Last week, broadcasters and broadcast journalists were abuzz with discussions of the FCC’s Media Bureau issuing a hearing designation order referring to an Administrative Law Judge questions about the proposed acquisition of the TEGNA broadcast stations by Standard General Broadcasting.  This week brings news that the parties have filed a Motion asking that the Judge certify this designation to the FCC Commissioners to determine whether the case really should have been designated for hearing.  The request that the case be referred to the Commissioners notes that the designation would have the effect of terminating the transaction, as the contract provides the parties only until May to close, and the buyer cannot get the agreement extended.  With so many questions about the TEGNA deal and its designation for hearing, we thought that we would review the hearing designation process and look at the inherent delays in the process which led to the parties’ contention that the designation, if not reviewed by the Commission, will effectively kill the deal.  In a subsequent article, we will look at some of the substantive issues raised by the hearing designation order.

Five years ago, we wrote about the hearing designation process in connection with the last major case where a proposed broadcast transaction was designated for hearing, i.e., Sinclair Broadcast Group’s proposed acquisition of the television stations owned by Tribune Media.  The TEGNA case differs from the Sinclair case in one significant manner, namely that the hearing designation order in the TEGNA case was issued by the Chief of the FCC’s Media Bureau, not by the Commissioners themselves.  In the Sinclair case, the Commissioners issued the hearing designation order, meaning there was no opportunity to ask for the review now being sought by the parties to the TEGNA deal.  When a designation order is issued by a Bureau, the party whose application was designated for hearing can, as in the TEGNA case, ask the presiding Administrative Law Judge to certify the case to the Commissioners before starting the hearing process, if there are questions of law that suggest that the case should not have been set for hearing.  While the Judge can decide to seek the guidance of the full Commission through this kind of certification, the full Commission need not take up the case even if the Judge decides to certify it to them.  Instead, the Commissioners can decide that the hearing should move forward, and that the legal issues can be considered later after the full hearing has taken place.  While that is the procedure set out in the FCC’s rules,  the TEGNA parties argue that were the Judge to certify the case and the Commission did take action, then they intend to directly appeal the matter to the Courts for review (which is normally not allowed until a decision is reached by the ALJ) because the designation for hearing by itself, issued after the application was pending for a year, equates to a the denial of the application.  What in the process for a case once designated for hearing that leads to that conclusion?  Let’s look at the process of setting a case for hearing.Continue Reading Parties to TEGNA Deal Seek Full Commission Review of Hearing Designation Order – Looking at the Process They are Trying to Avoid