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Court Lifts Stay on 2008 Media Ownership Rules

March 25 , 2010
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This week, the U.S. Court of Appeals for the Third Circuit issued an Order lifting the stay on its review of the Federal Communications Commission’s (FCC) February 2008 Report and Order regarding media ownership. The FCC’s February 2008 order concluded the 2006 Quadrennial Regulatory Review and relaxed the rule governing cross-ownership of newspapers and broadcast stations.

Under the previous newspaper-broadcast cross-ownership rule, common ownership of a daily newspaper and full-power broadcast station (AM, FM or TV) was prohibited if the station’s applicable coverage contour included the newspaper’s city of publication. The February 2008 order relaxed this rule for the largest 20 television markets. In those 20 markets, there will be a presumption that cross-ownership of a daily newspaper and a broadcast station is in the public interest as long as: (1) eight independent major media voices remain in the market; and (2) if the proposed combination involves a TV station, the TV station is not ranked in the top 4 in the market. A proposed combination outside of the top 20 media markets will be presumed not in the public interest unless the applicant can show clear and convincing evidence that the proposed combination would increase the diversity of independent news outlets. The February 2008 order left all other ownership rules intact.

The February 2008 order was challenged in several appeals courts by media parties arguing that the Commission should have taken further steps to relax its ownership rules, and public interest parties arguing that the February 2008 order went too far in its relaxation of the ownership rules. Additionally, several parties filed petitions for reconsideration with the FCC. After a circuit court lottery and a protracted battle over jurisdiction, the case was assigned to the Third Circuit, the same court that decided Prometheus Radio Project v. FCC in 2004, which overturned the Commission’s 2003 attempt to more aggressively relax its ownership rules. Until this week, the Third Circuit had agreed to stay the effectiveness of the February 2008 rules and hold the case in abeyance until the FCC could render a decision on the petitions for reconsideration. The FCC recently asked the Third Circuit to keep the stay in place so that the petitions for reconsideration could be dealt with during the course of the Commission’s 2010 Quadrennial Regulatory Review of its ownership rules.

Now that the stay has been lifted, the rules will go into effect and applicants will be able to apply for newspaper-broadcast combinations under the February 2008 framework. Meanwhile, the Third Circuit will proceed with its review of the case. Initial briefs will be due in mid-May with the briefing schedule concluding at the end of June. Oral argument will almost certainly follow and a decision will likely not be rendered until late in the year or even early next year. The FCC will proceed with its 2010 Quadrennial Review, but is not likely to issue any orders until after the Third Circuit reaches a decision.

We would be pleased to respond to any questions regarding these matters.