Section 308(b) of the Communications Act includes "character" as one of the elements the Federal Communications Commission (FCC) is to use to determine the granting and maintenance of licenses.
The continuing and escalating scandals in the United Kingdom relating to Murdoch-owned and -operated news gathering organizations raise serious questions about whether New Corp employees are fit to run a company that owns and operates cable stations under US law.
The latest shoe to drop in the News Corp scandal is the arrest of Rupert Murdoch's right-hand "person," Rebekah Brooks, in connection with allegations of corruption and phone-hacking.
The Federal Communications Commission (FCC) has struggled with issues that weigh on character, especially how close they must be to what the applicant (for a license) will be doing. But, there is no such questionable nexus between News Corps activities -- phone-hacking, for which they have already made a number of civil settlements, and corruption -- and the character necessary to run a cable station.
Does News Corp (or the Murdochs) deserve an innocent-until-proven-guilty presumption? We already know by admissions and the settlements and police that have lost their jobs that these activities occurred, and we know what they all say about the issue of character. We do not yet know the whole story -- but, we do have enough information already to judge that News Corp fails the character test.
Nor does it matter that these violations occurred in the UK. Indeed, if such activities were, somehow, legal in the UK, the Murdochs might have been able to argue that News Corp employees broke no laws and thus ought not to be held to the same standards in the US. That would have been weak, but it probably would have satisfied a Commission that errs on the side of leniency because they have struggled with how to handle matters of character.
No such arguments are available to the Murdochs. They broke British law, and those activities would also have violated American law. Moreover, these violations go right to the heart of communications for which the licenses are granted. Had these been isolated incidents by junior employees, News Corp could have owned up to the problem and taken corrective action. But, that is not what happened.
Since we now know that corporations are people (ref. the US Supreme Court and presidential candidate Mitt Romney), News Corp itself has shown itself to lack the character to maintain its FCC license. Or, to pierce the corporate veil, the Murdochs and the other current executives and Board members are not qualified for lack of requisite character to run a corporation that runs a cable station. Perhaps News Corp itself could maintain its licenses if it does a complete housecleaning of those who manage it.
Neither outcome would allow the Murdochs to continue in their current roles.