SCOTUS Backs FCC in FCC v. Prometheus Radio Project

In FCC v. Prometheus Radio Project, 592 U. S. ____ (2021), the U.S. Supreme Court held that the Federal Communications Commission’s (FFC) 2017 choice to repeal or modify a few of its media ownership rules wasn’t arbitrary or capricious under the Administrative Procedure Act (APA). The Court’s decision was unanimous.

Facts of this Case

Under its extensive authority to regulate broadcast media from the public interest, the FCC has maintained several ownership rules which limit the amount of radio stations, television stations, and papers that a single entity may own in a given marketplace. Section 202(h) of the Telecommunications Act of 1996 directs the FCC to review its media ownership rules every four decades and to repeal or alter any rules that no longer serve the general interest.

In 2017, the FCC concluded that all of its ownership rules were no longer necessary to encourage competition, localism, or viewpoint diversity. It concluded that the record evidence did not imply that repealing or modifying those three principles was likely to harm minority and female ownership. Based on that evaluation, the bureau decided to redesign just two of the three possession rules and modify the third. Prometheus Radio Project along with many other general interest and consumer advocacy groups (collectively, Prometheus) petitioned for review, arguing that the FCC’s choice to repeal or alter the three principles was arbitrary and capricious under APA. Meanwhile, the Third Circuit Court of Appeals vacated the FCC’s reconsideration order, holding that the record did not support the agency’s conclusion that the rule changes could have minimal impact on female and minority ownership.

Supreme Court’s Conclusion

The Supreme Court unanimously reversed. “[W]e conclude that the FCC’s 2017 arrangement was fair and reasonably clarified for purposes of the APA’s deferential arbitrary-and-capricious standard. We reverse the judgment of the Third Circuit,” Justice Brett Kavanaugh wrote on behalf of this Court.

The FCC also concluded that the three principles were no longer necessary to encourage competition, localism, and viewpoint diversity, and that altering the rules wasn’t likely to harm minority and female ownership.

The FCC’s evaluation was reasonable and reasonably clarified for purposes of the APA’s deferential arbitrary-and-capricious standard. The FCC considered the record evidence in competition, localism, view diversity, and minority and female ownership, along with

Reasonably concluded that the three possession rules no longer serve the general interest. The FCC concluded that the historic justifications for all those ownership principles no longer apply in today’s media marketplace, and that permitting efficient combinations among radio stations, television stations, and information – newspapers would benefit customers. The Commission further clarified that its very best estimate, based on the sparse record proof, was that repealing or modifying the three principles at issue here wasn’t likely to harm minority and female ownership. The APA needs no more.

The Court rejected Prometheus’ arguments that the FCC’s assessment of the likely effects of the rule changes on female and minority ownership rested on faulty data. The Court emphasized that the FCC declared that the gaps in the information collections it relied on, and noticed that, despite its repeated requests for additional information, it had received no countervailing evidence indicating that altering the three ownership rules was likely to harm minority and female ownership. The Court also noted that the APA imposes no general obligation on agencies to commission or conduct their philosophical or empirical studies.

“The FCC repeatedly requested commenters to submit empirical or statistical research on the relationship between the possession principles and minority and female ownership,” Justice Kavanaugh wrote. “Despite the requests, no commenter produced such evidence suggesting that altering the rules was likely to harm minority and female ownership.”

Finally, the Court concluded that the FCC made a reasonable predictive judgment based on the evidence before it. “In light of this sparse record on female and minority ownership along with also the FCC’s findings related to competition, localism, and viewpoint diversity, we cannot say the bureau’s choice to repeal or alter the ownership principles dropped outside the zone of reasonableness for purposes of the APA,” Justice Kavanaugh wrote.

Category: Law and Library