January 27, 2005 White House Drops Effort to Relax Media Ownership Rules By STEPHEN LABATON http://www.nytimes.com/2005/01/27/business/27cnd-media.html?ei=5094&en=f1f1d d448088fcab&hp=&ex=1106888400&partner=homepage&pagewanted=print&position=
WASHINGTON, Jan. 27 - The Bush administration has decided to abandon the effort by Michael K. Powell, the outgoing chairman of the Federal Communications Commission, to relax the regulations that have prevented the nation's largest media companies from growing bigger and entering new markets, government officials and industry lawyers briefed about the decision said today. In a final slap at Mr. Powell, the Justice Department will not ask the United States Supreme Court to consider a decision last year by a federal appeals court in Philadelphia that sharply criticized the attempt to deregulate the rules and ordered the commission to reconsider its action. Big media companies have been urging the administration to get involved in the case. But its decision not to recommend that the Supreme Court take the case sharply reduces the odds that the justices would intervene. The court had set next Monday as a deadline for the parties to file their initial papers in the appeal. Officials said one reason the administration decided not to seek Supreme Court review is that some lawyers were concerned that the case could prompt the justices to review related First Amendment issues in a way that could undermine efforts by the commission to enforce indecency rules against television and radio broadcasters. Over the last year, the agency has issued a record number and size of fines, and has been pressed by some conservative and other advocacy groups to be more aggressive. If, as now expected, the appeals court decision withstands legal challenge by some media companies, it would prevent the biggest media conglomerates from expanding. It also would return the rules back to the commission for further consideration. Lawmakers and some officials predicted that whoever succeeds Mr. Powell would be unlikely to embark on a course of wholesale deregulation of the media rules in light of the political furor that Mr. Powell's plan provoked. But they also said the agency could ultimately reconsider and relax a smaller number of the rules. In a bitterly partisan vote in 2003, the commission voted 3-to-2 to approve a package of deregulatory measures drafted by Mr. Powell that rolled back decades of ownership restrictions. One of the rules Mr. Powell sought to ease restricted a company from owning a newspaper and a television or radio station in the same city. Another rule limited the number of television stations owned by the networks, as well as the number of television stations owned by a single company in the same market. All told, the relaxation of the rules would have allowed companies in the largest cities to own as many as three television stations, eight radio stations and a cable operator, as well as a newspaper. They also would have allowed the largest television networks to buy more affiliated stations, although Congress rolled back that provision last year. Mr. Powell, who announced last week that he would be stepping down in March, had made the relaxation of the ownership rules a central feature of his agenda of deregulation. He has said the ownership restrictions are outdated because of technological changes, like the advent of the Internet, with its many sources of information, have expanded the universe of news and entertainment outlets available to consumers. He maintained that the increased concentration would not hurt competition. In some recent statements he has said he erred politically by not promoting the changes in a smaller, more piecemeal fashion, so as to avoid the political fallout that ensued after presenting the larger package of changes. The deregulation of the rules had been advanced by most of the television networks and many large media companies, including the News Corporation, the Tribune Company, the Gannett Company and The New York Times Company. It had been opposed by a broad coalition of Democrats and Republicans in Congress, as well as an unusual coalition of labor, consumer, religious, artistic and civil rights organizations. Some members of the coalition said they feared that further consolidation would increase the amount of indecent programming by a smaller number of outlets struggling to maintain high ratings and gain market share. Others said further consolidation would stifle creativity and lead to a decline in local news coverage as well as reduce the diversity of voices on the airwaves. Last summer, the United States Court of Appeals for the Third Circuit in Philadelphia ordered the commission to reconsider the deregulation of the rules. It concluded in Prometheus Radio Project v. Federal Communications Commission, a case filed by an organization of small broadcasters, that the agency had failed to adequately justify the new rules and had been "arbitrary and capricious" in the way it sought to relax the old ones. Mr. Powell responded by assailing the decision, saying it had "created a clouded and confused state of media law." But officials at the Justice Department informed the Federal Communications Commission this week that they would not intervene and seek to have the decision overturned. Late Wednesday evening, the general counsel's office of the F.C.C. sent an e-mail to senior agency officials informing them of the Justice Department's decision, officials said. Mr. Powell declined to comment as did Audrey J. Spivack, an agency spokeswoman. Jonathan S. Adelstein and Michael J. Copps, the commission's two Democrats who opposed the changes to the rules, applauded the administration's decision, which they suggested was a sharp rebuke of the agency under Mr. Powell. "This is a recognition of the failure of the commission to adequately justify its rules and is a recognition of its failure to protect the public interest," Mr. Adelstein said. "This is an historic decision for the media democracy movement." But Mr. Copps cautioned that the fight was not over, and that the next head of the agency should be careful not to make the mistakes that Mr. Powell had made. "This is welcome news, but we've got to be vigilant and not let anyone try to sneak consolidation through this agency in some piecemeal fashion," Mr. Copps said. You are a subscribed member of the infowarrior list. Visit www.infowarrior.org for list information or to unsubscribe. This message may be redistributed freely in its entirety. Any and all copyrights appearing in list messages are maintained by their respective owners.
