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NAB, Sinclair Defend FCC Deregulation to Court

Ask to be heard in Prometheus stay request

Reprinted from Broadcasting & Cable.

The National Association of Broadcasters and Sinclair have asked a federal court to allow them to weigh in on the request from critics of the FCC’s broadcast deregulatory decision that the court block that deregulation. They say that, while not parties to the suit, they are the ones most affected by a stay of the rules.

The broadcasters strongly support the FCC’s November decision to eliminate crossownership rules and loosen other local ownership restrictions. NAB earlier in the week signaled it wanted to intervene.

They reminded the U.S. Court of Appeals for the Third Circuit that it has taken no action on the stay — for one thing, it had given the FCC until Friday (Feb. 2) to respond to the request for a stay.

NAB and Sinclair say the FCC has given them consent to weigh in, while the petitioners — Prometheus Radio Project and Media Mobilizing Project — have refused to do so.

Just in case the court agrees, NAB and Sinclair included their opposition brief in the request it be accepted for filing along with the FCC’s response. Basically, their argument is that the emergency stay does not meet the test for granting it, a high bar that includes harm to the petitioners absent a stay and likelihood of victory on appeal.

How the FCC changes the rules will affect how Sinclair, the nation’s largest broadcast group, can grow and perhaps how its current deal to merge with the Tribune stations will be structured. The Department of Justice is still vetting the merger and, while deal watchers had been expecting a decision by now, it could be waiting to see how the court rules on the FCC decision.

“The court should give the entities who would be most affected by a stay of the commission’s new ownership rules an opportunity to be heard,” NAB and Sinclair told the court. “Movant-Intervenors are the entities directly regulated by the commission and thus will provide a unique and important perspective on the issues.”

Longstanding opponents of the FCC’s broadcast ownership rule decisions — under both Democratic and Republican administrations — have asked the U.S. Court of Appeals for the Third Circuit to force the current FCC to address diversity issues that court has long told the commission to address, and delay any deregulation of local ownership rules until that happens.

That came in an emergency request for a writ of mandamus filed by Prometheus Radio Project and Media Mobilizing Project.

They also want the court to stop the FCC from approving any license transfers that would not comply with the FCC’s previous ownership rules, which could potentially affect the Sinclair-Tribune deal.

The FCC under chairman Ajit Pai changed course from the commission of his predecessor, Tom Wheeler, and eliminated some local ownership rules — the newspaper/broadcast and radio/TV crossownership rules — and modified others.

But both the Wheeler and Pai approaches needed to be responsive to a remand of this same Third Circuit to take the impact of diversity into account when making those decisions, say the groups, and neither did so.

Prometheus Radio Project and Media Mobilizing Project, which challenged the Wheeler reg review as insufficiently regulatory and the Pai review as really insufficiently regulatory, say neither FCC based their decisions on sufficient diversity impact information, and so filed the emergency request for the writ of mandamus, which would be the court demanding that the FCC follow its mandate.

They want the Third Circuit to stay implementation of the Pai media ownership deregulatory changes — which include loosening duopoly rules and other local ownership restrictions — until 60 days after the FCC has adopted a new definition of eligible entities that will “advance ownership by minorities and women,” one of the diversity mandates Prometheus says the FCC has not followed. It also wants the court to set up a compliance schedule for the FCC to follow in addressing the diversity issues, and “enjoin the FCC from approving any broadcast license applications that would be inconsistent with the ownership limits in effect as of this date.”

They also want an answer from the court by Feb. 7, when the Pai broadcast ownership deregulation decision goes into effect.

On Nov. 17, as part of the congressionally mandated quadrennial media ownership reg review, the Republican FCC majority, under Pai assailed by FCC Democrats who strongly dissented, eliminated some decades-old broadcast regulations and loosened others in what broadcasters have argued is necessary to allow them to remain relevant in a sea of less-regulated competitors.

The order eliminated the newspaper-broadcast and the radio/TV cross-ownership rules; allowed dual station ownership in markets with fewer than eight independent voices after the duopoly, creating an opportunity for ownership of two of the top four stations in a market on a case-by-case basis (the FCC is not calling it a waiver); eliminates attribution of joint sales agreements as ownership; and creates an incubator program.

In doing so, the FCC reversed a decision by the previous FCC Democratic majority to leave most of the rules in place. Prometheus had challenged that decision, too, not because it had left most of the rules in place, but because Prometheus said it, again, did not sufficiently take diversity into account, which would have led to imposing more regulations, not simply leaving most in place. That earlier challenge has yet to be resolved and Prometheus also asked the court this week to consolidate this challenge with that one.

Prometheus argues that the Pai FCC also failed to respond to the Third Circuit’s direction, in remanding a previous attempt to deregulate, that it get better data on ownership diversity before deregulating.

The recent FCC decision under Pai did also initiate a rulemaking on creating a diversity incubator program and to consider the definition of eligible entity, but that did not cut it with Prometheus.