FCC ordered to rewrite media-ownership rule

By The Associated Press

04.03.02

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WASHINGTON — An appeals court has ordered federal communications regulators to rewrite yet another rule limiting media ownership.

The ruling, handed down yesterday by a three-judge panel of the U.S. Circuit Court of Appeals for the District of Columbia, criticized the government's restrictions on companies that want to own two television stations in the same market.

For decades such double station ownership was banned outright. In recent years, the Federal Communications Commission relaxed the rule somewhat to say that a company could own two TV stations in one market as long as one of them is not among the top four and if at least eight broadcast competitors remained after the deal.

Sinclair Broadcast Group Inc. sued over those changes. The appeals court agreed that the eight-competitor requirement and the FCC's decision not to count cable, direct broadcast satellite, radio or newspapers as one of those independent voices, is "arbitrary and capricious."

The court ordered the FCC to reconsider the definition of competitors as well as the number.

"The commission has failed to demonstrate that its exclusion of non-broadcast media from the eight voices exception is 'necessary in the public interest' " as required by law, the court wrote.

U.S. District Judge David Sentelle agreed with the majority's conclusions, but said the court should have thrown the rule out entirely rather than send it back to the FCC.

The decision is just the latest calling federal media-ownership rules into question, leading to speculation that a wave of big media industry mergers will result. The trend has consumer groups worried that more consolidation will lead to a handful of companies controlling all the information people receive as well as how they receive it.

The appeals court previously overturned rules barring a company from owning cable TV systems and broadcast TV stations in the same market.

And, at the court's direction, the FCC is reviewing rules forbidding a single company from owning television stations and cable outlets that reach more than about a third of the national audience. The FCC also initiated a review of rules that prohibit one company from owning a broadcast station and newspaper in the same market.

FCC spokesman David Fiske said the commission is considering whether to appeal the decision to the Supreme Court.

David Smith, president and CEO of Sinclair, said the company is "hopeful that the FCC and courts will respond in a manner that will allow over-the-air television to remain competitive with other forms of media."

Update

FCC votes to review media-ownership rules
Chairman says agency has failed to keep up with changes in technology and media marketplace, overhaul of guidelines 'is long overdue.'  09.12.02

Previous

FCC relaxes 'single ownership' rule on local radio, TV stations
WASHINGTON — Federal regulators on Thursday eased restrictions on the number of local radio and television stations that a broadcasting company can control.  08.06.99

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