Cable-broadcast combos get OK
Appeals court orders regulators to review TV broadcast limit rule.
February 19, 2002: 3:51 p.m. ET
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NEW YORK (CNN/Money) - An appeals court tossed out a rule Tuesday that prohibits a company from owning both a cable and television station in the same market.
The U.S. Court of Appeals for the District of Columbia vacated the rule because it doubted whether the FCC could, on remand, justify retaining it. AOL Time Warner (AOL: down $0.53 to $25.52, Research, Estimates), parent of CNN/Money, had sought relief from the rule.
Separately, the appeals court instructed federal regulators Tuesday to reconsider a decision which prohibits television broadcasters from reaching more than 35 percent of a national audience.
The court said that the Federal Communications Commission's decision to retain the rule was "arbitrary and capricious."
Both Fox Television Stations Inc. and Viacom Inc. had appealed the policy. The appeals court agreed Tuesday with the networks' claim that the FCC had not issued a single reason justifying the 35 percent cap. The court then remanded the case back to the FCC for further consideration and gives regulators a chance to either modify or repeal the rule.
Fox Television, a unit of News Corp., bought Chris-Craft Industries Inc.'s 10 TV stations, which put the television station above the cap at a nearly 41 percent national audience reach.
Viacom (VIA: down $1.17 to $42.38, Research, Estimates), which acquired both CBS and UPN, is also above the limit.
"We have long believed that the national broadcast ownership cap is outdated and no longer serves the public interest," News Corp. (NWS: up $0.06 to $26.27, Research, Estimates) said. "We are pleased the court agreed with our view, and now look forward to a speedy resolution of this issue from the FCC." 
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