Skip to main content

Appeals court vacates ownership rule change

A U.S. appellate court in Philadelphia has restored a ban that prevents media companies from owning both a newspaper and television station in the same market. The court found that the FCC didn’t give the public adequate opportunity to comment on the new rules that attempted to lift the ban in the 20 largest U.S. media markets. It remanded the issue back to the FCC.

However, in the same decision, the court upheld the FCC’s 2008 decision not to loosen the TV duopoly, radio ownership or TV-radio cross-ownership rules.

The newspaper-broadcast station rule change dates back to 2007, during the Bush administration, when former FCC Chairman Kevin Martin moved to ease the ownership restrictions in the largest media markets. Public interest groups challenged Martin and warned that too much consolidation would lead to less diversity in news coverage. It was those same public interest groups who won the case last week. They had argued that the FCC didn’t provide adequate notice and that elements of the rule were unsupported by evidence.

“This decision is a vindication of the public’s right to have a diverse media environment,” said Andrew Jay Schwartzman, policy director of Media Access Project, a Washington-based law firm. He said his group won on almost every point.

“The FCC majority knew that its effort to allow more media concentration was politically and legally unworkable, so it tried to end-run the procedural protections that are designed to give the public the right to participate in agency proceedings.”

“Today’s decision is a sweeping victory for the public interest,” said Corie Wright, policy counsel of Free Press, who argued the case along with Schwartzman. “In rejecting the arguments of the industry and exposing the FCC’s failures, the court wisely concluded that competition in the media — not more concentration — will provide Americans with the local news and information they need and want.”

Congress requires the FCC to review its media-ownership rules every four years. Those rules include the cross-ownership restrictions and limits on the number of television and radio stations that one company can own in a market. Last week’s ruling comes as the current FCC, now under Democratic control, is seeking to wrap up its latest review — which began last year.

“The commission is currently engaged in a statutorily mandated further review of its media ownership rules,” said Austin Schlick, the FCC’s general counsel. “With an updated record and this supportive decision, the agency should be able to take appropriate steps to ensure that the nation’s media marketplace remains healthy and vibrant.”
The appeals court let stand the FCC rules limited to broadcast stations.

“Today we affirm the 2008 Order with the exception of the newspaper/broadcast cross-ownership rule,” wrote the court, “for which the commission failed to meet the notice and comment requirements of the Administrative Procedure Act. We also remand those provisions of the Diversity Order that rely on the revenue-based ‘eligible entity’ definition, and the FCC‘s decision to defer consideration of other proposed definitions (such as for a socially and economically disadvantaged business, so that it may adequately justify or modify its approach to advancing broadcast ownership by minorities and women.”

Broadcasters remained convinced that the ownership rules need adjusting to reflect new market realities and should have the opportunity to spell out those concerns with the FCC as part of the latest review.

“There have been sweeping changes in the media landscape since most of the broadcast ownership rules were adopted decades ago,” said NAB spokesman Dennis Wharton. “NAB believes that modest reform of rules to allow free and local broadcasters to compete successfully in a universe of national pay TV and radio platforms is warranted.”