Opinion Analysis

Court upholds FCC’s changes to media ownership rules

Update (April 1, 1:23 p.m.): This article has been updated with expanded analysis.

The Supreme Court unanimously agreed on Thursday that the Federal Communications Commission could loosen restrictions on ownership of radio stations, television stations and newspapers. The justices rejected a challenge by public-interest and consumer-advocacy groups, which argued that the FCC had not adequately considered the effect that the changes would have on media ownership by women and minorities. Instead, the court suggested that it would give the agency leeway as long as it has “reasonably considered the relevant issues and reasonably explained the decision.”

The Trump-era policy that the court upheld could permit further consolidation among large media companies. But the FCC may revisit the policy under President Joe Biden.

As part of an effort to promote competition, a range of views, and a focus on local news, FCC rules have long regulated how many local television and radio stations one entity can own in the same local market. For similar reasons, the FCC has also limited “cross-ownership” – that is, the ownership of more than one kind of news outlet within the same market.

Federal telecommunications laws direct the FCC to review its media-ownership rules every four years, determine whether any of those rules “are necessary in the public interest as the result of competition,” and “repeal or modify any regulation” that it concludes is “no longer in the public interest.” In 2017, with Republican appointees holding a 3-2 majority on the FCC, the commission issued the order at the center of Thursday’s opinion. In a party-line vote, it repealed the cross-ownership rules and modified the limits on ownership of local television stations. After the U.S. Court of Appeals for the 3rd Circuit vacated the order, the FCC asked the Supreme Court to weigh in.

In an opinion by Justice Brett Kavanaugh in FCC v. Prometheus Radio Project (which was consolidated with National Association of Broadcasters v. Prometheus Radio Project), the Supreme Court reversed. He explained that under the federal law governing administrative agencies, an agency’s action is required to be “reasonable and reasonably explained.” In this case, Kavanaugh noted, the FCC concluded that the ownership rules had become “obsolete” as a result of massive changes in technology and the ways that Americans receive their news.

The FCC considered the effect that its changes would have on minority and female media ownership, Kavanaugh pointed out. The agency, Kavanaugh emphasized, “relied on the data it had (and the absence of any countervailing evidence) to predict that changing the rules was not likely to harm minority and female ownership.” Federal law, Kavanaugh concluded, “requires no more.”

Kavanaugh acknowledged that, when it was “assessing the effects on minority and female ownership, the FCC did not have perfect empirical or statistical data.” In fact, Kavanaugh conceded, the reality was “[f]ar from it.” “But,” Kavanaugh observed, “that is not unusual in day-to-day agency decisionmaking within the Executive Branch.” Federal agencies are not required, he indicated, “to conduct or commission their own empirical or statistical studies.” As part of the process of seeking input from the public, the FCC asked for evidence on the connection between the ownership rules and minority and female ownership, Kavanaugh stressed, but the FCC never received any evidence “indicating that changing the rules was likely to harm minority and female ownership.” Without more, Kavanaugh wrote, “the FCC made a reasonable predictive judgment based on the evidence it had.”

Justice Clarence Thomas filed a concurring opinion in which he argued that the lower court’s decision that the rule changes were invalid should be reversed for a separate reason: Nothing in the federal telecommunications law at issue even required the FCC to consider minority and female ownership in the first place, Thomas suggested.

The FCC is currently split with two Republican-appointed commissioners, two Democratic-appointed commissioners, and one vacancy. Biden has not yet nominated anyone to fill the open seat. The commission’s new acting chairwoman, whom Biden nominated for that role shortly after taking office, opposed the 2017 changes.

This post was originally published at Howe on the Court.