Third Circuit Rejects FCC Appeal Of Media Ownership Decision

Story by Inside Radio

The federal appeals court in Philadelphia has rejected a request for the entire panel to review a decision issued two months ago by a three-judge panel, which blocked several changes to media ownership regulations from remaining on the books. The Federal Communications Commission had sought the review, along with the National Association of Broadcasters and several companies that supported the revisions. They now have the option of filing an appeal with the Supreme Court.

In a brief notice released late Wednesday, the Third Circuit said that the three judges that took part in the original decision didn’t request the rehearing and a majority of judges who sit on the court didn’t vote in favor of a review. “The petitions for rehearing,” it said, “are denied.”

In a 2-1 decision issued in September, the Third Circuit struck down changes adopted by the Commission in November 2017 that, among other things, abolished the newspaper-broadcast and TV-radio cross-ownership bans and relaxed several television ownership restrictions, including allowing the same company to own two of the big network affiliates in a single market. The controversial decision also blocked the launch of an incubator program designed to bring more women and minorities into radio ownership.

The Third Circuit said the FCC’s analysis, which led to the regulatory rollback, was “so insubstantial” that it failed to provide a “reliable foundation” to the court supporting the conclusions. The court told the FCC that it needed to determine what impact the rule changes it proposed would have either through new empirical research or an in-depth theoretical analysis.

The FCC appealed the decision earlier this month, saying the court had overstepped its bounds and the job of regulating radio and television ownership belongs to the agency under federal law. In its petition, the FCC said the court has prevented the agency from fulfilling its legal obligation to conduct a quadrennial review of which media ownership limits are no longer in the public interest. “Through its several remands, the panel has effectively replaced the Commission’s broad-ranging public interest analysis with a narrow inquiry into the effect of the FCC’s rules on female and minority ownership,” the FCC told the court in an 18-page filing. It also argued that the appeals court failed to uphold guidelines created by earlier Supreme Court decisions that said federal agencies don’t need to generate original data or studies before changing a policy.

The appeal effort was joined by the National Association of Broadcasters and five radio and television companies, including Bonneville, Connoisseur Media, Nexstar, News Corp., and Sinclair Broadcast Group. In a joint petition, broadcasters said the court decision was “vastly overbroad and unjustified” since it vacated the FCC’s changes in their entirety, even though the judges said there was only one flaw in the agency analysis focused on minority and female ownership. Broadcasters said that has “nothing to do” with the overall changes, much less the creation of a radio incubator program.

Supreme Court Appeal Possible

The decision not to rehear the case at the appellate level was welcomed by those who had gone to court seeking to block the FCC from relaxing some of its media ownership regulations. Jessica González, an attorney with Free Press, called it a “welcome setback” for broadcast-industry efforts to pave a path to greater media consolidation. “FCC leadership has linked arms with the broadcast lobby to this end, and against any accountability for the shameful lack of ownership diversity in U.S. media,” she said.

The FCC and NAB have not yet indicated whether they intend to take their fight to the Supreme Court. But at the Commission there has been a growing sentiment that it may be needed, especially after repeatedly having its rule changes struck down, regardless of whether passed under a Democrat or Republican administration.

González thinks the FCC and broadcasters shouldn’t bother with a Supreme Court challenge. “The FCC needs to take the hint: Instead of wasting everyone’s time, it must undertake the court’s mandate in earnest,” she said.