WASHINGTON - The Bush administration has decided against appealing to the Supreme Court a ruling that prevents media conglomerates from expanding their reach in U.S. media markets, U.S. officials said on Thursday.

Even though the Federal Communications Commission had sought to relax the limits, the administration feared an appeal could risk a decision that would wipe all its media ownership limits off the books, one FCC official said, declining identification.

The FCC in 2003 eased media ownership restrictions, lifting a ban on companies in medium and large markets allowing them to own a newspaper and some television stations and radio outlets in a single market. The agency also agreed to let broadcasters own two or three TV stations in the bigger media markets.

The U.S. Court of Appeals for the Third Circuit decided last year that the agency's justification for the new limits was insufficient and put the rules on hold until the FCC addressed the court's concerns.

"We will not be petitioning the Supreme Court for certiorari (review) in the FCC case," said John Nowacki, a spokesman for the Justice Department which represents the administration and government agencies in cases at the court.

Tribune Co., which owns television stations and newspapers and hopes to acquire more, will file its own appeal, as will the National Association of Broadcasters, which represents television affiliates and radio stations.

"The 2003 FCC decision clearly established relief in major markets," said Shaun Sheehan, a lobbyist for Tribune. "The Third Circuit is holding the industry hostage. We feel compelled to seek review by the Supreme Court."

Tribune wants the ban lifted on cross-ownership of newspapers, television stations and radio outlets in a market.

Typically, if the administration appeals a decision, that boosts the chances the Supreme Court would hear the arguments.

If the high court seeks the Bush administration's opinion on the expected appeal by media companies, the official said it would oppose the constitutional challenges but may seek review of the merits of the appeals court decision.

But if justices turn down the appeal, then the FCC would likely begin reworking its rules to address the Third Circuit's concerns.

FCC Chairman Michael Powell announced last week he would step down as chairman in March and told Reuters that one of his regrets was not finishing the media rules before leaving.

He and media companies had argued that the proliferation of new sources of entertainment and information, such as the Internet, cable television and satellite services, justified relaxing the limits.

Lawmakers, consumer advocates and political groups have objected to looser limits, arguing that diverse viewpoints would be harder to voice, investigative reporting would suffer and local news coverage would dwindle.

"The commission should seize this second chance to do the right thing," said FCC commissioners Jonathan Adelstein and Michael Copps, two Democrats who opposed easing the limits.

They said the agency should launch a new review, get input from public hearings and complete independent research studies on concentration in media markets.

The FCC also had tried to permit television networks to own more stations, collectively reaching 45 percent of the national audience, up from 35 percent. But Congress overruled the FCC and set it permanently at 39 percent.

Both Viacom Inc.'s CBS network and News Corp.'s Fox network are close to that limit.

© Reuters 2005

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