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BACK TO THE DRAWING BOARD

Court Says FCC Must Better Justify Looser Ownership Rules
The Third Circuit U.S. Court of Appeals in Philadelphia yesterday dealt a blow to the FCC’s attempt to further relax media ownership rules. In a 2-1 decision, the court said the Commission had failed to adequately justify its new rules, which were adopted a year ago but have yet to take effect.

The decision further blocks the rules—which have also come under attack in Congress—from taking effect. The FCC wants to allow broadcasters to be able to own more television and radio stations, and own newspapers, television stations and radio stations in the same market—a practice that is currently prohibited.

"The Commission has not sufficiently justified its particular chosen numerical limits for local television ownership, local radio ownership, and cross-ownership of media within local markets," the 218-page decision says in part. The court instructed the FCC to rewrite the rules, as Commissioners who disagreed with the rules to begin with but were outvoted urged Chairman Michael Powell to hold hearings across the country and make the FCC’s deliberations more inclusive.

Media Access Project President Jay Schwartzman, who lobbied against the new rules, was quoted by Newsday as saying, “This is a big, big win for diversity in the media. The judges agreed with us that preserving democracy is more important than helping big companies grow bigger.”

But Gannett Corporation CEO Douglas McCorkindale, whose company has over 100 papers and 22 television stations, carped: "It just makes no economic sense, no business sense, no political sense,” talking about the current FCC ownership rules, in place since 1975. "It's a rule that's 20 years old that deals with a world we don't live in anymore."

The case is expected to be appealed to the Supreme Court.
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