Court Upholds FCC Media Ownership Rules But Remands Newspaper-Broadcast Cross-Ownership Rule

In a mixed decision for the FCC, the Third Circuit remanded part of the Commission’s 2008 order relaxing the newspaper-broadcast cross-ownership rule while upholding the order’s decision to maintain existing TV duopoly, radio ownership, and TV-radio cross-ownership rules. The remanded rule would have permitted newspaper-broadcast cross-ownership in the top 20 markets and in smaller markets under certain conditions.

A number of media watchdog groups challenged the FCC’s 2008 order, asserting that then-Chairman Kevin Martin did not follow proper rulemaking procedures by announcing the newspaper-broadcast rule change in a newspaper op-ed followed by a press release issued just weeks before its adoption. The Third Circuit agreed, stating that the FCC failed to “fulfill its obligation to make its views known to the public in a concrete and focused form so as to make criticism or formulation of alternatives possible.” The decision marks the second time that the Third Circuit has rejected Commission attempts to loosen media ownership restrictions, vacating relaxed limits proposed by the Commission in 2004 for failing to provide a reasoned analysis supporting its decision. Experts do not expect the FCC to appeal the Third Circuit’s decision.

Public interest groups applauded the Third Circuit’s decision to maintain the existing limits placed on television and radio ownership. Commissioner Michael Copps also praised the decision, calling it a “huge victory” for critics of media consolidation. By contrast, broadcasters argue that the ownership restrictions fail to reflect new market conditions and the rise of popular Internet media sources. Broadcasters assert that “modest reform” is still in the best interest of consumers and will likely reassert their challenges as part of the Commission’s ongoing ownership policy review, which is the subject of a pending Notice of Inquiry released last May.