Appeals Court Tosses Media Ownership Rules Back to FCC

"The Commission did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities," wrote Judge Thomas Ambro of the 3rd Circuit in his ruling.
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FCC Chairman Ajit Pai

A federal appeals court has overturned the decision by FCC chairman Ajit Pai to loosen media ownership rules, sending the plan back to the commission for further review.

“The Commission did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities,” wrote Judge Thomas Ambro of the 3rd U.S. Circuit Court of Appeals, in his ruling.

The ruling addresses a number of moves made by the FCC, including the 3-2 party line vote in 2017 to eliminate the ban on owning a newspaper and a TV or radio station in the same major market.

The FCC also made it easier for companies to have multiple local TV and radio stations in the same market, and for local stations to jointly sell advertising time.

FCC chairman Ajit Pai said in a statement that the commission intends “to seek further review” of the decision, arguing that a dissent from Circuit Judge Anthony Scirica “ultimately will carry the day.”

“For more than twenty 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,” Pai’s statement said. “But for the last fifteen 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.”

In a statement of her own, Democratic FCC Commissioner Jessica Rosenworcel wrote, “Over my objection, the FCC has been busy dismantling the values embedded in its ownership policies,” adding, “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.”

Judge Scirica, in his partial dissent, wrote, “In my view, the FCC balanced competing policy goals and reasonably predicted the regulatory changes dictated by the broadcast markets’ competitive dynamics will be unlikely to harm ownership diversity. I would not delay the FCC’s actions. I would allow the rules to take effect and direct the FCC to evaluate their effects on women- and minority-broadcast ownership in its 2018 quadrennial review.”

The FCC’s deregulation efforts have been one of the sparks behind the ongoing consolidation in the local TV sector, with Sinclair, TEGNA, Tribune and Nexstar all actively buying and in some cases selling. Nexstar completed its acquisition of Tribune Media just last week.