FCC, Broadcasters Get Top Court Hearing on Ownership Rules
FCC, Broadcasters Get Top Court Hearing on Easing Ownership Caps
(Bloomberg) -- The Supreme Court will consider letting the Federal Communications Commission ease limits on the ownership of local media outlets, agreeing to hear appeals from the broadcast industry and President Donald Trump’s administration in a fight that dates back almost two decades.
The justices will review a federal appeals court decision that blocked the changes and told the FCC to study the impact they would have on female and minority ownership in the media industry. Relaxing the rules could mean a wave of consolidation affecting TV stations nationwide.
The development is “great news,” said FCC Chairman Ajit Pai, who was chosen by Trump to lead the agency.
“Hope #SCOTUS affirms authority Congress gave us to amend ownership rules in light of a media marketplace that’s changed dramatically,” Pai said in a tweet, using a common abbreviation for the Supreme Court..
Critics of media consolidation expressed dismay.
The rules at issue “preserve whatever diversity of voices is left in local TV and radio,” said Gigi Sohn, a former Democratic FCC aide. “Any further watering down of the rules would make it worse.”
The FCC has been trying since 2002 to loosen its ownership restrictions, which affect broadcast stations and newspapers. Each time, the same three-judge panel of the Philadelphia-based 3rd U.S. Circuit Court of Appeals rejected key aspects of the changes. The Trump administration and companies, including News Corp. and Sinclair Broadcast Group Inc., say the rules are now badly outdated.
The appeals court “for more than 15 years has frozen the rules in place,” the companies argued in their appeal. “As matters now stand, the broadcast and newspaper industries -- unlike their marketplace competitors -- are subject to ownership rules adopted as long ago as the 1970s.”
The company group also includes the National Association of Broadcasters, Fox Corp. and Nexstar Media Group Inc.
Advocacy organizations led by Prometheus Radio Project are fighting the FCC changes. They called the 3rd Circuit ruling an “unremarkable” decision that merely required the commission to explain how the changes would affect its longstanding goal of increasing ownership diversity.
Ownership Diversity
The FCC may not “expressly embrace ownership diversity as an important policy goal yet fail to reasonably consider how its repeal of major broadcast-ownership restrictions would affect that goal,” argued the group, which includes Common Cause and the National Organization for Women.
The Trump administration said the 3rd Circuit improperly elevated gender and racial diversity above other important FCC considerations.
“The court effectively displaced the commission’s traditional approach to regulating in the public interest, which emphasizes competition and viewpoint diversity while also taking into account a broad range of additional considerations, including localism and other types of diversity,” the administration argued.
The FCC’s changes would eliminate a rule that had barred companies from owning two television stations in a market that didn’t have at least eight independently owned stations. The commission is also seeking to allow companies to own two of the top four stations in some markets.
In addition, the FCC would lift separate bans on ownership of both a daily print newspaper and a broadcast station in the same coverage area, and on ownership of both a radio and television station in a single market.
Under their usual scheduling practices, the justices will hear arguments early next year and rule by June.
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