Sinclair/Tribune Seen Likely to Go Before Full FCC

Delegating a matter to the bureaus is sometimes seen as an FCC tactic to make a decision harder to challenge, industry attorneys said. Since the item has been approved at the bureau level, it must be appealed to the full commission before the courts will ordinarily take it up, and it’s seen as easy for the agency to then delay acting on it, they said. This sort of logic was seen as the reason the agency’s now-rescinded policy on review of deals involving joint sales agreements was issued as a “guidance” from the Media Bureau in 2014 (see 1403140037). Deal proponents could also see delegated authority as a way to speed the approval process, industry attorneys said. Timing is important in Sinclair/Tribune because of the looming threat of a U.S. Court of Appeals for the D.C. Circuit decision that could strike down the FCC UHF discount rule (see 1805090075). The agency and Sinclair didn’t comment.

Sinclair/Tribune isn’t just new and novel because of its size, broadcast attorneys said. Its approval would be the maiden voyage for new ownership rules on FCC authorization of top-four duopolies, they noted. FCC rules require the bureaus to kick matters that don’t have clear precedents up to the full commission, said Georgetown Law Institute for Public Representation Senior Counselor Andrew Schwartzman, who also opposes the deal. In a news conference last week, Commissioner Jessica Rosenworcel said it’s her expectation that the full commission would vote on a deal “of this magnitude.”

“The matter obviously has generated significant public controversy, some justified and some not, and it is not an insubstantial transaction in terms of its size and impact,” emailed Free State Foundation President Randolph May, who has generally opposed FCC intervention in transactions. “It’s just about the way the Commission as an institution should handle matters like this one."

Handing the deal off to the bureau likely also would lead to strong political pushback, said industry attorneys and former officials. Chairman Ajit Pai’s interactions with Sinclair are reportedly subject of an investigation by the Inspector General’s office (see 1802200062), and target of frequent missives from Capitol Hill. It would look like a “railroading,” said one former official. The agency likely wants “all the process it can get” for the transaction, so the FCC’s eventual decision will be more difficult to challenge, an industry attorney said.

The delay created by approving Sinclair/Tribune at the bureau level also likely wouldn’t serve the companies involved, said a former FCC official. Though anti-consolidation groups would likely need to appeal such an approval to the commission before the courts, that would have the effect of lengthening the period of uncertainty about the deal’s eventual outcome. The principals would likely rather have a more certain outcome sooner, an industry attorney said. Though quicker approval might allow the deal to be granted before an unfavorable ruling on the UHF discount, that approval would be more vulnerable and more likely to be unwound, broadcast lawyers said.

If the deal is sent to the bureau, there’s little that Rosenworcel -- seen as the lone commissioner opponent to the deal -- could do to block it or force it to the full commission, Copps said. Though former officials said under some past administrations, two commissioners objecting was seen as sufficient to force an item before the full FCC, the policy was an unwritten rule dependent on the chairman’s discretion. Commissioner Mike O’Rielly suggested last year (see 1702220065) that such a policy be codified, but in his proposal, a single commissioner’s objection wouldn’t be enough to force a vote. O’Rielly’s office told us he still supports such a policy, but the current rule is entirely up to the chairman.