House teeing up private equity


The two congressional commerce committees, under Democratic agenda setters, are taking their oversight roles very seriously when it comes to broadcast and communications issues. This is especially true in the House, where Ed Markey’s (D-MA) Subcommittee on Telecommunications and the Internet is going to look into private equity cash in the broadcast arena. On the Senate side, they’ve finally rescheduled the DTV hearing derailed last month.

"The Role of Private Equity in the Communications Marketplace" is the title of the House session, on the calendar for Tuesday 3/11/08. They have already received written responses to questions on the topic from FCC Chairman Kevin Martin, who noted that the licensing rules applied to private equity groups are exactly the same as those applying to anybody else. He also noted that the jury is out on whether they are good for the public interest or not, pointing out that despite concerns about private equity ownership in some quarters, there were others who argued that it may offer advantages beneficial to the public that may be realized by getting divorcing corporate decision making from Wall Street’s quarterly treadmill.

The Senate hearing on DTV was postponed due to a memorial service for the late Tom Lantos (D-CA). It figures to be one of many on the schedule of both the House and the Senate as the clock ticks down on the DTV conversion. The new date is 4/8/08. The senators will focus on consumer awareness and the activities of the FCC and NTIA.

RBR/TVBR observation: In questioning Martin on the equity topic, House heavyweights Markey and John Dingell (D-MI) were concerned about "…a financial management style focused on cutting costs, increasing revenues and the ultimate resale of the enterprise." Some might argue that there is no further cutting of costs possible, if increasing revenues is the goal (although that obviously is not stopping Farid Suleman at Citadel). And there don’t seem to be too many buyers of any kind out there right now, when the greater concern is getting previously announced buyers all the way to the altar. Considering the highly unsettled transaction situation, this should be a very interesting session.