Supreme Court Punts in FCC Cross-Ownership Case

The Supreme Court decides not to review an Appeals Court decision blocking cross-ownership of broadcast and print properties

In a blow to broadcasters, the Supreme Court Friday declined to review a lower court ruling blocking a Federal Communications Commission decision that would have loosened regulations and allowed firms to own both newspapers and television stations in the same market.

The high court offered no comment on why it declined to accept the case, ruled on by the U.S. Court of Appeals for the Third Circuit, for review.

The court Friday also declined to review a lower court decision that threw out a $550,000 fine leveled by the FCC on CBS for Janet Jackson's "wardrobe malfunction" during the network's live coverage of the 2004 Super Bowl. The FCC declined to comment on either case.

Also read: Supreme Court Denies Appeal of Janet Jackson Indecency Case

The Supreme Court’s announcement means that the FCC's newspaper-broadcast crossownership restrictions remain on the books for the time being. However, the FCC is requried to review the ownership rules every four years. The agency's latest review is under way with a final decision on whether to loosen the regulations expected before the end of the year.

Media companies, including Tribune, Fox Television and Sinclair Broadcast Group, have made several appeals to the high court on a variety of grounds, including an argument that the FCC regulations violate the First Amendment rights of broadcasters and newspaper owners.

"We're disappointed the Supreme Court declined to review rules that limit local broadcasters' ability to compete with our national and multinational pay programming competitors," National Association of Broadcasters' Vice Presdient of Communications Dennis Wharton said in a statement. "NAB will continue to advocate for modernizing ownership rules that stem from an era of 'I Love Lucy.'"

“The media companies’ Hail Mary pass has fallen well-short of the mark," said watchdog group Free Press' senior policy counsel in a statement. "The Supreme Court wisely declined to waste its time reviewing these ill-founded industry attempts to undermine the FCC’s media ownership protections. The constitutionality of these rules is well-settled."

The case decided by the Third Circuit goes back to 2007, when the FCC, then headed by Republican Kevin Martin, decided to change the 35-year prohibition and permit cross-ownership by single companies in the largest markets.

The Philadelphia-based court struck down the rule last year, holding that the FCC had not followed proper procedures allowing the public to comment on the proposed change. The appeals court did not rule on the substantive merits of the FCC's rules loosening the restrictions.

The Supreme Court affirmed the right of the FCC to subject broadcasters to more stringent regulations than cable TV systems and other kinds of media companies in its 1969 Red Lion Broadcasting v. FCC case.

In its Red Lion decision, the Supreme Court said that the scarcity of broadcast channels justified subjecting broadcasters to a lower level of First Amendment protection under the law than would apply to others.

Also read: FCC Hears Pros, Cons on Its Latest Attempt to Allow Media Cross-Ownership

Broadcasters have long argued that overturning Red Lion is warranted by the profusion of new media outlets that have emerged over the past 40 years, including cable, satellite and those on the Internet.

“The disconnect between the outdated assumption of Red Lion and the competitive realities of today has become too large to ignore,” Tribune and the other broadcasters said in their high court appeal.

Also read: Broadcasters Press Supreme Court to Overturn TV, Radio and Newspaper Ownership Rules

But Andrew Schwartzman, an attorney for parties that challenged the broadcast industry appeals to the Supreme Court, told TheWrap that spectrum is now scarcer than ever.

“The notion that there is no longer scarcity of spectrum flies in the face of the reality that wireless operators are pressing for access to even more of the broadcasters’ spectrum every day,” Schwartzman said.