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Tribune Takes FCC Waiver Decision to Court

Suit Could Eliminate Federal Communications Commission's Newspaper-Broadcast Cross-Ownership Rules 12/05/2007 03:41:00 PM Eastern

It didn't take long for Tribune to take the Federal Communications Commission to court over its decision to grant temporary waivers for the company's newspaper-broadcast cross-ownerships in five markets.

The company filed suit in the D.C. Court of Appeals Wednesday, saying the decision was "contrary to law, arbitrary and capricious, an abuse of discretion, and not supported by substantial evidence."

.Why would Tribune sue a commission that just saved its buyout deal? Because it still gets the waiver whether it sues or not. And if it wins, the newspaper-broadcast cross-ownership ban could get thrown out altogether -- a step the chaiman has signaled he is unwilling to take. As expected, the filing took aim at the ban in its entirety as well. "[T]he commission's ongoing enforcement of its newspaper/broadcast crossownership rule in its existing form is unconstitutional," Tribune told the court.

Tribune had asked for indefinite waivers. The company said  it needed to get the waivers in five markets at least 20 business days before the end of the year so that it could get the deal done by Jan. 1 or risk having it fall apart and having the company sold for parts. The FCC's Republican majority denied permanent waivers, agreeing only to two-year waivers or six months after the end of any litigation over current or future ownership rules. Commission Democrats opposed the waivers, with commissioner Michael Copps anticipating Tribune's move.

"If the majority simply granted a two-year waiver to Tribune -- which would have been the straightforward thing to do -- Tribune would have been unable to go to court because a party cannot file an appeal if their waiver request is granted," Copps pointed out in his dissenting statement. "So what does this order do?  It denies the waiver request but offers an automatic (and unprecedented) waiver extension as soon as Tribune runs to the courthouse door. Presto! Tribune gets at least a two-year waiver plus the ability to go to court immediately and see if they can get the entire rule thrown out."

Copps also opined that Tribune would be able to appeal to the "more sympathetic" D.C. Circuit, bypassing the Third Circuit, which remanded the general ban back to the commission, although even that court indicated that the FCC could make a case for modifying or lifting the ban.

The Tribune waivers had been granted with an eye toward a Dec. 18 vote by the commission on chairman Kevin Martin's proposal to loosen the newspaper-broadcast cross-ownership ban in the top 20 markets, but only for stations not among the top-four-rated.

The commission voted to approve the Tribune waivers Friday, only three days after the chairman circulated the proposal to the commissioners.The Democrats had pledged to vote wthin that time period. The vote was on a fast track to give Tribune the lead time it said it needed to close a deal to sell the company to investor Sam Zell and Tribune employees by the end of the year. Martin said he did not want the deal to become a victim of the timing of the vote, which is being opposed by Hill Democrats, although at press time, Martin still planned to hold to that timetable, he told B&C.

Martin's cross-ownership proposal would clear the way for four of the five Tribune combos -- all except in Hartford, Conn. Tribune owns WTXX-TV and the Hartford Courant there in a market outside of the top 20, which would likely eventually have to be divested, Martin had said, if his proposal were adopted.

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