U.S. Supreme Court permits FCC to loosen media ownership rules
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[April 02, 2021]
By Andrew Chung and David Shepardson
WASHINGTON (Reuters) -The U.S. Supreme
Court on Thursday allowed the Federal Communication Commission to loosen
local media ownership restrictions, handing a victory to broadcasters in
a ruling that could facilitate industry consolidation as consumers
increasingly move online.
In a 9-0 ruling authored by Justice Brett Kavanaugh, the justices
overturned a lower court decision that had blocked the FCC's repeal of
some media ownership regulations in 2017 for failing to consider the
effects on ownership by racial minorities and women. Critics of the
industry have said further consolidation could limit media choices for
consumers.
The justices acted in appeals by the FCC, companies including News Corp,
Fox Corp and Sinclair Broadcast Group Inc and the National Association
of Broadcasters.
The associations for other broadcast networks' local affiliates,
including ABC, NBC and CBS, backed the appeals, arguing that
consolidation would help ensure the economic survival of local
television amid heavy competition from internet companies that provide
video content. Broadcast television stations have said they are
increasingly losing advertising dollars to digital platforms.
In 2017, the FCC - then led by Republicans during former President
Donald Trump's administration - voted to eliminate a ban in place since
1975 on cross-ownership of a newspaper and TV station in a major market.
It also voted to make it easier for media companies to buy additional TV
stations in the same market, and for companies to buy additional radio
stations in some markets.
The FCC, now equally divided between Democrats and Republicans, is led
by acting chairwoman Jessica Rosenworcel, a Democrat, who voted against
the 2017 decision. The agency is set to have a Democratic majority once
President Joe Biden nominates and the Senate confirms a new
commissioner. The FCC could then seek to reverse the 2017 order.
Rosenworcel did not immediately respond to a request for comment after
the ruling.
Writing for the unanimous court, Kavanaugh said that the FCC reasonably
reviewed the ownership rules to find that repealing or modifying them
"was not likely to harm minority and female ownership."
Kavanaugh added: "The FCC reasoned that the historical justifications
for those ownership rules no longer apply in today's media market, and
that permitting efficient combinations among radio stations, television
stations and newspapers would benefit consumers."
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The Supreme Court is seen in Washington, U.S., December 11, 2020.
REUTERS/Joshua Roberts/File Photo
The case highlighted diverging views on the best way to ensure a
competitive environment that promotes a broad range of local news
and information. Critics of the FCC's action have said relaxing
ownership rules could jeopardize a wider array of sources at the
local level.
The Philadelphia-based 3rd U.S. Circuit Court of Appeals had
thwarted the FCC's efforts to revise the rules since 2003 in a
series of decisions. The new rules were challenged by a number of
community advocacy groups led by the Prometheus Radio Project. The
3rd Circuit in 2019 blocked the new rules.
Former FCC Commissioner Mike O'Rielly, a Republican who voted for
the 2017 order, said he expects there will be some "strategic deals"
to consolidate in which a local newspaper could be acquired, but
that "no massive deals" are going to happen given the struggling
local media sector.
Cheryl Leanza, a lawyer for the plaintiffs who challenged the 2017
FCC decision, said that "the good news is the Biden FCC, once it
gains a working majority, can quickly get to work building a solid
record to promote the public interest standard and media ownership
diversity."
Advocacy group Free Press said the Biden FCC and Congress "must
recognize that hedge-fund and Wall Street-driven consolidation harms
local communities, and only decimates what's left of competition and
diversity. ... The silver lining here is (the court) deferred to the
agency's judgment and left room for a new commission to get this
right."
David Chavern, CEO of the News Media Alliance group that represents
more than 2,000 news organizations, hailed the ruling and said the
previous restrictions "had shackled the newspaper industry for far
too long. The repeal of the ban will generate much needed
investments and cross-platform synergies that will help sustain
local news media."
(Reporting by Andrew Chung in New York and David Shepardson in
Washington; Editing by Will Dunham)
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