FCC Inaction On Media Consolidation Continues On Anniversary Of Prometheus Ruling

Policy

from the sitting-on-your-hands dept

One year ago today, the Supreme Court handed down a decision in FCC v. Prometheus Radio Project. The decision provided a reset to a seventeen year long legal dispute over the FCC’s media ownership rules that had its inception in the Third Circuit in 2004.

In 1996, the Telecommunications Act included substantial revisions to the FCC’s ownership rules for broadcast stations. These changes led to a massive round of consolidation, especially in radio, giving rise to massive radio companies like Clear Channel and Cumulus.

Included in the Telecommunications Act was an ongoing requirement that the agency periodically review its ownership rules. This requirement was initially on a two-year (biennial) cycle that was later expanded to a four-year (quadrennial) review. As part of this mandate the FCC reviewed ownership in 1998 and in 2000 but took almost no action as the broadcast industry was still going through a substantial upheaval caused by rapid consolidation in radio.

Then, after conducting the 2002 Biennial review, the agency released a new set of ownership guidelines called the Diversity Index in 2003. Several legal challenges were filed to the FCC’s actions, and those challenges were consolidated into Prometheus Radio Project v. FCC, heard by the Third Circuit, which released its decision in June of 2004.

The decision, and the three that followed in 2011, 2016 and 2019, were harsh rebuttals of the FCC’s decision-making and represented a substantial set-back for the agency. The criticisms of the agency’s processes were focused on two major issues. First, the FCC did not, and would not, consider the effect of the rules changes on station ownership by minorities and women, and second, the FCC was unable (and largely unwilling) to generate empirical evidence that the changes the agency was trying to implement were having the desired effects.

I’ve discussed this sequence of events in research in the Federal Communications Law Journal here and here, as well as in the Hastings Communications and Entertainment Law Journal, and in a series of podcasts with the folks at Radio Survivor.

With just one day remaining in the Trump administration, and his chairmanship of the FCC, Ajit Pai’s agency and the National Association of Broadcasters (NAB) argued in front of the Supreme Court that they should be freed from the ongoing (and still unanswered) remands from the 3^rd Circuit Court of Appeals. Release from the ongoing remand cycle was an important part of the petition made to the court, and to be fair, was argued for very eloquently by NAB Counsel Helgi Walker during oral arguments.

The decision, written by Justice Kavanaugh was narrow, but provided the relief that the industry and the FCC were seeking, primarily by focusing on the agency’s most recent action on media ownership from 2017 to the exclusion of the events of the other 13 years of the lengthy dispute. However, there was a lingering, and unresolved issue left on the table by the court’s opinion: Notably: how to handle the 2018 Quadrennial Review Process.

While the conflict over the FCC’s 2016 and 2017 decisions were pending in the Third Circuit, the agency launched, on the last possible day to do so, the 2018 Quadrennial Review, but functionally took no further action in the matter. Now, in early 2022, without a full Commission, the agency faces an unfinished review from 2018 and another review of its ownership rules mandated by the Telecommunications Act to be launched this year.

It bears mention, even as we celebrate another year without action by the agency… even in light of the Supreme Court’s decision, that the agency could have acted at multiple points itself to break the deadlock, but it chose not to. The agency did not complete the 2010 Quadrennial review, rolling it right into the 2014 review, and then not acting until ordered by the Third Circuit to do so in April of 2016.

Then, after releasing an order in response to the Third Circuit in August of 2016 that made no significant changes to the existing rules, in 2017 the agency, now led by Ajit Pai, issued a new set of ownership rules, based on the same administrative record, that fundamentally altered several of the existing regulations, and then even after a loss in court in 2019, decided to continue pursuing legal remedies rather than complete the open 2018 proceeding.

So, in the end, as the agency has squandered another year, we should remember that the FCC is doing so in a way that is basically a trifecta of policy failure. The Commission is making the broadcast industry miserable by not updating the rules, while not developing functional policies to promote diverse ownership by women and minorities. Then there’s that small detail where the existing rules are still allowing local stations to get swallowed up by conglomerates, often removing the important local aspects to their news and informational content and thus hurting local audiences. 

But hey, I mean, what’s another year between friends, right?

Christopher Terry is an assistant professor of media law in the Hubbard School of Journalism and Mass Communication at the University of Minnesota and a research fellow for the Center for Quantum Networks.

Filed Under: broadcast industry, broadcasters, court ruling, fcc, media ownership, prometheus, radio, supreme court, tv