FCC Approves Media Ownership Rules on Party-Line Vote; Clyburn Hopes for Court Reversal

FCC relaxation of media ownership rules is an industry “holiday wish list” and won’t survive a legal challenge, said Commissioner Mignon Clyburn in her dissent on the order, which was approved on a 3-2 party-line vote Thursday, as expected (see 1711150054). “I vociferously dissent and look forward to the day when the court issues a decision to right this sad wrong,” Clyburn said. Commissioner Mike O’Rielly said he had no doubt the new standard will end up back before the 3rd U.S. Circuit Court of Appeals. That court would be “hard pressed” to find the moves aren’t supported in the record, he said. O’Rielly said he hopes the FCC will appeal if the 3rd Circuit again strikes down rules.

“Few of the FCC’s rules are staler than our broadcast ownership regulations,” said Chairman Ajit Pai. “After too many years of cold shoulders and hot air, this agency finally drags its broadcast ownership rules into the digital age.”

“Instead of engaging in thoughtful reform -- which we should do -- this agency sets its most basic values on fire,” said Commissioner Jessica Rosenworcel. “They are gone.” The FCC has engaged in a series of proceedings “custom built for Sinclair,” Rosenworcel said in a post-meeting news conference. She said it was “striking” and “unprecedented” how many members of Congress asked the FCC inspector general to investigate Chairman Ajit Pai and the decisions involving Sinclair. Pai said Thursday he hasn’t had contact with the IG’s office on the matter.

The order gets rid of cross-ownership restrictions for TV, radio and newspapers, does away with an action by the previous administration making joint sales agreements attributable for ownership calculation, and loosens duopoly rules. The reconsideration order eliminates the eight-voices test for duopoly ownership and establishes a case-by-case basis for top-4 duopolies. It also creates an incubator program for new entrants, which was a particular focus of criticism from the FCC Democrats. The approved item puts the incubator and the changes to ownership rules in “the wrong order,” Clyburn said. The incubator program is “a high price to pay” for the “damages” done by the recon order, said Rosenworcel. “A modest rulemaking on an incubator isn’t going to get us where we need to go.” The order also incorporated a presumptive waiver standard for stations in embedded markets, a provision extensively lobbied for by Connoisseur Media.

O’Rielly praised the recon order for reversing “shoddy” actions of the previous commission, disappointed it instituted a case-by-case process for approving top-four duopolies, instead of “bright-line rules.” O’Rielly said the recon order should have done more for radio, such as eliminating AM/FM subcaps. He criticized retention of requirements that broadcasters disclose shared service agreements. He suggested many of these issues could be addressed again in the 2018 quadrennial review of ownership rules.

Clyburn Rejected

The FCC majority rejected an extensive alternate proposal from Clyburn that would have included denying the petitions, gathering data on minority ownership ahead of any rule changes, separated the incubator program into its own rulemaking, and kicked any action on the ownership rules to the 2018 review. “There was in fact a path forward that could have garnered my support, but regrettably the proposal I put forth was rejected,” Clyburn said. She condemned the action as short-circuiting efforts of the FCC's Diversity and Digital Empowerment Advisory Committee.

Republicans said the FCC had enough information and a full record on media ownership, and it's time to change the rules. The past commission took “an ostrich-like” approach to media ownership rules, said Commissioner Brendan Carr. It did nothing to address diversity, Pai said: “This is the time.”

Clyburn said the order ignored the past decisions of the 3rd Circuit: “The courts have admonished this agency in the past for changing our rules without a supporting record and today’s order ... ignores" that. Senior officials have said the changes are supported in the record, and broadcast attorneys say the order is narrowly confined to the changes proposed in the petitions it's based on to make court challenges more difficult (see 1711080031).

Clyburn and Rosenworcel said the deregulation will make it easier for large broadcasters to grow larger. “We clear the way for more mergers of greater magnitude -- like the one presently before us -- which will benefit heartily from the destruction of these policies today,” Rosenworcel said.

Reaction

Reaction, pro and con, was quick.

Senate Commerce Committee ranking member Bill Nelson, D-Fla., and House Communications Subcommittee ranking member Mike Doyle, D-Pa., blasted the vote. The FCC was “delivering a blow to localism and diversity in our broadcast media,” Nelson said. “This act will pave the way for massive broadcast conglomerates to increasingly provide local viewers with nationalized cookie-cutter news and corporate propaganda that’s produced elsewhere.” The agency “has recklessly promoted the unhealthy consolidation of media ownership and continued paving the way for the Sinclair merger,” Doyle said. “In gutting the FCC’s media ownership rules, the commission has recklessly promoted the unhealthy consolidation of media ownership and continued paving the way for the Sinclair merger," said Doyle.

The deregulation “should be a national scandal,” said Free Press CEO Craig Aaron. “Chairman Pai has warped FCC policies and process to accommodate the creation of a Trump-friendly local-television conglomerate.” The rule rollback could affect midterm elections, blogged United Church of Christ attorney Cheryl Leanza. “Trump’s Chairman, Ajit Pai, is narrowing media and news choices for everyone, and the hardest hit will be low-income and historically marginalized communities.”

The previous limits were “not only irrational in today’s media environment, but they have also weakened the newspaper industry ... and forced local broadcast stations onto unequal footing with our national pay-TV and radio competitors,” said NAB President Gordon Smith. “This long-overdue decision recognizes the vastly different landscape that exists today, as compared to when the rule was created over 42 years ago,” said News Media Alliance President David Chavern.

"Citizens can expect an ever-more bland and homogenous media landscape controlled by out-of-town interests with no connection to their communities," said Public Knowledge Senior Counsel John Bergmayer. "They can expect large chains of broadcasters and newspapers controlled by billionaires to push their political agenda nationwide." Free State Foundation President Randolph May said the media landscape and internet provide enough voices. "The next time FCC Commissioner Clyburn and others express concerns about the lack of ‘viewpoint diversity,’ they should be pressed to say what viewpoints they believe are not available to the public in today’s incredibly diverse media environment,” May said. If the FCC handles the top-four rule correctly, it should be difficult for such combinations to exist, said American Cable Association President Matt Polka. "Stations will still have to show why a particular top-four combination serves the public interest. We think such a showing will be difficult in light of the proven impact on cable subscribers' pocket books."

A handful or two of protesters with signs decrying Sinclair buying Tribune gathered outside the FCC during the meeting, including former Commissioner Gloria Tristani, now with the National Hispanic Media Coalition. NHMC formally joined Sinclair/Tribune opponents The Coalition to Save Local Media Thursday, said a news release. The ownership changes and action on the Lifeline program (see 1711160021) made Thursday “a dark day,” Tristani tweeted.

Meeting Notebook

With more rules aimed at tackling robocalls, some are starting to worry about erroneously blocking of numbers. Commissioner Mike O'Rielly said that while such calls typically “are from bad actors” trying to do scams, he's hearing that providers increasingly are capturing “false positives” and it’s difficult and expensive to dispute such blocks. He said the robocall order approved Thursday -- which allows voice providers proactively to block calls deemed likely fraudulent because of the originating numbers -- assumes consumers want those blocks. He criticized that such blocking is done without prior consumer approval. The agency said commissioners adopted along with the new rules a Further NPRM that includes questions about how the agency can ensure the efficacy of its rules and what information it should gather to gauge that. It said the Further NPRM asks how the agency can ensure the problem of erroneously blocked calls can be easily corrected. Commissioner Jessica Rosenworcel partially dissented, criticizing the agency for not acting to prevent carriers from charging for robocall-blocking service. “This is the kicker: The FCC takes action to ostensibly reduce robocalls but then makes sure you can pay for the privilege. ... That’s ridiculous.” She dissented on that aspect. She said the agency needs to be far more aggressive regarding robocalls: “This is tepid stuff -- we need to bring the heat.” The text of the robocall order wasn't released.

Three-plus hours into the meeting, commissioners waived reading statements on issuing an NPRM on ending Form 325 reporting requirements for cable operators. They adopted it unanimously, as expected (see 1711030053).

Pai declined to comment when asked by a reporter about possible open internet action at December's meeting, which is seen as likely (see 1708310016).