Analysis: Supreme Court Rules in Favor of FCC, Broadcasters and Newspaper Publishers

In a 9-0 decision that represents a victory for broadcasters and newspaper publishers, the Supreme Court ruled that the FCC’s 2017 decision relaxing and eliminating certain multiple ownership rules was reasonable and properly based on the record in the proceeding. In particular, the FCC decision had eliminated the newspaper-broadcast and radio-television cross ownership rules and relaxed the local television ownership rule to permit an entity to own two television stations in any sized market as long as the stations are not both Top-4 network affiliates. The FCC’s 2017 decision also determined that joint sales agreements between television stations operating in the same market would not be considered attributable.

The FCC has tried to modify and relax certain ownership rules for two decades. However, its efforts have been blocked repeatedly by the same three judge panel of the Third Circuit Court of Appeals, which has insisted on maintaining jurisdiction over appeals of the FCC’s decisions with respect to the multiple ownership rules.

In the 2017 decision – which was issued near the beginning of Chairman Pai’s tenure – the FCC emphasized that dramatic technological advances which occurred in the decades since the rules at issue were adopted have transformed how Americans obtain news and entertainment. The FCC concluded that, because of these changes, the three rules no longer served the agency’s public interest goals of promoting competition, localism, and viewpoint diversity. The FCC also found that repealing or modifying the rules at issue was not likely to harm minority and female ownership. Several public interest groups appealed the decision to the Third Circuit. The Third Circuit vacated the FCC’s decision, which resulted in the rules that had been eliminated or modified being reinstated. Although the Third Circuit did not dispute the FCC’s conclusion that the three rules at issue no longer promoted competition, localism, and viewpoint diversity, the Court concluded that the record did not support the FCC’s conclusion that the changes would have a minimal effect on minority and female ownership. The FCC and a group of intervenors, including NAB, News Media Alliance and broadcast companies and newspaper publishers, appealed to the Supreme Court.

The Court concluded that the FCC’s determinations were reasonable and that its decision was entirely consistent with procedural requirements expert agencies are required to follow. According to the Court, the FCC considered the evidence from the record on competition, localism, viewpoint diversity, and minority and female ownership, and reasonably determined that the three rules no longer served the public interest.

The Court did not specifically address the Third Circuit’s 17-year retention of jurisdiction over the FCC’s multiple ownership rule decisions. However, because the Court reversed the decision but did not send it back to the Third Circuit, it should be easier for parties to request that a different court consider appeals of future FCC decisions relating to the multiple ownership rules.

If you have any questions about the Supreme Court's ruling, please contact any attorney in our office.

Categories: Broadcast and Media

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