Foes Want Court to Quash TV Rules - Multichannel

Foes Want Court to Quash TV Rules

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Trade groups, public-interest organizations and media companies are preparing to take the Federal Communications Commission to court over new broadcast-ownership rules that sparked an unexpected backlash on Capitol Hill.

The legal maneuvering has already begun.

In recent weeks, the National Association of Broadcasters, the Network Affiliated Stations Alliance (NASA), and Media General Inc. filed appeals in the U.S. Court of Appeals for the D.C. Circuit.

The Media Access Project, a public-interest law firm that opposed ownership relaxation but lost on some key issues, filed its own appeal last Wednesday. "We are not giving up," MAP attorney Cheryl Leanza said.

In June, the FCC voted to allow NBC, ABC, CBS and Fox to own more stations, provided their signals did not reach more than 45% of TV households nationally, up from the current 35%.

It also largely eliminated the ban on the common ownership of a newspaper and a TV station in the same market and made it easier for one company to own up to two or three TV stations in the same market, depending on the size of the market.

The new FCC rules officially take effect on Sept. 4, with the deadline to file court appeals falling on Oct. 4.

In court, alliances will vary with the issue.

NASA, which represents more than 600 independently owned affiliates of NBC, ABC, and CBS, is fighting the move to raise the cap to 45%. Both MAP and NAB support NASA's position.

The affiliates fear being overrun if the networks (and their chief programming suppliers) can capture more audience through greater station ownership.

NAB, meanwhile, is trying to overturn a local TV-ownership rule, which now permits one company to own two TV stations in any market that has at least five stations.

In an important caveat, though, the FCC said none of the top four-rated stations in a market could combine among themselves.

MAP supported the prior local-market rule, which allowed one firm to own two stations in a market provided at least eight independently owned stations remain.

NAB's problem with the new rule is that it failed to recognize that in small markets facing tough economic realities, mergers among the top four stations were a necessity.

"We want something that provides more relief to medium and small markets," NAB senior vice president and general counsel Jack Goodman said.

Media General, the Richmond, Va.-based owner of 26 TV stations and 25 daily newspapers, wants a complete repeal of the newspaper-TV crossownership ban.

Like the TV duopoly rule, the newspaper-TV rules were eliminated in large markets but retained to some degree in medium and small markets.

Newspaper-TV combinations are allowed in any market with at least four TV stations, but banned in markets with three or fewer TV stations.

Bear, Stears & Co. media analyst Victor Miller called the new rule "significant relaxation" which would allow newspaper-TV combinations in 179 of 210 TV markets.

In its court filing, Media General said the FCC's failure to repeal the newspaper-TV ban was "arbitrary and capricious," "contrary to the substantive evidence in the record," and "an abuse of discretion" under communications and administrative law.

Court action could be postponed for months. It's unclear whether the D.C. Circuit will get the case because MAP filed in the Third Circuit.

Courts often bump cases from the calendar for lengthy periods if the FCC is reviewing separately petitions for reconsideration.

"Recon" petitions, as they are known, are expected to pour into the FCC.

The scope of the litigation could change in the weeks ahead as well. Congress is considering legislation that would restore just the 35% national-ownership cap and other bills that would go so far as to void entirely the FCC's new rules.

Toppling an act of Congress requires a court to declare the 35% cap unconstitutional, a much harder standard to meet than proving the FCC violated federal statutes.

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