By: Eric A. Sell
News consumption isn’t what it used to be. The business model relied on by local news stations for decades—forged in the days of Cronkite and Murrow—just doesn’t cut it in a world of Facebook and Twitter. And if the industry does not change, local news may soon be a thing of the past.
But a seemingly worthwhile policy objective has “progress” stuck in the mud. And now the United States Supreme Court has to lay down the law.
Earlier this month, the Supreme Court granted cert in National Association of Broadcasters v. Prometheus Radio Project[1]—the latest round of a long-running dispute between the Federal Communications Commission (FCC) and progressive NGOs over women and minority ownership of news outlets.[2] This case could mark the end of a nearly two-decades-long legal fracas overseen by the same three-judge panel in the Third Circuit Court of Appeals (the result of an odd quirk of administrative law), implicating billions of dollars and possibly the survival of local news as we know it.[3]
The Issue
The dispute boils down to this: would repealing a four-decade-old FCC rule—originally designed to prevent Big Media from forming local monopolies that some argue now inhibit adaptation to the internet-age—adversely impact women and minority ownership of media outlets? The current FCC (and Big Media) says it will not, while progressive policy advocates say it will.[4]
How We Got Here
In the mid-1970s, the FCC adopted the Newspaper/Broadcast Cross-Ownership Rule, a restriction on media outlet ownership to prevent monopolization within local media markets.[5] The rule prohibited the ownership of a daily newspaper and full-power broadcast tv station that services the same community.[6] Back then, radio, newsprint, and local-tv broadcasts were effectively the only mediums for news consumption. It was a market landscape nearly unrecognizable today. So when technological trends became too much of an odd fit for the old rules to handle, Congress took action.[7]
Through the Telecommunications Act of 1996, Congress tasked the FCC with repealing or modifying any rule “no longer in the public interest” due to competition in the market.[8] Congress sought to break down dated, artificial barriers to competition. While the Act didn’t directly repeal the Cross-Ownership Rule, one of its central goals was responding to technological advancements in the industry spurred primarily by increased prominence of subscription and internet-based delivery and consumption.[9] To keep the regulations fresh, Congress directed the FCC to review its rules every four years to ensure they reflect current market and technological trends.[10]
For the better part of the last two decades, the FCC has unsuccessfully attempted to scrap the Cross-Ownership rule, arguing it no longer reflects the Telecommunications Act’s mission as envisioned by Congress.[11] But progressive watch-dogs foiled each attempt, arguing that the Commission did not stay true to previously announced policy objectives.[12]
The Legal Question
The core legal issue comes down to whether the FCC’s repeal of the Cross-Ownership Rule is arbitrary and capricious under the Administrative Procedure Act. Specifically, whether the Commission has adequately considered every “important aspect of the problem.”[13]
As part of its regular review in 2002, the FCC included “encouraging diversity in media-outlet ownership” as one of the public interest factors to consider before changing its rules.[14] The 1996 Act made no mention of ownership diversity as a congressional policy objective; nonetheless, the Commission incorporated this consideration into its analysis.[15] In many ways, this opened Pandora’s Box.
Unable to collect accurate, reliable data to flesh out the market potential for women and minority station ownership, the FCC has failed for over two decades to provide a reasoned basis for why repealing the Cross-Ownership Rule will not adversely impact this important policy goal.[16] While there is no evidence that scrapping the market restrictions would discourage women and minority ownership of news stations,[17] because the Commission cannot prove a negative, those opposed to the rule change have had a field day in federal court.
The same divided panel in the Third Circuit has heard every challenge to the FCC’s attempt to roll back the Cross-Ownership Rule.[18] Every time another court gets its hands on a petition for review of the FCC’s rule changes, the same petitioners (Prometheus Radio Project) move to consolidate the case with the original challenge.[19] And like clockwork, they succeed.[20]
The laws Congress passes often are not a model of clarity, leaving agencies to engage in a merry-go-round with persistent litigants that routinely fall on courts to sort out. This high-profile fight over the FCC’s media ownership rules fit this description. And like many banner legal brawls, the Supreme Court has the last word.
Now we will have to wait to see what the word is.
[1]Nat’l Ass’n of Broadcasters v. Prometheus Radio Project, 10-1241 (Cert. Granted, Oct. 2, 2020).
[2] Jill Goldsmith, Supreme Court Agrees To Hear Longstanding FCC Case On Relaxing Media Ownership Rules, Deadline (Oct. 2, 2020), https://deadline.com/2020/10/supreme-court-to-hear-longstanding-fcc-case-on-relaxing-media-ownership-rules-1234590203/.
[3] Id. at 7.
[4] Id. at 7–8.
[5] See 47 C.F.R. § 73.3555.
[6] In re Amendment of Sections 73.34, 73.240, and 73.636 of the Commission’s Rules Relating to Multiple Ownership of Standard, FM, and Television Broadcast Stations, 50 F.C.C.2d 1046, (Docket No. 18110) (1975), as amended upon reconsideration 53 F.C.C.2d 589 (1975), codified in 47 C.F.R. §§ 73.35, 73.240, 73.636 (1976).
[7] Telecommunications Act of 1996, Pub. L. No. 104-104, §202(h), 110 Stat. 56, 111-12 (1996).
[8] Id.
[9] Id.
[10] Id.
[11] Nat’l Ass’n of Broadcasters v. Prometheus Radio Project, 10-1241, 3 (Cert. Granted, Oct. 2, 2020).
[12] See Prometheus Radio Project v. FCC, 652 F.3d 431, 472 (3d Cir. 2011) (“Prometheus II ”) (Scirica, J., dissenting); Prometheus Radio Project v. FCC, 373 F.3d 372, 435 (3d Cir. 2004) (“Prometheus I ”) (Scirica, C.J., dissenting); see also Prometheus Radio Project v. FCC, 824 F.3d 33, 60 (3d Cir. 2016) (“Prometheus III ”) (Scirica, J., dissenting).
[13] Motor Vehicles Manufacturers Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983).
[14] 2002 Biennial Regulatory Review, 18 FCC Rcd. 13620, 13627–28, 13634 (2003) (“2002 Review”).
[15] Nat’l Ass’n of Broadcasters v. Prometheus Radio Project, 10-1241, 14 (Cert. Granted, Oct. 2, 2020).
[16] See id.
[17] See id. at 4.
[18] See Prometheus Radio Project v. FCC, 652 F.3d 431, 472 (3d Cir. 2011) (“Prometheus II ”) (Scirica, J., dissenting); Prometheus Radio Project v. FCC, 373 F.3d 372, 435 (3d Cir. 2004) (“Prometheus I ”) (Scirica, C.J., dissenting); see also Prometheus Radio Project v. FCC, 824 F.3d 33, 60 (3d Cir. 2016) (“Prometheus III ”) (Scirica, J., dissenting).
[19] Id.
[20] Id.
