Broadcasters Ask Court to Overturn FCC Media Ownership Rules

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By Lydia Beyoud

Nov. 14 — The nation’s top broadcast industry trade group filed suit Nov. 14 against the Federal Communications Commission over media ownership rules that the group argues don’t account for changes to the communications landscape in the internet age.

In a petition for review, the National Association of Broadcasters asked the U.S. Court of Appeals for the District of Columbia Circuit to vacate the FCC’s rules prohibiting ownership of more than two television stations, or a newspaper and TV station, in the same market National Association of Broadcasters v. FCC , D.C. Cir. App., No. 16-1394 . It cited the restrictions as examples of public interest regulations better suited to “a long-gone era.”

With its challenge, the NAB opened a new front in its ongoing fight against the rules. The group, including major broadcasters such as Sinclair Broadcast Group Inc., Gannett Company Inc., Hearst Television Inc. and Media General Inc., has been lobbying Congress to require the FCC to loosen the media ownership restrictions.

The NAB might end up scoring a win at the agency itself. Once Republicans take control of the FCC in President-elect Donald Trump’s administration, the agency could signal that it is prepared to rework some of the rules, Bloomberg Intelligence analyst Matthew Schettenhelm told Bloomberg BNA via e-mail. “It’s possible that the new FCC jumps ahead of the court here,” he said.

If the broadcast industry is successful in any of its attempts to loosen the FCC’s restrictions, opportunities for media industry consolidation in local markets could open up. “That means more newspapers, TV stations, and radio stations under one roof, serving the same local audiences,” Schettenhelm said.

The agency is required to undertake a quadrennial review of media ownership rules under federal law. The FCC concluded both its 2010 and 2014 reviews this year, but NAB said it still failed to meet a statutory requirement to “repeal or modify any regulation” no longer deemed to be in the public interest.

The NAB’s petition for review follows the U.S. Court of Appeals for the Third Circuit’s May decision vacating a controversial FCC rule to limit broadcaster joint sales agreements. Those allowed TV stations to combine advertising and sales resources in the same market. The FCC determined in 2014 that such agreements allowed broadcasters to skirt media ownership limits.

In that decision, ( Prometheus Radio Project et al. v. Federal Communications Comm., 3d Cir., Nos. 15-3863, 15-3864, 15-3865, 15-3866, 5/25/16), the court remanded the rules to the FCC without making a judgment on the merits of the agency’s decision to make JSAs trigger media ownership restrictions. Instead, the court vacated the rules because the FCC hadn’t concluded its quadrennial review of the media ownership rules since 2006.

The FCC approved its current set of media ownership rules on a party-line 3-2 vote Aug. 25. It readopted JSAs in addition to preserving existing media ownership limits, such as a prohibition on mergers among the top four national television networks.

The case is likely to end up moving from the D.C. Circuit to the same Third Circuit panel that ruled on Prometheus, Schettenhelm said. In its petition, NAB said it would not oppose transferring the case to that circuit.

If the case does come before the Third Circuit again, it wouldn’t be a surprise if the court’s patience with the FCC begins to wear thin, possibly leading to some of the media ownership rules being struck down, Schettenhelm said.

To contact the reporter on this story: Lydia Beyoud in Washington at lbeyoud@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

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