A company cannot own a newspaper and a broadcasting station in the same town unless such a joint ownership is "clearly . . . in the public interest," the U.S. Court of Appeals ruled here yesterday.
The ruling, which lawyers said is certain to be appealed, would affect 79 joint newspaper broadcast ownerships in cities across the nation - including Washington, D.C.
The appeals court decision, written by US. Circuit Chief Judge David L., Bazelon, did not directly order the newspapers to divest themselves of their broadcast stations. Instead, it ordered the Federal Communications Commission to adopt rules under which such divestiture would take place.
On Jan. 31, 1975, the FCC adopted a rule that joint newspaper-broadcast ownerships could not be formed in the future.
However, it said then that practically all existing joint ownerships could continue under what is known as a "grandfather clause." The clause allowed roughly 90 per cent of the existing combinations to stand, because, among other reasons, continued joint ownerships would allow for a general "stability" that would serve the public interest in those cities where they existed, the FCC said.
The FCC ruling was challenged by various groups, including a group called the National Citizens Committee for Broadcasting, which claimed the ruling did not go for enough and break up past joint arrangements.
On the other side, various newspaper publishing companies and groups challenged the ban against future joint ownership agreements as going too far.
In siding with the National Citizens Committee the three-judge appellate panel said the FCC had the authority to impose a ban on future joint ownerships and should have applied the ban retroactively.
"We believe . . . that divestiture is required except in those cases where the evidence clearly discloses that cross-ownership is in the public interest," Bazelon wrote in a lenghty opinion. Agreeing with Bazelon were U.S. Circuit Judges J. Skelly Wright and Spottswood Robinson III.
The commission had taken the position, according to Bazelon's opinion, that divestiture was not required unless there was a clear showing that the public interest was being harmed by the joint ownership.
Bazelon said that the FCC view was too narrow, and that divestiture is not only a "remedy for misconduct."
The presumption should instead be that the joint ownership cannot exist unless it clearly serves the public good, and that the public good increases when more groups have access to the limited number of broadcasting outlets that exists, Bazelon added.
"Although divestiture cannot guarantee greater diversity, it increases the likelihood that the public will be served by broadcasters with diverse views," Bazelon said.
He pointed out that the FCC has had a long-standing policy that "diversification of media sources is of central importance," which it seemed to have abandoned in allowing the existing joint operations to continue.
Rebutiing arguments that divestiture might lead to large out-of-town companies moving in to replace local owners of broadcasting stations, Bazelon said, "There is no reason to suppose that local entrepreneurs will not find television an attractive investment"
The opinion made clear that stability of ownership and financial solidity is not enough to pass the "public interest" test that would be set.
It it is sustained on appeal, the rulling would mean in Washington that the Washington Post Co. would have to divest itself either of the WTOP radio and television stations or The Washington Post newspaper.
The ruling does not appear to directly affect The Washington Star at this point. Since the Star changed ownership after the FCC rule took effect, it is already under order to own only one media property in town.
The Star ownership already has agreed to sell its WMAL here, and must decide either to sell WMAL television or the Star by January 1979, according to persons familiar with those transactions.
Joint ownership agreements currently exist in the following cities, according to a list submitted during the litigation that resulted in yesterday's ruling.