FCC Challenges Court's Broadcast Dereg Smackdown

Said panel got it wrong and full court needs to step in
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The FCC is seeking full-court review of a three-judge panel decision vacating its broadcast media ownership deregulation decision.

The Commission filed a petition for review Thursday (Nov. 7), arguing that the three-judge panel decision of appeals court imposed burdens beyond those allowed in the Administrative Procedure Act, second-guessed the FCC to the point that it undermined congressional intent, and breaks with higher-court and sister-court precedents.

Related: Third Circuit Again Hears Ownership Dereg Challenge

In September, that panel of the U.S. Court of Appeals for the Third Circuit vacated most of the FCC's deregulatory order, saying the agency "did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities."

The court was hearing an appeal by Prometheus et al. of the FCC's fall 2017 decision under chairman Ajit Pai to eliminate the newspaper-broadcast and the radio-TV cross-ownership rules; allow dual station ownership in markets with fewer than eight independent voices after that duopoly created an opportunity for ownership of two of the top four stations in a market on a case-by-case basis (the FCC was not calling it a waiver); and eliminate attribution of joint sales agreements as ownership; and created a diversity incubator program." As well as create some diversity mechanisms to address the court's long-standing concern.

Pai signaled back in September that the FCC would challenge the decision and made it clear what he thought of the court's persistent remands of FCC deregulatory decisions.

“For more than twenty years, Congress has instructed the Federal Communications Commission to review its media ownership regulations and revise or repeal those rules that are no longer necessary," said Pai at the time. "But for the last fifteen years, a majority of the same Third Circuit panel has taken that authority for themselves, blocking any attempt to modernize these regulations to match the obvious realities of the modern media marketplace. It’s become quite clear that there is no evidence or reasoning—newspapers going out of business, broadcast radio struggling, broadcast TV facing stiffer competition than ever—that will persuade them to change their minds. We intend to seek further review of today's decision..."

An FCC spokesperson was echoing that Thursday (Nov. 7), saying “Over the last 15 years, while the media marketplace has changed dramatically, the same Third Circuit panel has repeatedly prevented the FCC from modernizing its ownership rules, including the newspaper-broadcast cross-ownership rule that dates back to 1975. We hope that the full Third Circuit will agree to hear this case and finally allow the FCC to update these rules for the digital age.”

“Preventing local newspapers and broadcasters from achieving natural economies of scale in the face of new competition does not empower anyone," said Competitive Enterprise Institute research analyst and dereg fan Patrick Hedger. "It chokes off vital resources for existing voices and eliminates the opportunity for future ones to enter the marketplace. The law and the economics remain firmly on the side of the FCC in this case. We’re delighted the Commission is continuing the fight to keep newspapers and broadcasters competitive amidst the media market upheaval brought on by the Internet. What’s more, they’re doing it not through wasteful subsidies or regulatory protectionism, but liberalization to the letter of Congress’s intent.”

“For 15 years two judges on the Third Circuit have had a vexing veto over sensible media regulation modernization," said former Republican FCC Commissioner Robert McDowell. "It’s as if the Internet does not exist in Philadelphia. The Pai era order was thorough to the point of overkill. I think that the full Third Circuit will clearly see that the FCC’s 2017 order was well-reasoned, thoroughly explained and supported by the great weight of the evidence. It is time to bring an end to this bizarre vicious cycle that is completely out-of-touch with market realities.”