Why Court Smacks FCC Over Media Ownership


FCCdoorA federal appeals court in Philadelphia struck down the FCC’s ban on television Joint Sales Agreements between TV owners and criticized the agency for not completing a required quadrennial review of its media ownership rules for television and radio owners.

The court said the commission had not first determined if the two-year-old TV JSA ban is in the public interest.

The court pointed out nearly a decade has passed since the last media ownership review; those are supposed to be done on a quadrennial basis.

“Several broadcast owners have petitioned us to wipe all the rules off the books in response to this delay — creating, in effect, complete deregulation in the industry,” the court said in its decision. “This is the administrative law equivalent of burning down the house to roast the pig, and we decline to order it. However, we note that this remedy, while extreme, might be justified in the future if the commission does not act quickly to carry out its legislative mandate.”

The review is supposed to periodically determine whether the rules are still needed or should be changed or eliminated. Many station owners have complained the rules are antiquated and hold them back from completing transactions they need to in order to stay competitive.

The FCC’s delay keeps five broadcast ownership rules in limbo: the local television ownership rule, the local radio ownership rule, the newspaper/broadcast cross-ownership rule, the radio/television cross-ownership rule, and the dual network rule.

“If the commission is able to justify (by finding they are in the public interest) the existing ownership rules to which television JSA attribution applies — or, in the alternative, if it replaces the current rules with new ones it determines to be in the public interest — nothing in our opinion would prevent it from readopting the JSA rule at that time,” the court said.

FCC Chairman Tim Wheeler said after Wednesday’s monthly FCC meeting he will uphold a previous commitment to have a media ownership rule proposal before the other commissioners by the end of June. That doesn’t guarantee adoption, however.

NAB, meanwhile, was ecstatic about the court decision, saying the opinion directs the agency to do its job and adopt broadcast ownership rules that reflect the modern world.

“We’re particularly delighted the court highlights the irrationality of a rule that bars broadcast/newspaper combinations in the same market. This rule needs to be ended immediately.

“And finally, we’re pleased the court strikes down the FCC’s punitive joint sales agreement order. JSAs are clearly in the public interest — as Congress has decided — and allow free and local broadcasters a chance to compete against national pay TV conglomerates.”