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Court delays FCC rules on media

Disputed easing of ownership limits was slated for today

WASHINGTON -- A federal Appeals Court yesterday temporarily blocked the Federal Communications Commission's move -- due to take effect today -- to allow major media companies to widen their control over television networks, television and radio stations, and newspapers.

In the second significant setback in recent weeks for the commission plan, the US Circuit Court of Appeals for the Third Circuit, based in Philadelphia, ordered the agency not to take further steps to carry out its June 3 order easing long-standing media ownership limits.

The court said that, if it had not delayed the order, the challengers would lose "an adequate remedy should the new ownership rules be declared invalid in whole or in part." The court added that the commission would not be harmed, nor would media companies, by the delay.

"While we are disappointed by the decision by the court to stay the new rules, we will continue to vigorously defend them and look forward to a decision by the court on the merits," said FCC spokesman David Fiske.

The commission rules are also under attack in Congress. The House, in an initial rebuff to the agency in July, voted to overturn the rules. Similar efforts are expected in the Senate, where the Appropriations Committee may vote on the issue, which is included in a spending bill, as soon as today. The White House has threatened a veto if Congress approves a rollback.

The major change ordered by the commission would permit a single media entity to own stations serving 45 percent of the television audience -- an increase from 35 percent. The agency also relaxed its rules on cross-ownership of differing media and on ownership of local television stations. It retained its bar on one company owning more than one of the four major TV networks -- ABC, NBC, CBS, and Fox.

Court challenges to the commission rules have also been filed in US appeals courts in Washington, New York City, and San Francisco. But a federal court panel that manages multiple lawsuits filed in various cities last month ordered all the cases be linked for review in Philadelphia.

The first challenge in Philadelphia had come from a group named Prometheus Radio Project, a small group of what it calls a "collective of radio activists." Located in Philadelphia, the project works to protect low-power community radio stations, especially to protect access to news and information for low-income families who cannot afford cable television or access to the Internet.

It was the project's plea for a delay -- technically, a "stay" -- of the commission order that led to yesterday's ruling by the Appeals Court. Prometheus had argued in court papers that the new ownership rules would lead to "massive consolidation of the broadcast industry . . . before judicial review can be completed."

The Appeals Court, after a hearing yesterday, promptly issued its stay order, saying it was not yet persuaded that the challengers ultimately would win, but that "given the magnitude of this matter and the public's interest in reaching the proper resolution, a stay is warranted pending thorough and efficient judicial review."

That review is expected to take months, as the commission with the backing of the White House and Justice Department mounts a strong defense in court. Yesterday's order would remain in effect until that review was completed, although the commission has the option of asking the Supreme Court to lift the stay and thus allow the rules to take effect.

The new rules were adopted on a 3-2 vote of the bitterly divided agency. Commission chairman Michael Powell has pressed hard for the relaxation of the rules, arguing that the growth in media outlets would continue to ensure "robust competition" in the broadcast and newspaper industries even after consolidation.

In court papers filed in Philadelphia, the agency argued challengers did not need to delay the new rules, because no consolidation could occur until the FCC acted on individual requests to combine media outlets. Approval of any such consolidation, the commission said, could itself be challenged in federal court.

In voting to allow a media company to own outlets serving 45 percent of the national television audience, the commission majority concluded that the prior limit of 35 percent was no longer necessary to preserve "the balance of bargaining power between networks and affiliates."

A "modest relaxation" of that rule, the majority found, would help broadcast networks compete more effectively with cable and direct broadcast satellite operators and would "promote free, over-the-air television by deterring migration of expensive programming to cable networks."

The Appeals Court yesterday did not react to any of the arguments for and against the rules themselves, confining its action to a conclusion that a delay was necessary until a full-scale court review could be completed.

Material from Globe wires was used in this report.

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