Media Companies Seek Home-Court Advantage

Looking for a definitive answer to what media companies can own and where? Fuhgedaboudit.

A panel of judges last week consolidated the many court challenges to the FCC's Dec. 18 media-ownership rule decision in the Ninth Circuit Court of Appeals in San Francisco. But that is just round two in what could be a 15-round slugfest, according to one attorney involved in the imbroglio.

The attorney says there will be legal motions, followed by another flurry of legal motions stretching for months, with no court decision likely until perhaps early 2009. Each of the participants is looking for home-court advantage. Broadcasters will probably file a motion to transfer the case to the D.C. Circuit, while anti-consolidation activists want it moved to the Third Circuit in Philadelphia.

But the choice of the Ninth Circuit, if it stands, likely won't advance the time line on a decision on media-ownership rules.

Another attorney who has argued cases before that court says it is known for case backlogs, as well as being the circuit with the most reversals by the Supreme Court. “There is no telling where it will come out,” he says. The San Francisco court is probably a good second choice for anti-consolidation activists, he adds, but that is more because it is unpredictable than because it is predictably liberal.

In the meantime, there is disagreement over whether the old ownership rules apply during the challenge of the new rule changes, or whether the new rules will take effect March 22, 30 days after publication in the Federal Register.

After all the Sturm und Drang over revising the FCC's ownership rules, the commission's single deregulatory change—loosening and not lifting the ban on owning a newspaper and TV or radio stations—has taken fire from every direction.

The two chief Democratic presidential rivals, Hillary Clinton and Barack Obama, signed on as co-sponsors of a bill that would invalidate the rule change.

But they are in a long line of groups that don't like the rule. There are a host of legal challenges to the new rule, including challenges to leaving the old caps on radio and TV local ownership in place while the new rule is being fought over, and even the jurisdictional dispute over which court should hear the case.

Media activists don't like the decision because they say there is already too much deregulation. Most broadcasters don't like it because they say it doesn't go far enough and does nothing to loosen the caps on local TV and radio ownership, which they say they need to compete in a multichannel, multiplatform marketplace.

And when might the new rules kick in after four years of trying to come up with them? “I've got no idea,” says one lobbyist whose job is to figure such things out. So, not only is there a dispute over the rules, there is a dispute over how to adjudicate the dispute.

Broadcast attorneys have suggested that media activists have tried to game the system and raise their odds on not having the case heard in the D.C. Circuit, generally thought to be friendlier to broadcasters' arguments for deregulation. Activists filed in a number of circuits, asking that the case be transferred to the Third. Media Access Project President Andrew Schwartzman says the practical effect of those multiple filings gave them a better chance of getting the case referred to the Third, but says they were filed there because the only two options were the D.C. Circuit or the circuit where the business has primary residence. There was good reason to avoid D.C., he says, which he calls “hostile.”

Meanwhile, there are different schools of thought about where the FCC media-ownership rules stand. At least one broadcast lawyer argues that 30 days after the Feb. 21 publication of the new rule in the Federal Register, that rule will become the law of the land. He is advising his clients to proceed on that assumption, though he adds that he doesn't expect a land rush of new newspaper-broadcast cross-ownerships.

Schwartzman disagrees. “The Third Circuit stay is operative, “ he says. “It would be unwise for the FCC to start granting waivers.”

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John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.