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U.S. Supreme Court lets FCC loosen media ownership rules

by Reuters
Thursday, 1 April 2021 14:47 GMT

(Adds quotes from Justice Kavanaugh, background on case, paragraphs 7-13)

By Andrew Chung

April 1 (Reuters) - The U.S. Supreme Court on Thursday cleared the way for the Federal Communication Commission to loosen local media ownership restrictions, handing a victory to broadcasters in a ruling that could facilitate industry consolidation as consumers increasingly move online.

In a 9-0 ruling, the justices overturned a lower court decision that had blocked the FCC's repeal of some media ownership regulations in 2017 for failing to consider the effects on ownership by racial minorities and women. Critics of the industry have said further consolidation could limit media choices for consumers.

The justices acted in appeals by the FCC, companies including News Corp, Fox Corp and Sinclair Broadcast Group Inc and the National Association of Broadcasters.

The associations for other broadcast networks' local affiliates, including ABC, NBC and CBS, backed the appeals, arguing that consolidation would help ensure the economic survival of local television amid heavy competition from internet companies that provide video content.

Broadcast television stations have said they are increasingly losing advertising dollars to digital platforms.

The Philadelphia-based 3rd U.S. Circuit Court of Appeals had thwarted the FCC's efforts to revise the rules since 2003 in a series of decisions.

In 2017, the Republican-led FCC voted to eliminate a ban in place since 1975 on cross-ownership of a newspaper and TV station in a major market. It also voted to make it easier for media companies to buy additional TV stations in the same market, and for companies to buy additional radio stations in some markets.

The new rules were challenged by a number of community advocacy groups led by the Prometheus Radio Project. In a 2019 ruling, the 3rd Circuit blocked the FCC's rule changes.

Writing for the unanimous court, Justice Brett Kavanaugh said that the FCC reasonably reviewed the ownership rules to find that repealing or modifying them "was not likely to harm minority and female ownership."

Kavanaugh added: "The FCC reasoned that the historical justifications for those ownership rules no longer apply in today's media market, and that permitting efficient combinations among radio stations, television stations and newspapers would benefit consumers."

The case highlighted diverging views on the best way to ensure a competitive environment that promotes a broad range of local news and information. Critics of the FCC's action have said relaxing ownership rules could jeopardize a wider array of sources at the local level.

A group of 22 mostly Democratic-governed states and the District of Columbia, backing the FCC's challengers in the case, had told the justices in a written brief that the FCC's overhaul "threatens to further diminish" local news. Industry players, however, argued that it is the outdated rules that have hamstrung local journalism.

The FCC said that extensive changes in the media landscape reduced the likelihood that consolidation would lead to diminished viewpoint diversity and could help preserve traditional media outlets.

(Reporting by Andrew Chung in New York; Editing by Will Dunham)

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