FCC Expected to Pursue en Banc Appeal of Prometheus IV

The FCC is expected to start its planned appeal of the 3rd U.S. Circuit Court of Appeals ruling on Prometheus IV with an en banc appeal at the 3rd Circuit. That could make the agency unlikely to grant further waivers of ownership rules connected with the case, said academics, broadcasters and appellate attorneys in interviews. That could affect the approval of pending deals at the FCC, broadcast attorneys said.

This month’s withdrawal of a broadcast deal that would have led to a combination of low power top-four affiliates (see 1910170070) is seen as a further sign the FCC is unwilling to push the envelope now. “You’d rather not cost yourself votes by seeming to stick a finger in the eye of the court,” said Duke University law professor Stuart Benjamin, former FCC scholar in residence.

The agency can petition the Supreme Court after seeking en banc appeal, but the reverse isn’t true, so aiming for an en banc appeal could give the agency more bites at the apple, attorneys said. The 3rd Circuit has a narrow majority of Republican judges who might be more favorable to the FCC’s position, broadcast attorneys said. Prometheus is unusual in that the same panel of judges has retained the case over so many iterations, attorneys said.

The appeal is expected to be filed by early November, attorneys said. To be successful, the FCC would first need a majority of judges on the 3rd Circuit to agree a rehearing is needed, and then persuade the full panel to overturn the case, said Fletcher Heald appellate attorney Harry Cole. NAB and several broadcast groups were involved in the litigation, and would likely appeal as well, attorneys said.

If the FCC pursues an en banc appeal, it’s considered less likely to grant waivers or exceptions to the rules that were put back in place by the 3rd Circuit’s ruling.

Shortly after the 3rd Circuit vacated FCC rollback of rules such as the newspaper cross-ownership prohibition, the agency granted a long-stalled application by Gray Television for a top-four combination in Sioux Falls, South Dakota. That was criticized by Commissioner Jessica Rosenworcel. The likelihood of more such exceptions was the subject of a letter last week by Rep. Frank Pallone, D-N.J., and Rep. Mike Doyle, D-Pa. (see 1910220044).

The agency is unlikely to do that again until the appeal is decided, some experts said. “You have to be deferential,” said Baker Marquart appellate lawyer Ryan Baker. The full panel of 3rd Circuit judges hearing an en banc appeal would likely include the judges who ruled on the case, and the other jurists making up the panel would be their colleagues, said Baker. Granting numerous waivers of the rules before the appeal is decided would provide ammunition to appeal opponents, said Cole. The waivers would be “in huge red letters” on the front of the opposition brief, he said.

The recent withdrawal of Heartland Media’s proposed sale of KQTV St. Joseph, Missouri, to News-Press TV (see 1910180033) appeared to some lawyers not part of the deal to have occurred because the Media Bureau signaled it isn’t willing to approve a deal involving a combination of top-four affiliates. The agency had seemed reluctant to approve such deals before the 3rd Circuit ruling, but after the court’s decision, approval seemed even less likely. The KQTV matter is seen as an indication the FCC is unlikely to approve deals that involve combinations questionable under the rules after the 3rd Circuit remand. Lawyers in the deal declined to comment Friday.

Apparent MB questions about Terrier Media’s buy of TV and radio stations from Cox are considered a similar sign (see 1910180027). That transaction involves markets such as Atlanta and Dayton that could be seen as in conflict with newspaper cross-ownership rules, and recent ex parte filings indicate bureau interest in that aspect. Former Commissioner Robert McDowell had an Oct. 21 conference call with bureau Chief Michelle Carey, Video Division Chief Barbara Kreisman and staff from MB and the Office of General Counsel about the deal, said a filing posted in docket 19-98 last week. “The Parties discussed the Terrier Media applications, several markets included in the applications, and the options available to the FCC and the Parties following the Third Circuit’s recent decision in Prometheus Radio Project v. FCC.”

"Attorneys for Terrier Media continue to have positive discussions with the FCC and remain confident that the commission will approve the transaction as compliant with anti-trust laws and all applicable regulations after giving due consideration to the Prometheus decision," emailed a representative of the company Friday. Terrier is said to have business relationships with but is not owned by Apollo Global Management. Cox declined to comment.

It’s not clear if the Terrier/Cox deal will be affected by the 3rd Circuit’s remand, attorneys said. There's FCC precedent for allowing existing broadcast/newspaper combinations to be grandfathered, broadcast attorneys said. The agency also may think it has a strong appeal case, industry officials said. The FCC may believe this en banc appeal has a better chance than most, Benjamin said.