Last Friday, the Prometheus Radio Project (PRP) asked the Third Circuit Court of Appeals to overturn portions of the FCC’s recent media ownership order, which reinstated provisions of a 2008 order on media diversity, arguing that the FCC had failed to satisfy the court’s standard for defining an eligible entity.   

By a 3-2 margin on August 25, the FCC adopted an order which completed the agency’s first quadrennial review of the media ownership rules since 2007, and retained the existing prohibition against newspaper-broadcast station cross ownership and many other restrictions on media ownership.  In addition to reinstating the FCC’s March 2014 ruling on joint sales agreements (JSAs), which had been remanded by the Third Circuit last spring, the August 25 order also restored provisions on media diversity that had been struck down by the Third Circuit in 2011.  With the goal of promoting diversity in broadcast station ownership, the FCC affirmed a definition of eligible entities in the aforementioned 2008 order that was based on revenue and business size.  (In 2002, the FCC initially adopted the revenue-based eligible entity definition as an exception to the prohibition on the transfer of grandfathered station combinations that violated local radio ownership limits, reasoning that such an exception would promote diversity of ownership by facilitating new entry and growth of small broadcasters.)  Although the FCC maintained that minorities and women were also intended as beneficiaries of that decision, the Third Circuit remanded the eligible entity definition on grounds that the FCC had failed to demonstrate how these groups would be assisted by that definition.  In so doing, the Third Circuit panel instructed the FCC to consider other definitions of eligible entities, including, among others, the definition of socially disadvantaged businesses (SDBs) promulgated by the Small Business Administration (SBA).   

Reinstating the revenue-based definition in August, the FCC proclaimed, “we have studied this issue repeatedly and find that there is no evidence in the record that is sufficient to satisfy the constitutional standards to adopt race- or gender-conscious measures.”  Nevertheless, in a joint petition for review, PRP and the Media Mobilizing Project complained to the Third Circuit that the FCC cited “no additional evidence to show that this definition will promote ownership opportunities by minorities and women.”  As they accused the FCC of failing to “propose any new measures to increase broadcast ownership by minorities and women,” the joint petitioners claimed that, “without obtaining any additional information or improving its data collection, the Commission declined to adopt a definition of [an] eligible entity based on the SDB definition employed by the SBA, even though it acknowledged that the court . . . instructed it to do so.”  FCC officials offered no comment.