Court Asks FCC to Defend Media-Ownership Rule Stay

Appeals court gives FCC and backers three weeks to explain why it should delay hearing legal challenges.

The Third Circuit Court of Appeals has given the FCC and
backers of its position three weeks to explain why the court should not lift
the years-long stay on the commission's media ownership rule rewrite and
start hearing the legal challenges.

According to a copy of an order from a three-judge panel of
the court supplied to B&C, the
judges want more input on why the court should not lift the stay on the
revised newspaper-broadcast cross-ownership rule and set a schedule for briefs
on court challenges to that rule--both those currently before the court and
those held in abeyance.

"Upon consideration of the parties' status reports and
the responses to the orders filed June 12, 2009, and November 4, 2009, the
parties are hereby ORDERED to show cause why the stay entered by this
Court...and continued in Prometheus Radio Project v. FCC should not be
lifted," wrote the judges.

In particular, they said, "the parties are directed to
address the Media Parties' argument in their status report that, despite
proceedings over the last several years  repealing the 1975 Ban [on
newspaper-broadcast cross-ownership] that ban remains in effect. The parties
shall file responses to this order to show cause within twenty-one days of the
date of this order."

The FCC, back in October and again in November, asked to
keep the court's current stay of the rule change in place or, failing that,
remand the decision back to the commission. It also asked the court to hold off
on hearing the legal challenges until the commission had finished the
2010 quadrennial review of the media ownership rules. For its part, the FCC
said it was not going to rule on a petition to reconsider the cross-ownership
decision until it had finished the review, which it has already begun.  

In a status report filed with the court in October, the
commission reaffirmed that its 2008 decision to loosen the ban no longer
necessarily reflected the views of a majority of the commission (unlike in 2008,
the current majority is Democratic). In May, when Democrats gained the
majority, the commission had made that point to the court in asking that the
stay be kept in place. The court complied but has since sought the status
report on the FCC's progress on the issue.

A group of broadcasters, including CBS, Belo, Media General
and Gannet, opposed the remand and said the stay on the revised rules should be
lifted. The court now apparently wants to hear a better argument for why that
request should not be granted.

"This may indicate that the court recognizes that its
actions have resulted in no change in ownership rules for years, and that
result is not consistent with Congress' directive in the statute," said
one veteran broadcast attorney.

Might the court also recognize that given the current
economy, broadcasters have more urgent case for regulatory certainty? "I
don't know how much the court really appreciates [broadcasters' current
financial difficulties]," the attorney said. "I think the court
appreciates that since 1995, the commission has been saying something needs to
be changed in these rules, and 14 years later, they are still exactly the same
as they were. And under the commission's proposal, nothing was going to happen
for several more years."

In the 2008 decision, the FCC modified the outright ban on
newspaper/broadcast cross-ownerships in the top 20 markets and outlined a new
waiver process for smaller markets.

The FCC's media ownership rules have been under some form of
court challenge, stay, or review since then-FCC Chairman Michael Powell tried
to loosen them in 2003. FCC Chairman Kevin Martin argued the 2008 rules were a
modest change and a compromise, but they were almost immediately taken to court
by those who argued they went too far or not far enough.

In recent ownership workshops, broadcasters have argued
that in an increasingly multiplatform world, where broadcast-online-print
synergies may be one way of remaking their business models, the restrictions on
cross-ownership are even less defensible.