Washington was abuzz Monday (Sept. 23) after the U.S. Court of Appeals for the Third Circuit vacated the FCC's most recent effort to deregulate broadcast ownership, which the FCC under various, usually Republican, chairs, has been trying to do for most of the past two decades.
The court threw out a deregulatory November 2017 order that eliminated the newspaper-broadcast and the radio-TV cross-ownership rules; allows dual station ownership in markets with fewer than eight independent voices after the duopoly, creating an opportunity for ownership of two of the top four stations in a market on a case-by-case basis (the FCC is not calling it a waiver); eliminates attribution of joint sales agreements as ownership; and creates an incubator program.
“Media ownership matters because what we see on our screens says so much about who we are as individuals, as communities, and as a nation," said FCC commissioner Jessica Rosenworcel, who had voted against the deregulatory FCC media ownership order back in 2017. "But over my objection, the FCC has been busy dismantling the values embedded in its ownership policies. Today, the Third Circuit Court of Appeals agreed. The court rightly sent the FCC's handiwork back to the agency because the FCC's analysis was so 'insubstantial.' The FCC shouldn't be in the business of cutting corners when it comes to honoring our long-held values when updating media ownership policies.”
The court not only sent the decision back, but vacated the rule changes, meaning no further consolidation can occur that includes combining radio and TV and broadcast and newspapers, at least or until the FCC has sufficiently gauged those and other changes' impact on gender and racial diversity.
“The Court’s decision should put the brakes on big media consolidation," said Mike Copps, special advisor to Common Cause and Rosenworcel's former boss as chairman of the FCC. "Since the FCC rolled back its rules, several media giants announced plans to merge seeking to take advantage of a wild west. Our democracy suffers when just a few entities own the majority of our media, and the FCC’s media ownership rules are intended to prevent that from happening."
“Today’s ruling is a tremendous victory for the public," said another Jessica, Free Press VP of strategy and senior counsel Jessica J. González. "It admonishes the Trump FCC for its complete failure to consider the impact of its ownership policies on women and people of color. This marks the fourth time this court has rejected the relentless attempts from the FCC and the broadcast industry to weaken media-ownership limits regardless of the damage such drastic deregulation would cause local communities."
Republican FCC commissioner Michael O'Rielly, who voted for the deregulatory order the court rejected, took it out on the court in no uncertain terms, saying the FCC should appeal the decision straight to the Supreme Court (it could also first appeal the three-judge decision to the full court).
“For too long, the U.S. Court of Appeals for the Third Circuit has abused the statute and defied common sense as it pertains to media ownership limitations," he said, echoing his chairman, Ajit Pai. "It is clear that no argument, formula, or well-reasoned reform can satisfy the majority’s wrong-headed demands, guaranteeing the acomplete preservation of the broken and outdated status quo. This is a classic case of judicial activism and legislating from the bench that further justifies the ongoing fight for reforming the judiciary. Despite the market wreaking havoc on traditional business models, we have a court nonetheless trying to preserve 1970s regulations. I implore the Chairman and the Administration to take this decision to the U.S. Supreme Court.”
Broadcasters, who had wanted even more deregulation than the Pai FCC had crafted, were not happy.
"NAB is disappointed with the appellate court’s 2-1 decision vacating the FCC’s measured decision reforming outdated media ownership rules," said spokesman and executive VP Dennis Wharton. "It’s shocking that the same panel of judges has supplanted Congress’s and an expert federal agency’s views with its own for more than 15 years.
“The media marketplace has undergone massive changes over the past few decades, let alone since 2004. We strongly encourage the FCC to appeal this misguided decision so that broadcasters can compete on an even playing field with tech giants and pay TV conglomerates.”
Democratic commissioner Geoffrey Starks was not on the commission when the dereg was approved, but made it clear he would have voted against it.
“Today’s opinion is clear: The FCC’s approach to setting our media ownership rules needs a dramatic overhaul," he said. "We must recommit to our goals of promoting competition, localism, and diversity. We can no longer get by with the bad data and shoddy analysis – problems that have been highlighted far too often by courts and interested observers in recent years. The Court here suggests that ‘new empirical research’ may be required to fully satisfy our rulemaking requirements. I wholeheartedly agree. Needless to say, today’s decision will require us to go back to the drawing board on our underway 2018 Quadrennial Review, which relies upon much of the same analysis as the orders vacated by the Court today.”
Republican commissioner Brendan Carr sounded like he was ready to fight for the dereg.
“Newsrooms are shuttering in communities around the country. Journalists that have worked for decades to bring truth to light are being laid off by the dozen. This decline in local news gathering is part of a broader and disruptive trend in media," he said in a statement. "The Internet and digital platforms fundamentally reshaped the business of collecting and disseminating news and information. Yet, for decades, the FCC took no action—it refused to heed Congress’s call for the Commission to update its media regulations and ensure that they continue to serve the public interest. In the meantime, our outdated rules only made it harder to invest in local news gathering.
"In 2017, the FCC finally acted. We did so by modernizing our media ownership rules and incentivizing greater investment in journalism and additional resources for local reporting in the face of dramatic new competition from digital platforms. The benefits of a modern approach to media regulation are worth fighting for, and I look forward to additional court review or FCC action.”
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