Rupert Murdoch deemed 'not fit' to lead media in Britain. What about US?

In order to run a television network, a company needs a license from the Federal Communications Commission (FCC), since the airwaves are still considered a part of the public trust.

News Corporation, the owner of Fox Broadcasting, is now coming under the microscope over whether or not the FCC should look more closely at it in the wake of its phone-hacking scandal in Britain. This week, a British parliamentary committee, in a politically divided decision, said that News Corp. chairman Rupert Murdoch is “not a fit person to exercise the stewardship of a major international company.”

On May 1, Citizens for Responsibility and Ethics in Washington (CREW) asked FCC Chairman Julius Genachowski to immediately revoke the 27 Fox licenses on the grounds that broadcast laws can only be used by people of good “character” who will serve “the public interest” with “candor.” At the same time, a US senator has also written to the judge heading up a parallel judicial investigation in Britain to ask if there is any evidence any News Corp. units violated US laws.

However, communications law experts say it is highly unlikely the FCC will step in unless evidence surfaces that Mr. Murdoch’s communications empire was doing phone hacking in the US.

"Whatever happens in Britain, stays in Britain,” says Reed Hundt, former FCC chairman. “The implications of anything happening in the US to Fox and its TV licenses are between slim to none.”

Mr. Hundt, who was appointed to the FCC by President Clinton, says that all of News Corp.’s indiscretions took place in another country some time ago. “There is no evidence of ongoing activities,” he says.

Dallas communications lawyer Evan Fogelman says that the most that might happen is a “perfunctory” look at the News Corp activities, adding, “I would be surprised if there was a licensing issue in the US."

To generate FCC interest, he says would require some revelations that a US subsidiary of News Corp. was hacking into individuals’ private phones, as was done in Britain.

CREW says it's not impossible that phone hacking took place in the US. According to CREW’s letter to the FCC, there were news reports that News of the World – shuttered by Mr. Murdoch as the scandal broke – tried to hack into the voice mails of 9/11 victims.

In an interview, Melanie Sloan, executive director of CREW, says she understands the FBI is looking into the issue at the request of Rep. Peter King (R) of New York. “It’s not like it’s impossible,” she says, pointing out that News of the World employees hacked into the cellphone of murder victim 13-year-old Milly Dowler in Britain, as well as the phones of British soldiers in Afghanistan.

Ms. Sloan says the inquiry in Britain also found that News Corp. journalists had allegedly bribed police officers to get information. This could be a violation of the Foreign Corrupt Practices Act which bars US companies from bribing foreign officials.

“They likely were violating the Foreign Corrupt Practices Act,” she alleges.

On Wednesday, Sen. Jay Rockefeller (D) of West Virginia sent a letter to Lord Justice Brian Leveson, who is leading the special judicial investigation into phone hacking and other alleged illegal activities by News Corp. in Britain, asking if there is any new information suggesting illegal conduct in the US. Senator Rockefeller is chairman of the Senate Committee on Commerce, Science, and Transportation, which has jurisdiction over communications issues in the US.

Responding to criticism that the watchdog group took on Fox because of its conservative politics, Sloan said: “Those are commentators on the air, and they have different standards,” says Sloan. “This has nothing to do with content, only the character of Rupert and James Murdoch.”

Jack Horner, a spokesman for News Corp., says the company has no comment.

Immediately after the release of the parliamentary committee report on Tuesday, News Corp. said it acknowledged “significant wrongdoing” at News of the World and apologized to people whose privacy had been invaded. The company has been making private financial settlements with some of the victims.

On Wednesday, the News Corp. Board of Directors announced its “full confidence” in Murdoch’s fitness and unanimously issued support for him.

According to a letter sent by Sloan, federal courts have upheld the FCC’s consideration of character in making license determination as reasonable and appropriate. “The FCC may consider an applicant’s past conduct, including non-broadcast conduct, as a guide to how the applicant is likely to operate a broadcast station in the future,” wrote Sloan. “In looking at misconduct, the FCC must consider whether misconduct is isolated or represents a pattern of misbehavior, as well as how recently it occurred.”

The FCC has rarely acted to remove a company’s broadcast license. In the 1980s, the FCC began a long process to strip RKO of its broadcast licenses for lack of candor. In 1987, an administrative law judge ruled that RKO was unfit to hold its licenses because of a long history of deceptive practices. RKO eventually sold its broadcast unit.

“It’s rare for the FCC to act on these cases, but this seems to be the case they should act on,” says Sloan.

An FCC spokesman, Neil Derek Grace, said the agency would have no comment.