A federal appeals court has ordered the FCC to re-consider a rule barring broadcast ownership caps, which limit broadcasters from owning stations that reach more than 35 percent of the national audience. The ruling also nullified the federal ban on cable-broadcast cross ownership.
The court said the FCC failed to justify why the cross-ownership cap promoted competition, in light of increasing media options. FCC chairman Michael Powell called the decision "monumental," adding that he is unsure whether the commission will be able to provide such justification. NAB, which has supported the 35 percent ownership caps -- a position that has cost the association support from the major broadcast networks -- said it would continue to lobby for keeping the limits in place.
"The 35 percent television ownership cap has been critically important in preserving the network-affiliate relationship that has made the U.S. system of free, over-the-air broadcasting the envy of the world," said NAB president Eddie Fritts. "This rule has been instrumental in promoting localism and diversity. NAB will continue to build a solid record to convince the FCC, Congress, and the courts to preserve the 35 percent cap. We're also disappointed the court vacated the cable/broadcast cross-ownership rules, particularly given the absence of cable DTV carriage rules."
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