LOS ANGELES (Reuters) - Even though shock jock Howard Stern's radio and television show features scantily clad women and raunchy chatter, regulators on Tuesday ruled it a news program, exempting it from equal time rules on political coverage.

The staff decision by the Federal Communications Commission opens the way for the show to book two of the sexier candidates for California governor: Hollywood he-man Arnold Schwarzenegger and porn-star Mary Carey.

A media watchdog group immediately denounced the FCC ruling, calling it a reversal of decades of U.S. media regulation designed to promote fairness in election coverage and an informed public debate on government policy.

Executives at Infinity Broadcasting, which owns Stern's home station WXRK in New York, had been concerned that an appearance by either candidate would have required the show to make time for the more than 130 candidates running in California's hectic Oct. 7 election.

Schwarzenegger, a Republican front-runner who announced his candidacy on "The Tonight Show" with Jay Leno, had been slated to appear on Stern's freewheeling show in late August before an abrupt cancellation due to concerns about running afoul of regulations.

Carey, the star of adult videos such as "Double D Dolls" and "Decadent Divas" and one of several entertainers jostling for attention in the race, had also been slated to appear on the Stern show this week, her campaign manager said.

The equal opportunity provision of the Communications Act of 1934 requires broadcasters to treat political candidates equally when selling or giving away air time, although regulators had made exceptions for news programs such as "Meet the Press" and "Face the Nation."

"We expected the commission to rule favorably and we're pleased with the result," said Dana McClintock, a spokesman for Infinity Broadcasting.

In a written ruling, the FCC's Media Bureau also said that other broadcasters airing programs that qualify as news programming, such as "The Howard Stern Show," would not need to seek its approval before airing interviews with candidates.

The FCC staff said that the Stern show had qualified under the law because it was regularly scheduled and that Infinity had decided which guests to book based on their newsworthiness, without looking to advance any particular candidate.

The Washington, D.C.-based Media Access Project vowed to appeal to the full, five-member commission and file a lawsuit if that failed, although it conceded that neither challenge was likely to succeed before the California vote.

Although the California governor's race is being watched by much of the nation as a kind of political comedy, the FCC decision sets a serious and dangerous precedent that would allow local broadcasters to favor certain candidates or air interviews with only those deemed most entertaining, the head of the watchdog group said.

"You shouldn't let the oddity of the California election eviscerate 75 years of sound legal principles," said Andrew Jay Schwartzman, president of Media Access. "As this applies to local radio and city council elections, it is not funny at all."

Noting that the Communications Act was meant to provide an exemption for "bona fide" news programming, Schwartzman said, "When guests are selected by the size of their bust, it is not bona fide news programming."

Mark Kulkis, campaign manager for Carey, said he hoped to be able to book an appearance on the Stern show in early October. A spokesman for Schwarzenegger was not immediately available for comment.