Some Possible FCC Actions on Cap Seen More Viable Like Raising It
Any FCC moves to raise the national broadcast station ownership coverage cap or adjust the UHF discount in response to any unfavorable ruling from the U.S. Court of Appeals for the D.C. Circuit would face a certain legal challenge, but some actions are more viable, attorneys and academics on both sides of the issue said in interviews. FCC action on the cap is seen as a possible countermove to any D.C. Circuit ruling against restoration of the UHF discount, which a three-judge panel appeared to view unfavorably Friday (see 1804200059). It’s not clear what the FCC will do, and most attorneys we asked doubt the agency’s leadership has yet decided anything. Any action to further adjust the UHF discount or alter the cap would likely face a tough time in court, said University of Minnesota School of Journalism assistant professor-media law Christopher Terry.
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The most straightforward action the FCC could take to mitigate the loss of the discount would be to adjust the national cap upward, said lawyers who support the UHF discount and those who oppose it. There are already comments in the record in the national cap proceeding docket 17-318 supporting such a move, though other filings dispute the FCC has that authority. Commissioner Mike O’Rielly would need to change his stance on the agency’s power to change the cap (see 1712140054), broadcast attorneys said. The agency didn’t comment.
Though authority to alter the cap would be challenged in court, the FCC could argue that altering the cap is in within its discretion to update rules to reflect the media market, said broadcast attorneys, echoing comments of many broadcaster filings in the national cap docket (see 1803200059). FCC Counsel James Carr made a similar argument Friday, telling the court the FCC has an obligation to adjust its rules “when the facts on the ground change.” Attorneys said the regulator also could use similar logic to justify abolishing the cap altogether. Either move would likely lead to significant public pushback, said Danilo Yanich, University of Delaware School of Public Policy and Administration associate professor.
The national cap docket also contains a variety of suggestions for altering the UHF discount to make it more legally viable, and the FCC could take up one of these, broadcast attorneys said. They and academics panned a suggestion from broadcast affiliate groups that the discount be applied only to broadcast affiliate stations and not to network-owned ones. Implementing another discount that applied to only some classes of TV station would likely fall to an equal protection challenge, Terry said. NAB’s proposal to apply a discount to both UHF and VHF stations based on changes to the market rather than UHF technology may be more legally viable, broadcast attorneys said. In court Friday, judges repeatedly asked commission counsel for justification for the restored UHF discount now that its technical underpinnings no longer apply. A discount with an alternate justification might be more legally robust, an industry lawyer said.
Attorneys and industry officials also believe the FCC could act to approve Sinclair buying Tribune ahead of the court issuing a ruling. Tuesday, the companies said they were making a new proposal to the regulator (see 1804240076). Deal opponents issued releases Friday saying the FCC shouldn't approve the deal before the court decision. If the FCC moves quickly to alter the cap or approve Sinclair/Tribune before the court’s decision on the UHF discount restoration, its actions will be more open to challenge, one communications attorney said. Such action would likely be subject to additional scrutiny, the attorney said.
Congress established the 39 percent audience coverage cap so it could act to change it, Terry said. Lobbying legislators would be a safer way to get the rule changed than relying on courts, he said. Broadcast lawyers said Congress is a less viable option at the moment because members are seen as less willing to pass controversial legislation with an upcoming election.
If the court does strike down the UHF discount, broadcasters may have an additional avenue for attack in the form of a pending court case held in abeyance since the FCC moved toward restoring the discount. Fox filed a challenge against 2016 removal of the discount (see 1611220074), but the case was put on hold after the presidential election. If the D.C. Circuit strikes down the restored discount, it would resurrect the 2016 order, and then Fox could renew its challenge, industry lawyers said.