FCC 375

It may all come down to whether the Federal Communications Commission had enough data about the race and gender of who owns radio and television stations as a federal appeals court decides whether to uphold changes the FCC made to media ownership rules. A coalition of public interest groups, led by Prometheus Radio Project and Free Press, has asked the Third Circuit Court of Appeals in Philadelphia to strike down a Nov. 2017 decision by the Commission in favor of repealing 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.

In court Tuesday, attorney Cheryl Leanza argued the FCC has failed to meet its statutory obligation to promote gender and race diversity in ownership of broadcast stations. “The FCC needs to have sufficient data,” she said, arguing the result of the “flawed analysis” was bad decisions. “The rules should be vacated as a result,” Leanza said.

Courthouse News reports her argument seemed to find some support from two of the three judges on the appellate panel. And when pressed, FCC attorney Jacob Lewis told the court the Commission did consider the impact on women and minorities as it adopted its media rule changes. “Minority and female ownership is certainly an aspect of public interest but it is only one aspect of public interest,” he told the judges. Lewis also told the court the agency took steps to ensure the changes it adopted didn’t adversely impact competition, localism or diversity in broadcasting.

But Judge Thomas Ambro fired back, “Any data on gender would be better than zero.”

The public interest groups filed suit in March 2018 challenging the decisions made by the Commission as it wrapped up the 2016 quadrennial review.

The groups argued that the FCC must collect accurate data about ownership among women and people of color. Without that information, they say it’s impossible for the agency to make any claims about the impact its deregulatory agenda would have on ownership diversity. Free Press Policy Manager Dana Floberg noted in past appeals the Third Circuit has sided with their viewpoint, telling the FCC that it can’t allow further media consolidation without first examining how it would impact ownership opportunities for women and people of color.

“We’re suing the FCC for turning its back on this core principle, placing station ownership in the hands of just a few white men and denying millions of people the broadcast media their communities deserve,” Floberg said. She also accusing the FCC of ignoring Congress, which adopted broadcast ownership limits in order to promote a range of choices among local stations.

The scope of the Third Circuit fight expanded in October 2018 to also include the new radio incubator program. The Multicultural Media, Telecom and Internet Council (MMTC) and National Association of Black Owned Broadcasters (NABOB) appealed the incubator rules adopted. MMTC and NABOB have asked the court to review the mechanism dictating how established broadcasters can use the waivers they receive as a reward for participating in the incubator program. The two organizations say the market comparability standard adopted by the FCC is “arbitrary and capricious” and the decision was “an abuse of discretion” not supported by the law.

Unwilling to wait for how the court rules on that part of the legal challenge, the FCC announced this week it would begin accepting applications from broadcasters interested in taking part in the incubator program.

The Third Circuit gave no hint how soon it will issue a ruling on the latest challenge. Senior FCC officials have told Inside Radio the Commission is unlikely to take any votes on the latest quadrennial review until the appeals court rules on the challenges. Officials say the goal would be for the Commission to use the next court decision to help guide the latest quadrennial proposals. The hope is that would help the FCC when it inevitably ends up back in court defending what are sure to be future legal challenges to the next round of decision-making.