FCC Shouldn't Hide Behind Hearing Process, Broadcasters Tell DC Circuit
The FCC misrepresented the Standard/Tegna deal as complex and refused to engage with the broadcasters, and Friday’s Supreme Court opinion on agency adjudications underscores that the hearing process is unconstitutional, said Standard General, Cox Media Group and Tegna in their final response filing supporting their petition for mandamus at the U.S. Court of Appeals for the D.C. Circuit (see 2304110072).
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“Surely the FCC, which routinely encounters more complicated transactions, did not need a full year to understand it,” said the brief. The broadcasters asked the court to rule on the mandamus petition by April 21.
The FCC’s blaming of Standard’s voluntary commitments not to raise retransmission consent rates for acquired stations or cut jobs for delaying deal review is implausible and incredible, the filing said. The commitments were submitted late in the process because the FCC "had refused to engage with Standard General or to explain what problems the FCC might perceive with the transaction,” the filing said: It's “disingenuous to describe pledges meant to bring the matter to a close as derailing the process and resetting the clock.”
The longest it has taken the FCC to review other deals without waivers or divestitures is 182 days, compared with 400 for Standard/Tegna, the brief said. The only TV station transfer proceeding that has taken longer than Standard/Tegna was the Tribune bankruptcy reorganization in 2012, the filing said: “The statistics refute any suggestion that the supposed complexity of this transaction excuses the FCC’s delay.”
Arguments from the FCC and public interest intervenors that the agency shouldn’t be bound by the broadcasters’ May 22 deadline for the end of their financing “disregard market realities.” Allowing the agency to “pocket-veto” any deal by delaying past the expiration of financing could jeopardize access to capital for the entire broadcast industry and especially minority owners, the brief said: “The Commission’s disregard of a commercially reasonable financing deadline would exacerbate a problem the FCC is charged to correct.”
The broadcasters cited Friday’s SCOTUS decision in Axon Enterprise v. FTC (21-86) and SEC v. Cochrane (21-1239) as further evidence that the FCC’s hearing process isn't constitutional. The SCOTUS decision “reaffirmed” that “unaccountable” administrative law judges overseeing a proceeding are an injury that can’t be remedied once the proceeding concludes, the filing said: “That is all the more reason for acting now.”
The FCC said disqualifying the ALJ wouldn’t affect the case because the hearing can be presided over by commissioners, but the broadcasters said a commission vote would be preferable. “There has been no ‘Commission’ vote to do anything in this case, because the Media Bureau, which is run by a member of the Chairwoman’s staff, seeks to kill the deal without accountability before this Court,” it said. Media Bureau Chief Holly Saurer is also FCC Chairwoman Jessica Rosenworcel’s media adviser.
The FCC’s power to regulate retransmission consent fees is “illusory,” the broadcasters said. The FCC and amicus the American Television Alliance haven’t shown any evidence that rising retrans rates lead to higher prices for consumers, the broadcasters said: “The Commission cannot justify searching for an antitrust fire without identifying even a wisp of smoke.”
If the agency “truly believes the transaction would not advance the public interest despite its benefits for diversity and local news, that determination belongs in a judicially reviewable Commission decision,” the broadcasters said. “Not in a procedural ruling by a subordinate or a backfilling appellate brief.”