Limits on Media Ownership Stand
June 14, 2005
By Annys Shin
The U.S. Supreme Court yesterday let stand an appeals court ruling that limits the number of television stations, radio stations and newspapers a media company can own in a single market.
In issuing its decision, the court declined to enter the debate over whether the explosion in telecommunications, the Internet and cable television warrants an overhaul of ownership rules crafted in an era when news was dominated by daily newspapers and broadcast television and radio.
Rather, the high court declined to hear an appeal of a lower court's ruling that the Federal Communications Commission had not adequately justified a set of rules that it issued in June 2003 that relaxed several of the ownership restrictions.
As a result, the FCC will have to consider whether to try again to draft new rules on media ownership, potentially setting the stage for an intense lobbying effort by media companies hoping to gain more flexibility, industry analysts and commission members said.
FCC Chairman Kevin J. Martin said in a written statement yesterday that the commission would again reevaluate the ownership restrictions following the court's decision.
Martin was among the FCC commissioners who voted two years ago to make it easier for media giants such as NBC Universal Inc. and Viacom Inc. to buy more television and radio stations. The new rules also would have allowed a single company to own the television station with the highest ratings and the newspaper with the greatest circulation in the same market.
But a year later, when the new rules were slated to take effect, the U.S. Court of Appeals for the 3rd Circuit blocked them. The court did not rule on the merits of the FCC's new regulations but criticized the methods the agency used to figure out how many media outlets a company could own in a single market.
Several media companies then asked the Supreme Court to review the 3rd Circuit ruling.
The ruling is a disappointment for the newspaper industry and other media groups that think the concerns about media concentration do not make sense in a news environment saturated with cable channels, blogs and Web sites.
Newspaper Association of America president and chief executive John F. Strum said the existing ban on cross-ownership of television and newspapers was outdated and argued that it diminished the quality of television journalism.
"Television stations owned by newspaper companies have been shown to provide the best local news," Strum said.
Belo Corp., owner of the Dallas Morning News and one of the companies that brought the case to the high court, issued a statement saying the company was "optimistic" that the FCC would, on review, develop rules "that reflect today's marketplace."
Public interest groups, which fought the FCC rules on the grounds that they promote concentration in media ownership, hailed the Supreme Court's action.
"It's an enormous victory for those who seek greater diversity in ownership and greater competition in news media," said Gene Kimmelman, director of Consumers Union.