FCC Ownership Dereg Proposals Denied by U.S. Third Circuit

Court of appeals said FCC did not consider full effect of proposed rule changes.
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WASHINGTON—The FCC’s attempts to deregulate broadcast ownership have hit a setback, as the U.S. Third Circuit Court of Appeals has made a decision saying that the commission “did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities,” according to a report from TVT’s sister publication B&C.

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The deregulation efforts that were approved by FCC Chairman Ajit Pai and appealed to the Third Circuit would eliminate newspaper-broadcast and the radio-TV cross-ownership rules; allow dual station ownership in markets with fewer than eight independent voices after that duopoly an opportunity for ownership of two of the top four stations in a market on a case-by-case basis; eliminate attribution of joint sales agreement as ownership; and create a diversity incubator program, as well as other diversity mechanisms.

The decision, 2-1, was made by three judges of the Third Circuit and can now be appealed again to be heard either to the full court or directly to the Supreme Court.

“For more than 20 years, Congress has instructed the Federal Communications Commission to review its media ownership regulations and revise or repeal those rules that are no longer necessary,” said Chairman Pai in a statement following the decision. “But for the last 15 years, a majority of the same Third Circuit panel has taken that authority for themselves, blocking any attempt to modernize these regulations to match the obvious realities of the modern media marketplace. It’s become quite clear that there is no evidence or reasoning—newspapers going out of business, broadcast radio struggling, broadcast TV facing stiffer competition than ever—that will persuade them to change their minds.”

Citing a partial dissent given by Third Circuit Judge Anthony Scirica, Pai said that they will seek further review of the court’s decision.

The NAB’s Dennis Wharton, executive vice president of communications, gave another statement on the decision, backing up Chairman Pai’s efforts:

“NAB is disappointed with the appellate court’s 2-1 decision vacating the FCC’s measured decision reforming outdated media ownership rules. It’s shocking that the same panel of judges has supplanted Congress’s and an expert federal agency’s views with its own for more than 15 years.”

FCC Commissioner Jessica Rosenworcel, who opposed the deregulations—calling them a “dismantling” of the values imposed by the rules—also commented on the court’s decision:

“The court rightly sent the FCC’s handiwork back to the agency because the FCC’s analysis was so ‘insubstantial.’ The FCC shouldn’t be in the business of cutting corners when it comes to honoring our long-held values when updating media ownership policies.”