Broadcasters to Appeal Media Ownership Decision to Supremes

NAB believes decision was misguided; News Corp. argues that the scarcity rationale for broadcast regulation is no longer applicable

By John Eggerton -- Broadcasting & Cable, 12/2/2011 1:24:05 PM

The National Association of Broadcasters plans Monday (Dec. 5)  to ask the Supreme Court to overturn the Third Circuit's decision that leaves most of the FCC's media ownership limits in place. News Corp. will also challenge the rules, according to a source with the company who spoke on background.

There are expected to be a number of petitions filed by the end of the day Monday, which is the deadline for appealing the decision. ABC is not filing cert, according to a network spokesperson, but Paul Boyle, senior VP of public policy for the Newspaper Association of America, told B&C/Multi the group was considering joining in a petition, but had not made that decision yet. CBS had no responses at press time about their plans.

The Third Circuit Court of Appeals in July upheld the FCC's 2008 decision not to loosen the TV duopoly, radio ownership or TV-radio crossownership  rules and vacated and remanded its loosening of the broadcast/newspaper crossownership rule for  failure to meet notice and comment requirements.

"We're asking the Supreme Court to review the Third Circuit decision because we think it was misguided," said NAB spokesman Dennis Wharton. NAB is arguing that a split in the lower courts needs to be resolved. NAB will stress that the Third Circuit and the D.C. circuit looked very differently at the duopoly rules. The D.C. Circuit prevsiouly found that the duopoly rules, which limit how many stations one company can own in a market, were arbitrary and capricious. The Third Circuit, in its decision last summer, upheld the duopoly rules.

Resolving such splits is one of the reasons the Supreme Court will take a case, though it is no guarantee the court will hear the appeal.

News Corp. plans to go further and argue that the scarcity rationale for broadcast regulation is no longer applicable given the rise of alternate delivery systems from satellite and cable to telcos and the Internet. It took the same tack in asking the Supreme Court to throw out the FCC's indecency enforcement regime as unconstitutional.

FCC Chairman Julius Genachowski several weeks ago circulated an item responsive to the Third Circuit remand. According to sources familiar with the item, he proposes keeping those duopoly and other local market caps in place but lifting the ban on TV-radio crossownership and loosening the newspaper-broadcast crossownership rule per a previous effort by Republican Chairman Kevin Martin.

The Supreme Court filings continue a legal battle over media ownership changes that began in the last century-the June 2003 effort by then FCC Chairman Michael Powell to deregulate-and has seen proposed rule changes twice remanded back to the FCC by  the Third Circuit.