Viacom Asks FCC To Halt TV Sell-Offs

WASHINGTON — Viacom Inc. has asked the Federal Communications Commission to suspend a deadline by which it must sell off television stations to comply with federal ownership limits.

Viacom’s (VIA) request reflects a recent court decision that overturned the FCC’s limit on cable television system ownership.

That decision “makes it clear there is substantial likelihood that Viacom and other broadcast networks will succeed” in a similar challenge now pending in the same court, the U.S. Court of Appeals, Viacom says.

Initial briefs in the broadcast ownership case are due March 22. The final deadline for all reply briefs is June 18.

Providing Viacom temporary relief from the ownership caps until the case is decided “would merely preserve the status quo for a limited period of time and avoid forcing Viacom to divest stations which it might have a legal right to own,” the company says.

However, Viacom says if the commission doesn’t act by Friday, it will ask the court for relief. It’s not clear a divided FCC will act on the petition.

The agency’s new Republican chairman, Michael Powell, has questioned ownership caps. He is backed by fellow Republican commissioner, Harold Furchtgott-Roth. Both have suggested that a deadline for AT&T Corp. (T) to divest cable holdings should be suspended given the court ruling on cable limits.

But the two Democrats on the panel, concerned about concentration in media ownership, are unlikely to vote with Mr. Powell. The Bush administration hasn’t yet appointed the Republican vacancy on the five-member panel.

Consumer groups are urging the commission not to suspend the deadline, either for Viacom or AT&T.

“You can say something is pending in the courts, but there’s always something pending in the courts,” said Gene Kimmelman, Washington lobbyist for Consumers Union. “Once you put out a sign that you’re open for the business of circumventing orders and deadlines, you get deluged with requests for special treatment.”

Viacom’s merger with CBS last year enabled Viacom-controlled stations to reach 41 percent of the broadcast audience, exceeding the FCC’s 35 percent limit. The FCC required Viacom to sell stations in order to comply with the cap by May 4.

But the U.S. Court of Appeals cast doubts on the future of broadcast ownership limits when it struck down earlier this month the FCC’s 30 percent cable ownership limits as unconstitutional.

While the FCC can set ownership limits, it must do a better job of justifying them, the court said.

Copyright (c) 2001 Dow Jones & Company, Inc.