The FCC under presumed next Chairman Brendan Carr will scrutinize the Skydance/Paramount deal but also remove restrictions on broadcast ownership and “rebalance the scales in favor of business,” former FCC aide Adonis Hoffman wrote in a blog post for The Media Institute Wednesday. Although the FCC would “normally” review only the transfer of broadcast licenses connected with Paramount/Skydance, Hoffman said Paramount has issues with audience measurement and minority shareholders questioning the deal and that could merit the FCC conducting a more thorough examination. A complaint filed against CBS about editing a 60 Minutes interview “is unlikely to pass legal muster” but is also likely to lead Carr to look more closely at the transaction, Hoffman said. Though Hoffman expects scrutiny of the Paramount deal, the agency also will be friendlier to other broadcast acquisitions. “The new FCC promises to be much less hostile to companies seeking to consolidate,” he wrote. “That alone should encourage the mergers and acquisitions deals that have been sitting on the sidelines awaiting a more favorable regulatory environment.” He said Carr is likely to “reconfigure the vast amount of power that FCC bureaus now have and to centralize that decision-making in the office of the chairman.” That will make it more difficult for bureaus to levy fines and derail deals, Hoffman said, adding Carr will also likely streamline or sideline the agency’s advisory committees. Carr’s FCC “can be expected to function more like an activist SEC,” with regulations always changing to reflect shifting market dynamics. “Having served at the FCC as a legal adviser, Commissioner and now Chairman Carr has the institutional credibility to be politically courageous in consolidating power and effecting change.”
The incoming Republican administration and Congress will likely work at rolling back many of the current FCC’s policies through a combination of agency action, court decisions and the Congressional Review Act (CRA), attorneys and analysts told us in interviews. The CRA's threat also will likely limit the current FCC's agenda, they said. “The CRA is kind of looming over anything the FCC wants to try to do before the administration switches over,” said Jeffrey Westling, American Action Forum director-technology and innovation.
Broadcast executives during Q3 earnings calls were hopeful for ownership deregulation and progress on ATSC 3.0 from a Republican-controlled FCC, but FCC Commissioner Brendan Carr -- the perceived front-runner to chair the agency -- said Thursday that scrutinizing broadcasters is among his priorities. “We're very excited about the upcoming regulatory environment,” said Sinclair Broadcast CEO Chris Ripley during Sinclair’s call Wednesday. “It feels like a cloud over the industry is lifting ... and ... some much-needed modernization of the regulations will be forthcoming.” In a news release Thursday, Carr said when the transition to the next administration is complete “the FCC will have an important role to play reining in Big Tech, ensuring that broadcasters operate in the public interest, and unleashing economic growth while advancing our national security interests and supporting law enforcement.”
House Commerce Committee Chair Cathy McMorris Rodgers, R-Wash., urged FCC Chairwoman Jessica Rosenworcel and FTC Chair Lina Khan Wednesday to stand down from working on controversial matters during the transition from President Joe Biden to former President Donald Trump, who won a second term that morning (see 2411060042). Senate GOP leaders will likely send similar “pencils down” letters, lobbyists told us. Senate Commerce Committee ranking member Ted Cruz of Texas and other GOP leaders are likely to have their positions against controversial FCC and FTC action strengthened given the party won control of the upper chamber Tuesday night, lobbyists said. Cruz appears on course to take the Senate Commerce gavel next year, having prevailed Tuesday as part of the Republicans' victory (see 2411060001).
In talks with corporate governance lawyers, FCC Commissioner Nathan Simington has begun promoting how the FCC's cyber-trust mark could help reduce operations costs, making suppliers from trusted nations more competitive against Chinese suppliers. In an extensive interview with Communications Daily last month, Simington also discussed "smart and targeted" reforms of linear video distribution regulation (see 2409120059), his new practice of dissenting from monetary forfeitures (see 2409060054) and how he sees U.S. industrial policy in the context of China (see 2408200041). In addition, he touched on incentivizing commercial orbital debris removal. The following transcript was edited for length and clarity.
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).