Broadcast Ownership Stay Request a Heavy Lift but Has a Chance

Public interest groups’ request for emergency stay of the FCC’s November broadcast ownership order on reconsideration (see 1801250065) is considered a “big ask” but the agency’s record of defeat on ownership rules at the 3rd U.S. Circuit Court of Appeals means it has a real chance, said attorneys, broadcasters and academics. Petitioners Prometheus Radio Project and Media Mobilizing Project’s request the 3rd Circuit block the ownership rule changes and pending transactions based on them, and appoint a special master to force the FCC to collect data on minority ownership, might be a “tall lift” in most circumstances, said University of Minnesota School of Journalism assistant professor-media law Christopher Terry. If the court agrees the regulator again failed to follow the court’s directives, it’s “not an unreasonable request,” he added.

NAB filed a motion to intervene in the case Thursday, arguing the stay request would “impair” broadcasters’ ability to “compete effectively and provide quality local service in today’s media marketplace.” Members would be “adversely affected” if the rule changes from the recon order were blocked, the association said (in Pacer).

The stay request faces a high barrier to being granted because the public interest groups will have to show that not blocking the rules before they take effect would cause irreparable harm, said Fletcher Heald appellate attorney Harry Cole in an interview. The FCC will be able to argue the rule changes and any transactions they lead to are subject to appeal without the need for a stay, and courts should defer to the agency, Cole said. Emergency stay requests of agency rules are commonly regarded as long shots, he said.

Since public interest groups won all prior challenges to media ownership rules before the same panel requested for this case, the groups will enjoy an advantage in arguing that they're likely to succeed on the merits, Cole said. “Three times, a panel of this Court remanded FCC decisions, directed the FCC take specific actions to address the lack of racial and gender diversity in broadcast station ownership, and retained jurisdiction over the remanded issues,” said the stay filing. “Three times, the FCC has failed to follow these directives.” The agency declined comment.

The same court voiced support for eliminating newspaper cross-ownership rules in Prometheus III and said it could support doing away with media ownership rules, blogged Wilkinson Barker broadcast attorney David Oxenford. Broadcasters and FCC officials said that opinion supports the agency’s actions in the recon order, but Terry said that reading ignores the panel’s clear directions that the agency collect data on minority ownership on which to base decisions. “The FCC doesn’t have sufficient empirical evidence” to justify its rule changes, Terry said. In oral argument and in Prometheus III, the 3rd Circuit panel was highly critical of commission inaction on its prior decisions (see 1605250073).

The FCC crafted the order on reconsideration specifically to meet this sort of challenge, industry officials said. “Everyone knew this was coming,” said Gray Television Deputy General Counsel Robert Folliard in an interview. The order cues up an incubator program that also tackles the definition of an eligible entity, which the 3rd Circuit had ordered the FCC to define in prior Prometheus decisions. Since it doesn’t actually establish such a program, the court may not see it as sufficient, Terry said.

A stay likely would block many prospective deals, including Sinclair buying Tribune, attorneys said. Sinclair recently met with the Media Bureau about the criteria for being approved to own top-four duopolies as allowed under the recon order (see 1801250028). The possibility of a stay won’t be a surprise to broadcasters looking to deal, Folliard said. Any discussions about deals since the approval of the recon order will have taken a possible court challenge and stay into account, he said. Sinclair didn’t comment.

The commission is likely to argue the court’s directives to base decisions on minority ownership push the agency in an unconstitutional direction, Cole said. That could lead to the FCC seeking cert at the U.S. Supreme Court, if things don’t go its way in the 3rd Circuit, he said. It’s more likely Congress would act before the case went that far, Terry said. That might be the only way to stop quadrennial reviews from ping ponging between appeals, he said. If the FCC moved toward rules closer to what the public interest groups support, broadcasters and supporters of deregulation almost certainly would have been the ones taking the agency to court, Terry said. The commission “is in a hole” on this issue, he said. The quadrennial review rules put the FCC “in a horrible position,” Cole said.