Report: With Bush Re-elected, Good News for Cross-Ownership

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By: Jennifer Saba

The re-election of President Bush might prove to be a positive sign for those wanting fewer restrictions on media cross-ownership. As it stands now, however, the fate of media ownership is largely in the hands of the courts.

Prudential Securities’ Steven Barlow released a report last week on a possible “time line of events related to media regulatory issues,” based on conversations with regulatory specialists in Washington, D.C., and with newspaper contacts. Barlow put together several scenarios, representing his firm’s best-educated assessments, of what could occur over the next year or so. Most likely the case will hit the Supreme Court, according to the report.

The last official word on cross-ownership came in in June 2004, when the U.S. Court of Appeals for the Third Circuit kicked the Federal Communications Commission’s ownership guidelines back to the agency, stating they were too vague and arbitrary, and thus putting any mergers or acquisitions into a holding pattern.

For the case to be heard by the Supreme Court, several things would have to occur.

First, parties to the suit — the FCC and, likely, the affected media companies — must file a petition for certiorari, asking the Supreme Court to hear the case, by Jan. 3, 2005.

The Supreme Court has six to eight weeks to decide if it will take on the case (between February 2005 and April 2005).

Should the Supreme Court decide to hear the case — which Barlow thinks is likely — parties will briefs in advance of oral arguments, which would be heard sometime next session, starting in October 2005.

“We are estimating a ruling would be delivered by April 2006,” the report predicts.

If the Supreme Court does not agree to hear the case, the move would throw the industry into more uncertainty, the Prudential report says. The Third Circuit’s findings would stand, and the industry would have to firm up its methodology on its guidelines, at the least.

Also something to consider is leadership at the FCC. It’s expected that Michael Powell will serve out his full term as chairman until 2007. The report said it “believes media deregulation stands a better chance under an FCC helmed by Michael Powell.”

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