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SCOTUS Gives FCC Win in Regulation Rollback After Decades-Long Legal Battle

WASHINGTON, DC - FEBRUARY 26:  The seal of the Federal Communications Commission hangs inside the hearing room at the FCC headquarters February 26, 2015 in Washington, DC. The Commission will vote on Internet rules, grounded in multiple sources of the Commissions legal authority, to ensure that Americans reap the benefits of an open Internet.  (Photo by Mark Wilson/Getty Images)
By Joseph Fawbush, Esq. on April 02, 2021 7:15 AM

In 2017, the Federal Communications Commission changed ownership rules for local news media. Specifically, the FCC thought the prohibition against the same business owning both a newspaper and television station in a major market was no longer necessary. The FCC also wanted to make it easier to buy a second or third radio station in the same market. The FCC did this to “foster competition, localism, and viewpoint diversity." Section 202(h) of the Telecommunications Act of 1996 directs the FCC to review its media ownership rules every four years and to repeal or modify any rules that no longer serve the public interest.

However, this effort to deregulate was challenged in federal court, which wasn't surprising, as the FCC has tried to remove these regulations every four years since 2002. Every time, it has been successfully challenged in federal court. In 2019, the Third Circuit U.S. Court of Appeals again sent the FCC back to the drawing board, the fourth time it had done so. While federal courts generally give deference to federal agency findings, in 2019 the Third Circuit found that the FCC failed to properly examine how the deregulation would impact female and minority ownership, something it was required to do under the law.

FCC's Findings Were Valid, Supreme Court Holds

The Supreme Court reversed on Thursday, April 1, in a unanimous opinion. Justice Kavanaugh wrote the opinion for the court.

The FCC's argument in removing the ownership rules was that “no arguments were made" that existing rules were “necessary to protect or promote minority and female ownership." Further, even after requesting data on the potential impact of the rule changes on female and minority ownership, the FCC did not receive any. For studies that it did have, it interpreted as showing an increase in minority ownership after the rules were relaxed in previous years.

The Third Circuit held that the FCC did not analyze the data correctly or seek out enough information on the future impact of the rule changes. “To be sure," Justice Kavanaugh wrote, “in assessing the effects on minority and female ownership, the FCC did not have perfect empirical or statistical data. Far from it. But that is not unusual in day-to-day agency decisionmaking within the Executive Branch." As such, it did not fall outside of the “zone of reasonableness" required for a federal court to hold an agency regulation in violation of the Administrative Procedure Act.

Justice Thomas issued his own concurrence, writing that he didn't believe the FCC needed to inquire after the rule changes' effect on minority and female ownership in the first place.

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