Wednesday, March 24, 2010

Court Lifts Ban On Media Cross Ownership

The FCC voted to adopt one modest portion of the 6/2/03 media ownership rulemaking back in December of 2007 -- partial relaxation of the ban on the crossownership of broadcast and print properties in a single market, applicable to the top 20.

It’s pretty much been frozen under appeal since then, until now. The Third Circuit has decided to lift the freeze and proceed with the case.

The FCC under Chairman Julius Genachowski had asked that the rules continue to be frozen, since the FCC was in the process of reviewing them anyway as part of the Quadrennial Review.

The Court decided to move forward despite this request. The FCC’s preference to keep the rule frozen was not unanimous on the 8th Floor.

The Court’s current move was hailed by FCC Commissioner Robert McDowell, who petitioned it for just such a move in a letter last April.

McDowell said, “I am pleased that the U.S. Court of Appeals for the Third Circuit has decided to move forward promptly with its review of the Commission's 2007 media ownership decision -- and to lift the stay that until today has frozen in place burdensome ownership rules that are many years out of date.”

He continued, “As I said in the letter I filed at the Third Circuit last spring, when the court was contemplating a change in the Commission's position concerning the timing of court review, I favor swift action on the pending appellate challenges.”

He concluded, “The lifting of the stay on the Commission's very modest relaxation of the newspaper/broadcast crossownership rule is particularly appropriate given the economic upheaval affecting the ongoing viability of many daily newspapers and broadcast stations. I also believe that the Commission can only benefit from instruction of a Third Circuit ruling on the 2007 ownership rules as we begin the next round of the statutorily required quadrennial review of the regulations.”

The decision Tuesday by the U.S. Court of Appeals for the Third Circuit lifts the Federal Communications Commission's "cross-ownership" ban.

That restriction had remained in effect under a stay issued by the court in 2003 as it has tried to sort out legal challenges to attempts by two previous FCC chairmen, Republicans Michael Powell and Kevin Martin, to relax the rules.

The decision comes as the current FCC, now under Democratic control, gears up for its next congressionally mandated review of its media ownership rules. Those rules, which the agency must review every four years, include the cross-ownership ban and limits on the number of television and radio stations that one company can own in a market.

In the meantime, some media companies already own newspapers and television stations in the same market because they were grandfathered in when the rules were first put into place in 1974.

The current court case began when Powell tried to lift the cross-ownership ban in large media markets and raise the caps on TV and radio station ownership. That effort drew legal challenges from public interest groups that said he had gone too far and from media companies that said he had not gone far enough.

The Third Circuit sent the matter back to FCC, telling it to rewrite the rules. And that led Powell's successor, Martin, to try to ease the cross-ownership ban in big media markets — drawing more legal challenges from both sides.

The court, however, held off on deciding those cases because the agency had said it wanted to reconsider Martin's actions. Yet the FCC has made no progress on that front and has instead punted the issue to the upcoming review of the media ownership rules. Tuesday's court decision allows Martin's relaxed rules on media ownership to take effect.

According to Andrew Jay Schwartzman, head of the nonprofit law firm Media Access Project, the decision signals that the court has lost patience with the FCC.

Media Access Project has led the public interest coalition in its fight against any relaxation of the rules, warning that too much media consolidation would lead to less diversity in media coverage. Schwartzman said that while he is disappointed by the court's action, he understands why it is frustrated with the FCC's slow pace.

Free Press, another public interest group involved in the challenges, called on the FCC "to take decisive action to protect media diversity and to encourage competition in local news."

Robert McDowell, one of two Republicans on the five-member FCC, welcomed the court's move to lift "burdensome ownership rules that are many years out of date." He added that the decision is "particularly appropriate given the economic upheaval affecting the ongoing viability of many daily newspapers and broadcast stations."

Still, John Sturm, head of the Newspaper Association of America, said he does not expect a wave of media companies to start buying up newspapers and TV stations in the same market. Even the eased rules adopted under Martin come with some restrictions.


No comments: