The Telecommunications Act of 1996 requires the FCC to review its rules governing broadcast media ownership every four years.  Under Section 202(h) of the Act, the FCC must determine whether those rules “are necessary in the public interest as the result of competition” and must “repeal or modify any regulation it determines to be no longer in the public interest.”

Respondents Prometheus Radio Project and others challenged various FCC attempts to change its regulations, arguing, among other things, that the Commission did not sufficiently consider the effects the changes would have on broadcast ownership diversity in determining whether to repeal or modify its regulations because they are no longer in the public interest.  The U.S. Court of Appeals for the Third Circuit agreed, noting that the FCC cited no evidence that it had considered the potential effects of its rule changes on gender diversity and that its analysis of the changes’ effects on racial diversity was inadequate.  As a result, the Third Circuit held that the FCC’s changes were arbitrary and capricious in violation of the Administrative Procedure Act (APA).

The FCC petitioned the Supreme Court to review the Third Circuit’s ruling, and the Court agreed to hear the case, along with a similar case brought by the National Association of Broadcasters (NAB).  CAC filed an amici curiae brief on behalf of members of Congress in support of Respondents in the two consolidated cases.

Our brief made two key points.  First, we explained that both the Supreme Court and Congress have long recognized the importance of broadcast media to American public discourse and that maintaining diversity in broadcast media ownership is essential to serving the public interest.  The FCC itself has reaffirmed through the years (including in this case) that it must consider the effects of its rule changes on minority and female ownership of broadcast media as part of its public interest analysis.

Second, our brief argued that the text, structure, and history of the Telecommunications Act require the FCC to meaningfully consider ownership diversity when repealing or modifying its regulations.  The plain language of the Act requires the FCC to “repeal or modify” regulations based on whether they are “no longer in the public interest.”  That instruction compels the FCC to first determine whether a regulation promotes diversity in broadcast media ownership because the existence of a diverse array of media sources is essential to the public interest.  Further, the Act’s use of the broad phrase “public interest” refutes Industry Petitioners’ argument that the FCC must consider the potential effects of rule changes only on competition or market forces and not on diversity.  Finally, the history of Congress’s regulation of broadcast media further demonstrates that the FCC must meaningfully consider broadcast ownership diversity, including minority and female ownership, when determining whether its rules are in the public interest.

In April 2021, the Court reversed the judgment of the Third Circuit, holding that the FCC’s decision to repeal or modify the regulations on broadcast media ownership was not arbitrary and capricious in violation of the APA.  The ruling focused primarily on the Court’s determination that the FCC’s analysis of the regulations’ impact on minority and female ownership of broadcast media was within “the zone of reasonableness,” given the information the FCC had.  Importantly, the Court’s opinion did not adopt NAB’s argument that the FCC had no statutory obligation to consider the rules’ impact on female and minority ownership.