ADELSTEIN, COPPS CALL FOR PUBLIC COMMENT ON DIVERSITY INDEX
After the 3rd U.S. Appeals Court, Philadelphia, remanded major FCC broadcast ownership rules (CD June 25 p1), largely based on a “flawed” logic of the diversity index, Comrs. Adelstein and Copps urged the commission to seek public comment on new rules. “We failed to seek comment on the diversity index methodology last time in a rush to judgement. Let’s get something out to start a dialogue about the index,” Adelstein told us. Said Copps: “It would be a great mistake to drag our feet or rehash old arguments.”
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The court made suggestions in its decision on fixing flaws in the FCC diversity index, which it used to determine cross-ownership rules. Adelstein said those issues could have been resolved the first time around if experts in the field, as well as the general public, could have weighed in on the issue.
The court said the FCC shouldn’t put too much weight on the Internet as a distinct media outlet. “There is a critical distinction between websites that are independent sources of local news and websites of local newspapers and broadcast stations that merely republish the information already being reported. The latter don’t present an independent viewpoint and thus should not be considered as contributing to diversity to local market,” the court majority wrote.
The FCC could also fix problems with its rules by being more consistent on how the rules are applied, said attorney Robert Long, who argued the case. “In their opinion, the judges provided a chart, showing these market share inconsistencies,” Long said. The court said the Commission needs to justify why it weighted different media outlets the same within a market. The ABC station in N.Y., for example, was given the same weight as a community college station.
The court’s opinion makes the traditional FCC bright- line ownership approach, which relied on the number of licenses in a given market, difficult, said analyst Blair Levin, an ex-FCC chief of staff. The court appears to want the FCC to determine mergers and acquisitions on a case-by- case basis. “The court clearly is pressing the FCC to provide more rigorous analysis in justifying the distinctions it is making and the lines it is drawing,” Levin said. The court appears to want the FCC to devise an index rather than establish rules, which would be logistically impossible, a source said.
But many were not surprised the judges took issue with the index. The idea of a “magic” solution “did not get a good reception,” said Andrew Schwartzman, pres. of Media Access Project. During daylong oral arguments in the case in Feb., the justices said they thought there were “inconsistencies” with FCC’s reasoning.
The 218-page decision, about 100 of which was Chief Judge Anthony Scirica’s dissent, is still being studied by the industry. “It’s going to take a little while for everyone to digest this. It’s very complex,” Long said. Many were still in reaction mode. The Network Affiliated Stations Alliance (NASA) said they were pleased the court rendered the UHF discount moot and allowed the Commission to “follow through with its intent to phase out the discount for the networks at the conclusion of the DTV transition,” said NASA Chmn. Alan Frank.
Former FCC Comr. Gloria Tristani, managing dir. of the Office of Communication of the United Church of Christ, urged the public Fri. to contact the FCC to make sure consumers have a voice in the FCC rules. “The FCC has a golden opportunity to put into place rules that promote a more diverse and local media, and a media that looks like America,” she said.
But the FCC’s next move is unclear. It can take the case back to the 3-judge panel for a rehearing, though that would be fruitless, Schwartzman predicted. The FCC can’t appeal to the full 3rd Circuit, because several judges would have to recuse themselves from the case due to a conflict, he said.
Some interested party or the FCC will appeal part of the decision to the Supreme Court, which could decide the case in its next term that ends in June 2005, Levin said. “But the chances of success of getting the justices to even hear the case is greatly reduced,” Schwartzman said. The FCC won’t act on the remand prior to the Presidential election, which could mean changes to FCC leadership in Jan., several executives told us.
The decision will probably undercut the chances of the Senate media-ownership amendment that was added last week to a defense authorization bill (CD June 23 p1), Levin said. The amendment is already expected to be targeted by the House and the administration, and the “ruling largely blocking the FCC liberalized rules [will] take some of the urgency away from the measure,” Levin said.