The United States Supreme Court yesterday released its decision upholding the FCC’s 2017 changes to its ownership rules in the FCC v Prometheus Radio Project case (see our summary here).  Those rules had been put on hold in 2019 by a decision by the Third Circuit Court of Appeals which held that the FCC had to develop a more detailed record on the impact of rule changes on minority ownership before making any such changes (see our summary of that decision here).  The Supreme Court did not issue a sweeping decision evaluating the competitive landscape for the broadcast industry, nor was it expected to.  Instead, the Court decision was a narrow legal one, looking at whether the decision of the FCC was entitled to traditional judicial deference to expert administrative agencies.

The Supreme Court was reviewing the legal question of whether the FCC’s 2017 review of diversity was adequately justified.  In 2017, the FCC determined that that no substantial impact on diversity was proven by any party who filed comments in the media ownership proceeding and, to the extent that there was an impact, the benefits of making broadcast companies stronger competitors in today’s media marketplace outweighed that impact.  The Third Circuit would have had the FCC conduct a sweeping historical analysis of the impact of past instances where the ownership rules were relaxed to see the impact on minority ownership so that the FCC could judge the likely impact of new changes to the rules.  The Supreme Court found that the FCC had no obligation to conduct its own studies into that issue and, based on the evidence before the FCC, its decision to relax the rules was not an arbitrary one.  Thus, it was entitled to the deference given to decisions of expert regulatory agencies (see our article here on the deference given to administrative agency decisions).  In essence, this was a narrow decision based on principles of administrative law to which all nine Justices, liberal and conservative, could agree.
Continue Reading Supreme Court Reinstates 2017 FCC Changes to Broadcast Ownership Rules Including the End to Newspaper-Broadcast Cross-Ownership Ban – But Radio Changes Yet to Come