Court Says Keep Media Case in Philly

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In a setback for NBC, CBS and Fox, a federal court last week refused to transfer an important media-ownership case to the U.S. Court of Appeals for the D.C. Circuit, the typical home of challenges to Federal Communications Commission policies.

In an effort supported by the FCC, the three networks (ABC did not participate) sought to have the case moved from the 3rd U.S. Circuit Court of Appeals in Philadelphia. They argued that the D.C. Circuit was the proper venue, because that court had issued two rulings on which the FCC partly based its new broadcast-ownership rules adopted in June.

In a ruling last Monday afternoon, a panel of the 3rd Circuit voted 2-1 to retain the case.

"This court is no less qualified than any other Court of Appeals to determine whether the FCC has appropriately considered the public interest in its decision-making," wrote Circuit Judge Julio M. Fuentes in an order joined by Circuit Judge Thomas L. Ambro.

Chief Judge Anthony J. Scirica supported moving the case to the D.C. court, saying that venue is a frequent site for FCC litigation and federal appeals courts should minimize the risk of issuing rulings that transmit conflicting instructions to that agency.

On Sept. 3, the 3rd Circuit panel unanimously voted to stay the FCC's new broadcast-ownership rules, which generally allowed ABC, CBS, NBC and Fox to control more local TV stations and also allowed newspapers, TV stations and radio stations to combine within their local markets.

The 3rd Circuit is expediting the case, with oral arguments set for Wednesday, Nov. 5, and a decision expected in the first quarter of 2004.

The networks were keen on seeing the case moved to the D.C. Circuit in part because that court has a habit of overturning FCC media-ownership rules as inconsistent with federal law. The court remanded a rule that capped at 35% the number of TV households a TV station group could reach with its signals. In response, the FCC moved the cap to 45%.

NBC, CBS and Fox are expected to ask the court to agree that no cap is justified in today's media market.

Former FCC chief of staff Blair Levin, now a media analyst with Legg Mason, said in a client note that the 3rd Circuit's retention of the case "was generally negative for broadcasters, as the D.C. Circuit has been very predictable in terms of its rulings favoring greater media ownership deregulation."

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