Court lifts stay on media ownership rules--consolidation can go ahead

by John Eggerton, Broadcasting and Cable

The Third Circuit Court of Appeals has vacated its stay of the media ownership rules and set a briefing schedule beginning May 17.

Back in December, the court gave the FCC and backers of its position three weeks to explain why it should not lift the years-long stay on the commission's media ownership rule rewrite and start hearing the legal challenges.

The court has now decided to proceed with the case despite FCC requests that it allow the commission to review the rules first.

The court's lifting of the stay would appear to temporarily reinstate the commission's decision under then Chairman Kevin Martin to loosen the newspaper-broadcast crossownership rules. Which means that at least until the court or the FCC makes a decision, broadcasters could combine TVs and newspapers in the top 20 maarkets and smaller ones under specific conditions, though it is hardly the regulatory certainty broadcasters are seeking.

"Upon consideration of the parties' status reports and the responses to the orders filed June 12, 2009, November 4, 2009 and December 17, 2009, the stay entered by this Court in Nos. 03-3388 et al., and continued in Prometheus Radio Project v. FCC, 373 F.3d 372 (3d Cir. 2004) is hereby lifted. The following briefing schedule shall apply to these consolidated proceedings," wrote Chief Judge Anthony Sirica, setting the following briefing schedule:

* "Briefs and Appendices of Petitioners/Appellants shall be filed and served on or before May 17, 2010.

* Briefs of Respondents/Appellees shall be filed and served within thirty (30) days of service of briefs of Petitioners/Appellants.

* Reply briefs, if any, shall be filed and served with fourteen (14) days of service of responsive briefs

* Pursuant to Fed. R. App. P. 28(i), the parties may join in or adopt by reference portions of another's brief to avoid repetitive briefing. Parties may also file consolidated briefs."

The judges said in December that they wanted 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.

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.

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.

Former FCC Michael Powell, now a senior advisor with Providence Equity Partners, says the Third Circuit should have some new facts to consider as it looks at the rules. "This is a new day," he told B&C in an interview. "That court was originally dismissive about the Internet [in terms of a competing voice in the market], which I think to me was their big error and I continue to think was right. To say that this is not a substitute or people don't get their news from it gets harder as the years go by."

"I am pleased that the U.S. Court of Appeals for the Third Circuit has decided to move forward promptly with its review of the Commission's 2007 media ownership decision and to lift the stay that until today has frozen in place burdensome ownership rules that are many years out of date." said FCC Commissioner Robert McDowell of the decision . "As I said in the letter I filed at the Third Circuit last spring, when the court was contemplating a change in the Commission's position concerning the timing of court review, I favor swift action on the pending appellate challenges. The lifting of the stay on the Commission's very modest relaxation of the newspaper/broadcast cross-ownership rule is particularly appropriate given the economic upheaval affecting the ongoing viability of many daily newspapers and broadcast stations. I also believe that the Commission can only benefit from instruction of a Third Circuit ruling on the 2007 ownership rules as we begin the next round of the statutorily required quadrennial review of the regulations. "

article originally published at Broadcasting and Cable.

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