Court Rules Against Media Monopoly

by Katherine Stapp

(IPS) NEW YORK -- Public interest groups scored an almost total victory in a lawsuit to overturn changes by the U.S. Federal Communications Commission (FCC) that had loosened media ownership rules, but they say the fight against market consolidation is far from over.

Last week, the Third Circuit Court of Appeals nullified the most contentious FCC rule changes, finding that the agency "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 formulas of the FCC, the main media oversight agency in the United States, "all have the same essential flaw: an unjustified assumption that media outlets of the same type make an equal contribution to diversity and competition in local markets," the three-judge panel found.

Had the FCC rules been left intact, a single company could have owned three television stations, eight radio stations, and the monopoly newspaper in a single market.

Opponents of media consolidation, who feared that the rules would have allowed a handful of media giants to dominate news and information, hailed the verdict as a major victory for media diversity and access.

"Our next step will be a campaign to get the president to respect this decision, and persuade the administration not to appeal it," said Pete Tridish, of the Philadelphia-based Prometheus Radio Project, a plaintiff in the lawsuit.

"The citizens have spoken on this issue, and now the courts have spoken. The FCC was barking up the wrong tree, and it is time for them to do what the judges told them to and start over," he said. "This time, when the public speaks: Listen."

The ruling did not affect other changes permitting a single corporation to own stations that collectively reach 39 percent of the U.S. viewing public -- as opposed to the previous maximum 35 percent.

But the decision did throw out the rule on the cross-ownership of newspapers and broadcast stations, and requires the FCC to rethink the rules governing the concentration of broadcast ownership in local markets.

The agency has not yet said whether it will appeal the verdict.

"The bigger victory here is that media industry plans for cable TV ownership deregulation, Internet broadband deregulation, etc, are in for a much tougher fight," said Jeff Chester, executive director of the Centre for Digital Democracy.

"We plan to be proactive in our digital media and democracy policy efforts as well. So traditional approaches to media mergers will, for the moment, be greatly affected."

The greatest challenge is to take the lead in shaping the emerging digital media system so it will support civic and cultural communications, in addition to competition, according to Chester. "The victory in court merely slows a commercial conglomerate juggernaut."

Still, the ruling invalidated key tools used by the agency, like the so-called Diversity Index, which assesses the relative influence of various media on local audiences.

And the judges rejected the FCC's assertion that the 1996 Telecommunications Act mandated a loosening of ownership rules. The FCC argued that that ownership caps should be lifted unless evidence could be shown to warrant their retention. The court ruled they should be maintained unless sufficient evidence can be shown to warrant their removal.

"Our next step is to urge the public to weigh in with the FCC before commissioners set out to rewrite the rules," said Mike McCabe, of the Wisconsin Democracy Campaign.

"We want the FCC to give the public a voice on the issue of media ownership, so the Wisconsin Democracy Campaign and other public interest advocates are demanding public hearings."

The rule changes, announced by FCC chairman Michael Powell last June, had drawn fire from across the political spectrum. More than two million people sent postcards to Congress to urge lawmakers to the overturn the new rules, which were blocked from taking effect by a federal court in September 2003.

The campaign united groups as diverse as the conservative National Rifle Association and the liberal MoveOn.com, a web-based network of some two million activists.

"The next step is for artists to stay connected to these issues. We need to make sure that the discussion remains public and that the FCC ensures that the bandwidth is maintained according to principles of diversity, localism and competition," said Jenny Toomey, executive director of the Future of Music Coalition.

"That would mean no more consolidation until we understand what was lost in radio," she said.