On Thursday, The FCC filed a petition in the U.S. Court of Appeals for the Third Circuit seeking a review of its recent decision vacating the FCC’s modernized media ownership rules.
An FCC spokesperson said, “Over the last 15 years, while the media marketplace has changed dramatically, the same Third Circuit panel has repeatedly prevented the FCC from modernizing its ownership rules, including the newspaper-broadcast cross-ownership rule that dates back to 1975. We hope that the full Third Circuit will agree to hear this case and finally allow the FCC to update these rules for the digital age.”
For an in-depth analysis on what thismeans for you we turned to Broadcast Attorney John Garziglia.
(By John Garziglia) The FCC on November 7 filed a Petition for Rehearing En Banc of the recent 3rd Circuit’s decision in Prometheus IV striking down the FCC’s Quadrennial Review Order on Reconsideration, adopted in 2017.
The 3rd Circuit Court of Appeals decision in Prometheus IV overturned the FCC’s elimination of the newspaper/broadcast and television/radio cross-ownership rules, rescission of the television “eight-voices” test for mergers, and establishment of a broadcast station incubator program. In striking down the rule changes, the 3rd Circuit held that the FCC had an obligation “to adequately consider the effect its 2017 rules would have on ownership of broadcast media by women and racial minorities.”
The FCC, in its Petition for Rehearing, argues that the 3rd Circuit “effectively replaced the Commission’s broad-ranging public interest analysis (which is focused by statute on competition but historically has included considerations of localism and diversity) with a narrow inquiry into the effect of the FCC’s rules on female and minority ownership.” The FCC complains that it is “[f]aced with daunting instructions on remand – to collect decades-old data that may not exist, and to consider unspecified alternatives, all to satisfy legal standards that are unmoored [from the law] – the Commission has been set up for failure.”
Indeed, failure is what the FCC has experienced before the same three 3rd Circuit judges for the past fifteen years. The FCC argues that, if the 3rd Circuit’s decision is not overturned, it could broadly change administrative law regarding agency deference to make and change its own rules.
If the full 3rd Circuit agrees to hear the FCC’s appeal en banc, there will be a new briefing schedule, new oral arguments and another significant wait for a revised decision. If, however, the full 3rd Circuit refuses an en banc hearing, then the only avenues remaining for the FCC are a writ of certiorari to the U.S. Supreme Court with an unlikely chance for success, or going back to the drawing board and giving the 2017 rule changes another try.
The FCC’s filing for an en banc review in Prometheus IV impacts radio broadcasters by probably further delaying the FCC’s 2018 Quadrennial Review. Among the changes being considered by the FCC in the 2018 Quadrennial review are the NAB’s proposed elimination of radio ownership restrictions in all markets except for the top 75, ownership of up to eight FM radio stations in each of the top 75 radio markets (with two additional stations allowed if there is participation in the Commission’s incubator program), and an unlimited ownership of AM stations in any market. Without FCC relief from the 3rd Circuit’s requirement that it must show substantive data on changes to minority and female ownership to support its 2017 rule relaxations, the FCC is equally unlikely to obtain such data supporting any relaxation of the radio ownership rules.
A 3rd Circuit en banc review of the Prometheus IV decision increases the chances that the eventual decision will give the FCC more leeway to fashion its broadcast ownership rules based upon competition. A 3rd Circuit refusal to review en banc, however, may mean we will see a Prometheus V, a Prometheus VI and so on, with the FCC stuck in a regulatory abyss, required to review its ownership rules every four years but unable to appreciably change them.
John Garziglia is a communications attorney at Womble Bond Dickinson and can be reached at (202) 857-4455 or John.Garziglia@wbd-us.com