The FCC “placed the interest of a private equity firm ahead of everyday people” by approving Terrier Media’s buy of Cox Enterprises stations (see 1911220069) and Terrier’s plan to comply with newspaper/broadcast cross-ownership rules by reducing the Dayton Daily News publication schedule, wrote Dayton, Ohio, Mayor Nan Whaley (D) and former FCC Commissioner Mike Copps in USA Today Thursday. “A region of nearly 1 million people will bear the brunt of these devastating cuts to its primary news source.” The deal's OK “with its explicit endorsement of profit over the public interest demonstrates that the FCC has lost its way.” The FCC had done away with the cross-ownership rules when Terrier proposed the purchase, but the 3rd U.S. Circuit Court of Appeals’ Prometheus IV restored the rule before the agency approved the transaction. Copps is a special adviser to Common Cause, a Prometheus petitioner. “FACT CHECK: The FCC eliminated the stupid and outdated rule that is leading to this outcome, but the Third Circuit Court of Appeals, at the urging of your co-author, reinstated it,” tweeted Matthew Berry, FCC Chairman Ajit Pai's chief of staff. “I suspect your co-author neglected to inform you that the very restrictions he supports are one of the major elements responsible for the decline in local journalism (in Dayton and elsewhere),” tweeted NAB General Counsel Rick Kaplan to Whaley. In the absence of the Prometheus "ruling we would not have revised the filing this way," emailed a Terrier spokesperson. "From the beginning, we saw our investment to improve services to local communities and this operational change was not our intent nor in our original filing.”
Notable CROSS rulings
The 2016 quadrennial media ownership rules, in line with the mandate issued in the 3rd U.S. Circuit Court of Appeal's fall Prometheus IV (see 1909230067), are again in effect, the FCC Media Bureau ordered Friday in docket 14-50. It issued revised commercial radio station renewal application procedures, saying effective immediately, every licensee seeking renewal of a commercial station license must report any violation of the newspaper/broadcast or radio/television cross-ownership rules, while the bureau seeks OMB OK to add a new question on this topic to the renewal application. It announced procedures for processing Form 314 assignment applications and Form 315 transfer of control applications for commercial radio and TV stations.
Two pending broadcast deals could be affected by rules resurrected by the 3rd U.S. Circuit Court of Appeals in Prometheus IV, FCC Chairman Ajit Pai responded to House Commerce Committee Chairman Frank Pallone, D-N.J. On Oct. 22, Pallone questioned FCC approval, shortly after the court’s decision, of a deal in Sioux Falls, South Dakota, that involved Gray owning two top-four stations (see 1910220044). “Because the Bureau’s action is plainly lawful and supported by substantial record evidence, there is no need to, much less plan to, reconsider it,” Pai told Pallone. Both pending deals also involve Gray, and neither would currently comply with the restored eight-voices test, Pai said. Gray seeks to buy KCPM Grand Forks, North Dakota, from G.I.G. North Dakota, pending since February 2018, Pai said. Gray sought approval in October to buy WYCI Saranac Lake, New York, from Cross Hill Communications. Gray hasn’t asked for a waiver in the Grand Forks deal but sought a failing-station waiver for the Saranac Lake transaction, the letter said. The FCC “has not yet taken action on either application and does not currently have a timetable,” Pai said. “We are evaluating our options for seeking further review of the Third Circuit’s decision.” Pai declined to provide Pallone with the agency’s internal legal analysis of the deal, “consistent with Commission practice in responding to Congressional document requests.” Departing from prior practice “would prejudice the Commission and chill the ability of attorneys to provide candid legal advice and guidance,” Pai said. His response dated Dec. 3 was posted Wednesday.
The House Communications Subcommittee's Thursday FCC oversight hearing is expected to include criticism of commission actions and a focus on telecom policy priorities like deciding how to allocate proceeds from a coming auction of the 3.7-4.2 GHz C band, said lawmakers and others in interviews. FCC Chairman Ajit Pai and the other four commissioners are to testify during the panel, which will begin at 10 a.m. in 2123 Rayburn. The hearing will happen a day after the House easily passed another FCC-related policy priority, the Pallone-Thune Telephone Robocall Abuse Criminal Enforcement and Deterrence (Traced) Act (S-151).
FCC Media Bureau approval of Apollo Global Management-related Terrier Media’s buy of Cox Media Group and Northwest’s stations (see 1911220069) is another indication the FCC isn’t likely to approve deals with complications testing the limits of existing broadcast rules, attorneys, broadcasters and brokers said in interviews this week. “If it pushes the envelope, they’ll slow your deal up,” one broadcaster said.
FCC staff approved about $3.5 billion worth of broadcast deals, over opposition from some opponents of media consolidation. A company affiliated with Apollo Global Management is buying what stakeholders have said are all of Cox Enterprises' TV stations and most of its radio stations. Also being purchased are apparently all of Northwest's TV stations (see 1910180027).
An FCC appeal of Prometheus IV at the Supreme Court is expected by agency and industry stakeholders. Left unclear is how the rules restored by 3rd U.S. Circuit Court of Appeals will affect the industry in the meantime, said broadcasters and broadcast attorneys at a Media Bureau event on industry trends Thursday. They said the agency shouldn't wait on the uncertain appeal to deregulate broadcast ownership. Wednesday evening, the 3rd Circuit declined the regulator's request to reconsider the case (see 1911200063)
The FCC should reject Terrier Media’s amendments to its proposed deals with Cox and Northwest Broadcasting, said Common Cause and the United Church of Christ, Office of Communication in a joint ex parte filing posted Friday in docket 19-98 (see 1910310072). Terrier’s amendment “violates the goals” of the media ownership rules restored by a recent 3rd U.S. Circuit Court of Appeals ruling, “using technicalities to circumvent compliance with those rules,” the filing said. The amendments, which would reduce the circulation of a newspaper involved in the deal and turn in the license of some TV stations, would take advantage of “the FCC’s own failure to update its rules,” the filing said. The newspaper broadcast cross-ownership rule’s singling out of daily newspaper circulation as an ownership benchmark and lack of mention of digital distribution show the rule’s definitions “no longer make sense in today’s media marketplace,” the filing said. The FCC’s “failure to meaningfully update the NBCO Rule does not mean it should permit the Applicants to exploit this loophole,” the filing said. “The Commission already turned a blind eye to the Court’s ruling when it granted a prior transaction even though it contained media ownership rule violations,” the filing said, referencing the approval of a Gray TV transaction in Sioux Falls, South Dakota. “This is part of a troubling pattern,” the filing said.
U.S. government searches of international travelers’ phones and laptops without warrant or probable cause violate the Fourth Amendment, U.S. District Court in Boston ruled Tuesday. Alasaad v. McAleenan involved controversial airport searches by Customs and Border Protection and Immigration and Customs Enforcement. The American Civil Liberties Union, Electronic Frontier Foundation and ACLU of Massachusetts filed the lawsuit. “This is a great day for travelers who now can cross the international border without fear that the government will, in the absence of any suspicion, ransack the extraordinarily sensitive information we all carry in our electronic devices," said EFF Senior Staff Attorney Sophia Cope. The Department of Homeland Security didn't comment.
The FCC Media Bureau's finding that a group of broadcasters violated per se good-faith negotiating standards in talks with AT&T could be a seminal moment that puts teeth into what some consider toothless rules, lawyers with retransmission consent negotiation experience told us. Others said the rules aren't ambiguous, so Friday's decision (docket 19-168) in response to AT&T's complaint (see 1906190027) provides little new clarity. Everyone agreed such rulings in favor of complainants are rare, and some attorneys told us they believe this is the first time broadcasters have been found in violation of the good faith rules.