Prometheus Radio Project v. FCC was a case heard and adjudicated by the U.S. Third Circuit Court of Appeals in 2003 and 2004. The majority ruled 2-1 to throw out the FCC's attempt to raise the limits of cross-ownership of media. They ruled that a "diversity index" used by the FCC to weigh cross-ownership (of radio, television and newspapers) employed several "irrational assumptions and inconsistencies." Dissent by Chief Judge Anthony Joseph Scirica noted that the majority were simply employing their own assumptions.
The Supreme Court later turned down an appeal, so the decision stands. The FCC was ordered to reconfigure how it justifies raising ownership limits.
Prometheus Radio Project vs. Federal Communications Commission
Court name: United States Court of Appeals for the Third Circuit
Date of Decision: February 11th, 2004
Case Citation: 373 F.3d 372
Statement of Facts
1. During the FCC’s 2003 biennial review they released an order that made six changes to the media ownership rules of the 1996 Telecommunications Act.
2. Changes to the local television ruling that allowed for increased ownership. Existing ruling allowing duopolies would be increased to triopolies for markets that qualified, and also held restrictions that limited a single entity to having only one of the top-four broadcast stations in an area.
a. Under these new rulings duopolies could exist in 162 of the 210 markets, whereas only 70 of the 210 could exist in the previous ruling. In addition to the influx on duopolies, triopolies would be allowed in the nine of the 210 markets.
3. Changes how the FCC determined local radio markets, from the existing method of contour overlap to a method created by market research group Arbitron.
a. Other changes include noncommercial radio stations being counted in each markets station count.
4. Elimination of current restrictions that prohibited ownership of television broadcast stations and newspaper by a single entity
5. Elimination of limits based upon size for ownership of both a television and radio broadcast station in the same market.
6. These rules would effectively be replaced by a single cross-ownership ruling called Cross Media Limits.
a. Cross Media limits would remove restrictions of owning both a television station and daily newspaper to all but the smallest markets.
7. Increase the television broadcast audience reach limit from 35% to 45%.
8. Did not repeal or modify the dual network rule which permitted television stations to have affiliations with more than one network, excluding the four major networks.
9. A joint association of public interest groups, referred to as the “Citizen Petitioners” filed suit against the FCC to have their orders reviewed and scrutinized.
a. The Citizen Petitioners consisted of a number of non-profit advocacy groups such as the Prometheus Radio Project as well as media outlets such as Fox Entertainment Group and Viacom Inc..
1. Shortly after the FCC released the publication of their Order many groups filed petitions for it to be reviewed (including Prometheus Radio Project.
2. Court was chosen from a lottery because petitions were filed in multiple different circuit courts.
3. All appeals for the review of the order were consolidated and a stay was put on the FCCs’ order.
4. FCC’s motion to have the hearings venue transferred to D.C. Circuit Court was denied.
a. Subsequent Legislation occurred when the 1996 Act was amended by Congressed, increasing the reach cap of the national television audience rule to 39% from 35%.
b. Congress changed the FCC’s biennial review requirements to quadrennial reviews.
1. Based upon the ruling by Congress requiring the FCC to (biennially review its regulations, two issues came up questioning the FCC’s new orders:
a. Are the orders necessary in the interest of the public and fostering competition?
b. If it is not deemed necessary or in the interest of the public should a regulation be repealed or modified?
c. Did the FCC provide accurate and complete justification for the orders?
1. The court concluded in a majority 2 to 1 vote that the FCC failed to provide enough information justifying its proposed orders to repeal and modify current regulations.
2. Court ordered a stay and that the FCC to justify its approach to determining its numerical limits.
3. Court did not find any constitutional flaws in the Cross-Media Limits replacement of cross-ownership rules, but believe that the FCC did not provide enough information to support it decision.
4. The FCC appealed the court’s decision stating that the stay prevented other regulatory changes that the court did approve as to be in necessary to the public’s interest.
1. The court found that they could not deem the recommended decision to repeal and modify regulations necessary or in the interest of the public based upon the lack of justification.
Legal Principles Applied
1. The Count concluded that continued cross-media ownership regulation is in the public interest and does not violate the first and fifth amendments.
2. Multiple references towards court case Sinclair, 284 F.3d 153, were made citing policy objectives protecting diversity. The courts decided the FCC did not base its suggested Cross Media Limits from diversity results.
3. Citizen Petitioners cited Corp. V. Thomas, 838 F.2d 1317 and United States V. Nova Scotia Food Prods. Corp., 568 F.2d 240 when stating that the FCC failed to publicly note that the Diversity Index was their methodology to derive their Cross Media Limits.
1. Chief Judge Scirica dissented against the courts conclusion to remand the FCC’s order, stating that the court was imparting its own personal policy judgment in place of an agency who was acting within its delegated review process.
1. While I understand the Citizen Petitioners concern for a lack of information regarding the choices the FCC had made, I am personally leaning towards Chief Judge Scirica’s dissenting opinion. The FCC was mandated to monitor its regulations and alter them in ways they think would be in the best interest of the public. Instead of letting the FCC follow through with its regulatory changes based upon their expert opinion and observing the results at the now quadrennial review period, the judges were supplanting their own opinion.