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Court to Consider Stay of FCC Rules

Sep 1, 2003  •  Post A Comment

In a major judicial test for the Federal Communications Commission’s new media ownership rules, the U.S. Court of Appeals in Philadelphia has announced hearings Wednesday on a request to stay the agency’s controversial deregulation.
FCC Chairman Michael Powell has refused to stay the new rules on his own, even though two of agency’s five commissioners-Democrats Michael Copps and Jonathan Adelstein-have pleaded for a reprieve. That means absent court intervention, the new regulations will go into effect Thursday-firing the starting gun on what critics fear will be an unprecedented rush of media industry merger action.
But bowing to agency critics, the Philadelphia court last week agreed to consider their case for a last-minute reprieve from the new deregulatory environment pending resolution of challenges.
If granted, a stay would amount to a stinging rebuff to the FCC’s Republican majority, including Chairman Powell, and could derail the new regulations for years.
In its plea for a stay, the activist Media Access Project warned that absent a court-ordered delay, “Massive consolidation of the broadcast industry will occur before judicial review can be completed.”
For its part, the FCC told the court that stay proponents had “failed to make the necessary showing of irreparable harm and a likelihood of success on the merits” needed to warrant a stay of the agency regulations.
Industry attorneys close to the case conceded it is highly unusual for an appeals court to hold a hearing on a stay request. Several of the attorneys, however, said a stay is a long shot at best.
But Harold Feld, MAP associate director, said a stay is very much within the realm of possibility.
“The fact that they’re calling for oral argument makes clear that they haven’t made up their minds,” Mr. Feld said.
Even as the Philadelphia court moves forward on legal challenges, the Senate Appropriations Committee is tentatively slated this week to consider a spending bill that agency critics expect to be amended with a rider that would bar the FCC from raising the national ownership cap to 45 percent. By a 400-21 margin, the House of Representatives has already approved similar legislation.
Sen. Byron Dorgan, D-N.D., has vowed to force a Senate vote on a resolution to overturn the FCC’s deregulation shortly after Congress returns from recess this week.
In addition to opposing the stay request, the FCC last week asked the Philadelphia court to turn over all of the legal challenges to the agency’s deregulation to a court in Washington.
The case against the FCC was originally assigned to the court in Philadelphia by a lottery because critics had appealed the agency’s decision in several federal appeals court jurisdictions.
Sources said the fact that the Philadelphia court got the case in the first place was good news for critics of the FCC’s deregulation, because the Court of Appeals in Washington-where appeals of federal agency rulings are usually considered-has been harshly critical of agency media ownership restrictions.
In a filing with the Philadelphia court last week, the FCC attributed the fact that the case had ended up in Philadelphia to “forum shopping” by agency critics.
The FCC also argued that its media ownership rulings included responses to earlier decisions by the Washington court overturning agency media regulations.
“There is substantial and consistent case law that in these circumstances transfer to the court whose prior remand occasioned the order now on review is appropriate,” the FCC argued.
Also urging the Philadelphia court to relinquish the challenges to its judicial counterpart in Washington last week were three of the Big 4 TV networks: CBS, Fox and NBC.
Those three networks are in the fight because they oppose the efforts of critics to overturn one of the FCC’s controversial June 2 rulings-a provision that would raise the cap on national TV ownership from 35 percent to 45 percent of TV homes.
ABC is not participating in the lawsuits because it has plenty of room to grow under a 35 percent cap, while the other networks are either at the cap or already exceed it.
Said Preston Padden, Disney executive VP, worldwide government relations, “Because we are at 24 percent, we have not been a part of the litigation regarding these rules. However, we continue to support broad and principled deregulation of the broadcast ownership rules.”
Jeff Chester, executive director of the watchdog Center for Digital Democracy, said the court pleadings demonstrate how little the FCC and networks trust “honest politics outside the Beltway.”
MAP’s Mr. Feld said the FCC request demonstrates the agency’s lack of confidence in its case for deregulation.
“Obviously they think they will get a better hearing in the D.C. circuit,” Mr. Feld said.