Supreme Court Hears Argument Over Media Ownership Rules

A general view of The United States Supreme Court - July 10, 2018 in Washington, DC. -Getty-H 2018
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On the final full day of the presidency of Donald J. Trump, his administration urged the Supreme Court to allow media ownership rules to change despite some who believe the move would hurt female and minority ownership of broadcast outlets. A high court with three Trump appointees could grant such wish, although the forthcoming decision figures to be prelude to more battles ahead.

Under a 1996 change in telecommunications law, the Federal Communications Commission reviews old ownership rules every four years and must repeal or modify anything that is no longer “necessary in the public interest as the result of competition.”

The FCC has taken this mandate and pursued deregulation, including a repeal on a ban of single-market cross-ownership of a broadcast station and newspaper. But repeatedly, the 3rd Circuit Court of Appeals has stood in the way because the independent agency, in its view, hadn't done an adequate job of justifying the impact on minority and female ownership of broadcast stations. That directive to the FCC for more consideration and better analysis has now landed at the Supreme Court at a moment when free-market conservatives are in position to flaunt their power on the high court. Accordingly, the future in the TV industry could be one of megamergers.

At today's hearing, many of the justices sought — and got — confirmation that nothing in the 1996 law explicitly required the FCC to examine minority ownership at all. "Can we reverse on those grounds?" asked Justice Samuel Alito.

Justice Sonia Sotomayor voiced why the case doesn't simply end there.

"It seems to me that the FCC has said for decades that minority and women ownership is in the public interest. I don’t see anything in the statute that says otherwise," she said.

Continuing, Sotomayor nodded to the Administrative Procedure Act, which ensures that government agencies aren't arbitrary nor capricious when making changes. She added, "We have a legion of cases that say while you don’t have to rule in a particular way, when you reject something, you should give it ample consideration."

According to Deputy Solicitor General Malcolm Stewart, the government hadn't previously applied the minority and female ownership criteria in adopting and retaining cross-ownership rules. Stewart thought the justices should be deferential to the FCC, a position that seemed to find favor with Justice Brett Kavanaugh, who noted the broad language of the 1996 law.

The National Association of Broadcasters also got a chance to argue for a repeal of the cross-ownership ban. Representing the group, Gibson Dunn partner Helgi Walker urged the high court to resolve the case on an analysis of the 1996 law (rather than the FCC's authority to interpret it) so there wouldn't be a sequel when a new administration got its own chance to review media ownership rules. She also implicitly backed Justice Clarence Thomas' concern that rules predated technological developments when addressing Alito's direction to highlight the benefits of allowing expiration: "For example, a broadcaster buying a failing newspaper would be a good thing [as] newspapers have been in a downward spiral for decades. … Amazon owns The Washington Post. Nobody thinks that’s the end of democracy."

Still, appearing on behalf of the Prometheus Radio Project, a nonprofit advocacy group, Ruthanne Deutsch stressed the Administrative Procedure Act with perhaps some hope that the conservative majority on the court wouldn't so readily be deferential to government regulators. The FCC's order "fails basic accountability," she said, adding that allowing the FCC to be "wholly arbitrary would only encourage agencies to do sloppy work."

Joe Biden will soon have his opportunity to nominate a new member to the FCC, and new leadership could then swing the commission toward a different direction.

The justices are undoubtedly cognizant of that dynamic, as perhaps evidenced by Chief Justice John Roberts' question today about what scrutiny would apply should a new administration take a race-conscious approach to media regulation. Stewart answered it'd be subject to heightened scrutiny. It's unlikely that this will be the grounds for a reversal of the 3rd Circuit as neither of the petitioners made it a core part of their arguments. Nevertheless, it perhaps portends what's coming as a new president is sworn into office.