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Powell: Media Case Monumental

2/20/2002 10:09 AM Eastern

Federal Communications Commission chairman Michael Powell Wednesday called
Tuesday's court ruling on ownership rules a 'monumental' decision that puts new
pressure on the agency to justify rules designed to prevent excessive
consolidation.

'I think yesterday's case was a monumental case in the media space. It's not
the only shoe potentially to drop,' Powell said. He was referring to a pending
case involving FCC rules limiting multiple TV-station ownership in a market.

On Tuesday, a panel of the U.S. Court of Appeals for the D.C. Circuit ordered
the FCC to eliminate a rule that effectively banned the common ownership of a TV
station and a cable system in the same market.

The rule stated that if a cable system and a TV station were jointly owned,
the cable system was barred from carrying any local TV station in the
market.

The court also sent back to the FCC for reconsideration a rule that barred a
TV-station owner from reaching more than 35 percent of TV households.

The substance of the rules aside, Powell said, the court's most important
holding was that it placed new burdens on the FCC.

The agency, he added, now has the duty to mount a vigorous defense grounded
in hard evidence if it wants to retain media-ownership restrictions. Otherwise,
the FCC has to modify or eliminate the rules, he said.

'That's a huge burden on the commission. The problem is that the commission
has a very poor history of coming up with those persuasive justifications if it
isn't given substantial deference. And this interpretation gives the government
little to no deference,' he added.

Powell said he didn't know whether the FCC would ask the Department of
Justice to appeal the ruling.

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