FCC rules favoring big media have a lengthy day in court

Appeals court panel hears nine hours of arguments

February 12, 2004|By Leon Lazaroff | Leon Lazaroff,CHICAGO TRIBUNE

PHILADELPHIA - Big media companies eager to loosen federal limits on industry ownership faced off against consumer advocates calling for tighter controls in an unusually long hearing yesterday before a three-judge panel of the 3rd U.S. Circuit Court of Appeals.

At issue was the Federal Communications Commission's justification for approving in June a comprehensive set of ownership rules that delineated the type and quantity of media properties that a company can own in a single market and nationally.

Fox Broadcasting Co., Viacom Inc., which owns CBS, and Tribune Co. criticized the FCC for not going far enough in relaxing ownership rules. Tribune is owner of The Sun, 16 other newspapers and two dozen television stations.

The public interest group Media Access Project argued that the commission had wrongfully accepted the industry's view that the 1996 Telecommunications Act created a "presumption toward deregulation."

"What the FCC has done is place the burden on the proponents of the rule to demonstrate why a rule is necessary," said Andrew Jay Schwartzman, the Media Access Project's chief executive. "This is not a correct reading of the law and in fact demonstrates that the commission has had its thumb on the regulatory scale."

The oral arguments, originally scheduled to run for about four hours, instead lasted nine, a reflection of the passions on both sides and the complicated and often arcane points under discussion.

The hearing was held in response to the court's surprising decision in September to stay the FCC's rules. Those rules, which were scheduled to go into effect last fall, have been the source of contentious debate within Congress and in public forums.

Yesterday's oral arguments boiled down to competing definitions of the "public interest" and in what amounts the FCC should emphasize competition vs. diversity and "localism."

The 1996 Telecommunications Act instructs the FCC to periodically review its many rules and requires it to "repeal or modify any regulation it determines to be no longer in the public interest."

Arguing on behalf of Clear Channel Communications Inc., which owns or programs more than 1,300 radio stations, Miguel Estrada told the judges that the FCC was correct to rule that diversity - assuring a variety of programming - should be regarded as secondary to competition when determining how many radio stations any company is permitted to own in a market.

The announcement early in the day that Comcast Corp. had made a hostile takeover bid for Walt Disney Co. underscored the debate over media ownership, offering fuel for both sides.

Richard E. Wiley, a former FCC commissioner arguing on behalf of the newspaper industry, expressed consternation that while Comcast, the largest cable television corporation in the country, could legally buy a television network, newspaper companies have been forbidden from acquiring a television station in the same market since 1975.

The FCC's rules would allow such acquisitions. Public interest groups say that could give one company too much control over the expression of local opinions.

"If you want to know the actual quality of local news, it is essential that you know who is producing that local news," said Glenn B. Manishin, a lawyer representing the National Council of Churches and a variety of consumer groups.

The court is expected to issue a ruling this spring.

The Chicago Tribune is a Tribune Publishing newspaper.

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