Court ruling major blow to media mergers

July 7, 2011 at 4:12 PM
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WASHINGTON, July 7 (UPI) -- A U.S. appeals court in Philadelphia Thursday struck down an agency's rule to allow a company to own newspapers and broadcast stations in the same market.

The appeals court panel said the change in Federal Communications Commission regulations that would have allowed newspaper and broadcast ownership failed to meet the public notice and comment requirements of federal law.

The panel also upheld limits on the number of broadcast stations a company may own in a single market but told the FCC to take into account how its regulations affect ownership of media by minorities and women.

The complicated ruling by a three-judge panel may have communications lawyers decoding it for some time, but it essentially affirms a 2008 order overturning a 2007 FCC ruling. The 2008 order was challenged by a number of media companies. The challengers were consolidated for the purposes of the panel's ruling.

The largely unanimous ruling said, "In these consolidated appeals, we consider the commission's most recent revisions to its media ownership rules. In December 2007, following its 2006 Quadrennial Regulatory Review, the commission announced an overhaul of its newspaper/broadcast cross-ownership rule and granted permanent waivers of the rule to five specific newspaper/broadcast combinations."

The FCC would have allowed broadcast/newspaper ownership in the Top 20 U.S. markets.

The FCC "set out a series of other measures to address broadcast ownership diversity, in a separate order."

But the order never went into effect; the appeals panel stayed that order pending review.

"In 2009, the FCC moved for voluntary remand of the 2008 order. We denied that opposed motion," the panel said. "Today we affirm the 2008 order with the exception of the newspaper/broadcast cross-ownership rule, for which the commission failed to meet the notice and comment requirements of the (federal) Administrative Procedure Act."

The panel said, "There is no basis for CBS and Clear Channel's First Amendment claims that the media ownership rules are impermissible attempts by the FCC to manipulate content," adding, "we deem lacking in merit Media General and Cox's argument that the rule violates their rights to equal protection under the Fifth Amendment by treating newspapers differently from other media. ... The U.S. Supreme Court has upheld this treatment, as we recognized in (the main consolidated case), and we are bound by that precedent."

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