High Court Probes Regulatory Shakeup in Evolving Media Landscape

The Federal Communications Commission caught heat for leaving women and minority media ownership out of the equation when it took aim at decades-old cross-ownership rules.

(AP Photo/Andrew Harnik, File)

WASHINGTON (CN) — As the Supreme Court closed in finally on a deregulation effort dating back to the late ’90s, a lawyer for the government told the justices Tuesday that a media cross-ownership ban was meant for another era.

The Federal Communications Commission instituted the ban back in the 1970s, said Deputy U.S. Solicitor General Malcolm Stewart, with radio and television cross-ownership in mind.

“The rules were justified by considerations of viewpoint diversity,” Stewart said, “but what the commission meant was, it’s better to have more independent outlets in the community.”

For today’s media, however, Stewart emphasized that the rule “didn’t serve the public interest.”

“The commission explained that the profusion of new media outlets, particularly through cable and the internet, alleviated the viewpoint diversity concerns that had originally justified the restrictions,” he said.

Stewart, along with the National Association of Broadcasters, seek a high court reversal after the Third Circuit found that the FCC eliminated the rule without considering what the change would mean for broadcast ownership by women and people of color.

Opposing the rule change, Ruthanne Deutsch for the Prometheus Radio Project told the justices Tuesday that the case is “about whether the agency engaged in reasoned decision making.”

“The problem here is that the reconsideration order fails this basic requirement of administrative accountability based on zero information about female ownership, and then nonsensical analysis of badly flawed data on minority ownership,” Deutsch said.

But a lawyer for the broadcasters told the Supreme Court that changes were necessary to promote competition with largely unregulated social media networks.

“The Third Circuit has no basis, other than its own policy preferences, to make that [considering female and minority ownership] a mandatory much less controlling factor in all reviews,” said Helgi Walker, an attorney for Gibson Dunn representing the National Association of Broadcasters.

When Chief Justice John Roberts asked Walker whether she was saying it would be arbitrary and capricious to consider the impact the relaxations had on diversity owners, she echoed Stewart’s earlier point.

“No, but it was not required,” she said, pointing out that the FCC’s broadcast ownership restrictions date back to the Roosevelt administration. 

Stewart also argued Tuesday that other programs will create space for female and minority owners in the industry, like its incubator program and “eligible entity” definition. “Those roles may incidentally benefit female and minority owners or prospective owners even though they’re not limited to those people,” he said.

During questioning, Justice Sonia Sotomayor asked Stewart why the agency shouldn’t judge the FCC on rejecting negative effects based on inadequate data.

He maintained that “although the agency has historically looked at enhanced female and minority ownership, as a goal to be achieved through some means, it has not historically looked at that criteria as a basis for its cross-ownership restrictions.” The lawyer also told Justice Samuel Alito that the agency could not readily obtain data on the effects of minority and women ownership.

Justice Brett Kavanagh further asked Stewart to explain why the FCC didn’t think the rolled back regulations would hurt diversity owners.

“The commission found that the most likely consequence of eliminating the band is that broadcast stations will buy newspapers, rather than the reverse, because the newspaper industry is in such trouble,” Stewart said.

Though Walker made the case that the rule was inhibiting outlets from purchasing struggling local newspapers, she did not provide an example when Justice Alito asked for a real-world case of a TV station buying a newspaper and keeping it in business.

“Amazon gets to own the Washington Post today,” Walker told the justice. “Nobody thinks that’s the end of democracy. It’s surely not the end of democracy if a local broadcaster can buy a local newspaper and keep it alive.”

In a difficult bit of questioning for Deutsch, meanwhile, Justice Stephen Breyer expressed his frustration at the quality of data being used to assert that deregulation would devastate diversity ownership. “Why in heaven’s name did you not, or groups that support you, given the tremendous number of people who are interested in this — why are there not some studies or something?” Breyer said.

Justice Amy Coney Barrett later asked Deutsch about one of the few studies cited in Prometheus’s case: the 1990s era “Free Press” study, which showed a 40% drop in minority ownership of full-power television stations following a previous FCC relaxation.

Barrett asked Deutsch whether it was backward looking. Deutsch said that it was “a snapshot in time, showing that the more consolidated the market, the less likely, there were to be women and people of color, or owners.”

“To be sure that I understand that you’re saying that they did make a predictive judgment,” Barrett clarified.

“It offered predictive analysis. Like if you make this change, then this is the likelihood that this will happen, this being a decrease in minority- and women-based ownership. I don’t think it went so far as that. But it was an inference that could be drawn from that analysis,” Deutsch said.

Barrett questioned, however, if this inference was admissible.

“If it’s just an inference that could be drawn from that analysis, why isn’t the commission correct that there was no evidence in the reference that showed there would be harm?” the justice said.

The legal battles between the Prometheus Radio Project and the FCC have been underway since the 1990s.

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