FCC Inaction on Media Consolidation Continues on Anniversary of Prometheus Ruling

from sitting on hands department

A year ago to the day, the Supreme Court rendered a decision in FCC v Prometheus Radio Project. The decision resets a seventeen-year legal dispute over FCC media ownership rules that began in the Third Circuit in 2004.

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

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

Then, after conducting the biennial review in 2002, the agency issued a new set of ownership guidelines called Diversity Index in 2003. Several legal challenges have been filed against the FCC’s actions, and these challenges have been consolidated into Prometheus Radio Project v. FCCheard by the Third Circuit, which rendered its decision in June 2004.

The decision, and the three that followed in 2011, 2016 and 2019, were stark rebuttals of FCC decision-making and represented a substantial setback for the agency. Criticisms of the agency’s processes focused on two major issues. First, the FCC has failed and was unwilling to consider the effect of rule changes on minority and female station ownership, and second, the FCC has been unable ( and largely reluctant) to generate empirical evidence that the changes the agency was trying to implement were having the intended 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 left in the Trump administration and his FCC presidency, Ajit Pai’s agency and the National Association of Broadcasters (NAB) argued before the Supreme Court that they should be freed from the ongoing (and still unanswered) referrals of the 3rd Circuit Court of Appeals. Release from the ongoing remand cycle was an important part of the motion to the court and, to be fair, was argued very eloquently by NAB attorney Helgi Walker during oral argument.

The ruling, written by Judge Kavanaugh, was narrow, but provided the relief the industry and FCC were looking for, primarily by focusing on the agency’s most recent action on media ownership from 2017. excluding the events of the other 13 years of the long dispute. However, there was one lingering and unresolved question left on the table by the court’s opinion: namely: how to handle the 2018 quadrennial review process.

With the dispute over the FCC’s 2016 and 2017 rulings pending in the Third Circuit, the agency launched, on the last possible day to do so, the 2018 Quadrennial Review, but functionally took no action. another measure in this regard. Now, at the start of 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 due to be launched this year.

It’s worth mentioning, even as we celebrate another year without agency action…even in light of the Supreme Court’s decision, that the agency could have acted on its own at several points to exit the dead end, but she chose not to. The agency failed to complete the 2010 quadrennial review, integrating it directly into the 2014 review, then acting only on orders from the Third Circuit to do so in April 2016.

Then, after issuing an order in response to the Third Circuit in August 2016 that made no significant changes to the existing rules, in 2017 the agency, now headed by Ajit Pai, issued a new set of ownership rules, based on the same administrative rules. record, which fundamentally changed 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 2018 open process.

So at the end of the day, as the agency has wasted another year, we have to remember that the FCC is doing it in a way that is basically a political trifecta of failure. The Commission is making the broadcasting industry miserable by not updating the rules, without developing working policies to promote diverse ownership by women and minorities. Then there’s that little detail where the existing rules still allow local stations to be gobbled up by conglomerates, often removing important local aspects of their news and informational content and thereby harming local audiences.

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

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

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

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