Prometheus Radio Project v. FCC (Prometheus IV).

AuthorMagloughlin, Andrew
PositionMedia ownership by women and minorities rulings

939F.3D 567(3D CIR. 2019)

In Prometheus Radio Project v. FCC, (1) the United States Court of Appeals for the Third Circuit vacated and remanded the FCC's reconsideration order and incubator order relating to media ownership restrictions as arbitrary and capricious under 5 U.S.C. [section] 706(2)(A) because the FCC failed to address the orders' impact on station ownership by women and minorities. (2)

  1. BACKGROUND

    The FCC has always held authority to regulate broadcast media ownership under the Communications Act of 1934. (3) Ownership restrictions imposed under this authority intend to promote competition, diversity, and localism. (4) However, after decades of technological change in the communications field, Congress worried the FCC's broadcast ownership rules might harm competitiveness of entities burdened by them. (5) So, with Section 202(h) of the Telecommunications Act of 1996 as amended, Congress required the FCC to review each of its media ownership rules on a quadrennial (6) basis and repeal those that no longer serve the public interest in light of competitive developments. (7) One of the considerations for public interest review under Section 202(h) is impact on diversity, including broadcast station ownership by women and minorities. (8)

    These quadrennial reviews have spawned litigation galore and the relevant history is complex. (9) The same Third Circuit panel in this case (10) partially vacated and remanded the FCC's 2002 Biennial Review reforms for loosening ownership restrictions as arbitrary and capricious in Prometheus I. (11) Then, the same panel again in Prometheus II partially vacated and remanded the FCC's 2006 Quadrennial Review ownership reforms and its proposal for promoting broadcast ownership by women and minorities as arbitrary and capricious. (12) Next, in Prometheus III, the same panel found that the FCC's twelve-year long delay in defining "eligible entit[y]" (13) for purposes of promoting fledgling broadcast stations by women and minorities was unreasonable. (14)

    This case, Prometheus IV, involves both the FCC's response to Prometheus III and its subsequent reversal of this response after the administration change following the 2016 presidential election. (15) In 2016, under then-Chairman Tom Wheeler, the FCC completed its delayed 2014 Quadrennial Review, retaining broadcaster ownership restrictions and declining to create a broadcast incubator program as suggested by commenters. (16) Industry groups petitioned the FCC for rehearing, and the FCC under Wheeler's successor, Chairman Ajit Pai, granted it, which led to the FCC's reconsideration order on ownership restrictions in 2017 and incubator order establishing a broadcast incubator program in 2018. (17)

    The reconsideration order repealed bans on cross-ownership of television stations and newspapers, as well as television stations and radio stations. (18) It partially relaxed the FCC's local TV ownership rules by repealing the "eight voices" rule that banned mergers in markets that would have fewer than eight independently-owned TV stations following a proposed transaction. (19) The reconsideration order also preserved a blanket ban on mergers between two of the top four TV stations in a given market, but amended it to permit discretionary waivers. (20) The incubator order incentivized incumbent broadcasters to train, finance, and provide resources for new market entrants by waiving radio ownership rules for incumbents in "comparable markets," which are radio station markets with a similar number of stations as the market of the new entrant. (21) Eligible entities for this assistance must (1) qualify as small businesses under the Small Business Administration's criteria and (2) be "new entrants," defined as businesses that do not currently own any television stations or more than three radio stations. (22) The FCC believed these rules would boost ownership among women and minorities. (23)

    Ten entities sought judicial review for a combination of provisions in the reconsideration order and incubator order. (24) The...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT