The FCC violated the Communications Act by not rolling back broadcast ownership rules in the 2018 quadrennial review (QR) order, ignoring the increased competition broadcasters face, said petitioners Zimmer Radio, Nexstar, NAB, Beasley Media and Tri-State Communications in a reply brief filed in docket 24-1480. It was filed in the 8th U.S. Circuit Court of Appeals Tuesday. In addition, all four network affiliate groups and a host of radio companies filed intervenor briefs against the FCC. The Communications Act's provision requiring QRs -- Section 202(h) -- isn't a “check-the-box exercise,” said the petitioner’s brief. “Congress intended it to operate as a mechanism of continuing deregulation,” and the plain text instructs that the FCC “demonstrate affirmatively that its rules remain necessary in light of competition” or “modify or repeal them entirely.”
The FCC’s order allowing geotargeted radio broadcasts let broadcasters “go after new revenue streams” and is “the dawn of new possibility for radio,” said FCC Commissioner Geoffrey Starks in remarks at the National Association of Black Owned Broadcasters Black Media Summit and Power of Urban Radio Forum. The order is “a game changer,” especially for “small and singleton owners that are working hard to stay on the air,” said Starks. Both the commissioner and NABOB were vocal supporters of the radio geotargeting order before it was approved unanimously in April. REC Networks and Press Communications targeted the order with petitions for reconsideration (see 2406210054). The FCC is working to wrap up the 2022 quadrennial review “as soon as we can,” said David Strickland, media adviser to FCC Chairwoman Jessica Rosenworcel, in a panel discussion Thursday. Strickland declined to comment on the timing of the 2022 QR or say whether ongoing litigation over the 2018 QR could influence it.
The FCC’s 2018 quadrennial review order “reasonably” found that competition hasn’t diminished the need for the agency’s broadcast ownership rules. Moreover, the agency was within its authority to expand rules limiting broadcasters from owning multiple top-four network affiliates, the FCC said in a respondent's brief filed in the 8th U.S. Circuit Court of Appeals. The agency was responding to challenges of the QR order that multiple broadcasters brought (see 2407160069). Though filed Friday, the brief wasn’t public until Monday. “The record showed that despite the proliferation of non-broadcast sources of audio and video programming, broadcast radio and television remain virtually the only providers of local programming,” the FCC said. Broadcasters “provide the lion’s share of the local news and community-oriented programming that is essential to achieving the FCC’s goals of promoting localism and viewpoint diversity,” therefore justifying the retention of limits on local radio and TV ownership, the agency said. The FCC dismissed broadcaster arguments that its approach means broadcasters could never obtain relief from agency ownership restrictions even if the industry were on the brink of death. “This doomsday scenario is purely hypothetical,” the FCC said. “Neither broadcast radio nor broadcast television is currently in such dire straits.” In future Quadrennial Review proceedings, “if non-broadcast providers of audio and video services start offering more of their own local news and community-oriented programs in competition with the local programming of broadcast stations,” the FCC could revise its market definitions, the filing said. The agency expanded the top-four prohibition to include multicast channels and low-power stations to prevent broadcasters from exploiting workarounds to limits on owning multiple top-four stations in the same market, the brief said. MVPDs “have first-hand experience of the harm caused by certain broadcasters’ end-runs around the rule,” said NCTA and the Advanced Television Broadcasting Alliance in an intervenor brief supporting the FCC position. “Those end-runs cause the same public interest harms that the Top-Four Prohibition was meant to prevent and should therefore be prohibited for the same reasons.” The court should reject broadcaster arguments that the expansion of the top-four rules regulates content and violates the First Amendment, the FCC said. The rule change “targets transactions involving network affiliations that may be used to evade the local television rule, and it applies regardless of the content of programming.”
The FCC and other parties that Standard General and founder Soohyung Kim accuse of participating in a racist conspiracy to torpedo the company's $8.6 billion purchase of Tegna (see 2404250059) are urging dismissal of Standard's suit. Multiple defendants argued in motions to dismiss Monday that Standard's suit before the U.S. District Court of the District of Columbia is in the wrong court. The U.S. Court of Appeals for the D.C. Circuit in April denied a Standard/Tegna petition for writ of mandamus aimed at pushing the FCC to move on review and approval of the deal (see 2304210058).
Don’t expect major daylight between a Kamala Harris administration and the Joe Biden White House on major communications policy issues, industry and policy experts predicted. Much focus and effort would center on defending the FCC's net neutrality and digital discrimination orders in the current federal circuit court challenges, as well as pursuing net neutrality rules, they said. Less clear would be the nature of the relationship between Harris' White House and Big Tech. The Harris campaign didn't comment. Deregulation and undoing net neutrality are considered high on the to-do list for the administration of Republican presidential nominee Donald Trump if he's elected (see 2407110034).
The FCC’s Communications, Equity and Diversity Council may lobby for affordable connectivity program funding, according to comments at Tuesday’s CEDC meeting, the second under a new charter that lasts until 2025. The CEDC has 10 months to prepare recommendations for the FCC on implementing digital discrimination rules and getting the most for underserved communities out of federal broadband infrastructure funding, Chair Heather Gate said. “We must make recommendations to the FCC directly, but we should not be afraid to make recommendations that the FCC can communicate with other agencies,” Gate said. “We may also ask the FCC to communicate our recommendations with the White House or Congress."
The Democratic Party’s switch to Vice President Kamala Harris as its candidate for the White House is expected to provide a huge boost to broadcasters’ political advertising haul from the 2024 election, TV and radio executives said during recent Q2 earnings calls. Broadcasters also see sports returning to traditional airwaves, and Nexstar CEO Perry Sook predicted pay TV is arriving at an “inflection point” that could arrest plummeting subscriber numbers and drooping retrans dollars. Outgoing Tegna CEO Dave Lougee disagreed during what he said would be his final earnings call before retiring. “The innings of net retrans as the growth driver have certainly come to the later stages,” he said. Mike Steib will succeed Lougee next week.
Sens. Elizabeth Warren, D-Mass., and Bernie Sanders, I-Vt., and Rep. Joaquin Castro, D-Texas, are urging the FCC and DOJ Antitrust Division to “closely scrutinize” the Venu Sports streaming platform joint venture from Disney subsidiary ESPN, Fox and Warner Bros. Discovery (see 2402070006). “This massive new sports streaming company would be poised to control more than 80% of nationally broadcast sports and more than half of all national sports content, putting it in a position to exercise monopoly power over televised sports,” the lawmakers said in an eight-page letter to DOJ Antitrust Chief Jonathan Kanter and FCC Chairwoman Jessica Rosenworcel released Wednesday. “The market power of [Venu's] three giant parent companies would enable it to discriminate against competitors and increase prices for consumers.” The streaming deal’s description as a joint venture “should not prevent antitrust and telecommunications regulators from giving it the scrutiny it deserves,” the lawmakers said: The FCC and DOJ Antitrust should “oppose it if it violates antitrust or telecommunications laws or regulations.” They suggested the FCC examine whether the Venu Sports proposal represents “a violation of the national ownership cap” given its “duty to prevent a single entity from reaching more than 39% of households, and its broader mandate to promote competition in the public interest.”
The FCC treats its quadrennial review process “like a basketball center blocking shots,” broadcasters say as they challenge the FCC’s 2018 quadrennial review order in an opening brief in the 8th U.S. Circuit Court of Appeals. The broadcasters argue that the 8th Circuit should vacate not only the 2018 QR order, but also local TV and radio ownership limits, because the FCC has failed to justify retaining them. The agency “never seriously examines whether its rules are in the public interest as a result of clear competition; instead it simply swats at certain alternative proposals,” says the filing from NAB, Zimmer Radio, Tri-State Communications, Nexstar and Beasley Media. Though the brief was filed Monday, as of Tuesday afternoon, it was still inaccessible on the 8th Circuit’s website because the clerk of the court must approve filings before they go public. “Congress directed the Commission to determine whether its broadcast ownership rules remain necessary in light of competitive changes; that undertaking requires a fresh look each time, and an affirmative, reasoned justification if the Commission determines the limits are still necessary,” the brief says. “The Commission failed that task.” The petitioner brief and an intervenor brief from the ABC, CBS, Fox and NBC affiliate station groups argue that the U.S. Supreme Court’s recent decision overturning Chevron deference means the 8th Circuit should rule that the agency has violated Section 202h of the 1996 Communications Act. A collection of radio broadcasters also filed as intervenors. The QR order “disregards the deregulatory nature of section 202(h) and ignores competition from non-broadcast sources,” the joint brief says. The broadcasters also argue that the QR order’s inclusion of channels hosted on multicast stations or low-power stations under the Top Four prohibition violated the First Amendment. “The Commission may not regulate broadcasters’ programming choices -- the Communications Act does not authorize it, and the First Amendment forbids it,” the joint filing says. “It is long past time for the FCC to modernize its broadcast ownership rules; these are relics from a bygone era, created before the internet, smartphones, social media and streaming,” NAB CEO Curtis LeGeyt says in a release. “NAB's brief succinctly demonstrates to the U.S. Court of Appeals for the Eighth Circuit that the FCC has failed to justify that these rules remain necessary to serve the public in light of the immense competition broadcasters face in today's media marketplace."
Expect a Donald Trump White House and FCC to focus on deregulation and undoing the agency's net neutrality and digital discrimination rules, telecom policy experts and FCC watchers tell us. Brendan Carr, one of the two GOP minority commissioners, remains the seeming front-runner to head the agency if Trump wins the White House in November (see 2407120002). Despite repeated comments from Trump as a candidate and president calling for FCC action against companies such as CNN and MSNBC over their news content, many FCC watchers on both sides of the aisle told us they don’t expect the agency to actually act against cable networks or broadcast licenses under a second Trump administration.