The Office of Management and Budget, acting pursuant to the Paperwork Reduction Act, has just approved the FCC’s broadcast incubator program, about which we wrote here. That approval makes the program effective. The program permits an established broadcaster to provide assistance to a new broadcaster (generally, a qualified small business) to enter the radio broadcast industry. If, over a 3-year period, the assistance provided by the existing broadcaster (usually either financial assistance or management training) is deemed a success, the established broadcaster can receive a credit allowing it to purchase a station in excess of the radio ownership limits allowed for broadcasters in a market of similar size to the one in which the incubation occurred. It is interesting that this rule became effective just as the US Court of Appeals heard oral argument on the question of whether that program does enough to encourage new entrants into broadcast ownership to meet court-imposed obligations to address these issues.
The oral argument is on the appeal of the FCC’s 2017 ownership decision which, among other things, did away with the prohibition on newspaper-broadcast cross-ownership and the rule that required that there be 8 independently owned TV stations in a market before one owner could own two stations in that market. The appeal, as we wrote here, essentially argues that the FCC has not done enough to promote minorities and other new entrants to get into broadcast ownership. Reports are that the judges asked the FCC many questions at yesterday’s argument as to whether the FCC had enough data to conclude that the changes that were made in 2017 were in the public interest and would not unduly burden new entrants who want to get into media ownership.
There is rarely any ability to determine from an oral argument in front of an appeals court how the ultimate decision will come up – but many will be watching. Not only could the court theoretically order the 2017 decision undone (though the same court in the US Third Circuit has previously questioned whether the newspaper-broadcast cross-ownership rule made any sense in today’s modern media landscape – see our article here) but, were the court to determine that more study was needed before rules could be changed, the current media ownership review, concentrating principally on radio issues (see our article here), could be put on hold while the FCC conducts whatever additional review is required by the court’s decision. A court decision usually takes at least several months to be considered, written and released to the public. Until then, many interested parties will be anxiously awaiting the news.