In light of the ubiquity of cable and satellite, a controversy over the ownership of terrestrial broadcast stations may seem like a sideshow. The reality is, however, that an increasing number of American households are receiving broadcast stations by means of over-the-air transmission, either exclusively or together with a subscription video service.
The Supreme Court recently heard arguments over moves taken by the FCC in 2017 to loosen regulations on broadcast stations. These included lifting the ban on common ownership of broadcast stations and newspapers in the same market and cross-ownership of television and radio stations. The FCC’s proposed deregulation also made it easier for outlets to join forces for purposes of advertising sales or to merge outright.
The Third Circuit rejected these proposed changes in September, 2019. It ordered the FCC to reconsider the rules changes in their entirety with greater attention to their effect on women and minority ownership of broadcast stations. The government and the National Association of Broadcasters (NAB) appealed to the Supreme Court, which heard arguments in January.
The position of the FCC and NAB is that broadcasters face so much more competition than they did in decades past that they must be permitted to consolidate in order to survive. They argued that the FCC is not required to prioritize women and minority ownership in its rulemaking. The NAB took this further. It asserted that Section 202(h) of the Telecommunications Act of 1996 calls for deregulation as a matter of simple statutory interpretation. That section requires the FCC conduct a biennial review of its rules and repeal or modify “any regulation it determines to be no longer in the public interest” as the result of competition.
The public interest parties took an administrative law approach. The issue they presented was not whether competition or diversity should be the controlling policy but whether the FCC had adequately explored the potential effect of deregulation on women and minorities. The rulemaking, they contended, included only conclusory statements of minimal effect without supporting data. Where the public interest parties had presented a study from Free Press showing that deregulation would affect women and minority station ownership adversely, the FCC did not present a substantive response.
Several of the Justices, both liberal and conservative, questioned the FCC’s failure to show specific data to support its decision to prioritize competition over diversity. Justice Sotomayor put it this way. “We have a legion of cases that say you don’t have to rule in favor of one point of view or another, but when you’re rejecting something, you should give it adequate consideration.” Justice Kavanaugh challenged the Deputy Solicitor General with a similar question. “Having considered it, doesn’t the FCC have to justify how it considered it?”