FCC Media Ownership Order Draws Lengthy GOP Dissents, Clyburn Lament

The FCC released its media ownership order Thursday. As expected, the order approved Aug. 10 on a party line 3-2 vote (see 1608110058) resolves the 2010 and 2014 quadrennial reviews, leaves most existing ownership rules in place and restores joint sales agreement rules that were knocked down by the 3rd U.S Circuit Court of Appeals. “The record in this proceeding leads us to conclude that retaining the existing rules is the best way to promote our policy goals in local markets at this time,” the FCC said. A court challenge is likely by all sides, both allies of media deregulation and its foes said in interviews.

Commissioners Ajit Pai and Mike O'Rielly blasted the order in dissents totaling 17 pages, saying the rules accomplish little and Chairman Tom Wheeler should have relaxed newspaper-broadcast cross-ownership (NBCO) rules as four FCC members backed that. “Rarely have I seen a proceeding take so long and a document say so much in order to accomplish nothing of value,” said O'Rielly.

Commissioner Mignon Clyburn, who reportedly didn't support NBCO deregulation, lamented that the order doesn't include new data collection efforts that could provide backup for diversity rules. The 3rd U.S. Circuit Court of Appeals “was crystal clear: if more data is needed, we 'must get it,'” Clyburn said. “I stand ready to work with the Commission and interested researchers to fulfill this goal so that the Commission has the information it needs to ensure that the right policies are in place to promote a vibrant and diverse media landscape.”

Wheeler's blocking of the compromise that would have eliminated NBCO rules because it wasn't unanimously supported flies in the face of his past record of 3-2 decisions, Pai said in a dissenting statement. “As someone who has been on the losing end of more 3-2 votes than I care to remember, I am baffled by this new requirement for unanimity,” Pai said. “We’ve been told for years by the FCC’s leadership that 3-2 votes are what democracy is all about. Except, I guess, when it isn’t.” Wheeler didn't allow the compromise to go forward because the split wasn't along party lines, Pai said. “This is a shame because our regulations should always be shaped only by the facts and law -- not crass political considerations.” O'Rielly also complained that one Democratic objection could derail the compromise effort. “This blatant political move should be seen for what it is,” O'Rielly said. “It is hard to be surprised at this approach in the current political atmosphere in Washington, D.C., except that is not how an 'independent' Commission should operate.” Clyburn's office and the FCC didn't comment.

The order is considered certain to be challenged in court once it's published in the Federal Register, numerous broadcast and public interest attorneys told us. Georgetown Law Institute for Public Representation Senior Counselor Andrew Schwartzman told us he's “reasonably certain” Prometheus Radio Project, which successfully challenged FCC ownership reviews three times, will want “judicial review.” Petitioners that challenge the order within 10 days of its publishing will be put in the lottery to decide the venue where the case will be tried, and attorneys told us they expect Prometheus -- which is in the 3rd Circuit -- to appeal within that time frame. A broadcaster challenge in the D.C. Circuit is also expected, several attorneys have told us.

The ownership order reestablishes the 15 percent attributable JSA rule, in terms of the amount of advertising time another station can broker before it must claim ownership of the second station, and grandfathers existing combinations until 2025. It allows JSAs that were dissolved in connection with transaction approvals to be resurrected. The item also requires for the first time that shared service agreements be uploaded to stations' online public files. Broadcast ownership rules are mostly unchanged, though the order provides an exception for failing entities and a waiver process.

The order also reestablishes the revenue-based standard for eligible entities, because the FCC doesn't believe enough evidence is in the record to allow it to adopt diversity rules that rely on race or gender, the order said. “The only statistical evidence in the record pertains to discriminatory access to capital and the rest is anecdotal evidence that is of more limited value for purposes of satisfying heightened scrutiny.” Evidence of past discrimination in the broadcast industry “is not nearly as substantial as that accepted by courts in other contexts as satisfying strict scrutiny,” the order said.

Schwartzman echoed Clyburn's complaint that the order does nothing to measure diversity data. “The commission has to get the data necessary to make an informed judgment about the effect of any changes of its rules, and it has failed to do so," he said. Data collection efforts aren't feasible, the FCC said. “Given our determination of the infeasibility of this research, the lack of any support in the record indicating that it would be feasible, and the very substantial funds and time it would take to conduct it -- likely millions of dollars and several years -- we do not believe it is in the public interest,” the order said.

Criticism

Most reaction to the order was negative.

“While the goal of preventing the consolidation of media power in the hands of an elite few has merit, the FCC has again overreacted," said House Judiciary Committee Chairman Bob Goodlatte, R-Va. “It has reacted in a way that is likely to harm the objectives of smaller media outlets eager to compete.” Goodlatte said the FCC “continues its recent tradition of advancing unnecessary and burdensome regulations on a partisan basis while ignoring new technologies and market realities.”

One surprise was that the order didn't meet a Multicultural Media, Telecom and Internet Council request to extend cable procurement rules to other industries (see 1608220057). Instead, the FCC will “evaluate the feasibility” of extending the rule to broadcasters. “The FCC has forfeited an historic opportunity to provide for broad, nondiscriminatory procurement outreach throughout the telecom and high tech sectors,” said MMTC CEO Kim Keenan in an emailed statement. “By failing to take this simple step, the FCC has needlessly deprived minority- and women-owned businesses of even a chance to compete for billions of dollars in procurement opportunities over the coming decade.” MMTC said it will decide soon whether to petition for judicial review.

NAB lambasted the FCC for basing its media ownership review on insufficient information, in a letter Thursday. NAB had filed (see 1606300067) a Freedom of Information Act request for the records the FCC based its decision on, and received “information that was already publicly available, including several [items] that can best be described as 'odds and ends,'” NAB said. The documents included media coverage and past statements that had been publicly released, our review found. These records “expose a particularly lackluster and ultimately arbitrary and capricious effort by the FCC to seek out and consider other information that would show unequivocally how marketplace changes have nullified the need for the rules,” NAB said. “Ultimately, these records provide further evidence that the Commission’s decision to maintain the existing broadcast ownership restrictions, including the wildly outdated printed newspaper cross ownership ban, is arbitrary and capricious, and continues to be contrary to law.”

The agency "made absolutely no progress on media diversity," said Cheryl Leanza, who represents the United Church of Christ, which was allied with Prometheus. "It has ignored, for a third time, the mandate of the U.S. courts and the directives of the Communications Act."

The American Cable Association praised the order for its effect on retransmission consent negotiations. The order will “rein in the practice of a single owner of a top-four and non-top-four rated station achieving this same goal by simply swapping their network affiliations outside the purview of the FCC,” ACA President Matt Polka said. “This abusive practice permits the stations' owner to negotiate retransmission consent for two top-four rated stations at the same time, thus driving up prices and harming consumers.”