LAST WORD
The FCC Fights Back
The commission wants the “last word” in a debate with two U.S. Court of Appeals judges who have curbed ownership rules for 17 years. BY MEREDITH SENTER
T
he Federal Communications Com- Bush to the Obama to the Trump admin- reality. For example, the newspaper-broadmission (FCC) says it is “mad as istrations. In four instances the two judg- cast cross-ownership ban lost relevance, if hell, and it’s not going to take this es from the Third Circuit have foiled the it ever had any, decades ago. Yet the court anymore.” Well, maybe the com- FCC’s attempts to modify its ownership continues to foil its repeal. mission hasn’t used those exact words, but rules. In each case, the same third judge In the most recent decision, the court it is certainly channeling Howard Beale dissented. In other words, two judges have didn’t question the commission’s competifrom the movie Network. effectively constituted themselves as an tion analysis, which showed how dramatiThe commission’s ire relates to a three- FCC ownership rule review court. cally the industry had changed. Instead, it judge panel of the U.S. Court of focused on the quality of the data Appeals for the Third Circuit, the FCC used in evaluating female which hears cases arising in New and minority ownership, which Jersey, Pennsylvania and Delathe judges found to be insufficient. ware. It set aside the commisUltimately, the decision on sion’s 2017 decision that loosened whether changes to the ownership the broadcast ownership rules, as rules are in the public interest is a discussed in “Dear Expert” on question of policy. According to page 6. the FCC, Congress has delegated Making the situation even the policy decision to the commore grating: over the last 17 mission, not to two judges. years, the same three judges have The commission initially asked reviewed every attempt by the all the judges in the Third Circuit FCC to revise its broadcast ownto rehear the case. The National ership rules pursuant to the conAssociation of Broadcasters and gressionally required review proseveral station groups joined this rulings of two judges who are at odds with the FCC could be cess. And two of the three have The request, arguing that the two overturned by the U.S. Supreme Court. consistently thwarted the FCC’s judges based their decision on ownership-relaxation efforts. The court’s decisions appear to be based impermissible factors and that it is impropHere’s the backstory: In 2003, a public more upon the policy considerations the er for the same judges to retain jurisdiction interest group known as the Prometheus two judges believe are of paramount impor- over the rules. Not surprisingly, the Third Radio Project sought review of the FCC’s tance than upon whether the rules adopted Circuit denied the request. 2003 reevaluation of its ownership rules by by the FCC are unlawful. This is an imThe FCC’s next step is to ask the U.S. Sufiling an appeal in the U.S. Court of Ap- portant distinction because under the U.S. preme Court to intervene. It is not required peals for the Third Circuit. legal system, laws are enacted by Congress to take the case. But unless it does, the comIn 2004, two of the three judges set aside and agencies. Judges’ roles are generally lim- mission’s decades-long much of the FCC’s 2003 decision, telling ited to determining whether the laws were efforts to liberalize the the FCC that it needed to give the judges lawfully enacted and to interpreting them. broadcast ownership a better explanation of why the ownership In this instance, the statute requiring the rules may continue to rules should be relaxed. FCC to review its rules every four years be stymied by the two It is not unusual for a U.S. Court of Ap- directs the commission to consider current judges. peals to set aside a rule adopted by a federal ownership rules and repeal or modify any It rema ins to be regulatory agency. But in this case, the deci- that are no longer in the public interest as seen who will have the sion was remarkable because the court said a result of competition. The two judges in last word. that it retained jurisdiction over the case, the majority, however, have focused primarMeredith Senter is a member of the law firm which meant that after the FCC reconsid- ily on whether the commission adequately Lerman Senter PLLC, which represents clients ered the rule change, the same three judges analyzed the impact of the rule changes on before the FCC. He can be reached at would consider any appeal. female and minority ownership. msenter@lermansenter.com or (202) 429-8970. Since that time, the composition of the More importantly from an industry perLerman Senter represents one of the parties seeking rehearing of the court decision. FCC has changed three times, from the spective, the court’s decisions seem to ignore
30 The Financial Manager • January/February 2020
