Crossownership punted back to the FCC


The US Third Circuit Court of Appeals has ordered the FCC to review its 2008 rulemaking to loosen the broadcast-newspaper cross-ownership rule in the largest markets. The federal appeals court also ordered a further review of efforts to promote minority and female ownership of media outlets, but upheld most of the 2008 action retaining most ownership limits where they stood.

The Philadelphia-based panel ruled that the FCC violated the Administrative Procedures Act (APA) because then-FCC Chairman Kevin Martin voiced his opinion that the crossownership rule should be loosened in a New York Times op-ed piece. The FCC said that was irrelevant and didn’t fall under the APA, but the court held that it restarted the clock for public comment.

The court also said that the FCC failed to demonstrate how its Diversity Order structured primarily to benefit small business entities (and cited in the crossownership rulemaking) would enhance minority and female ownership of media outlets. That has also been remanded to the Commission for further examination. Since the FCC had long ago determined that a return to its previous preferences based on race and/or gender would not pass constitutional muster, the court ruling may not leave the Commission much room to maneuver.

While the case based on the 2008 action has been pending at the Third Circuit the FCC has been pretty much unable to complete work on its 2010 Quadrennial Review of its ownership rules. The court said the issues it remanded should now be incorporated into the  2010 Quadrennial Review.

RBR-TVBR observation: From the outset it has been clear that the Third Circuit Court of Appeals in Philadelphia, which is not the usual forum for FCC-related litigation, has consistently failed to grasp the issues before it in the broadcast ownership arena. The latest remand doesn’t make much sense, but that doesn’t surprise us. Does it even matter? We’re not aware of a single broadcasting company with an interest in buying a newspaper and few newspaper companies have the financial wherewithal to buy a TV station in their market.