Media Ownership Lawsuits’ End Bring Focus on New Rules Back on FCC

The focal point of new media ownership rules is wholly back on the FCC, since all pending litigation challenging the agency’s last review of the limits has ended. Industry executives and lawyers, FCC officials and nonprofit representatives who oppose further consolidation agreed in interviews last week that the ball’s in the commission’s court. The regulator had been waiting for a ruling, which came in July from a Philadelphia appeals court, on how to proceed on diversity issues (CD July 8 p3). Another court Wednesday (CD Aug 11 p13) denied a licensing challenge on the 2008 order.

The next step at the commission is issuance of a rulemaking notice on the current review, agency and industry officials said. The review was due to have been completed in 2010, under the Telecom Act. A commission spokesman declined to comment.

The review looks like it won’t be wrapped up until next year, probably in the winter or spring, agency officials, industry lawyers and advocates for self-described public interest groups predicted. The rulemaking notice on the quadrennial ownership review is still being worked on by the Media Bureau (CD July 18 p8), they said. It’s likely to circulate on the eighth floor for a vote as early as September, but perhaps not until October, agency officials said.

Allowing for the possibility of challenges to the two appellate courts’ rulings this summer, the commission seems unlikely to be laboring on the quadrennial proceeding under the specter of a new court ruling. July’s remand of diversity rules and some restrictions on common ownership of a daily newspaper and radio or TV station in the same market in major cities by the 3rd U.S. Circuit Court of Appeals led the bureau to adjust work on the rulemaking, FCC officials said. That work appears ongoing, they said. Last week’s decision by the U.S. Court of Appeals for the D.C. Circuit rejecting Media General’s appeal of rules on licensing and constitutional grounds doesn’t appear to be changing the scope of bureau work, lawyers watching it said. A Media General spokesman declined to comment.

The delay in this proceeding hasn’t prompted widespread, public grumbling among broadcast executives and lawyers and public-interest advocates. The advocates said they don’t expect the next version of the rules to be eased too much from the order approved on partisan lines during the tenure of FCC Chairman Kevin Martin. An industry lawyer likewise said he doesn’t expect to get much deregulation. Another broadcast lawyer said it’s an open question how much some of the deregulatory aspects of the report on the future of media, done under the auspices of Chairman Julius Genachowski, will influence the forthcoming rulemaking.

One thing that’s clear is that it’s up to the FCC to proceed, an executive and lawyers for industry and public interest groups said. “The only thing I think is possible is that someone might seek rehearing in the 3rd Circuit or they might seek cert” to have Prometheus Radio Project v. FCC heard by the Supreme Court, said Director Angela Campbell of Georgetown University’s Institute for Public Representation. “It seems like a waste of their clients’ money,” if anyone appeals the D.C. Circuit’s dismissal of Media General v. FCC, because the court didn’t decide on the merits, she added. It said the 2008 order didn’t amount to a licensing decision, and so the D.C. Circuit wasn’t the venue to hear an appeal.

"We're not unhappy with the current rules,” said Campbell of consolidation opponents generally. “We know as a practical matter they're unlikely to be tightened up, so why would we be pushing for anything?” A ban on common ownership of more than one TV station in many markets, and more than two top-four outlets anywhere, cross-ownership limits and a cap on the number of radio stations any entity can have in one market is a lot, Campbell said: “We'd like them to be tightened up” ideally.

Consolidation foes say the FCC should crack down on violations of the spirit if not letter of rules when two or more stations in a city share news, ad sales and/or other operations. “I wish the commission would enforce the rules, as opposed to sort of put them on indefinite hold as they figure out what they're doing” in the ongoing review, Campbell said of “virtual duopolies.” It now seems “quiet” on the dealmaking front, yet some stations “are basically doing everything but merging in name,” said Policy Counsel Corie Wright of Free Press: “We absolutely want the proceeding to move as quickly as it can and for it to be effective and efficient, but not at the expense of getting it” right. For the bureau to fully address the diversity issues raised by the remand, it may take some more time, Wright said. “I don’t know that the diversity issues were teed up prior to the 3rd Circuit’s decision, and the 3rd Circuit has issued clarity on just how much it expects the FCC to address those problems.”