Februray 11, 2004
By David B. Caruso, Associated Press

PHILADELPHIA -- Federal Communications Commission lawyers were defending rule changes before a federal appeals court that would allow companies to own newspapers and television stations in the same city for the first time.

The change is being challenged by a coalition of media access groups, who argue that it and other regulatory reforms made by the FCC last year will stifle competition between media companies, trigger mergers and leave too many broadcast outlets in the hands of just a few large corporations.

The 3rd U.S. Circuit Court of Appeals in September blocked the regulations from taking effect until it had time to review the activists' claims.

A three-judge panel was to hear oral arguments in the case Wednesday in Philadelphia.

The FCC has said in legal briefs that it has the legal right to draft media ownership rules. The agency, which regulates broadcast television and radio stations because they use public airwaves to transmit their signals, said the changes are needed to keep pace with a marketplace transformed by cable and satellite television and the Internet.

Opponents of the ownership changes had also challenged an FCC rule that would have allowed a single company to own TV stations reaching up to 45 percent of the nation's viewers. Previously, that cap was set at 35 percent.

That part of the case, though, may be moot.

Congress has since overruled the FCC and voted to set the television cap at 39 percent. It is unclear whether the compromise will be acceptable to the groups challenging the rule changes.

The 3rd Circuit generally does not indicate how long it expects to take to issue an opinion in the case, but decisions frequently take several months.