(by John Garziglia) Another court review of the FCC’s radio and television ownership rules which will likely be known as Prometheus IV is coming. Both public interest groups and the National Association of Broadcasters will reportedly be filing appeals by next Monday’s deadline of the FCC’s August 25, 2016 “Second Report and Order” which refused to make substantive broadcast station ownership rule changes.
Every four years, the FCC is required by law in a Quadrennial Review of its radio and television station ownership rules to determine whether the limitations are “necessary in the public interest as a result of competition” and to “repeal or modify any…no longer in the public interest”. As previously reported in “Scant Radio Ownership Rule Changes” , the FCC in August made few rule changes.
The NAB signaled some of its concerns with the FCC’s Second Report and Order in a policy blog titled “Let’s Do the Time Warp Again – The FCC’s Ownership Rules Remain Stuck in 1975”. Writing for the NAB, Senior Deputy General Counsel Jerianne Timmerman signals that TV ownership rules, and in particular the newspaper/broadcast cross ownership rule, will be the NAB’s focus, likening the FCC’s retention of its restrictive rules to an “impressive imitation of an ostrich with its head in the sand”.
The U.S. Court of Appeals for the Third Circuit, rather than the D.C. Circuit, is likely to once again hear the ownership rules appeals although that is not a foregone conclusion. The Third Circuit heard the appeals in Prometheus I , Prometheus II , Prometheus III.
It is worth recalling that several of the petitioners before the Court in Prometheus III argued that because of the FCC’s multi-year delay in fulfilling its statutory responsibilities to determine “whether any of such rules are necessary”, the Court should throw out virtually all of the FCC’s broadcast station ownership rules.
While the Court concluded in Prometheus III that a wholesale elimination of the broadcast ownership rules “would invite chaos”, the Court subtly threatened that if current justifications for broadcast ownership rules along with disposals of unnecessary rules were not quickly adopted by the FCC, the Court in a later decision might consider a broad elimination of radio/TV station ownership restrictions or other extreme measures.
When the Court decision in Prometheus III was released, I speculated in “Court Chides FCC For Not Doing Its Job” that the easy way out for the FCC was to find broad justifications for most of the existing radio and television ownership rules, and then repeal one or two cherry-picked rules over which the broadcasting industry raised the most ruckus and in which public interest groups seemed the least interested (the newspaper/broadcast cross-ownership rule came immediately to mind).
But I warned of another almost equally likely outcome. I noted that the FCC, being a regulatory body that is politically swayed, has a potential to freeze in place, doing nothing, which would continue the multi-year delay which the Court found so objectionable.
If the FCC did nothing, I speculated that the Court may seriously consider its threatened extreme measures, ranging from throwing out all of the FCC’s broadcast station ownership rules (which would send public interest groups into apoplexy) to ruling that the Commission is prohibited from taking any regulatory actions in which the ownership rules are implicated until the FCC takes seriously its Quadrennial Review obligations (which would kill almost all broadcast station transactional activity).
It is worth recalling the dissenting observations in the Second Report and Order of the FCC’s two minority commissioners. FCC Commissioner O’Rielly lamented that “rarely have I seen a proceeding take so long and a document say so much in order to accomplish nothing of value”. Commissioner Pai hoped that “the court that reviews this sad and total abdication of the administrative function finds, once and for all, that our media ownership rules can no longer stay stuck in the 1970s [as they are] as timely as ‘rabbit ears’…”.
The FCC’s broadcast station ownership restrictions for our radio industry can be thought of as radio zoning. While a loosening of FCC radio ownership restrictions as argued for by many broadcasters may allow our radio industry to hold its own against unregulated competitors, a complete lack of ownership limits may have an undesired effect similar to the lack of real estate zoning. Un-zoned strip malls are often community blights.
If the Court was to follow through on its threat to throw out broadcast ownership rules, the result could be equally repugnant as un-zoned strip malls. Virtual radio singularity, a totality of radio consolidation, would break the fragile community bonds and rapport that until now represent the core of radio’s exceptionality. The very nature of our radio industry could be forever and irredeemably altered if all radio ownership restrictions were to be jettisoned due to the FCC’s regulatory stasis. Our radio industry should be careful of what it asks from the Court of Appeals.
