SCOTUS Supports Broadcasters – Overturns Appeals Court’s Decision Preventing Broadcast Ownership Deregulation

Last week the U.S. Supreme Court issued a rare unanimous decision regarding the FCC’s broadcast ownership rules.  SCOTUS reversed the judgment of the U.S. Third Circuit Court of Appeals, which prevented the FCC from relaxing several ownership rules for 17 years.

At issue were the FCC rules restricting broadcast newspaper cross-ownership and radio TV cross ownership as well as a modification to the local TV ownership rules.  The case did not involve the local radio ownership rules or the national TV ownership rule.

This is a significant win for the NAB and the Commission.  Viewed in context, the unanimous decision is a slap at the U.S. Third Circuit that refused to move forward for more than a decade.  Nonetheless, the decision may not result in wholesale deregulation of broadcasting; especially further relaxing of the radio ownership rules.

First, the primary litigant in the case, Prometheus, argued that the FCC did not properly consider the impact of deregulation on broadcast ownership by minorities and women.  Citing to the record, the Court’s decision held that the FCC did properly analyze the impact of its decision on ownership by minorities and women.  With the exception of the concurring opinion by Justice Thomas, the majority did not hold that the FCC was precluded from considering these elements going forward.  It simply said that the FCC’s analysis eliminating and modifying the rules in question was correct.

Second, the court made it clear that the case was specific to the three rules mentioned above. The broadcast/newspaper cross ownership and the TV/radio cross ownership rules are now eliminated.  The local TV ownership rule is now modified. To reinstate these rules, the FCC would be required to develop a new record and justification for the rules.  While not impossible, it would be extremely difficult for the FCC to reinstate these rules.  We doubt they will return.

Third, the Supreme Court did not pass judgment on the validity of the FCC’s remaining ownership rules.  In fact, it stated specifically that the FCC’s other rules, such as the local radio ownership rule and the national TV ownership rules were not before the court.  The decision certainly does not require the FCC to eliminate these other ownership rules.

Fourth, there is no indication that a Democratically controlled commission wants to relax or eliminate its remaining broadcast ownership rules.  At the present time, there are two Republican and two Democrats on the FCC.  Given the current composition of the FCC, it cannot move forward with major, controversial policy decisions.  Once an additional Democrat is appointed, it is unlikely that broadcast ownership deregulation will be on the top of the agenda.

This is a major victory for those seeking to relax the broadcast ownership rules.  At the very least, it eliminates the U.S. Third Circuit’s choke hold over reviewing FCC ownership rules.  It does support the FCC’s decision to eliminate or modify the three rules mentioned above. Moreover, the decision reinforces the idea that the courts should give the FCC due deference when reviewing its decisions.

Nonetheless, we do not expect this decision to open the flood gates with respect to FCC ownership deregulation. As FCC Commissioner Starks noted in a press statement.

“The Supreme Court spoke clearly, coming out strongly in favor of agency deference under the Administrative Procedure Act.  We can now move forward confidently to address media ownership in future Quadrennial Reviews in a manner that is data-driven and otherwise fully consistent with our duty to promote and ensure competition, localism, and diversity in the public interest.  And to be clear, nothing in the Court’s holding upsets our long-established ruling that media ownership decisions must take into account how diversity will be affected.”

A special thank you to the NAB’s legal team!  NAB was a full party to this litigation, filing a brief and participating in the oral argument. There is no doubt that the NAB’s participation helped shape this important decision.

To see a good article on the subject in Bloomberg Law click HERE.  


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