Cross-ownership rules for media companies
What Are Cross-Ownership Rules?
Established primarily by the Federal Communications Commission (FCC).
Aim to prevent media monopolies by limiting ownership of multiple media outlets in the same geographic market.
Examples: rules restricting owning both a newspaper and a TV station in the same city.
Purpose: promote diversity of viewpoints, competition, and localism in news and programming.
Key Concepts:
Local Cross-Ownership Ban: prohibits owning a newspaper and a broadcast station (TV or radio) in the same market.
National Ownership Limits: caps on total market reach.
Rule Changes & Waivers: The FCC has revised and relaxed rules over time, prompting legal challenges.
Judicial Review: courts review whether the FCC’s rulemaking complies with law and evidence.
Important Cases on Cross-Ownership Rules
1. Prometheus Radio Project v. FCC (2011)
Background: The FCC tried to relax local cross-ownership rules in 2007.
Issue: Petitioners challenged the FCC’s repeal, arguing FCC failed to adequately justify the change or consider public interest impacts.
Holding: The D.C. Circuit struck down the FCC’s changes because the FCC did not sufficiently demonstrate that relaxing the rules would serve diversity and competition.
Significance:
Reinforced that FCC must conduct thorough analysis and base decisions on substantial evidence.
Courts will carefully scrutinize agency decisions that reduce media ownership restrictions.
2. FCC v. Prometheus Radio Project (2014)
Background: After remand, the FCC issued a new order adjusting cross-ownership rules.
Issue: The court again reviewed whether the FCC complied with the Administrative Procedure Act (APA).
Holding: The court gave partial deference but still vacated parts of the FCC’s new rule for inadequate explanation on how public interest was protected.
Significance:
Demonstrated ongoing judicial oversight.
Showed courts require agencies to balance economic realities with diversity goals transparently.
3. Capital Cities Cable, Inc. v. Crisp (1984)
Background: Case involving FCC’s authority to regulate cable TV cross-ownership and related matters.
Holding: Supreme Court upheld broad FCC authority to regulate cable to protect competition and diversity.
Significance:
Confirmed FCC’s power to enact rules limiting ownership.
Established courts give deference to FCC’s policy judgments under Chevron.
4. Time Warner Cable Inc. v. FCC (2009)
Issue: Challenges to FCC’s media ownership rules, including cross-ownership.
Holding: Court largely upheld FCC’s rules but remanded certain provisions for further explanation.
Significance:
Reinforced that the FCC’s rulemaking must be reasoned and evidence-based.
Agencies must consider market changes and technology evolution when setting ownership limits.
5. Fox Television Stations, Inc. v. FCC (2012)
Issue: Challenges to media ownership rules including cross-ownership and local TV ownership.
Holding: Court vacated parts of FCC’s rules for failing to adequately justify changes.
Significance:
Emphasized procedural requirements for rule changes.
Showed courts’ willingness to hold agencies accountable for thorough public interest analysis.
Summary: What These Cases Tell Us
FCC has authority to set cross-ownership limits but must justify rules with solid evidence.
Courts use the arbitrary and capricious standard to review FCC decisions.
The agency must balance competition, diversity, localism, and the realities of media markets.
Procedural fairness and public input are crucial.
Technology and market evolution complicate how cross-ownership rules apply, requiring ongoing review.
Quick question for you:
Why do you think courts require such detailed evidence from the FCC when it tries to relax cross-ownership rules? What interests are they trying to protect?
RELATED Blog
0 comments