02.13.2004 12:00 PM
Media ownership battle back in court

Public interest groups and broadcasters urged a federal appeals court in Philadelphia last week to order the FCC to rewrite its media ownership rules. The court’s decision could have an enormous impact on the future business models of television,radio stations and local newspapers.

At a hearing lasting more than eight hours, opponents of the FCC’s new rules urged a three-judge panel of the United States Court of Appeals for the Third Circuit to restore the federal restrictions that had prevented a company from owning a newspaper and a radio or television station in the same market.

The plaintiffs also asked the court to reverse rules that would make it easier for a broadcaster to own more television stations in the same market.

On the opposing side, a group of newspapers, television networks and other large broadcasters, including Clear Channel Communications, the nation’s largest broadcast radio company, argued that the FCC had not deregulated the industry enough. They asked the court to return the rules to the commission and order it to rethink its media regulations.

The FCC’s general counsel, John A. Rogovin, told the judges that the new regulations, as passed last summer by a Republican majority on the FCC, were grounded in law and competition policy and should be affirmed by the court.

The FCC adopted the new rules last June, eliminating the restriction on one company’s owning a newspaper and a television or radio station in the same market. They also gave television networks the ability to grow to reach 45 percent of the national audience with their local affiliate stations, from the previous limit of 35 percent.

Last month, Congress attached a provision to a spending bill that lowered that cap to about 39 percent—the current reach of the two largest networks, Viacom’s CBS and the News Corporation’s Fox. The legislation, which President Bush signed, eliminated that rule from consideration by the court.

Last September, the appeals panel issued a temporary order that prevented the FCC from enforcing the rules.

Though the judges did not hint how they might decide the case, the New York Times reported that their questions suggested that the judges were troubled by a tool, the “diversity index,” that the FCC used to analyze the marketplace when it created the new rules. The index, for example, concluded that a broadcast station run by Dutchess County Community College had greater market reach than The New York Times.

It could take the court several months to issue its decision.

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