Analysis: Murdoch's Fox TV licenses seen surviving UK scandal

Mon May 7, 2012 5:54pm EDT
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By Jasmin Melvin and Yinka Adegoke

(Reuters) - Rupert Murdoch faces limited risk of losing News Corp's broadcast permits in America, even amid screaming headlines in Britain that the media mogul is unfit to run a major company.

The U.S. Federal Communications Commission has the power to deny a license renewal if it finds the license is not being used by people of good "character" who will serve "the public interest."

But former FCC officials and other experts say the agency has been loath to use that power in the past, and is highly unlikely to challenge News Corp's 27 Fox U.S. television licenses despite calls from a Washington-based ethics watchdog to do so.

"As a result of Reagan-era deregulation and broadcaster-friendly legislation in 1996, it is very, very hard for the FCC to take away a license," said communications lawyer Andrew Schwartzman.

Last week, a British parliamentary report scolded News Corp's British newspaper arm for misleading a five-year investigation into the hacking of the phones of politicians, murder victims, soldiers and celebrities, and said Murdoch was "not a fit person" to oversee a major international company.

The report dropped a heavy hint to British communications regulator Ofcom, which is investigating whether satellite TV provider BSkyB is a "fit and proper" broadcaster. News Corp has a 39 percent ownership stake in BSkyB.

In the United States, the FCC can refuse to renew the license of a U.S. TV station if it has evidence of misconduct involving that particular station.

"The only other way a license can be lifted is by revocation, which is a years-long process in which the FCC has an extremely high burden of proof," said Schwartzman, long-time policy director of the recently closed public interest law firm Media Access Project.   Continued...

A still image from broadcast footage shows News Corporation Chief Executive and Chairman, Rupert Murdoch, speaking at the Leveson Inquiry into the culture, practices and ethics of the media, at the High Court in London April 26, 2012. REUTERS/POOL via Reuters TV