, in some cases, may be high and dry.
So a big story, quite complicated, that's the latest.
COSTELLO: All right. Quick look at the futures before you have to go. LEE: Yes, we've seen a little choppiness this morning. Right now things look pretty good. One stock to keep in focus, Dow component, AT&T. The company is expected to post an operating profit of 53 percent in the recent quarter. That's up from 35 cents a year ago. They are reporting before the opening bell today.
Back to you.
COSTELLO: Carrie Lee, we'll get back to you in the next half hour, many thanks.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired July 24, 2003 - 06:18 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Now it's time, though, for a little business buzz. A big decision by the Federal Communications Commission has been rejected in the House, and this could mean a very big headache for a few large media companies.
Let's check in with Carrie Lee live in New York at the Nasdaq site.
Good morning -- Carrie.
CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Hello, Carol.
This is a story with very wide implications. Yesterday, the U.S. House of Representatives voted yes on a bill that rejects a decision by the FCC that extends the limits on the market ownership of media companies. And the Senate also is expected to pass a similar amendment in September.
Let me give you a little background here. Now last month, the FCC had raised the percentage of ownership that one media can have in a television market from 35 percent to 45 percent. This had been one of the largest deregulation cases on Capitol Hill. Representatives then rejected it with a 400 to 21 vote.
Now critics of this FCC decision say that the higher cap would give media companies too much control and could crunch out smaller firms. However, there were some critics, and no surprise, companies like General Electric, Viacom and NewsCorp all lobbied before the FCC's moves, saying that owning more television stations was really their only chance to defend themselves against competing cable channels.
Well Viacom now has a 40 percent share in the nation's television groups, NewsCorp owns 38 percent, both well above that lower 35 percent. So if this comes to pass, they may have to slim down. They may have to sell some assets to comply.
This all puts the Bush administration in a pretty tough position, Carol. Remember President Bush has been a supporter of deregulation all along. Now he can veto if the House bill becomes law and anger many Republicans in the House or he can sign it into law and that means media companies, in some cases, may be high and dry.
So a big story, quite complicated, that's the latest.
COSTELLO: All right. Quick look at the futures before you have to go. LEE: Yes, we've seen a little choppiness this morning. Right now things look pretty good. One stock to keep in focus, Dow component, AT&T. The company is expected to post an operating profit of 53 percent in the recent quarter. That's up from 35 cents a year ago. They are reporting before the opening bell today.
Back to you.
COSTELLO: Carrie Lee, we'll get back to you in the next half hour, many thanks.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
