Court Says FCC Ignored Hard Data in Rush to Help Media Monopolies

The FCC’s multi-year effort to kill media consolidation rules at the behest of giants like Sinclair Broadcasting has been rejected by the courts, who ruled the agency failed to seriously consider the negative impact unchecked media monopolies have on the public at large.

In a 2-1 new ruling, the U.S. Court of Appeals for the Third Circuit forced the FCC to go back to the drawing board in its quest to make life easier for media giants, arguing the agency “did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities." In 2017, Pai’s FCC voted to eliminate a cap preventing any one broadcaster from reaching more than 39 percent of the nation, a 77-year-old rule requiring broadcasters keep a local studio in the towns they service (to encourage community participation), as well as rules preventing broadcasters from owning more than two TV stations and one radio station in the same market. These changes were intended to help companies like Sinclair Broadcasting, whose proposed $3.7 billion merger with Tribune Media would have given the company ownership of more than 230 broadcast stations, reaching 72 percent of the American public. That deal was scuttled last year after Sinclair was accused of misleading the FCC to gain regulatory approval. A coalition of union workers, consumer groups, and media advocacy organizations quickly challenged the FCC, stating it had failed to consider the impact of “radical deregulation on race and gender diversity in broadcasting.”

The court today agreed, stating that FCC analysis justifying its decision was “so insubstantial that it would receive a failing grade in any introductory statistics class.”

As a result of the court ruling, the FCC will be forced to reconsider its plan to make it easier for media giants to merge their way to market domination.

“At first glance, this is a huge victory for the listening and viewing public," Andrew Schwartzman, one of the lawyers battling the FCC told Motherboard in a statement. "The Court of Appeals has found that the FCC has yet again failed to assess how changing its ownership limits affect people of color and women,” he said. “Diverse ownership benefits everyone, and rejection of the FCC’s deregulation is a small step in restoring a system that promotes such diversity."

Data has shown that the elimination of quality local broadcasters via consolidation has a profoundly negative impact on both minorities and the public at large. Numerous studies indicate that the erosion of quality local journalism not only results in a dumber and more divided populace, but that this increased tribalism can easily sway elections. Former FCC lawyer Gigi Sohn told Motherboard the ruling was hugely important in the quest to ensure that communities have access to a diverse range of media viewpoints, as opposed to the homogenized, sometime facts-optional coverage Sinclair has been widely criticized for.

“The ruling is vital because it leaves in place the few rules that protect against a handful of media companies controlling free, local over-the-air radio and TV broadcasting, which is still the place where large numbers of Americans get their local news and information,” Sohn said. This isn’t the first time the Pai FCC has had its wrist slapped by the courts for playing fast and loose with the facts. Pai efforts to eliminate broadband subsidies for tribal residents—as well as an industry-backed plan to kill environmental reviews for cellular tower placement—were also both recently shot down by the courts for being short on justifying evidence.

“In his desire to destroy as many protections for consumers, diversity, competition and democracy as quickly as possible, the Chairman has forgotten one of the core tenants of administrative law; that an agency must adequately justify its decisions based on the record before it,” Sohn said. Christopher Terry, a professor of journalism and mass communication at the University of Minnesota, told Motherboard that this is the fourth time in the last fifteen years the FCC has had its wrist slapped by the courts in the media consolidation debate. “This represents the 4th time the FCC has lost on the same basic issue,” he said. “There is no empirical evidence to support what the agency has done on media ownership since 1996.” Given the FCC’s ongoing problems justifying its policies with hard data, consumer groups remain hopeful that the courts will also shoot down the FCC’s repeal of net neutrality, a decision also widely criticized for ignoring the public welfare and playing fast and loose with the facts.