Appeals Court hints it won't challenge 39% TV ownership cap
WASHINGTON -- A US Appeals Court indicated it won't challenge Congress's new limit on the number of television stations that networks such as Viacom Inc.'s CBS may own, leaving intact a 39 percent cap on viewers reached.
President Bush last month signed legislation pushed by Republican lawmakers that eases restrictions on networks' ownership of TV stations. The current 35 percent federal cap would have forced CBS and News Corp.'s Fox network to sell some stations.
The 3rd US Circuit Court of Appeals in Philadelphia omitted consideration of the TV station limit from today's oral arguments that challenge the Federal Communications Commission's other new media ownership rules, according to a copy of the court schedule on its website.
"By backing off consideration of this issue, the court leaves intact the 39 percent standard set by Congress," said Paul Gallant, an analyst with Schwab Capital Groups in Washington who last year was a senior aide to FCC chairman Michael Powell.
The Philadelphia panel last month asked all of the lawyers planning oral arguments whether they thought challenges to the FCC's proposed 45 percent cap should be heard. Virtually every party -- including independently owned network-affiliated stations, which were planning to contest the TV ownership cap -- agreed that the legislation eliminated the need for any argument.
"We told the court that if they want to hear about it, we're happy to do so, but Congress has spoken," said Robert Long, a Washington lawyer representing the Network Affiliated Stations Alliance.
A spokeswoman for the Appeals Court, Patricia Dodszuweit, declined to comment.
Several other new FCC media rules will be challenged today by consumer advocates who say they go too far in allowing media consolidation, and by TV networks and newspaper publishers who say they don't go far enough. The agency, led by Powell, a Republican, approved the rules last June in a 3-2 party-line vote.
The Philadelphia court last September had temporarily blocked implementation of all six new media rules. Lawyers involved in the case expect the court to issue a final ruling within the next few months.
"Our preliminary assessment is that the judges have a slight predisposition to remand at least some of the rules to the FCC for further consideration," said Blair Levin, a Legg Mason Wood Walker Inc. analyst and former FCC chief of staff.
The most visible FCC rule to be addressed lets a company own a newspaper and TV station in the same large or midsize city. Newspaper publishers such as Tribune Co., owner of the Los Angeles Times and Chicago Tribune, and Gannett Co., owner of USA Today, pushed the FCC to adopt the "cross-ownership" rule.
"When media outlets merge, fewer reporters are competing to cover a story," said Andrew Schwartzman of the nonprofit Media Access Project, a consumer advocacy group that will be challenging the cross-ownership rule tomorrow. "Civic participation and democracy depend on citizens' ability to find out what is going on in their hometowns and cities."
Former FCC chairman Richard Wiley, a lawyer who is representing Gannett, publisher Belo Corp. and the Newspaper Association of America, plans to defend the FCC's changes to its 1975 rule prohibiting most cross-ownership.
