Martin Media Ownership Proposal Violates APA, FCC Told

The limited deregulation envisioned in Martin’s proposal drew complaints by Fox, Media General, Tribune and others. The plan violates APA and general principles of administrative law because legal precedent demanded that the cross-ownership ban be repealed fully, the companies said. In Section 202(h), the 1996 Telecommunications Act requires the commission to repeal rules that no longer serve the public interest, said filings by several broadcasters and publishers. The 3rd U.S. Appeals Court in Philadelphia ruled in 2004 that the cross-ownership ban wasn’t needed to promote competition, localism or diversity, they said. That court’s remand of the most recent FCC order deregulating media ownership, in Prometheus Radio Project v. FCC, led Martin in June 2006 to start the current review and circulate an order to carry out his plan. The order will be voted Tuesday at a media-heavy meeting (see separate report in this issue), the FCC said late Tuesday. Commissioners Jonathan Adelstein and Michael Copps and many senators have said they want the vote delayed.

Adelstein and Copps called the vote’s timing “a huge mistake” in a late Wednesday release. “The FCC should have heeded the calls of Congress and the American people to conduct a credible process on an issue of this importance,” the FCC Democrats said. Their bids to “get the processes back on track” haven’t borne fruit, Adelstein and Copps said. “Given the lateness of the hour, we hope that either we can turn this around internally, or that Congress can save the FCC from itself,” they said. “It means taking meaningful action on minority and female ownership and broadcast localism, rather than the mish-mash of half-baked ideas currently before us.”

The NAB and many broadcasters termed Martin’s order a good start, but want more. The FCC should kill the cross- ownership ban under the Telecom Act and general administrative law principles, Media General said. “Long established administrative law precedents equally compel total repeal,” as the commission did in a 2003 order, the company said. “Changing course at this point and doing anything short of repealing the 1975 rule would similar violate administrative law precedent… Any change would require clear and compelling evidentiary support and a detailed and persuasive explanation for reversing the direction laid out in 2003.” Tribune agreed that Martin’s plan is “inconsistent” with APA requirements and the 3rd Circuit remand in Prometheus.

Others were harsher in assessing the cross-ownership proposal. “An unwarranted regulatory step backward,” said Fox, contrasting it with the 2003 order. “Such an abrupt about-face is inconsistent with the reasoned decisionmaking required of the commission. An agency changing its course must apply a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored.” The NAB said Martin rightly sought a partial repeal of the cross-ownership ban, but he could do more based on “the voluminous record in this proceeding.” The FCC should weigh newspapers’ and stations’ financial condition when owners seek approval of cross-ownership arrangements, the NAB said, also urging the agency to ease restrictions on common ownership of two TV stations and to let companies own more radio stations in a given market. “The November 13 proposal does not reflect current video marketplace realities because it makes no changes to the existing television duopoly rule,” the NAB said.

Martin’s plan doesn’t take into account a 2002 court remand of duopoly rules, Sinclair said. That company’s suit against the FCC led to the U.S. Appeals Court for the District of Columbia remand of the rules, which prevent a company from owning two stations in a market if both are among the four most popular and if the market doesn’t have at least eight other independently owned full-power TV broadcasters. The Martin proposal is “unacceptable to say the least,” Sinclair said. “The chairman is compelled to heed the court’s directive yet has inexplicably and unjustifiably failed to do so.” The Coalition of Smaller Market Television Stations called the duopoly rule outdated, criticizing Martin for not revamping it in the cross- ownership order. Clear Channel likewise slammed the order for not changing radio station caps. “The FCC is under an affirmative, mandatory obligation to address the local radio ownership limits in this proceeding” from the 3rd Circuit, Clear Channel said. “The very same types of concerns that appear to be animating the chairman’s proposal to relax the newspaper/broadcast cross-ownership rule compel at least analogous action as to radio.” Martin has said cross- ownership rules most need updating.

The chairman took heat from foes of consolidation for issuing what they called an unusual and vaguely worded news release on his proposal. Neither that release nor a rulemaking notice published in August 2006 in the Federal Register amount to proper public notice, said Common Cause, the National Organization for Women, United Church of Christ and six other groups. Another reason the November proposal isn’t sufficient notice is because it wasn’t published in the Federal Register or voted on by the commissioners, said the filing. Martin issued the release after failing to persuade his colleagues to vote for a public notice. The American Federation of Television and Radio Artists and the CWA said Martin’s handling of the release “makes a mockery of a fair, open and deliberative process.” The agency should publish the rule in the Federal Register and give the public three more months to comment on it, the unions said.

Martin bucked APA procedure because that law mandates a commissioner vote on requests for comment, said Prometheus, which sued the FCC over the last round of media deregulation. Martin could have followed the rules by issuing a public notice, said Media Access Project President Andrew Schwartzman, representing the group. Martin’s failure to issue a notice “certainly gives us one more potential basis for legal challenge in the event the commission adopts this rule,” Schwartzman said. “I do not recall this ever having been done since I've been watching the FCC.”

A professor of administrative law not involved in media ownership policy agreed that Martin’s move was unprecedented. “I've never seen anybody make a press release asking for comment on particular proposed language,” said Lewis & Clark College Professor William Funk. “This clearly cannot satisfy the requirements for a notice of proposed rulemaking on a number of different levels, and I can’t believe the chairman even believes it does.” But no law says a commissioner of any agency can’t individually seek public comment on a proposal, Funk said. “The APA certainly doesn’t require that you publish in your notice of proposed rulemaking the explicit text of the proposed rule.” It’s not “standard practice” for the FCC to tell the public exactly what an order will say before commissioners vote, Martin wrote House Commerce Committee Chairman John Dingell, D-Mich. (CD Dec 12 p3): “Because of the unusually controversial nature of the media ownership proceeding, I took the extra step,” he said.

Some consolidation critics said Martin should have done more and released the text of an order. His release offered few specifics, Consumer Federation of America, Consumers Union and Free Press said in a filing. “Terms are not defined. Classifications, conditions and standards for merger review are ambiguous,” said the groups. “Given the credibility deficit that follows from the agency’s record on this issue, it is imperative that the commission avoid the cloud of suspicion that will arise in its absence of a transparent process.”