The Third Circuit Court of Appeals has finally had it with the FCC’s timetable for producing, or in this case not producing, regulatory certainty in its mediaownership rules. The court last week lifted its stay on the FCC’s modest deregulatory revision of the rules, and said it would hear arguments from both industry leaders and activists on why they opposed that change.
When the FCC decided in 2007 to only loosen the newspaper-broadcast cross-ownership rules, it was a decision that seemed to please nobody. Broadcasters and newspaper owners said it was not enough relief from a regime that prevented them from getting together to survive and hopefully prosper with combined resources and cost-saving synergies. Media consolidation foes complained that even so modest a deregulation proposal was too much.
It has been almost 2½ years, and broadcasters still don’t know where they stand. The new FCC majority doesn’t seem to like the 2007 decision either, and now the court has compelled it to act.
With the stay lifted, broadcasters have a window of opportunity to combine with newspapers in the top 20 markets, but only those with a single property. The FCC or the court could eventually overturn the loosened rules, but broadcasters who buy now would likely get to keep their new combos, unless the FCC conditioned the purchase on the court’s eventual decision on the challenges. Once again, so much for regulatory certainty.
Lifting the stay probably won’t create a land rush for newspaper-broadcast combos in top markets. Arguably, the smaller-market stations are more in need of creating multi-platform distribution systems. But the FCC still denies those stations the ability to combine.
The real good news is that the court will now hear arguments on why loosening cross-ownership rules did not go far enough. Broadcasters will be armed not only with the economic realities of declining ad fortunes, but also with the new-tech reality that multi-platform models of delivery are the accepted currency of the digital age.
Back when the Third Circuit remanded the more deregulatory rule changes under then-FCC Chairman Michael Powell, the court was not buying the argument that cable and the Internet should count as competitive media voices.
That would seem tough to ignore this time around, particularly since the FCC is billing broadband as the new medium of choice for content delivery, access to government information and comment on public issues, such as FCC proposals. It seems to us the FCC can’t have it both ways. If broadband is the marquee medium for everything from video delivery to social and government interaction, the FCC needs to transform its media-ownership rules to take that into account.
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