At stake are recent FCC moves toward deregulation, allowing the common ownership of a newspaper and broadcast stations in the same market, as well as giving more leeway for media companies to own more than one TV and radio outlet in the same city.
The dispute stretches back two decades, a few years after the FCC began a new, congressionally mandated requirement to regularly review its media ownership rules determine whether they were still necessary in the public interest.
The Third Circuit Court of Appeals has repeatedly rejected the FCC’s efforts to modify the rules, and most recently a 2017 effort to overhaul the ownership restrictions. The appeals court determined that that effort failed to adequate analyze the effect that the rule changes would have on women and minority ownership of broadcast stations.
The Republican-dominated FCC has argued that the current ownership restrictions are out of date, particularly when it comes to the prohibition on ownership of a newspaper and broadcast outlet in the same market, as local entities grapple with increased advertising competition from digital and internet sources.
The National Association of Broadcasters, one of the lead plaintiffs in the case, joined with other media outlets to argue in a brief that “the broadcast and newspaper industries continue to struggle under the dead weight of those rules.”
Malcolm Stewart, Deputy Solicitor General, Department of Justice, Washington, D. C. and attorney Helgi Walker for the National Association of Broadcasters argued before the Court on behalf of petitioners. The FCC, they said, looked at three main factors when considering looser ownership rules — benefit to the consumer, localism and competition. The Commission did try to examine the impact of the rule change on women and minority owned business but found the data available very limited. The FCC concluded from the the data, however, that it did not show harm. Their attorneys also noted that the agency uses other tools like incubators and eligibility programs to foster ownership diversity.
“Amazon gets to own The Washington Post today. No one thinks that’s the end democracy. It’s certainly not the end of democracy if a local broadcaster buys a local newspaper,” said Walker, adding that a combination could even save a struggling local papers that might otherwise die.
Attorney Ruthanne Mary Deutsch argued for the respondents that the FCC has routinely included the impact on women and minority owned business in its rulemaking evaluation and that the data that it used in its previous court arguments was too incomplete to rule on — which is why the circuit court threw it back. If, she said, the FCC had decided to relax the rules without considering the impact, on women and minority owned business it should have come right out and said so clearly — not presented half-baked justification.
The Justices seemed to struggle to understand whether or not the FCC was in fact required to consider women and minority owned business under what Justice Neil Gorsuch said appeared to be a very broad “public interest” mandate. Or, if it was more precedent that anything and if that precedent had to be considered in this case. Or, on the other hand if it was indeed time to revamp rules that have been in place since the 1996.
“I am a bit confused. It seems to me that the FCC has been saying for decades that minority and female ownership, consideration of it, is in the public interest and I don’t see anything that says otherwise. I don’t think the FCC has disavowed that it should be looked at,” said Justice Sonya Sotomayor.
“Were you saying we don’t think the changes in the rules will affect female and minority ownership or we don’t have evidence of this?” asked Justice Elena Kagan.
“We say the evidence is fragmentary, but based on the evidence we have there will not be a major effect, and the possibility that there may be any effect” is not enough to stop sound rule changes,” responded Stewart.
Walker said some clarity was crucial, echoing a statement by the NAB earlier this month that, “The Third Circuit’s 15-year blockade of reasonable reforms, based on its atextual policy preferences, must now come to an end,” the NAB earlier this month.
Their argument in fact is that Congress directed the FCC to review its rules by examining whether they were “necessary in the public interest as the result of competition,” but not to “consider minority and female ownership or the public interest in a vacuum.”
But the coalition of public interest groups, led by Prometheus Radio Project, contends that the FCC has “historically considered the values of localism and five different types of diversity: ‘viewpoint, outlet, program, source, and minority and female ownership diversity.'”
The groups wrote in a brief last month that the FCC majority, in relaxing the ownership limits, “justified its action based on an arbitrary analysis of the same facts: It asserted that wholesale deregulation would not harm this public-interest goal—even though any reasonable analysis of the record showed that past deregulation caused harm.”
The Justices adjourned the hearing at the one hour mark.
Republicans will no longer hold a majority on the FCC as of Wednesday, when chairman Ajit Pai steps down as Joe Biden is inaugurated. Biden has yet to name a successor, but Democrats will eventually hold a 3-2 edge on the commission.