Rules called 'arbitrary,' 'capricious'

WASHINGTON — Media ownership rules continued their loosening trend Tuesday, as a federal appeals court here ruled in favor of relaxing a duopoly reg blocking a broadcaster from owning two TV stations in the same market unless there are eight other broadcast TV stations in the market.

Appellate robes said the FCC was “arbitrary” and “capricious” in excluding cablers and other media outlets from the eight-voice test. Ruling admonished the regulatory agency for failing to back up its argument that diversity and localism are protected by broadcast stations alone.

The court stopped short of declaring the duopoly rule unconstitutional and throwing it out altogether; rather, it directed the FCC to rethink that part of the rule dictating what constitutes a “voice” in any given market.

Celebratory broadcaster

Still, there was rejoicing at Sinclair Broadcasting, which led the judicial charge.

“It’s all but impossible for the FCC to do anything other than further relax the duopoly rule,” said Mark Hyman, Sinclair veep for corporate communications. “The court laid out, in our view, a very narrow road map.”

Sinclair and other broadcasters operating in smaller markets argue they need the economic advantage of duopolization if they are to survive. It becomes much easier to own two stations if the eight-voice standard includes, for example, cable TV and radio stations and newspapers.

The National Assn. of Broadcasters, although not a direct party to the matter, commended the court ruling for allowing greater flexibility when it comes to small-market duopolies.

Less restrictive atmosphere

The duopoly rule is one of several key ownership rules up for review at the FCC.

In back-to-back rulings handed down over the past year, the same appeals court found serious problems with a cap blocking a broadcaster from owning stations that reach more than 35% of the national audience, as well as a cap blocking a cabler from reaching more than 30% of the nation.

As with Tuesday’s ruling, the court said the FCC had failed to provide adequate justification for the caps as calibrated.

With Republicans atop the power pyramid, most expect the FCC to be in a relaxing mood when reformulating the regs in question. FCC chair Michael Powell has appointed a task force to consider the fate of the endangered rules.

The FCC itself loosened the duopoly rule in 1999 by implementing the eight-station proviso.

The appeals court took the FCC to task for limiting the eight voices to broadcast stations, when the reg agency allowed the radio biz to form duopolies according to a voice test that included other media outlets.

Adding it up

Going one step further, the ruling suggested the FCC might rethink the total number of voices of any kind required in a given market before a duopoly is allowed.

“Duopoly is needed in these smaller markets. You’ll see a strengthening of the economics of TV. You’ve read about local stations cutting out their newscast; if they get two stations under their wing, they’ll be able to bring some of the newscasts back,” broadcaster Lowell “Bud” Paxson said.

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