NEW YORK A federal appeals court yesterday struck down an effort by the Federal Communications Commission to make sweeping changes in media-ownership rules, handing a victory to public-interest groups and consumer advocates who argued the changes would limit diverse sources of news.
The ruling by a three-judge panel of the 3rd U.S. Circuit Court of Appeals in Philadelphia threw out rules that would have allowed companies to own more television and radio stations in a single market. The court also left intact an order it made in September blocking the rules, announced in June 2003, from taking effect.
However, the court also found the FCC was within its rights to repeal a blanket prohibition on companies owning both a newspaper and a television station in the same city. Several media companies have lobbied for the ban to be lifted.
In their 2-1 decision in Prometheus Radio v. FCC, the judges wrote that the FCC "has not sufficiently justified its particular chosen numerical limits for local television ownership, local radio ownership, or cross-ownership of media within local markets."
The rule changes have been the subject of much debate. The FCC said the old rules had become outdated, while the public-interest groups challenging the proposed rules said they would permit too much consolidation of media ownership.
"This is a big, big win for diversity," said Andrew Jay Schwartzman, chief executive officer of the Media Access Project, a Washington, D.C.-based public-interest law firm that led the lawsuit. "The court recognized that debate and democratic values are more important than letting big media corporations grow bigger."
FCC Chairman Michael Powell criticized the ruling, saying in a statement it was "deeply troubling and hampers the flexibility of the agency to protect the American public."
Powell noted the court's Chief Judge Anthony Scirica dissented from the ruling, saying the court "has substituted its own policy judgment for that of the FCC and upset the ongoing review of broadcast media regulation mandated by Congress."
But consumer advocates and other opponents of the FCC's efforts to deregulate media ownership were quick to hail the decision.
Gene Kimmelman, senior public policy director for Consumers Union, one of the plaintiffs, called the ruling "a complete repudiation of rules that would allow one or two media giants to dominate the most important sources of local news and information in almost every community in America."
FCC Commissioner Michael J. Copps saw the decision as vindication of his vote against the rules.
"The commission has a second chance to do the right thing," he said. "This time we must include the American people in the process instead of shutting them out."
The cross-ownership issue had been closely watched by newspaper publishers that also own TV stations, such as Tribune Co. and Media General Inc. Both companies are pursuing strategies of owning clusters of newspapers and TV in the same market.
John Sturm, CEO of the Newspaper Association of America, said the group was pleased the court left in place the FCC's decision to repeal the across-the-board ban on cross-ownership. He said the industry would continue to press its case for making such combinations possible.
Earlier this week, the Senate approved a provision sponsored by Democrat Byron Dorgan of North Dakota and Maine Republican Olympia Snowe to repeal the ownership rules. Dorgan's communications director Barry Piatt said the rules "were enacted with barely any effort by the FCC to see what the public thought about them."
The court's ruling does not affect national limits on broadcast ownership. Last year, the FCC raised the limits on the size of the national audience that can be reached by a single owner of TV stations from 35% to 45%, but Congress later passed a law that put in place 39% cap.