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Relaxed Media Ownership Rules Kiboshed, Sort Of

Now that Rupert Murdoch and Sumner Redstone have comfortably slipped through the media-ownership noose, lawmakers and the courts are tightening it.

A federal appeals court on Thursday bounced the relaxed media-ownership rules, issued by the FCC last June, back to the commission. According to Reuters, the U.S. Court of Appeals for the Third Circuit in Philadelphia told the agency to do a better job of justifying its methodology. The D.C. Court of Appeals likewise remanded the agency's previous ownership rules in 2001, prompting the crafting of the erstwhile new rules, thus leaving the agency with two sets of toothless rules.

Not surprisingly, FCC Chairman Michael Powell was not amused.

"This is the second time a court has put aside exhaustive efforts by the expert agency to set numerical limits," Powell said in a statement. "This has created a clouded and confused state of media law. The chaotic results demonstrate the wisdom of Chief Judge Scirica's nearly 100-page dissent, where he says that 'the Court has substituted its own policy judgment for that of the FCC and upset the ongoing review of broadcast media regulation mandated by Congress.... We will thoroughly study this voluminous opinion and consider carefully our next steps."

Meanwhile, the public interest groups that dragged the FCC into Court crowed about the victory, as did the two FCC commissioners who voted against the relaxed rules.

"The rush to media consolidation approved by the FCC last June was wrong as a matter of law and policy," said Commissioner Michael Copps in a prepared statement. "The Commission has a second chance to do the right thing."

Copps recommended launching a series of hearings "to gain a better understanding of the impact of media concentration on our communities," but how these would differ from the current round of "localism" hearings is unclear.

Copps ally and consolidation opponent Commissioner Jonathan Adelstein called the court ruling "a vindication for the vast majority of the American public who opposed these rule changes. The court largely undid what would have been the most destructive rollback of media ownership protections in the history of American broadcasting."

Actually, what most Americans objected to--or at least a majority of those who filed comments with the FCC--was increasing the portion of the national audience that a single company was allowed to reach with broadcast signals. The FCC originally raised this national audience-reach cap from 35 to 45 percent, but the outcry was so swift and thorough that Congress moved immediately to roll it back. Later, however, in late-night haggling just as lawmakers prepared to adjourn for the Christmas and New Year holidays, a small clutch of Republicans managed to raise the cap to 39 percent, thus ensuring that neither Mr. Murdoch's News Corp. nor Mr. Redstone's Viacom would have to divest any television stations. Both own stations reaching a total of 39-percent of the national audience.

The court ruling doesn't affect the 39-percent cap, which also will remain untouched by legislation flowing through the chute on Capitol Hill.

In a dazzling display of election-year posturing earlier in the week, the Senate approved legislation that appeared to crack down on media giants, when it actually hogties small to mid-market broadcast groups like Sinclair, Lin TV and Pappas. The Senate passed an amendment from Sen. Byron Dorgan (D-N.D.) to roll media-ownership regulations back to the eight-voice test, where one company can own two local TV stations only in markets where at least eight separately owned stations remain.

Additional amendments--to increase indecency fines from $27,500 to $275,000 per incident with a maximum of $3 million a day, and to institute penalties for violence--were also passed. All amendments were passed as riders on a fast-track Department of Defense Authorization bill. The House version of the bill avoided media ownership and violent content, but called for indecency fines of up to $500,000. Those differences will be hammered out in conference, where lawmakers can back away from the ownership amendment--especially in light of the court ruling--and still maintain a punitive public appearance.