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FCC Ownership Rules Delayed

September 2, 2003

A federal appeals court Wednesday issued an emergency stay delaying new Federal Communications Commission rules that would allow a single company to own newspapers and broadcast outlets in the same city.

The 3rd U.S. Circuit Court of Appeals said the community-radio advocates who sued would suffer irreparable harm if the new rules were allowed to go into effect as scheduled Thursday.

The new media ownership rules, which the FCC approved in June on a party-line, 3-2 vote, also would allow a single company to own TV stations reaching 45 percent of the nation's viewers.

Smaller broadcasters and network affiliates are concerned the new rules will allow the networks to gobble up more stations and limit local control of programming. Supporters say the changes will help broadcasters compete in a market changed by cable television, satellite broadcasts and the Internet.

The House, over the objections of the Bush administration, voted overwhelmingly in July to block the FCC rules. The Senate plans to take up the issue next week.

The rules were challenged in court by the Prometheus Radio Project, a Philadelphia-based coalition of media access groups that campaigns for greater radio access and helps groups seeking to establish low-power radio stations.

"Given the magnitude of this matter and the public's interest in reaching the proper resolution, a stay is warranted pending thorough and efficient judicial review," a three-judge panel of the appeals court wrote in its brief opinion. The judges did not comment on the merits of the complaint.

An attorney for the Prometheus Project, Samuel L. Spear, praised the decision. He said his clients believe their ability to broadcast will be hurt by the growth of media conglomerates.

The FCC decision "just allows the big media companies to grow bigger and to monopolize the industry more," Spear said.

An FCC spokesman said the agency was disappointed by the decision and would continue to defend the new rules in court. In a hearing earlier Wednesday, FCC attorneys had argued that the rules could go into effect as scheduled without any long-term damage to the groups fighting it.

When the case will be heard was unclear. The appeals court has yet to rule on motions to move the case to another venue, such as Washington, D.C.

Sen. Byron Dorgan, D-N.D., who, along with Mississippi Republican Trent Lott has been leading a group of senators trying to undo all the FCC changes, said the court's ruling "will give a boost to our efforts."

"The ruling recognizes what I hope most of the Senate recognizes: These rules are inappropriate," Dorgan said in an interview.

Blair Levin, a former FCC official who is an analyst with the Legg Mason investment firm, said the stay probably will have little immediate impact because congressional opposition to the looser ownership rules led media companies to put most of their plans on hold.

The ownership rules also face other challenges.

The National Association of Broadcasters wants fewer restrictions on media ownership. The influential industry group filed an appeal last month to block changes to how radio markets are defined and overturn rules that still prevent TV station mergers in some smaller markets.

Critics of easing ownership restrictions had asked the FCC to suspend the rules while the agency studied their impact on communities. FCC Chairman Michael Powell, one of the three Republicans who backed the new rules, had said that although the commission is examining ways to promote local programming, that issue should be addressed separately from the ownership rules.