3rd Circuit Decides For People over Corporations in FCC Case

The Third Circuit U.S. Court of Appeals in Philadelphia handed the public a huge victory on Thursday, and giant corporations a rare loss, in their decision [PDF] on a case that (ironically enough, given the subject matter) most of the public knew nothing about, but one which has the potential to benefit real people with better quality news and information for decades to come.

The case, Prometheus Radio Project v FCC, pitted "Citizen Petitioners" who seek more persons owning local media outlets to ensure diversity in viewpoints and news coverage, versus "Deregulatory Petitioners" who want fewer persons (spell that "corporations") to own local media outlets, and the publicly-owned broadcast airwaves that go with them, in order to enhance their profits.

At stake were the rules determining how many local TV and radio stations one company can own in a single market; whether a newspaper owner can also own a TV or radio station in the same town; and how broadcast ownership by minorities and women should be handled.

The Deregulators challenged the FCC's constitutional and legal authority to set rules and restrictions on ownership of broadcast spectrum licenses, while the Citizen Petitioners sought to protect the FCC's authority, even while challenging a number of new rules the agency speciously attempted to enact without appropriate public input.

Six attorneys representing Free Press, Media Alliance, The United Church of Christ, and Prometheus Radio Project went up against 48 lawyers representing such corporate behemoths as Clear Channel, CBS, Belo, FOX, Cox, Sinclair, Tribune, and Gannett, and groups including the National Association of Broadcasters, plus another 8 attorneys for the FCC and 5 more from the US Department of Justice. The case became a classic David v. Goliath struggle.

The good news this time around, at least for the moment, David finally won one...

The case dealt with current ownership rules, as determined by the Telecommunications Act of 1996 and the Federal Communications Commission (FCC). There are a myriad of rules, among them these which now allow that one party may own no more than:

• two TV stations and six radio stations in the same market (or one and seven);
• three TV stations in large markets where 18 or more stations exist;
• up to eight radio stations in the same town.

The FCC is tasked with making sure the broadcast media --- via the limited broadcast spectrum which is owned by we, the people --- serves the public interest. Every four years, as required by the 1996 Telecommunications Act, the FCC must revisit the issue of public interest in media ownership (the "Quadrennial Review.")

In 2003, the FCC Commissioners held public hearings on media ownership, then essentially ignored what the public told them. The FCC, chaired at the time by Republican Michael Powell, next laid out a group of rules that put more broadcast media stations into fewer hands. The public rose in protest (as covered in my 2009 documentary, Broadcast Blues.)

After Powell's hearings, Prometheus Radio went to court to challenge the new rules. They won a Third Circuit Court ruling which found that the FCC had not properly listened to the public and would need to start from scratch.

So, four years later, from October 2006 to November 2007, the FCC, this time under Republican chair Kevin Martin, once again held a series of public hearings on media ownership, but in some cases, as the court find this time around, they offered the public as little as 10 calendar days notice before the meetings. Worse, as revealed during the trial, the FCC actually buried studies with findings which undercut their own advisement for relaxation of ownership rules. (An Inspector General's report even found that the FCC had a research strategy specifically designed to justify their preconceived goal: the repeal of the newspaper-media cross-ownership rule.)

Then Martin, on November 13, 2007, just four days after the final public hearing, issued an Op-Ed in the New York Times which outlined the newspaper/broadcast ownership rules he was considering. Until then, neither the public --- nor even fellow FCC commissioners --- knew what rules he was considering.

Déjà vu. Hold public hearings, then ignore the public. Just as Powell had done four years earlier.

On Thursday then, to the delight of the "Citizen Petitioners," the Third Circuit Court of Appeals decided that, on the issue of newspaper/broadcast cross-ownership, the FCC failed to give the public proper notice and opportunity to comment on the rule-making, and must, once again, start from scratch in its next quadrennial review.

The court also ruled that the FCC's studies surrounding minority and female ownership of broadcast stations are woefully inadequate, and that topic must also be revisited in the next quadrennial review. In their decision, they noted "the Commission referenced no data on television ownership by minorities or women and no data regarding commercial radio ownership by women. This is because, as the Commission has since conceded, it has no accurate data to cite."

On the other ownership issues, the Court flatly rejected claims by Deregulatory Petitioners that all of the FCC's media ownership rules are unconstitutional:

Deregulatory Petitioners ask us to overturn the scarcity doctrine. That doctrine establishes that - In light of [their] physical scarcity, Government allocation and regulation of broadcast frequencies are essential ... We continue to decline [Deregulatory Petitioners'] invitation to disregard precedent ... The abundance of non-broadcast media does not render the broadcast spectrum any less scarce. The Supreme Court's justification for the scarcity doctrine remains as true today as it was in 2004 --- indeed, in 1975 --- many more people would like to access the [broadcast spectrum] than can be accommodated.

We agree with the FCC that the rules do not violate the First Amendment because they are rationally related to substantial government interests in promoting competition and protecting viewpoint diversity.

In addition, the Court also rejected the notion that the explosion of new media alternatives means that rules meant to ensure diversity and competition in the public interest use of the broadcast spectrum are no longer needed:

CBS asserts that the rule is no longer in the public interest in light of record evidence that the media market is growing more diverse and competitive … While the FCC acknowledged this trend, it found that traditional media ... are the most frequently used and most important sources of local and national news ... Although CBS claims that a revolution has transpired in the media marketplace, the record supports the FCC's conclusion that new media such as the Internet and cable still do not outrank newspapers and broadcast stations as sources of local news.

The "Citizens Petitioners" were jubilant following the court's ruling.

Brandy Doyle of Prometheus Radio told The BRAD BLOG: "No matter what issues matter to you, media matters. Broadcast media ownership rules are required for assuring diversity of views in our communities. FCC has to allow the public to help write the rules."

Tracy Rosenberg of Media Alliance told us: "It's taken a long time for the courts to hear the voices of the hundreds of thousands of people who called for more media diversity, not less. We're proud to have joined the Prometheus Radio project in what's been an 11-year legal journey to prevent more destructive media consolidation."

Two media corporations which were frequently cited in Thursday's ruling, CBS and Clear Channel, declined to comment.

Writing at SaveTheNews.org, a campaign of Free Press, one of the Citizen Petitioners, Josh Stearns hailed the court's rejection of the corporate argument that the FCC has no business regulating the nation's broadcast spectrum.

"This change would have given individual companies enormous - and unacceptable - control over your local media in print, on TV, on the radio and even online," wrote Stearns following the ruling.

FCC General Counsel Austin Schlick issued this public statement: "The Third Circuit's approval of the 2008 ownership rules for broadcast stations affirms the FCC's authority to promote competition, localism, and diversity in the modern media marketplace. The Commission is currently engaged in a statutorily mandated further review of its media ownership rules. With an updated record and this supportive decision, the agency should be able to take appropriate steps to ensure that the nation's media marketplace remains healthy and vibrant."

A spokesperson within FCC Commissioner Michael Copps office told The BRAD BLOG he was hopeful that now that the court has spoken, the next Quadrennial Review could take place very soon, hopefully this summer.

Citizens counsel Angela Campbell of the Institute for Public Representation said that the current FCC, chaired by Democrat Julius Genachowski, wrongly defended Kevin Martin's decision, and that has wasted a lot of time. "There's not even any Notices for Proposed Rule Making yet," (as required by the 2010 Quadrennial Review, which has not yet begun.) "There's two ways to look at that: one, they've been putting together studies and evidence to determine what public interest rules should be, or two, they've not been taking this seriously." Campbell hopes the FCC does develop the data to do the right thing this time around, especially with regard to newspaper cross-ownership and women and minority ownership of broadcast stations.

Andrew J. Schwartzman of Media Access Project, who argued the case on behalf of "Citizen Petitioners", said, "I expect a different, more skeptical approach from the FCC, they will be very careful to include the public this time."

"This is an amazing victory, but it could be short lived. A large reason for this victory is the public weighed in, and public interest groups weighed in with data," says Corie Wright, counsel for Free Press, but he also added a note of caution. "We want to celebrate, but we want also want to make sure this does not become undone in the next ownership review."

Free Press' Stearns cited the public's input as a key factor in the victory. "The court pointed to public comments from local citizens as a key factor in overturning the FCC's attempt to change its rules," wrote Stearns. "This decision makes it clear: Citizens' voices matter."

But, Stearn warns, though the victory was a major one for the public interest, there is no time to rest:

Right now around the country, local stations are using loopholes and backroom deals to get around current media ownership rules. We have found at least 200 stations in 80 communities that are currently consolidating all or part of their newsroom, putting more and more media in the hands of fewer and fewer people. While the courts may uphold the FCC's current rules, we need the FCC to go even further. Click here to tell the FCC to stop this covert media consolidation.

Sue Wilson is a media activist, director of Public Interest Pictures' Broadcast Blues, and a 22 year veteran of broadcast journalism. Her numerous awards include Emmy, AP, RTNDA, and PRNDI for work at CBS, PBS, FOX, and NPR. She is the editor of the media criticism blog, Sue Wilson Reports.

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