3rd Circuit Panel Skeptical of FCC Lack of Data in 'Prometheus IV'
PHILADELPHIA -- Judges for the 3rd U.S. Circuit Court of Appeals hearing oral argument for Prometheus IV Tuesday aggressively questioned the FCC's lack of data on the impact on diversity of its ownership rules. They seemed skeptical of agency arguments that it wasn't required to gather additional information to justify rolling back ownership regulations. “Where the data ends, that's where the commission's judgment begins,” argued FCC Associate General Counsel Jacob Lewis Tuesday in support of the FCC's 2010 and 2014 quadrennial review orders and subsequent order on reconsideration. Since eliminating the rules served the public interest, the agency didn't need to know the impacts of those decisions on diversity, he said.
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“To make assumptions, you have to have facts,” said Judge Thomas Ambro. Is gathering data on diversity “really that difficult?” asked Judge Julio Fuentes. “You have their license applications.”
The panel wasn't amenable to arguments from the anticonsolidation petitioners Prometheus Radio Project, Free Press and others that the court should appoint a special master to oversee FCC data collection efforts if the ownership rules are vacated and remanded. Such masters are usually appointed only to observe, not direct, Ambro told their representative, United Church of Christ attorney Cheryl Leanza. Judges questioned arguments from the Multicultural Media Telecom and Internet Council and National Association of Black Owned Broadcasters the FCC hadn't given required notice it would allow waivers from its radio incubator program in “comparable markets.” Receiving an ownership waiver in a large market is “an inducement,” Fuentes said. The judges didn't ask as many questions about broadcaster arguments that it was arbitrary for the FCC to not eliminate rules against common ownership of two top-four stations in the same market, and Ambro asked why it wasn't within the FCC's discretion to draw such a line.
Attorneys on both sides told us Tuesday that Ambro and Fuentes didn't appear accepting of Lewis' arguments that the data gathering wasn't required. Told some of the data the FCC had used to justify its ownership rulings hadn't taken into account the effects on gender, Fuentes and Ambro described the commission's data collection as “zero.” “Ten times zero equals zero,” Ambro said. “If we were to affirm, I can just see the blurb: '3rd Circuit flunks Stats 101,'” Ambro told Lewis. Broadcast attorneys had said the FCC was starting from behind in the case (see 1906070052">1906070052) and an attorney representing broadcast intervenors in the case appeared primarily focused on minimizing what rules would be vacated if the panel finds against the FCC.
“The proper remedy is targeted remand,” argued Gibson Dunn attorney Helgi Walker, saying the FCC wasn't required to collect the diversity data. Most of the FCC's ownership recon order shouldn't be vacated if the issue is the lack of data collection, she said in an interview. The agency can correct the missing data on remand, Leanza said. FCC General Counsel Tom Johnson declined to comment.
The FCC “sidestepped” the court's data collection requirements and reused an eligible entity standard the 3rd Circuit had previously rejected, Leanza said. Diversity is only one aspect of the public interest standard, and since the agency didn't have evidence of an adverse impact, it had to move forward, Lewis said. Judge Anthony Scirica -- the lone dissenter in previous FCC Prometheus losses -- challenged Leanza on whether the agency had fulfilled its obligations. The FCC was under direction to “take action,” he said. “Why can't they move forward?”
Intervenors had challenged the standing of the anticonsolidation and diversity group petitioners, but the three-judge panel asked no questions about that. That's a signal they aren't likely to throw the case out on standing, a broadcast attorney said. The panel may have been unwilling to take that matter up with the case in its fourth iteration with many of the same petitioners, the lawyer said.
The FCC hasn't sufficiently provided evidence to show that the combinations permissible without the top-four prohibition would hurt competition, argued broadcast lawyer Jack Goodman. There's no data to be provided on how top-four deals affect competition because the agency has never allowed them, said FCC Counsel Matthew Dunne. Attorneys told us Tuesday that if the court finds in Prometheus' favor and vacates or remands the media ownership recon order, it likely can't simultaneously rule in favor of Goodman's broadcaster clients that the order didn't go far enough.
The regulator didn't properly give notice that it wasn't considering population as the deciding factor for whether markets are comparable for the purposes of the broadcast incubator program, said Litton attorney Dennis Lane. The NPRM used the phrase “similar markets,” he said. “Those are synonyms,” argued Lewis. He said allowing incubators in large markets would be an incentive encouraging incubation.
MMTC Senior Adviser David Honig was “stunned” by Lewis' argument. “We do not believe the U.S. broadcasting industry is so disinterested in diversity that only a sham program will motivate the industry to act,” he said after the hearing.