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The fight over media industry deregulation may be returning to the top of the legislative agenda. The U.S. Supreme Court is expected later this year to consider rules passed by the Federal Communications Commission that would ease mergers among newspaper, radio and TV companies. A federal appeals court in Philadelphia last summer blocked the agency from implementing changes to the ownership restrictions. Media companies already have asked the justices to hear the case, and the U.S. solicitor general is expected to make a similar request this month. The justices typically take cases recommended by the Solicitor General. Sources said Supreme Court action would force foes of media mergers to intensify their efforts to get Congress to intervene. “As it becomes increasingly clear that the Supreme Court will take the case, lawmakers are waking up and realizing that legislation is necessary,” said a source close to Rep. Maurice Hinchey, D-N.Y., who backs stronger limits on media mergers. “This has the potential of putting more wind behind the issue, legislatively speaking.” Acting U.S. Solicitor General Paul Clement has until Jan. 31 to decide whether to appeal the 3rd Circuit’s decision to void the FCC rules, which the agency adopted in June 2003. Opponents of media consolidation are meeting with members of the House and Senate to discuss ways to keep existing restrictions in place should the justices take the case and side with the FCC. Such discussions are likely to remain under wraps until the Supreme Court decides whether to accept the case, which is likely to occur in March. In rewriting the media merger regulations, the FCC relaxed restrictions on deals by agreeing to let a company own a maximum of three TV stations in large markets, such as New York or Los Angeles, instead of two. It also permitted some companies to own two TV stations, instead of one, in midsize markets. In addition, a company may own a newspaper and broadcaster in the same market. But in June the 3rd U.S. Circuit Court of Appeals stayed the rules, arguing that the FCC had failed to justify its changes to the media ownership limits. It ordered the agency to reconsider the regulations and barred their implementation. The source close to Rep. Hinchey said lawmakers felt little need to act after the appeals court froze the FCC rules. The Supreme Court could change that by restoring the regulations, the source said. Despite the congressional interest, proposals to roll back FCC ownership rules would have a tough time gaining passage because of opposition from the White House, House GOP leaders and some conservative Republican senators. Hinchey, however, plans to move forward nonetheless. He will re-introduce the Media Ownership Reform Act to reinstate pre-June 2003 media ownership caps. The measure also would increase restrictions on dealmaking, such as limiting the number of radio stations one company could own to 5 percent of the nationwide total. The bill also would reinstate a rule prohibiting one company from owning a TV station and cable system in the same market. Sen. Byron Dorgan, D-N.D., is expected to introduce similar legislation in the Senate. Legislative experts said measures on media ownership are unlikely to pass on their own. But such measures could be attached to a widely supported bill, said Andrew Lipman, telecom partner at law firm Swidler Berlin in Washington. Lawmakers used that tactic in January 2004 when they tacked onto a spending bill a 39 percent cap on the percentage of U.S. households any single television company may serve. The FCC had sought to lift the limit to 45 percent from 35 percent. One possible vehicle this year for media ownership legislation is a bill expected to be introduced by Sen. Sam Brownback, R-Kan., that would substantially increase how much the FCC could fine broadcasters for airing “obscene” and “indecent” material. Legislation reforming the Universal Service Fund, which provides subsidies for phone service in high-cost areas and for high-speed Internet service in schools and libraries, also could be used to advance media ownership limits. Congress this year will also begin rewriting the 1996 Telecommunications Act, a law that contains both telecom and media provisions. This legislation, which is unlikely to pass until 2006, could become a vehicle for media ownership measures. Copyright �2005 TDD, LLC. All rights reserved.

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