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Michael Powell, the newly appointed chairman of the Federal Communications Commission, announced March 29 to the House Telecommunications Subcommittee that his agency will soon begin reviewing ownership caps on broadcast television and other forms of media.

Currently, the FCC bans single ownership of TV stations that reach more than 35% of the total population. It also bars single ownership of broadcast stations and newspapers in the same market. Such rules need to be either justified or eliminated, Powell told the panel.

For decades, the FCC has enforced ownership limits to prevent the growth of monopolies in the industry. The rules were softened by the Telecommunications Act of 1996, shepherded by former Vice President Al Gore. What followed was a frenzy of mergers, acquisitions, and consolidations in the broadcast industry.

Powell has indicated he is willing to go further. Both he and his fellow Republican commissioner Harold Furchgott-Roth have publicly questioned the need for caps on station ownership. He has indicated that the present rule preventing one company from owning more than one television network may be revised.

Executives at media conglomerates have argued that the ownership limits are outdated in a world where huge companies like AOL and Time Warner can merge. Powell told committee members that one of his immediate goals is to streamline the FCC's merger review process. That may be necessary in the wake of a March 5 decision by a federal appeals court in Washington that struck down regulations preventing media companies from serving more than 30% of the nation's total cable or satellite television markets. The court's three judges found that such regulations violate the right to free speech guaranteed by the First Amendment to the Constitution. In a related decision, they also ruled against regulations that prevent cable providers from controlling more than 40% of the programming and channels they offer to their subscribers.

"The FCC has not met its burden under the First Amendment and, in part, lacks statutory authority for its actions," the judges wrote of current regulations. The judges have asked the FCC to re-write the regulations, a task Chairman Powell appears eager to tackle. "This decision creates momentum for cable to consolidate further," analyst Scott Cleland told the Wall Street Journal. "The court told Powell to go back to the drawing board, and he will probably come up with a much more liberal set of regulations." Consumers Union lobbyist Gene Kimmelman called the judges' ruling "an enormous loss, and a devastating blow to consumers," who may face rising costs and diminishing choice as a result.