Administrative Stay of UHF Discount Restoration Sheds Little Light on Court's Direction
A judicial administrative stay issued against FCC restoration of the UHF discount (see 1706010081) will keep the rule from coming back into effect on its planned June 5 effective date. It doesn’t indicate much about how the case will play out, attorneys said in interviews Friday. The stay is intended to give the U.S. Court of Appeals for the D.C. Circuit enough time to consider the emergency request for stay filed by several public interest groups, “and should not be construed in any way as a ruling on the merits of that motion,” said the order (in Pacer) issued Thursday evening. Since courts are able to reject outright emergency requests for stay, it should be mildly encouraging for public interest petitioners Free Press, Common Cause, Prometheus Radio Project and the others that the court asked the FCC for a response and set aside more time to consider the matter, said Fletcher Heald appellate lawyer Harry Cole.
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He and other attorneys said the case is still likely to be decided in the FCC’s favor (see 1705300070). Georgetown University Institute for Public Representation Senor Counselor Andrew Schwartzman, who represents the petitioners, said it's impossible to know how the court will proceed.
The stay could mean broadcasters will have to wait “a few weeks” to find out what happens with the UHF discount, Wells Fargo analyst Marci Ryvicker emailed investors. The June 5 effective date is “irrelevant,” she said, and inserts “uncertainty” into broadcaster expectations of deregulation. Wilkinson Barker broadcast attorney David Oxenford said in a blog post Friday he expects things to move faster. “It appears the consideration of these arguments will play out very quickly,” Oxenford said. There doesn’t seem to be a reason for all this speed, he said. “There does not seem to be any imminent risk of anything happening, as the FCC procedurally does not seem to be in a position to imminently grant any application that would create new combinations taking advantage of the reinstated UHF discount,” said Oxenford, also calling the matter “an anomalous rush to a decision.”
A long stay would harm broadcasters, said Sinclair in a filing. The company is dependent on the discount’s restoration for its proposed buy of Tribune Media. “It cannot be disputed that suspending a pending transaction for months while waiting for a judicial appeal to run its course would cause significant harm,” Sinclair said. “Such a delay would inherently increase financing and other costs and perhaps jeopardize funding and consummation of the transaction completely.” Uncertainty created by the court battle “is clearly an overhang” for Tribune and Sinclair because of their proposed deal, Ryvicker said.
The administrative stay asks petitioners to file a single reply in support of the emergency motion by Wednesday morning, which Cole also said was positive for their case, since it provides another chance to present arguments. Filings indicate disagreement between public interest petitioners and broadcast intervenors that asked the groups for permission to file individual responses rather than the joint one previously indicated. Several intervenors did file jointly, including Univision and Tribune, but Sinclair filed its own. Schwartzman informed the court of the dispute, and suggested an administrative stay as possible remedy.
The stay was issued by a different panel of judges than asked the FCC to respond to the initial emergency stay request. The previous panel consisted of Judges Sri Srinivasan, Nina Pillard and Thomas Griffith. The panel that ordered the stay consists of David Tatel, Robert Wilkins and Janice Brown. An official in the D.C. Circuit’s Clerk office said the panel switch was because the makeup of the court’s rotating motions panel changed as scheduled, declining to explain the exact nature of that schedule. One attorney said the previous panel, featuring two judges appointed by former President Barack Obama, might take a harder look at the administrative procedure questions of the FCC case, since it involves a rollback of rule made under the previous administration. On the current panel, Brown was appointed by former President George W. Bush, Tatel by former President Bill Clinton, and Wilkins by Obama. The D.C. Circuit official said it wasn't possible for her to tell us the make-up of the judges’ panel that will rule on the emergency stay order.
Petitioners haven’t demonstrated that halting restoration of the UHF discount will cause irreparable harm, said the FCC and broadcaster responses. Before being eliminated by the previous FCC, the discount was in effect for decades, Sinclair noted. “Everything Sinclair or any other broadcaster would be able to do upon restoration of the UHF Discount, it could have done legally for many years prior to the Commission’s repeal of the UHF Discount late last year.” The discount was created in 1985, and the national cap was set at its current 39 percent of households in 2004. It "strains credulity to claim restoration of the UHF Discount will now suddenly cause Petitioners to suffer immediate and irreparable harm,” Sinclair said.
Discount restoration won’t directly cause the harm that concerns the petitioners, the FCC said. “They contend that if, at some indefinite point in the future, the FCC commences a separate adjudicatory proceeding to consider a license transfer application that would have violated the national cap but for the UHF discount, and if the FCC approves the application, they will suffer cognizable harm at that point." That chain of events depends on deals the FCC hasn’t considered yet and “is much too speculative to warrant a stay,” the agency said.