Panel Slams FCC Move to Ease Media Ownership Rules

PHILADELPHIA (CN) – The Federal Communications Commission implemented sweeping rule changes for media ownership without taking into account how they negatively affect female and minority ownership, the Third Circuit ruled Monday.

FCC Chairman Ajit Pai listens to a question from a reporter on Dec. 14, 2017. (AP Photo/Jacquelyn Martin, File)

The ruling is the latest in a series of legal battles that began in the 1990s between the Prometheus Radio Project and the FCC. The latest dispute centers on the commission’s decision to do away with a ban on owning a TV station and newspaper in the same market and ease rules for mergers.

“The commission might well be within its rights to adopt a new deregulatory framework (even if the rule changes would have some adverse effect on ownership diversity) if it gave a meaningful evaluation of that effect and then explained why it believed the trade-off was justified for other policy reasons,” U.S. Circuit Judge Thomas Ambro wrote in a 42-page opinion. “But it has not done so. Instead it has proceeded on the basis that consolidation will not harm ownership diversity.”

But the FCC provided the court with no evidence that this was the case, the judge said.

“We simply cannot say one way or the other,” Ambro explained. “This violated the commission’s obligations under the [Administrative Procedure Act] and our remand instructions, and we ‘may not supply a reasoned basis for the agency’s action that the agency itself has not given.’”

Representing the Prometheus Radio Project, Cheryl Leanza of the consulting firm A Learned Hand argued in June that the FCC’s relaxed television ownership and radio-television cross-ownership rules brought minority and female ownership of broadcast media to abysmal lows.

Leanza expressed satisfaction with Monday’s ruling.

“My clients are vindicated that the court means what it says, although disappointed that it has taken 20 years and the Federal Communications Commission has still not complied with the Third Circuit’s directives to consider how media consolidation impacts ownership by women and people of color,” she said in an email Monday.

She said the commission used bad data when it revised its rules in 1996 and 1999, arguing it had no data on women ownership when it examined the impact that these revisions would have on minorities and women attempting to infiltrate television and radio markets.

“The FCC treated its obligation as less-important than high school math homework and it got caught turning in work that, according to the court, ‘would receive a failing grade in any introductory statistics class,” Leanza wrote.

FCC counsel Jacob Lewis, who did not immediately respond to a request for comment Monday, acknowledged this data was imperfect during oral arguments.

Ambro was joined in the majority by U.S. Circuit Judge Julio Fuentes.

U.S. Circuit Judge Anthony Scirica, the third member of the panel, partially dissented.

“In my view, the FCC balanced competing policy goals and reasonably predicted the regulatory changes dictated by the broadcast markets’ competitive dynamics will be unlikely to harm ownership diversity,” he wrote.

Scirica added, “I would not delay the FCC’s actions. I would allow the rules to take effect and direct the FCC to evaluate their effects on women- and minority-broadcast ownership in its 2018 quadrennial review.”

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