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Appeals Court Rejects FCC's Media Ownership Rules
WASHINGTON -- The Federal Communications Commission and the nation's largest media companies Thursday were dealt a huge setback by a federal appeals court that ordered the regulatory agency to review its new ownership rules and better justify the basis upon which ownership limits were relaxed.The ruling, a split decision, was handed down by the U.S. Third Circuit Court of Appeals in Philadelphia. It blocks implementation of rules the FCC approved last June that touched off a firestorm of opposition that united pressure groups across the political spectrum. In effect, the FCC must go back to the drawing board and the big media companies must put their market consolidation plans on hold.Andrew Jay Schwartzman, president and chief executive officer of the Media Access Project and lead counsel for the citizens groups who brought the legal challenge to the new FCC rules, called the appeals court decision "a big, big win for diversity. It looks like the court agreed with us that preserving democracy is more important that helping big companies grow bigger." Schwartzman said it will take a few hours to sort out the lengthy court ruling, which was a split decision, and a lengthier statement will follow. But for now, he added, it looks like "the court has told the FCC to take its deregulatory thumb off the scale."The new FCC rules permitted newspapers and broadcasters to own media properties in the same market, increased the number of television stations a single company could own, and authorized one company owning two television stations in certain markets. The FCC said relaxing ownership limits was justified by the growth of the Internet and pay-television services. But opponents argued big media companies would grow so large that the caliber of local news reporting would suffer, and the free flow of information and opinion vital to a democracy would be stifled.The court took issue with various news and market diversity indexes the FCC established in justifying its rules. Opponents argued the indexes were flawed and presented extensive studies to buttress their points.The new rules were approved by the FCC on a 3-2 vote along party lines. The agency's chairman, Republican Michael K. Powell, said the commission was updating obsolete ownership limits that were imposed before the Internet and cable television were conceived. In a written statement, Powell said today's court decision is "the second time a court has put aside exhaustive efforts by the expert agency to set numerical limits [which] has created a clouded and confused state of media law" The FCC chairman also said the decision "perversely may make it dramatically more difficult for the commission to protect against greater media consolidation. It sets near impossible standards for justifying bright-line ownership limits. The fear is realized in the opinion itself. The court rejected the commission's effort to limit further radio consolidation. It also upheld the elimination of the newspaper cross-ownership rule, while rejecting our efforts to place reasonable limits on those combinations. This is deeply troubling and hampers the flexibility of the agency to protect the American public, as this agency is charged to do."Powell's statement underscored the dissenting opinion by the chief judge of the appellate court, which states "the court has substituted its own policy judgment for that of the FCC and upset the ongoing review of broadcast media regulation mandated by Congress."But FCC Commissioner Michael J. Copps hailed the court decision as a victory for the American people. "The rush to media consolidation approved by the FCC last June was wrong as a matter of law and policy," he said. "The commission has a second chance to do the right thing...It would be a great mistake to drag our feet or rehash old arguments. It is time to protect media democracy in America."Copps called on the FCC to schedule a series of hearings across the country to gain a better understanding of the impact of media concentration in specific markets. "We need independent research studies on media concentration in a variety of markets so that we can make a decision that has a more solid foundation. Clearly, the court found that the FCC's previous studies were inadequate and lacked credibility. "FCC Commissioner Jonathon S. Adelstein, the other Democrat on the five-person commission, called the court decision "vindication for the vast majority of the American public who opposed these rule changes. The court largely undid what would have been the most destructive rollback of media ownership protections in the history of American broadcasting," he said.Adelstein noted that earlier this week the U.S. Senate also voted to block the new media ownership rules from taking effect. Congress and the court "got it right, and the FCC got it wrong," he said. "We now need to work together on a bipartisan basis to fix the rules so they comply with the court order and respond to congressional and public concerns...This time the commission should truly act in the interest of the American public rather than the corporate interests of media giants who want to get even bigger.""