Trump FCC Tries to Claim Its Blatant Sinclair Favoritism Was Entirely Coincidental

The FCC has quickly been dismantling rules designed to protect media consumers and smaller competitors.

May 23 2018, 1:00pm

Protesters demonstrate the purchase of local NBC 10 station by conservative Sinclair Broadcast Group on March 19, 2018 in Cranston, Rhode Island. Image: Shutterstock.

The Trump FCC has routinely been accused of being far too cozy with the companies the regulator is supposed to be holding accountable. From the FCC’s historically-unpopular attack on net neutrality to its defense of prison telco monopoly overcharging, being a genuine consumer ally isn’t something the agency is likely to be accused of anytime soon.

But the FCC has found itself under particularly-heavy fire for its efforts to dismantle decades-old media consolidation rules—simply to help aid Sinclair Broadcast Group’s planned $3.9 billion merger with Tribune.

Sinclair’s proposed Tribune acquisition would give it ownership of more than 230 broadcast stations, reaching 72 percent of the American public. The company’s news reporting has been ridiculed as factually-dubious on a good day, and the deal’s impact on discourse and competition has raised alarm bells among Republicans and Democrats alike.

Republicans worry the deal could stifle smaller independent media voices. Democrats worry that Sinclair’s hard-right leaning news will simply muddy the public discourse waters further in a nation already struggling to come to terms with a rather nasty disinformation problem.

Ignoring both concerns, the FCC has quickly been dismantling rules designed to protect media consumers and smaller competitors from precisely this sort of threat.

From weakening a rule preventing any one broadcaster from reaching more than 39 percent of the nation, to the dismantling of a 77-year-old rule that required broadcasters keep a local studio in the towns they service (in a long-standing bid to encourage community participation), Ajit Pai’s FCC has been unapologetically single-minded in its quest to help Sinclair grow larger.

Pai’s efforts have been so aggressive, they’ve resulted in the nonpartisan FCC Inspector General launching an investigation into whether Pai may have violated federal corruption rules by coordinating the efforts with Sinclair.

In an apparent attempt to deflate mounting criticism for perceived cronyism, Pai’s fellow Commissioner Mike O’Rielly recently published a missive to the FCC website attempting to “debunk” what he’s calling the “Sinclair agenda myth.”

O’Rielly, whose unabashed support of Trump recently earned him a government ethics watchdog wrist slap for violating the Hatch Act, went so far as to call bipartisan worries about Sinclair a “misguided fantasy.”

“I believe it is time to call these assertions for what they truly are: a rhetorical tool designed to divert attention from opponents’ lack of substantive objections to the underlying policies, combined with what seemingly appears to be an extreme personal dislike for the company itself,” declared O’Rielly.

Any regulatory changes done to benefit Sinclair were actually accomplished to “relieve the entire broadcast industry of a burden,” O’Rielly claims, adding that any direct benefit to Sinclair was “residual and non-intentional” and that the agency’s only goal is to eliminate “outdated and costly media rules that no longer make sense today.”

In short, O’Rielly is trying to claim that absolutely every benefit Sinclair has received from the FCC’s wholesale assault on media consolidation rules is entirely coincidental. Unsurprisingly, critics of the FCC’s efforts on this front aren’t particularly impressed by O’Rielly’s claims.

“Everything that Sinclair needed to get done seemed to happen exactly when they needed it to get done,” David Goldman, chief counsel for communications issues for the House Energy & Commerce Committee told Motherboard in a phone interview.

For example, when Sinclair found its merger ambitions hamstrung by a rule barring a broadcaster from owning multiple stations in smaller local markets, the FCC quickly set to work eliminating that restriction.

And when Sinclair found itself rubbing up against rules preventing it from reaching any more than 39 percent of the public (to protect smaller media competitors and opinion diversity), the FCC quickly restored a discarded loophole known as the UHF Discount, explicitly implemented to let Sinclair limbo under the rules by underestimating the company’s real reach.

"O'Rielly can say this is all just part of the current majority’s plan to deregulate everything under the sun, without regard for who benefits the most, but that's missing the point,” argues Matt Wood, Policy Director for Free Press, one of the organizations fighting the merger.

“Sinclair couldn't even contemplate its massive takeover of Tribune without this relief, which the Commission has been exceptionally eager to grant from day one of Pai's Chairmanship,” Wood said.

Clearly the FCC Inspector General found these and other “coincidences” to be concerning enough to warrant a broader investigation. As did a panel of appellate judges, who recently questioned why the FCC felt compelled to restore the controversial and relatively obscure UHF discount just weeks before the Sinclair merger was officially announced.

Consumer groups say that the examples O’Rielly uses in his blog entry to prove the FCC acted ethically are red herrings and straw men designed to distract from the broader problem: the merger itself and the FCC’s blind fealty to the nation’s largest corporations.

“It's almost funny to watch him twist himself in knots -- making arguments that only serve to prove the points he says he's debunking,” said Wood. “On the national ownership cap, for example, O'Rielly admits that he thinks raising the cap is downright unlawful for the FCC. He thinks that his agency doesn't have the authority from Congress to do that. Yet he'll vote to do it anyway—voting to let Sinclair and other giant broadcasters get even bigger.”

Meanwhile Sinclair has been promising to sell off select stations in order to ensure the deal meet whatever media consolidation limits remain intact. But Wood and other deal critics have accused the company of playing shell games in the past by “spinning off stations” to partner companies (or subsidiaries) while still maintaining control.

The restoration of the UHF discount is currently being challenged by consumer groups in federal appeals court. As a result, Pai’s FCC this week began fielding additional public comments on the merger in the hopes of obtaining merger approval before any of the lawsuits or FCC investigations thwart the agency’s agenda.

The move didn’t sit well with Pai’s fellow FCC Commissioner Jessica Rosenworcel.

“The FCC is still waiting on a court decision about how many stations one company can own,” Rosenworcel stated on Twitter. “No way it should rush ahead now before the court acts. The rule of law matters.”

But as the FCC’s attacks on net neutrality made perfectly clear, this is an FCC that doesn’t much care for the rule of law, hard data, the will of the public, or much of anything else if it gets in the way of the quest to aid some of the biggest and least-liked companies in America.

Meanwhile the Sinclair battle is far from over. Should the FCC’s restoration of the UHF discount be struck down by the courts, the Sinclair merger as currently crafted would effectively be blocked—leaving Sinclair and the FCC left looking for more creative “solutions” to a 39% ownership cap even O’Rielly argues the agency lacks the authority to completely eradicate.