Powell and the FCC's two other GOP commissioners, who had backed the rules, said the old ones were obsolete, crafted before the advent of modern outlets such as cable television, satellite radio and the Internet. Yet Powell recommended that the Justice Department not pursue an appeal, according to a source familiar with the situation. He thought an appeal process would have been drawn-out and politically messy, even while believing the lower court did not show the FCC proper deference in staying the rules, the source said.
Powell, attending the World Economic Forum in Davos, Switzerland, declined public comment yesterday. In Washington, FCC Commissioner Kathleen Q. Abernathy declined to comment; Commissioner Kevin J. Martin was unavailable.
Democratic FCC Commissioner Jonathan S. Adelstein called the rules legally flawed.
Court Rejects Rules On Media Ownership (The Washington Post, Jun 25, 2004)
Compromise Puts TV Ownership Cap at 39% (The Washington Post, Nov 25, 2003)
Senate Votes to Block FCC Media Rules (The Washington Post, Sep 17, 2003)
Panel Fires Shot Across FCC's Bow (The Washington Post, Sep 5, 2003)
FCC Releases Its New Media Ownership Rules (The Washington Post, Jul 3, 2003)
The Democrats on the commission, however, who had led the opposition to the rules, were cheered by the decision not to appeal.
"The previous order was a disaster," said FCC Commissioner Jonathan S. Adelstein. "Now the administration has acknowledged it was legally flawed and not worth fighting for."
Rep. Edward J. Markey (D-Mass.) said the proposed rules would have allowed "excessive" media consolidation that "would have made Citizen Kane look like an underachiever."
If the court does not take up the media companies' appeal, the FCC is left with several options, any of which are likely to rile numerous factions:
The FCC can attempt to stick with the proposed rules and simply return them to the appeals court with better justification. Even with Powell's planned departure in March, the commission retains a Republican majority that may favor such a solution. Those who opposed the rules before probably would do so again.
The agency can go back to the drawing board and craft an entirely new set of rules. This is the approach favored by the FCC's Democratic commissioners, Adelstein and Michael J. Copps, who favor tighter restrictions on media ownership. Media companies and FCC Republicans likely would oppose this plan.
Instead of trying to pass all the ownership rules at once, the commission could try to approve them one at a time in an attempt to defuse resistance. Martin, a possible successor to Powell as FCC chairman, is the commission's strongest advocate of lifting the rule that forbids one company from owning a newspaper and television station in the same city. Copps and Adelstein fear that attempts to pass such rules "under the radar scope" would allow advocates to "accomplish piecemeal what they couldn't get whole," Copps said in a statement yesterday.
The FCC can do nothing, leaving existing rules in effect. This would keep the newspaper-television cross-ownership ban in place but leave the FCC with no rule governing ownership of local television stations.
One rule now out of the FCC's hands determines how many television stations a network can own. FCC rules had said that one network could not own a group of stations reaching more than 35 percent of the national audience. The new FCC rules would have raised the limit to 45 percent.
The station-ownership limit became the most controversial of the rules and, ultimately, Congress fixed it in law at 39 percent in January 2004. The figure represents the percentage of audience reached by News Corp. and Viacom stations; were the figure set lower, the companies would have had to sell stations. It also prevents them from buying additional stations.