The Federal Communications Commission urged the Supreme Court to relax rules limiting ownership of local media outlets, arguing that the restrictions are obsolete and unneeded.
Telephonic oral argument in FCC v. Prometheus Radio Project and National Association of Broadcasters v. Prometheus Radio Project, which were consolidated and heard together, lasted 81 minutes, exceeding the scheduled 60 minutes.
The hearing took place on Jan. 19, the Trump administration’s last full day in office.
Republicans lost majority control of the FCC on Jan. 20, when Chairman Ajit Pai stepped down with the inauguration of President Joe Biden. Democrats are expected to have a 3–2 majority when a replacement is appointed.
It's been the position of the Republican-controlled FCC that as local media outlets face growing competition from the internet, current ownership restrictions are obsolete, especially the ban on owning a newspaper and broadcast outlet in the same market. Democrats tend to favor stronger restrictions to reduce concentrated ownership of media properties, but want rules that favor women and minorities.
The National Association of Broadcasters argued in a brief that “the broadcast and newspaper industries continue to struggle under the dead weight” of ownership restrictions.
The 3rd Circuit Court of Appeals prevented the FCC from loosening ownership rules, directing the regulator to study the potential effects of the changes on female and minority ownership in the media sector.
Pai had justified the challenged rule change, which permitted broadcasters to combine with a newspaper in the same market and own two of the top four stations in a city.
Deputy Solicitor General Malcolm L. Stewart advanced the same line of reasoning during oral arguments.
“Section 202(h) of the Telecommunications Act of 1996 reflects Congress's conclusion that in light of intervening competitive developments, broadcast cross-ownership restrictions adopted in an earlier era may no longer be warranted,” Stewart said.
“To ensure that such restrictions do not remain in force simply through inertia, Congress required the FCC to reexamine those rules every four years and to repeal or modify any rules that no longer serve the public interest,” he said, adding that in 2017, the FCC determined that some of its media ownership rules should be repealed and that its local television rules should be relaxed.
“The profusion of new media outlets, particularly through cable and the internet, alleviated ... viewpoint diversity concerns that had originally justified the restrictions. It further found that the rules disserved the public interest by preventing economically efficient combinations that would provide consumers better broadcast service.”
In response to a question from Justice Clarence Thomas, Stewart said tougher regulation of broadcast media has been urged by some because “the broadcast spectrum is scarce, not as many people can broadcast on the frequencies as would like to, and, therefore, it's necessary to have a federal agency that allocates the spectrum and decides how it can best be used to serve the public interest.”
But such enhanced regulation of cable and the internet isn’t needed “because one person’s voice doesn't crowd out another’s,” Stewart said.
National Association of Broadcasters' attorney Helgi Walker said concerns about concentrated media ownership are overblown.
“Amazon gets to own the Washington Post today. No one thinks that’s the end of democracy. It’s certainly not the end of democracy if a local broadcaster can buy a local newspaper and keep it alive,” Walker told Justice Samuel Alito.
Justices Sonya Sotomayor and Elena Kagan challenged Stewart.
“I'm a bit confused. It seems to me that the FCC for decades has been saying that minority and women ownership ... consideration of it is in the public interest,” Sotomayor said.
Kagan said, “Were you saying we don’t think the changes in the rules will affect female and minority ownership or we don’t have evidence of this?”
“We were saying the evidence is fragmentary,” Stewart replied, “but based on the evidence we have, our best assessment is there will not be a substantial effect. And the mere possibility that there could be such an effect is not a sufficient basis for foregoing regulatory changes that we would otherwise deem to be very desirable."
Speaking for the respondent advocacy groups, lawyer Ruthanne Mary Deutsch said the FCC had not “engaged in reasoned decision-making.”
“Based on zero information about female ownership and a nonsensical analysis of badly flawed data on minority ownership, the agency repeatedly assured the public that consolidation would do no harm to either,” she said.
“The government now asks for deference. It says that the uncertainty was acknowledged, prediction is hard, and it argues essentially that because no harm was shown, there was nothing to be waived. But because the no-harm findings here were wholly arbitrary, to defer on this record would only encourage agencies to do sloppy work to avoid making tough choices.”