Media Ownership Laws Face Legal Challenge

10 September 2001

Oral arguments were presented by a number of leading broadcasters before the Court of Appeals in Washington DC on Friday in two legal challenges to media ownership regulations.

A coalition of Fox Television, NewsCorp, Viacom, CBS and NBC is seeking to overthrow the law banning media companies from owning stations reaching over 35% of American households. Opposing the lawsuit is the Federal Communications Commission, supported by the National Association of Broadcasters and the Network Affiliated Stations Alliance.

In the other lawsuit, AOL Time Warner is challenging the ban on ownership of both cable systems and broadcast networks.

Opening proceedings, Fox attorney Edward Warren argued that the 35% cap breached the First Amendment, preventing broadcasters “from reaching 65% of the American public.”

In response, an attorney for the FCC and its supporters argued: “This case is not about whether the cap policy is the ‘right’ policy, it’s about a simple constitutional question. Did the FCC do the job Congress told it to do – review the cap along with other broadcast rules?”

Under the 1996 Telecom Act, the FCC has to review its regulations every two years. At the first review in 2000, the FCC claimed it was too early to change the 35% limit because the market had yet to absorb trends initiated by the Act. Ironically, this decision was opposed at the time by Michael Powell, recently appointed FCC chairman, who now has to defend it.

However, the three-judge panel queried the thoroughness of the review, prompting FCC attorney Greg Pash Jr to admit his case was not in good shape. “And it’s getting worse,” retorted one judge. When Pash suggested that the review was an internal FCC matter and therefore not open to judicial scrutiny, he got an abrupt answer from Judge Harry Edwards: “It’s reviewable.”

Edwards went on to attack the biennial review system imposed on the FCC by Congress. “It’s a silly statute… What was Congress thinking about, to make the FCC review all its regulations every two years? But we’re stuck with it, so let’s play the game.”

The court’s decisions on both lawsuits are not expected for several months.

News source: MediaWeek (USA)