Supremes Serenaded On Ownership

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The NAB and media activists weighed in last week on media ownership, specifically the FCC's "cross-petition" to the Supreme Court, which is reviewing whether to hear appeals of a lower court's decision remanding the deregulatory rules.

The FCC has not appealed the case to court, but in March made a special filing known as a cross-petition, which allowed it to weigh in on third-party appeals.

The FCC urged the justices not to take up the case, but suggested that if the appeals were going to be heard, there were a few issues the FCC wanted to be considered.

Several appeals seek review of the Philadelphia federal appeals court's decision in summer 2004, which ordered the FCC to rewrite its June 2003 broadcast-ownership deregulation.

The FCC told the court that the appeals, many of which challenge the FCC’s authority to set numerical limits on broadcast ownership, do not warrant review because that authority has already been upheld in previous cases.

But if the appeal is granted nevertheless, the FCC said the justices should rule that the lower court got many things wrong. Specifically, the FCC disagreed with the lower court’s finding that the agency's method of weighting the market power of TV, radio, cable and newspaper outlets for the purposes of setting limits on cross-platform ownership was faulty.

The FCC also said the Philly court was wrong to minimize the impact of the Internet on media diversity. Finally, the FCC challenged the notion that it was arbitrary in drawing numerical limits on the number of broadcast properties one owner can control in a market.

In a brief commenting on the FCC's cross-petition, the NAB said only one of the FCC's reservations have merit, and that the lower court was wrong to throw out the FCC's deregulation of local-ownership limits such as the ban on cross-ownership of hometown newspapers and broadcast stations, and restrictions on two-station TV duopolies.

Both the FCC and the NAB agree the lower court was wrong to rule that the commission did not adequately justify how it picked the numerical values of the relaxed limits. The NAB, however, opposes the FCC's larger rationale for urging the high court not to take the case at all.

The NAB derided the FCC's contention that there is no conflict between the standards of review used by the Philly court's decision and a 2000 ruling by the federal appeals court in Washington to deregulate its rules in the first place. "The notion that the two courts applied the same standard is not plausible," the NAB wrote.

NAB also urged the justices to reject the FCC's argument that the Supreme Court should not act because the current state of ownership rules is "interlocutory," or provisional. "It is now nearly 10 years since Congress passed the 1996 Act to relax ownership restrictions in the multibillion-dollar media industry, and there is still no settled understanding of the basic standards that govern the commission's proceedings.”

Unlike the NAB—which wants the justices to review only the specific range of local-ownership rules that affects local-TV ownership—anti-consolidation and consumer activists want the court to reject the case in its entirety, and said none of the FCC's concerns in the cross-petition have merit.

The Philly court was not out of its legal bounds by ordering a rewrite, wrote attorneys for Georgetown University’s Institute for Public Representation, Media Access Project, the consumer Federation of America, the Minority Media & Telecommunications Council and Pace University Law School. "The court neither forbade nor compelled specific rules; it simply remanded those rules that were without factual record support or rational agency explanation," the attorneys stated. Nor, as the NAB suggested, "does this case present any broad, unsettled issue of law."

The advocacy groups also urged the high court not to raise the issue of whether the underlying rationale for ownership regulation—specifically the Red Lion decision's spectrum scarcity argument—remains valid.

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