The Quadrennial Review: The Federal Communications Commission's Latent Superpower & What Can Be Done to Free It.

Author:Schatz, Bryan
 
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TABLE OF CONTENTS I. INTRODUCTION 253 II. HOW THE SMALL MOLEHILL OF THE QUADRENNIAL REVIEW GREW TO BECOME A "HULK"-ING MOUNTAIN FOR THE FCC 256 A. Legislative History: How the Quadrennial Review Came to Be and Why It Was Inserted into the Telecommunications Act of 1996 256 B. Legal History: What Shaped the Quadrennial Review into What It Is Today and How It Is Still Influenced by Past Challenges 258 C. Current Media Ownership Rules: Complex, Confusing, and Convoluted Principles Governing Media Ownership 262 D. Chains Made from Kryptonite: The Procedures That Bind the Quadrennial Review and How They Have Changed from Their Original Implementation 264 1. Originally Prescribed Procedures and the "Ossification" Plague 264 2. FCC's Self-Imposed Procedures as a "De-Ossification" Tool 265 III. THE TIME IS NOW FOR THE FCC TO REALIZE ITS QUADRENNIAL REVIEW POWERS 266 A. In a Flash, Congress Can Prescribe Clean Air Act-Like Hybrid Rulemaking Procedures and Provide More Power to the FCC During the Quadrennial Review. 267 1. Clark Kent or Superman? The FCC's Self-Prescribed Procedures Are Nearly the Same as the Clean Air Act's Hybrid Rulemaking Requirements, But Without the Super-Impact 268 2. The Clean Air Act's Procedural Protections Provision Would Greatly Help the FCC and the Quadrennial Review. 270 B. The Judicial System Can Lighten the Level of Scrutiny Applied to FCC Proposed Media Ownership Rules from the Quadrennial Review. 272 1. The Current Scrutiny Applied to Proposed Media Ownership Rules Is Akin to A "Hard Look" and Should Be Lightened and More Deferential. 272 2. Lighter Scrutiny with Greater Deference to FCC Conclusions Would Allow the FCC to Be More Effective in Promulgating Rules During the Quadrennial Review. 274 C. The FCC Can Elect to Issue Temporary Rules Along with Each Quadrennial Review to Avoid Immediate Legal Challenges to Its Proposed Rules. 277 1. Temporary Rules Can Create an Opportunity for the FCC to "Experiment" and Gather Data Regarding Potential Rules or Amendments 277 2. The Data from the Experimental Period Can Be Used by the FCC to Support Final Rules and Reduce Subsequent Litigation. 278 IV. CONCLUSION 279 I. INTRODUCTION

In 1996, Congress authorized the Federal Communications Commission (the "FCC") to review its media ownership rules every four years as part of the Quadrennial Review ("QR"), (1) with the goal of determining whether or not the rules continue to be "necessary in the public interest." (2) The QR is a powerful tool for the FCC as it allows the FCC to advance diversity in the news and among media owners, foster competition in the industry, and promote localism (3)--all in the name of serving the public interest. Much like a superhero who gains his or her abilities by chance, the FCC has tried to figure out the extent of its QR powers and how these powers can best be employed. To date, the FCC has struggled to implement new rules after its QRs, effectively neutralizing the power of the QR. (4)

The QR can be the FCC's way to stay on top of the changing media markets and a tool for the FCC to protect the public from further concentration of media ownership (5) as the industry shifts from media accessed via print and television to media accessed over the Internet. The entire Communications Act, as amended, hardly contemplates the "Internet," mentioning it only a few times; the QR can serve as a way for the FCC to monitor changing media consumption avenues, such as the growth of Internet media consumption. (6) The Communications Act, though the most important governing statute regarding communications regulation, barely touches on the Internet and how it should be regulated for telecommunications purposes--despite the fact that the Internet is becoming the primary sources for news. (7) Currently, more consumers are getting their news from the Internet and moving away from print and television media. (8) Under Section 202(h) of the Telecommunications Act, the FCC can promulgate new media ownership rules or modify the current rules every four years (the Quadrennial Review) and regulate the industry from which the public is accessing its news. (9)

Peter Parker's (Spiderman's alter-ego) uncle Ben warned Peter that "[w]ith great power there must also come--great responsibility!" (10) Applying that principle to the FCC and the power of the QR, this quote would state, "with great power comes great responsibility; enough responsibility to inundate the power and overwhelm it!" As it stands, the FCC's various responsibilities include following Section 553 informal rulemaking procedures, (11) holding self-prescribed public hearing sessions, (12) and navigating the inevitable legal challenges, which ensue after the proposal of any rule. (13)

Taking a step back and looking at the QR from a big picture standpoint provides some clarity as to the choices that the FCC must make to free the QR from its current place of ineptitude. As required by Section 202(h), the FCC reviews media ownership rules every four years; the proposed rules are challenged in court and then, shortly thereafter, another QR is due. (14) This initial review forces the FCC to expend valuable resources, time and consideration to study the current media ownership rules, and to deliberate and craft new rules or justifications for the standing rules. Then, the FCC expends valuable resources, time, and consideration in trying to justify its QR findings, when they are inevitably challenged in court. Regardless of the court's finding, the FCC must consider the media ownership rules once again when the next QR arrives, but now with the added wrinkle of needing to evaluate and consider the idiosyncrasies of the most recent judicial holding from the past-QR's legal challenge. This struggle is precisely why the QR has become inept.

New rules proposed under the FCC's QR power have yet to come to fruition, (15) because they are caught in a web of constant legal challenges and shifting lenses of judicial analysis. (16) This struggle of legal challenges that has plagued the FCC is not unique to the agency; it is part of a larger problem known as the "ossification" of rulemaking that has affected many other agencies. (17) Over the years, the QR process has changed and the FCC has tried to improve the process, (18) so as to stand a better chance in the face of legal challenges. (19) Still, more is needed before the FCC can be efficient and effective in using its QR power.

Congress, the courts, or the FCC must act now in order to free up the QR and allow the FCC to use this power to efficiently help the communications industry transition into the next age of media consumption. (20) Section II of this note will explore the QR's past by looking at the legislative history, the current procedures employed and the procedural history, and the legal history; also, Section II will explain the current media ownership rules and why now is the time for the FCC to realize its QR powers. The next Section of this Note will analyze some of the potential solutions, which can help free up the QR and help the FCC promulgate and enforce new media ownership rules. The final Section will look at how Congress can act to provide procedural protections for the QR, the courts can alter the applicable level of scrutiny applied to the QR, and the FCC can enact a different type of rule to help empower the QR.

  1. HOW THE SMALL MOLEHILL OF THE QUADRENNIAL REVIEW GREW TO BECOME A "HULK"-ING MOUNTAIN FOR THE FCC

    To fully understand why action is needed to free up the QR, it is important to consider how each potential entity that could provide a solution has interacted with the QR in the past. Analyzing the legislative history will provide context for how Congress created the QR and some of its intentions whereas analyzing the legal history and looking at past challenges to rules proposed under the QR will help provide context for how the courts have approached proposed FCC media ownership rules. It is helpful then to note where each of the major media ownership rules currently stands. Ultimately, analyzing the QR procedures will provide context for how the FCC has wrestled with the QR.

    1. Legislative History: How the Quadrennial Review Came to Be and Why It Was Inserted into the Telecommunications Act of 1996

      The QR, as embodied in Section 202(h) of the Telecommunications Act, has very little legislative history to explain why it was drafted the way that it was. (21) It appears that the rule was intended as a tool for large media corporations to get the national television ownership cap removed, (22) or at least progressively raised, every two years. (23) Because the FCC had to "justify" the cap at the level at which it was set, the two lobbyists who drafted Section 202(h) knew that this would be a difficult task for the FCC and would allow for industry challenges to any FCC media ownership determinations. (24) After the first Quadrennial Review, the FCC's determinations were challenged in the D.C. Circuit. (25) These first challenges led to the FCC raising the national media ownership cap ten percent from its previous level. (26) The national television ownership cap was eventually modified and led to a series of Congressional actions which lowered the cap from forty-five to thirty-nine percent, moved the biennial reviews to quadrennial, and lead to several other legal challenges to the findings of the original lawsuits as the FCC applied those holdings. (27)

      Andrew Schwartzman, Harold Feld and Parul Desai, who all participated in some of the first cases concerning the QR and communications law experts, state in their article that "[d]espite the attempt to deregulate through the back door, it would seem that the courts have resolved ambiguities relating to the interpretation of Section 202(h) in favor of making it a less intrusive provision." (28) While Section 202(h) may have avoided becoming a tool for "deregulatory" purposes, it still remains a...

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