CONSUMER GROUPS, OTHERS ASK FCC TO RECONSIDER NEW MEDIA RULES

The FCC, in fact, had put a freeze on the filing of certain broadcast licensing applications and amendments because it was scrapping its old forms and creating new ones to reflect the new rules and needed approval from the Office of Management & Budget. The freeze was lifted Aug. 15, allowing the agency to begin approving transactions on the new forms as early as mid-Sept. All that changed, however, with the court’s ruling, which blocks the Commission from enforcing the new rules. An FCC spokeswoman said the agency still was studying the implications of the court’s ruling, so it couldn’t immediately say how it would deal with the form situation. An FCC official told us late Thurs. that the agency would reinstitute the freeze until the dilemma was sorted out.

The mid-Sept. timing for the agency to begin processing applications was why the court’s swift action Wed. took so many by surprise. Though the judges were free to rule at any time, they pointedly asked attorneys in the case how much time they could take to contemplate before making a decision. The attorneys noted that, while the new rules were scheduled to take effect Thurs., no transactions actually could take place before mid-Sept., so there would be no alleged “harm” if the judges weren’t to rule until that time. The ruling puts the FCC’s new rules on hold until the court decides the merits of the overall case.

Still unclear Thurs. was whether the Philadelphia court would keep the case or transfer it to the U.S. Appeals Court, D.C. Many observers of the arguments before the court Wed. said the judges in fact were delighting in the complex details of the case, as well as the media attention the case brought with it. Although the judges originally had scheduled just 1 hour for oral argument, their intense questioning extended it to more than 2 hours.

The next court move comes Mon., when Media Access Project (MAP) must file a response to a joint motion by the major TV networks -- supported by the FCC -- to move the case to D.C. Then on Wed., attorney Henk Brands, representing NBC, CBS and Fox, will respond to MAP. The judges can ask for oral argument or simply can issue a ruling on paper. In predicting the judges would keep the case, some observers noted they had asked the attorneys about briefing schedules and when they might begin oral argument.

There were many potential complications that could be thrown into the mix, however. First, it was possible that not all of those who wanted to sue the FCC over the rules had yet emerged. Opponents of the media ownership rules have until the end of Oct. to file petitions for review. So while the opponents already are numerous -- Media General, the NAB and the Prometheus Radio Project, to name a few -- other opponents may emerge, possibly throwing the case into further disarray.

The FCC, meanwhile, must consider petitions for review, which were due at the agency Thurs. The Commission could ask the courts to hold in abeyance any legal case while the agency considered the petitions for review and whether it wanted to revise the rules itself. An FCC spokeswoman said the agency hadn’t made a decision on whether to request abeyance.

And yet another complication is what Congress may or may not do. Experts said Congress could overturn the FCC’s rules in their entirety, making any court action moot. The judges said Wed. that they couldn’t consider what Congress might do and that their obligation was to interpret existing law, not what might become law. All that could change if Congress passed a new law in the interim.

Sen. Snowe (R-Me.) said the court’s ruling wouldn’t deter her from continuing to work on legislation to overturn the FCC’s media ownership rules. “These controversial media ownership rules, which were not thoroughly vetted with the American public, present a risk to television and radio news reporting as we know it,” she said.

Sen. Dorgan (D-N.D.), sponsor of a “legislative veto” of the rules that could be voted on by the Senate as early as next week, said of the court’s decision: “I think this is great news. It stops the process dead in its tracks for now. I think the court must have understood what we know -- the FCC embarked on these dramatic rule changes without the benefit of national hearings and thoughtful analysis.” House Commerce Committee Chmn. Tauzin (R-La.), who supports the rules, didn’t comment. His committee was in the middle of 2 days of hearings on the energy blackout.

The court’s ruling gave opponents of the media ownership rules new resolve in pushing Congress to act. MAP Pres. Andrew Schwartzman said: “This action gives us the opportunity to convince Congress and, if necessary, the courts, that the FCC’s decision is bad for democracy and bad for broadcast localism. Perhaps it will embolden Congress to overturn the new rules in their entirety. That would save everyone a lot of time and effort fighting it out in the court to obtain the same result.” Consumers Union Senior Dir. Gene Kimmelman said the court wouldn’t have taken “such extreme action” in granting the stay if it were not “highly suspicious of the FCC’s rationale.” He said the court’s action should further convince Congress that the FCC’s rules were “fundamentally flawed.” A spokesman said NAB still was studying the court’s ruling but was concentrating its efforts on convincing Congress to enact a “clean” rollback to 35% of the national audience reach cap, meaning a bill without other amendments the NAB saw as unfavorable.

Among those asking the FCC to consider revising its rules or scrapping them altogether were Consumers Union (CU) and the Consumer Federation of America (CFA). In their petition for reconsideration, they said the Commission had relied on “faulty analysis” and a diversity index “that was pulled from thin air” and produced “absurd results.” CU and CFA said the agency was inconsistent in how it counted the number of media outlets and contradicted itself in its economic analyses. Capitol Bcstg. asked the FCC to reconsider how it handled the UHF discount and asked for a comprehensive review of how the rules collectively promoted the public interest. It said the Commission also should “count duopolies and triopolies when calculating the national TV ownership percentage to avoid concentrating too much potential political power in the hands of a single media outlet at the national, state and local level.” Also among those who filed petitions for reconsideration were ARSO Radio Corp., the Amherst Alliance and Bennco Inc. Others were expected before the end of the day.