On Tuesday, as has been covered in most of the broadcast trade press, the US Supreme Court held its oral argument in the Prometheus case. In this case, the FCC and a number of media companies seek to overturn the Third Circuit’s decision that threw out the FCC’s 2017 media ownership rule changes. As we wrote here, these changes included the abolition of the newspaper-broadcast and radio-TV cross-ownership rules, the abolition of the “rule of eight” that requires that there be eight independent TV owners in a market to allow the common ownership or control of two TV stations in a market, the allowance in some cases of the common ownership of two of the top 4 TV stations in a market, and the determination that TV joint sales agreements are not attributable. When the Third Circuit overturned the 2017 decision, those changes were undone (see our article here). In addition, the Third Circuit’s basis for its decision was that the FCC had done an inadequate job assessing the effect that relaxations in the media ownership rules might have had on minority ownership in the past and how diversity of ownership would likely be affected by the 2017 changes (looking for historical information the FCC claimed not to have). As a result, all other changes in the FCC’s media ownership rules have been put on hold, including proposed changes to relax the radio ownership rules because if the Third Circuit decision is upheld, any further changes in the local ownership rules have to make that same showing.
The argument on Tuesday went like so many court arguments – there were lots of questions directed by the Justices to all parties in the case. While there were some questions about whether the FCC had adequately justified its 2017 decision, there seemed to be many questions focused not on whether to overturn the Third Circuit decision, but instead on whether to overturn it on narrow grounds (that the FCC had justified the need for reform of its ownership rules despite any impact it might have on minority ownership and the courts should defer to the opinion of the expert agency), or whether to come out with a more sweeping ruling that says that the statute calling for Quadrennial Reviews of the FCC’s ownership rules makes competition issues the guiding factor in assessing whether or not to relax existing ownership rules, and that ownership diversity is at most a collateral or secondary consideration. If the Court in fact decides to overturn the Third Circuit, the basis of the decision could impact future ownership proceedings. What is next for those proceedings?
Continue Reading The Supreme Court Argument on Media Ownership – What’s Next?