FCC Ownership Caps

A coalition of public advocate groups is pushing back against the Federal Communications Commission’s request that a federal appeals court reject legal challenges to changes approved to the media ownership rules.

The FCC last month told the Third Circuit Court of Appeals there’s no reason to reverse modernization steps it has already approved, calling the advocate groups’ challenge “meritless” and urging its petitions to be denied. “The Commission concluded that its reforms would provide broadcasters and local newspapers with greater opportunities to compete in today’s media marketplace and invest in new sources of local news and public interest programming,” it said in a brief filed in Philadelphia.

Prometheus Radio Project, Free Press, and several of their allies, on Friday filed a reply brief challenging the arguments presented by the FCC, arguing the agency relied upon an “insubstantial record” to justify its media ownership rule revisions. “The FCC acted despite the fact that it had extraordinarily flawed race data and no gender data at all,” the coalition told the court.

The groups contend the FCC has failed to meet its statutory obligation to promote race and gender diversity in broadcast-media ownership. It says that’s backed up by data showing women and minorities are “woefully underrepresented” among broadcast-license holders. “Rather than fixing and analyzing its ownership data as promised, the FCC gave up on race/gender diversity altogether. In fact, the FCC repeatedly justifies using flawed data because it is the only data available, ignoring that curing the defect is within its own control,” the coalition said. In its brief, the coalition also accuses the FCC of trying to “dodge” earlier court rulings by saying its rule changes aren’t designed to help women and minorities, but rather boost new entrants and small businesses in general. It also says the radio-only incubator program was based on “flawed data” and says because it doesn’t extend to television it won’t promote race and gender diversity.

The coalition of public interest groups, led by Prometheus Radio Project and Free Press, has asked a federal appeals court to review a Nov. 2017 decision by the Commission which repealed the 42 year-old newspaper-broadcast cross-ownership ban as well as the radio-television cross-ownership ban. The FCC order also delivered a number of ownership rule changes to the television industry, including eliminating the so-called eight voices test and overturning a decision to make TV joint sales agreements attributable toward local ownership caps. Unhappy with the steps taken, the groups subsequently filed suit in March 2018 challenging the decisions.

Free Press Policy Manager Dana Floberg says the FCC has repeatedly failed to win the court’s approval for rule changes that would rollback limits on media consolidation without first studying the impact on women and people of color. “The FCC has a statutory obligation to promote competition, diversity and localism in media ownership,” Floberg says. “Not only has the agency failed to meet this obligation, but it has also failed to adequately measure diversity in ownership among its license holders.”

Senior officials inside the FCC have previously told Inside Radio the Commission is unlikely to take any votes on the 2018 quadrennial review until the appeals court rules one way or the other on the lawsuits related to its previous reviews of media ownership rules. Officials say that would allow the Commission to adjust its decision-making to whatever the courts decide. That could help ensure the next round of decision-making doesn’t end up in a similar legal limbo.

The open-ended nature of the 2018 quadrennial rulemaking will be helpful in that goal, since it doesn’t draw any tentative conclusions or offer any proposals. Instead, it simply asks dozens of questions about the current media marketplace.

The radio industry may not be speaking with a unanimous voice for what it would like in the next quadrennial review, but during a meeting with FCC chair Ajit Pai last week officials from the National Association of Broadcasters focused on small market reforms. In a disclosure filing about the meeting, the NAB said it told Pai that those stations in small and medium markets and AM stations in markets of all sizes especially need relief from what it believes are outdated ownership rules. “It is imperative that the Commission modernize the radio and television ownership rules to not only allow broadcasters to survive but also thrive,” the NAB said.