Yesterday, a panel of judges from the US Court of Appeals for the Third Circuit decided by a 2 to 1 vote to overturn the FCC’s 2017 decision that made significant changes to its ownership rules (see the decision here). The Court sent the case back to the FCC for further consideration. The 2017 decision (see our article here) was the one which ended the ban on the cross ownership of broadcast stations and daily newspapers in the same market and the limits on radio-television cross-ownership. The 2017 decision also allowed television broadcasters to own two TV stations in markets with fewer than 8 independent owners and made other changes to the radio and TV ownership rules. Yesterday’s decision also put on hold the FCC’s incubator program meant to assist new owners to acquire radio stations (see our summary of the incubator program here). All of this was done without any analysis whatsoever as to whether marketplace changes justified the changes to the ownership rules or of the impact that the undoing these rule changes would have on broadcasters and other media companies – including on radio companies hoping for changes in the radio ownership rules in current proceeding to review those rules (see our articles here and here).
What led the Court to overturn the decision if it was not the Court’s disagreement with the FCC’s determination that change in the ownership rules was needed? This Court, in fact these same three judges, has overturned the FCC three times in the last 15 years, stymieing ownership changes because the Court concluded that the FCC had not sufficiently taken into account the impact that rule changes would have on diversity in the ranks of broadcast owners. Here, again, the Court determined that the FCC did not have sufficient information on the impact of the rule changes on ownership diversity to conclude that the rule changes were in the public interest – and thus sent the case back to the FCC to obtain that information before making any ownership rule changes. What led the Court to that conclusion, and what can be done about this decision?