News

FCC Loses Another Media-Ownership Case

4/02/2002 8:53 AM Eastern

The Federal Communications Commission lost another media-ownership case
Tuesday when a federal court sent back a rule that limits TV-station ownership
in local markets.

The FCC rule permitted one company to own two stations in the same market if
eight independently owned stations remained after the transaction and if the two
stations that combined were not both among the four highest-rated stations in
the market.

A three-judge panel of the U.S. Court of Appeals returned the rule to the FCC
for further consideration, saying the agency failed to explain adequately why
the 'eight voices' remaining post-transaction all had to be full-power TV
stations, commercial or noncommercial.

In an opinion by Judge Judith Rogers, the court noted that when the FCC
relaxed rules on the common ownership of radio and TV stations in the same
market, the postmerger voice test included not only local TV and radio stations,
but also cable systems and independently owned daily newspapers.

Rogers said it was not 'readily apparent' why the commission made the
distinction it did as 'necessary in the public interest.'

'We hold that the [FCC] has failed to demonstrate that its exclusion of
nonbroadcast media in the eight-voices exception is not arbitrary and
capricious. Accordingly, we remand the local ownership rule to the [FCC] for
further consideration,' Rogers wrote.

Judge David Sentelle agreed that the FCC's eight-voices
test was arbitrary, but he would not have returned the rule to the commission
for further review. Instead, Sentelle said, he would have ordered the FCC to
eliminate it under media-ownership policies established by Congress.

The FCC's rule was challenged by Sinclair Broadcast Group Inc., a large
TV-station owner based in Baltimore.

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