`
`
`
`
`
`Nos. 19-1231, 19-1241
`In The
`
`
`FEDERAL COMMUNICATIONS COMMISSION, ET AL.,
`Petitioners,
`
`v.
`PROMETHEUS RADIO PROJECT, ET AL.,
` Respondents.
`
`NATIONAL ASSOCIATION OF BROADCASTERS, ET AL.,
`Petitioners,
`
`v.
`PROMETHEUS RADIO PROJECT, ET AL.,
`
` Respondents.
`
`
`
`On Petitions for Writs of Certiorari to the
`United States Court of Appeals for the Third Circuit
`
`BRIEF IN OPPOSITION
`
`
`Cheryl A. Leanza
`BEST BEST &
` KRIEGER LLP
`2000 Penn. Ave. NW
`Suite 530
`Washington, DC 20006
`
`Ruthanne M. Deutsch
` Counsel of Record
`Hyland Hunt
`DEUTSCH HUNT PLLC
`300 New Jersey Ave. NW
`Suite 900
`Washington, DC 20001
`(202) 868-6915
`rdeutsch@deutschhunt.com
`Counsel for Prometheus Radio Project, Movement
`Alliance Project (f/k/a Media Mobilizing Project),
`Common Cause, NABET-CWA, Free Press, and Office
`of Communication, Inc. of the United Church of Christ
`[Additional counsel listed on signature page]
`
`
`
`
`
`QUESTION PRESENTED
`Whether the Third Circuit correctly applied long-
`settled standards of administrative law—the same
`standards that Petitioners ask this Court to apply—to
`hold that the Federal Communications Commission
`acted arbitrarily and capriciously in promulgating its
`media-ownership rules after the agency failed to
`adequately consider what it has long recognized to be
`an important aspect of the public interest served by
`those rules.
`
`
`
`
`
`
`
`
`
`(i)
`
`
`
`ii
`
`PARTIES TO THE PROCEEDINGS
`
`Respondents here are the Prometheus Radio
`Project, the Movement Alliance Project (formerly
`known as the Media Mobilizing Project); Common
`Cause;
`the National Association of Broadcast
`Employees and Technicians–Communications Workers
`of America (NABET-CWA); Free Press; and the Office
`of Communication, Inc. of the United Church of Christ
`(petitioners below); together with the Benton Institute
`for Broadband & Society (formerly known as the
`Benton Foundation); the National Hispanic Media
`Coalition; the National Organization for Women
`Foundation; Media Alliance; and Media Counsel
`Hawai’i (respondents-intervenors below).
`All other parties to the proceedings are correctly
`described in the Petition of the National Association of
`Broadcasters, et al., No. 19-1241 (at ii–iv).
`
`
`
`
`
`
`
`
`iii
`
`TABLE OF CONTENTS
`QUESTION PRESENTED ........................................... I
`PARTIES TO THE PROCEEDINGS ......................... II
`OPINIONS BELOW .................................................... 1
`STATEMENT .............................................................. 1
`REASONS FOR DENYING THE PETITION .......... 15
`I.
`The Third Circuit’s Fact-Bound Application Of
`Settled Administrative Law Standards Presents
`No Legal Question Warranting Review............ 17
`A. This Case Is Even Less Worthy of
`Certiorari than Its Predecessors. ................ 17
`B. As the Government Acknowledges, No
`Question of Statutory Interpretation Is
`Presented. ..................................................... 19
`II. This Court’s
`Intervention
`Is Unnecessary
`Because The Agency Has All The Tools It Needs
`To Fix Problems Of Its Own Making. ............... 24
`A. The 2018 Quadrennial Review Now
`Underway Is Not “Distorted” by the
`Third Circuit’s Decision. .............................. 24
`B. Further Backward-Looking Judicial
`Review Is Unnecessary. ............................... 26
`III. The Third Circuit’s Decision Is Correct. ........... 29
`CONCLUSION .......................................................... 38
`
`
`
`
`
`
`
`iv
`
`TABLE OF AUTHORITIES
`
`CASES:
`Associated Press v. United States,
`326 U.S. 1 (1945) .................................................... 2
`Bowen v. Am. Hospital Ass’n,
`476 U.S. 610 (1986) .............................................. 30
`
`Chamber of Commerce v. SEC,
`443 F.3d 890 (D.C. Cir. 2006) .............................. 35
`
`Dep’t of Homeland Sec. v. Regents of Univ. of Cal.,
`140 S. Ct. 1891 (2020) ....................................passim
`
`Dist. Hosp. Partners, L.P. v. Burwell,
`786 F.3d 46 (D.C. Cir. 2015) ................................ 34
`
`Encino Motorcars, LLC v. Navarro,
`136 S. Ct. 2117 (2016) .................................... 23, 34
`
`FCC v. Nat’l Citizens Comm. for Broad.,
`436 U.S. 775 (1978) .......................................... 2, 33
`
`Fox Television Stations., Inc. v. FCC,
`280 F.3d 1027 (D.C. Cir. 2002) .....................passim
`Fox Television Stations., Inc. v. FCC,
`293 F.3d 537 (D.C. Cir. 2002) .......................... 4, 23
`
`FCC v. Fox Television Stations, Inc.,
`556 U.S. 502 (2009) .............................................. 34
`
`
`
`
`v
`
`In re Core Commc’ns, Inc.,
`531 F.3d 849 (D.C. Cir. 2008) ................................ 9
`
`Michigan v. EPA,
`576 U.S. 743 (2015) .............................................. 23
`
`
`Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto.
`Ins. Co.,
`463 U.S. 29 (1983) .........................................passim
`
`NARUC v. FCC,
`737 F.2d 1095 (D.C. Cir. 1984) ............................ 35
`
`New Orleans v. SEC,
`969 F.2d 1163 (D.C. Cir. 1992) ............................ 32
`
`Prometheus Radio Project v. FCC,
`373 F.3d 372 (3d Cir. 2004).............................. 5, 20
`
`
`Prometheus Radio Project v. FCC,
`652 F.3d 431 (3d Cir. 2011).............................. 7, 35
`
`Prometheus Radio Project v. FCC,
`824 F.3d 33 (3d Cir. 2016).......................... 8, 20, 21
`
`
`SEC v. Chenery Corp.,
`332 U.S. 194 (1947) ........................................ 23, 37
`
`
`Sinclair Broad. Grp., Inc. v. FCC,
`284 F.3d 148 (D.C. Cir. 2002) .......................... 4, 30
`Stillwell v. OTS (Office of Thrift Supervision),
`569 F.3d 514 (D.C. Cir. 2009) .............................. 33
`
`
`
`vi
`
`
`STATUTES:
`Pub. L. No. 104-104, 110 Stat. 56 ............................... 3
`47 U.S.C. § 303 ........................................................ 2, 3
`47 U.S.C. § 303 note (§ 202(h)) ...........................passim
`47 U.S.C. § 310(d) ........................................................ 2
`
`AGENCY MATERIALS:
`1998 Biennial Regulatory Review,
`15 FCC Rcd. 11058 (2000)...................................... 3
`2002 Biennial Regulatory Review,
`18 FCC Rcd. 13620 (2003).............................passim
`2006 Quadrennial Regulatory Review,
`23 FCC Rcd. 2010 (2008) ............................. 2, 6, 28
`2010/2014 Quadrennial Further Notice and Order,
`29 FCC Rcd. 4371 (2014) ....................................... 8
`
`2014 Quadrennial Regulatory Review, Second Report
`and Order,
`31 FCC Rcd. 9864 (2016) ..............................passim
`
`2014 Quadrennial Regulatory Review,
`Reconsideration Order,
`32 FCC Rcd. 9802 (2017) ..............................passim
`2018 Quadrennial Regulatory Review Notice,
`33 FCC Rcd. 12111 (2018).............................passim
`
`
`
`vii
`
`Broadcast Localism,
`19 FCC Rcd. 12425 (2004)...................................... 2
`
`Promoting Diversification of Ownership in the
`Broadcasting Services,
`23 FCC Rcd. 5922 (2008) ....................................... 7
`
`Rules and Policies to Promote New Entry and
`Ownership Diversity in the Broadcasting Services,
`33 FCC Rcd. 7911 (2018) ..............................passim
`
`OTHER AUTHORITIES:
`Free Press, Comment on 2018 Quadrennial
`Regulatory Review (Apr. 29, 2019) ...................... 25
`Multicultural Media, Telecom and Internet
`Council, Comment on 2018 Quadrennial
`Regulatory Review (Apr. 28, 2019) ...................... 25
`John Eggerton, Local TV Tops Pandemic News
`Sources, MULTICHANNEL NEWS (June 3,
`2020) ..................................................................... 28
`
`For Local News, Americans Embrace Digital
`But Still Want Strong Community
`Connection, PEW RES. CTR. (Mar. 26, 2019) ........ 27
`Christopher Terry, Localism as a Solution to
`Market Failure: Helping the FCC Comply
`with the Telecommunications Act, 71 FED.
`COMM. L. J. 327 (2019) ......................................... 27
`
`
`
`viii
`
`The Leadership Conference on Civil and
`Human Rights, Comment on 2018
`Quadrennial Regulatory Review (Apr. 29,
`2019) ............................................................... 25, 33
`John Sands, Local News Is More Trusted than
`National News—But That Could Change,
`KNIGHT FOUND. (Oct. 29, 2019) ............................ 28
`DANA A. SCHERER, CONG. RESEARCH SERV.,
`R43936, THE FCC’S RULES AND POLICIES
`REGARDING MEDIA OWNERSHIP,
`ATTRIBUTION, AND OWNERSHIP DIVERSITY
`(2016) ...................................................................... 2
`Dominik A. Stecula et al., How Trust in
`Experts and Media Use Affect Acceptance of
`Common Anti-vaccination Claims, HARV.
`KENNEDY SCH. MISINFORMATION REV. (2020) ...... 28
`
`
`
`
`
`
`BRIEF IN OPPOSITION
`
`OPINIONS BELOW
`The petition in No. 19-1241 omitted two of the
`orders under review: 2014 Quadrennial Regulatory
`Review, Second Report and Order, reported at 31 FCC
`Rcd. 9864 (2016) (“2016 Order”), and Rules and
`Policies to Promote New Entry and Ownership
`Diversity in the Broadcasting Services, reported at 33
`FCC Rcd. 7911 (2018) (“Incubator Order”). Excerpts
`from those orders are included in the Petition
`Appendix in No. 19-1231. The third order under
`review, 2014 Quadrennial Regulatory Review,
`Reconsideration Order, is reported at 32 FCC Rcd.
`9802 (2017) (“Reconsideration Order”) and included in
`full in the Petition Appendix in No. 19-1241.1
`
`STATEMENT
`The Third Circuit correctly applied settled
`principles of administrative law to a particular
`administrative record and held that the Federal
`Communications Commission did not adequately
`explain or support its conclusions about how its rule
`changes would impact its own long-standing policy
`goal. That
`fact-bound, splitless, unremarkable
`application of administrative law raises no question
`worthy of this Court’s review. The petitions here
`should be denied, just as this Court has done twice
`before in earlier iterations of this case.
`
`1 All appendix citations are to the Appendix in No. 19-1231.
`(1)
`
`
`
`
`
`2
`
`1. Since its origin, the FCC has been entrusted
`with regulating broadcasting in the public interest,
`e.g., 47 U.S.C. §§ 303, 310(d), pursuing three
`“longstanding policy goals of competition, localism,
`and diversity,” e.g., 2016 Order, 31 FCC Rcd. at 9870;
`see also Broadcast Localism, 19 FCC Rcd. 12425,
`12425 (2004).
`of
`dissemination
`possible
`“[T]he widest
`information from diverse and antagonistic sources is
`essential to the welfare of the public.” Associated Press
`v. United States, 326 U.S. 1, 20 (1945). The FCC has
`long regarded diversity as critical to the public interest
`and, for decades, has judged ownership diversity,
`specifically,
`to be an
`“important Commission
`objective,” based on “a positive correlation between
`viewpoints expressed and ownership of an outlet.”
`2002 Biennial Regulatory Review, 18 FCC Rcd. 13620,
`13627–28, 13634 (2003) (“2002 Review”); see FCC v.
`Nat’l Citizens Comm. for Broad., 436 U.S. 775, 780
`(1978). Throughout the rulemakings at issue here, and
`consistent with its statutory mandate to make
`communications available “without discrimination on
`the basis of race, color, religion, national origin, or
`sex,” 47 U.S.C. § 151, every quadrennial review has
`reaffirmed these policies. See, e.g., 2006 Quadrennial
`Regulatory Review, Report and Order, 23 FCC Rcd.
`2010, 2016–17 (2008) (“2006 Review”) (“reaffirm[ing]”
`the “longstanding policies” set out in the 2002 Review);
`SG Pet. 5. See also DANA A. SCHERER, CONG. RESEARCH
`SERV., R43936, THE FCC’S RULES AND POLICIES
`REGARDING MEDIA OWNERSHIP, ATTRIBUTION, AND
`OWNERSHIP DIVERSITY 1–2 (2016) (describing the
`
`
`
`3
`
`Commission’s historic commitment to ownership
`diversity as part of the public interest).
`2. The FCC has modified its broadcast ownership
`rules many times over the years. While the
`Commission imposes limits at both the national and
`local levels, only local ownership rules are at issue
`here. Some rules apply to ownership of multiple
`stations within a single service (such as television or
`radio). Others restrict “cross-ownership,” e.g., prohibit
`common ownership of a newspaper and broadcast
`station within a local market. The FCC also grants
`benefits or exceptions to certain licensees (sometimes
`called “eligible entities”).
`In the 1996 Telecommunications Act, Congress
`significantly liberalized many broadcast ownership
`rules, including limits on local radio station ownership
`and TV/radio cross-ownership in the largest local
`markets. Pub. L. No. 104-104, § 202(a)–(f), 110 Stat.
`56, 110–11. In § 202(h), Congress also required the
`Commission to review “all of its [broadcast] ownership
`rules quadrennially,” “determine whether any of such
`rules are necessary in the public interest as the result
`of competition,” and “repeal or modify any regulation
`it determines to be no longer in the public interest.” 47
`U.S.C. § 303 note (Broadcast Ownership).
`3.a. In 2002, the D.C. Circuit reviewed the FCC’s
`1998 Biennial Regulatory Review Report, 15 FCC Rcd.
`11058 (2000). In that first review, the FCC retained its
`national audience-reach TV ownership limit and a rule
`that effectively prohibited TV-cable cross-ownership
`in the same local market. Fox Television Stations., Inc.
`v. FCC, 280 F.3d 1027, 1034–35 (D.C. Cir. 2002) (“Fox
`
`
`
`4
`
`I”), modified on reh’g, 293 F.3d 537 (D.C. Cir. 2002)
`(“Fox II”). Consistent with § 202(h), the FCC could
`retain rules to promote diversity, the D.C. Circuit
`held, and “nothing in § 202(h) signals a departure”
`from the “historic scope” of the public interest inquiry’s
`“historical[] embrace[] of diversity
`(as well as
`localism).” Fox I, 280 F.3d at 1042. But the FCC’s
`retention of those rules was arbitrary because the
`FCC’s explanations were “woefully inadequate” and
`“merely listed” numbers. Id. at 1044.
`The D.C. Circuit separately reviewed under
`§ 202(h) the FCC’s decision to modify local TV
`ownership rules to permit common ownership of two
`local stations if one of the stations is not among the top
`four and if eight independent stations remain. Sinclair
`Broad. Grp., Inc. v. FCC, 284 F.3d 148 (D.C. Cir. 2002).
`That court remanded the rule, holding that the eight-
`voices test was arbitrary because the FCC did not
`explain why it counted fewer outlets in its local
`television rule than it did in a similar cross-ownership
`rule. Id. at 162, 164. Notwithstanding deference, the
`court held, “the Commission cannot escape the
`requirements that its action not ‘run[] counter to the
`evidence before it’ and that it provide a reasoned
`explanation for its action.” Id. at 162 (quoting Motor
`Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co.,
`463 U.S. 29, 43 (1983)).
`b. In its 2002 Review, the FCC reaffirmed that
`local ownership rules are necessary to promote
`diversity. 2002 Review, 18 FCC Rcd. at 13793. The
`Commission thus retained, with some modification,
`the pre-existing local TV and radio limits. Prometheus
`
`
`
`5
`
`Radio Project v. FCC, 373 F.3d 372, 386–87 (3d Cir.
`2004) (“Prometheus I”). But it took a new approach to
`setting cross-ownership rules. The FCC used a
`“Diversity Index,” modeled on a commonly used
`antitrust market concentration index, to construct a
`new set of cross-media limits. It prohibited all
`newspaper/broadcast and TV/radio combinations in
`the smallest markets (with three or fewer TV
`stations), adopted some
`limits in medium-sized
`markets (with between four and eight TV stations),
`and imposed no restrictions in the largest markets
`(more than eight TV stations). Id. at 388. The FCC also
`permitted “eligible entitles” to engage in otherwise
`prohibited transactions, defining “eligible entities”
`based on the Small Business Administration’s annual
`revenue standards. 2002 Review, 18 FCC Rcd. at
`13811–12.
`Upon review, the Third Circuit upheld the
`Commission’s decisions to partially repeal the
`newspaper/broadcast ban; adopt a revenue-based
`eligible entity definition; modify the definition of local
`radio markets; and retain the
`local TV rule.
`Prometheus I, 373 F.3d at 397–435, 445–63.
`
`The Third Circuit concluded, however, that the
`Commission did not
`sufficiently
`explain
`its
`replacement limits for cross-ownership and local-
`market restrictions. For example, the FCC did not
`adequately justify its decision to exclude cable
`television from the Diversity Index while including the
`internet, or its assumption that all local TV stations
`have equal market shares. Id. at 406–07, 418–19. The
`court therefore remanded these rules because the new
`
`
`
`6
`
`limits “all have the same essential flaw: an unjustified
`assumption that media outlets of the same type make
`an equal contribution to diversity and competition in
`local markets.” Id. at 435.
`In the same decision, the Third Circuit reviewed
`the FCC’s repeal of the failed station solicitation rule,
`which required an applicant to solicit an out-of-market
`buyer before it could sell a failing station to an in-
`market buyer. Id. at 420. The court noted that
`“preserving minority ownership was the purpose of
`the” rule and, therefore, repealing it “without any
`discussion of the effect of its decision on minority
`television station ownership” did not provide the
`“reasoned analysis” necessary to support a policy
`change. Id. at 420–21. Noting that the FCC had
`deferred consideration of other proposals to promote
`minority broadcast ownership, the court directed it to
`consider them on remand. Id. at 421 n.59.
`c. The FCC took almost four years to resolve the
`issues remanded in Prometheus I, addressing them
`only in its 2006 Review. There, it abandoned the
`Diversity Index and largely returned to the pre-
`existing rules with minor adjustments. 2006 Review,
`supra. The Commission also modified the newspaper/
`broadcast rule, establishing presumptions in favor of
`newspaper/radio combinations and, under certain
`conditions, newspaper/television combinations in the
`top twenty markets, but otherwise presuming such
`combinations were not in the public interest. Id., 23
`FCC Rcd. at 2018–19. It re-adopted the pre-2002-
`Review radio/television cross-ownership rule, local
`
`
`
`failed station
`
`7
`
`limits, and
`radio and television
`solicitation rule. Id. at 2058, 2068–69.
` In a separate contemporaneous order, the FCC
`adopted thirteen proposals to “expand[] opportunities
`for new entrants and small businesses, including
`minority- and women-owned businesses, to own
`broadcasting outlets” to “strengthen the diverse and
`robust marketplace
`of
`ideas.”
`Promoting
`Diversification of Ownership in the Broadcasting
`Services, 23 FCC Rcd. 5922, 5924 (2008) (“Diversity
`Order”). The additional opportunities were available
`to “eligible entities,” as defined using the same
`revenue-based definition of eligible entity adopted in
`the 2002 Review.
`On review, the Third Circuit unanimously upheld
`the FCC’s decisions on the local television and radio
`rules. Prometheus Radio Project v. FCC, 652 F.3d 431,
`458–64 (3d Cir. 2011) (“Prometheus II”). The panel
`majority found, however, that the Commission failed
`to provide adequate notice of changes to the
`newspaper/broadcast rule. Id. at 445–46, 453.
`Given the FCC’s avowed purpose for the Diversity
`Order—“increasing broadcast ownership by minorities
`and women,” id. at 469—the court held that the FCC
`had not reasonably explained how the revenue-based
`eligible entity definition would further that goal. Id. at
`471 (finding the FCC “offered no data attempting to
`show a connection between the definition chosen and
`the goal of the measures”). The court noted that “the
`Commission referenced no data on
`television
`ownership by minorities or women and no data
`regarding commercial radio ownership by women”
`
`
`
`8
`
`because, “as the Commission has since conceded, it has
`no accurate data to cite.” Id. at 470 (emphasis in
`original). Because “[p]romoting broadcast ownership
`by minorities and women is, in the FCC's own words,
`‘a long-standing policy goal of the Commission,’ ” the
`Third Circuit urged the Commission to “gather[] the
`information required to address these challenges.” Id.
`at 472.
`d. The FCC failed to produce a decision on
`remand in the 2010 Quadrennial Review. Instead, in
`2014, the FCC issued a 2010/2014 Quadrennial
`Review, Further Notice of Proposed Rulemaking and
`Order, 29 FCC Rcd. 4371 (2014), announcing tentative
`conclusions and requesting further comment. Review
`of this order was originally assigned to the D.C. Circuit
`under 28 U.S.C. § 2112(a)(3). After reviewing the
`briefs, and with the Government’s support, the D.C.
`Circuit transferred the case to the Third Circuit.
`Prometheus Radio Project v. FCC, 824 F.3d 33, 39 (3d
`Cir. 2016) (“Prometheus III”); see Resp. of FCC to
`Motion to Transfer Cases to the Third Circuit, Howard
`Stirk Holdings. v. FCC, No. 14-1090 (2015).
`The Third Circuit unanimously agreed that the
`Commission’s delay in adopting an eligible entity
`standard was “agency action unlawfully withheld or
`unreasonably delayed,” 5 U.S.C. § 706(1). Prometheus
`III, 824 F.3d at 48. The court remanded with
`directions “to act promptly to bring the eligible entity
`definition to a close,” id. at 49, instructed the FCC to
`“make a final determination as to whether to adopt a
`new definition,” and stated “[i]f it needs more data to
`
`
`
`9
`
`do so, it must get it,” id. (citing In re Core Commc’ns,
`Inc., 531 F.3d 849 (D.C. Cir. 2008)).
`4.a. Two months later, the FCC issued the first of
`the three orders under review, the 2016 Order. There,
`the FCC found that “the public interest is best served
`by retaining [the] existing rules, with some minor
`modifications.” App. 60a. The Commission expressly
`concluded that each of the rules was consistent with
`long-standing goals to promote race/gender ownership
`diversity. See App. 63a (top-four and eight-voices local
`TV limits are “consistent with the Commission’s goal
`to promote minority and female ownership”); App. 72a
`(same for local radio ownership limits); 2016 Order, 31
`FCC Rcd. at 9913, 9944 (modified newspaper/
`broadcast cross ownership ban); id. at 9945 (existing
`radio/TV cross-ownership limits).2
`In rejecting a request to tighten rather than
`merely retain its ownership rules, the Commission
`attempted to examine how previous ownership rule
`relaxation had affected ownership diversity. For TV
`ownership,
`the Commission used a National
`Telecommunications and Information Administration
`(NTIA) ownership report which
`identified 32
`“minority-owned” full power TV stations in 1998. App.
`66a. After the FCC relaxed local TV ownership rules,
`NTIA’s report showed a decline to 23 stations in 1999-
`2000. Id. at 67a. The Commission’s separate dataset
`from nearly a decade later, however, reflected higher
`
`
`2 Portions of the 2016 Order not excerpted in the Government’s
`appendix are cited to the FCC Record.
`
`
`
`10
`
`minority ownership of 60 stations in 2009, 70 stations
`in 2011, and 83 stations in 2013. Id.
`For radio, the FCC reported that, in 1995, the
`year before national radio limits were eliminated,
`NTIA data showed 312 minority-owned stations
`compared with 284 and 305 stations in 1996-97 and
`1998, respectively. App. 73a. The FCC’s separate data
`reflected 644 such stations in 2009; 756 in 2011; and
`768 in 2013. Id.
`The FCC recognized both comparisons were
`flawed because they did not necessarily reflect “actual
`changes in the marketplace,” id. at 66a n.211; NTIA’s
`entirely different methodology produced incomplete
`counts, id. at 67a n.212; and there was no “data on
`female ownership,” id.; see also id. at 73a nn.325–26.
`The FCC concluded this data served to reject
`requests to tighten the rules to promote greater
`ownership diversity, yet did not justify loosening the
`rules, because there was “no evidence in the record
`that would permit [it] to infer causation.” Id. at 67a–
`68a; see also id. at 72a–74a. Recognizing the flaws in
`its data, the FCC described outreach efforts that it
`posited would “improve the quality of its broadcast
`ownership data” going forward. Id. at 83a–89a.
`After largely retaining the ownership rules, the
`FCC also re-adopted the same revenue-based eligible
`entity definition previously remanded twice by the
`Third Circuit. Id. at 77a.
`b. Fifteen months later, in November 2017, the
`FCC issued the Reconsideration Order, using the
`“same facts used by this Commission just over a year
`ago to reach the exact opposite conclusions.” 32 FCC
`
`
`
`11
`
`Rcd. at 9890 (Commissioner Clyburn, dissenting). The
`Reconsideration Order eliminated the newspaper/
`broadcast and television/radio cross-ownership rules
`and rescinded the local television ownership rules
`except for the top-four restriction and prohibition on
`owning more than two stations in a local market. App.
`156a–157a.
`While reaching diametrically opposite conclusions
`from the 2016 Order, the FCC did not alter its view
`that diversity,
`including
`ownership diversity,
`remained an important aspect of the analysis. See, e.g.,
`id. at 167a–68a & n.49 (describing the Commission’s
`policy goals of “viewpoint diversity, localism, and
`competition,” and declining to consider “arguments
`that ownership does not
`influence viewpoint”).
`Instead, it concluded that the very same race/gender
`ownership data and analysis that the 2016 Order
`found insufficient to justify loosening the rules now
`did justify loosening them. See id. at 195a; id. at 198a
`(citing the same data discussed in the 2016 Order).
`Finally, the Commission announced its intent to
`adopt an “incubator program” that would “provide an
`ownership rule waiver or similar benefits to a
`company that establishes a program to help facilitate
`station ownership for a certain class of new owners,”
`leaving
`formal
`implementation—including
`the
`definition of which entities would be eligible for that
`program—to a subsequent order. Id. at 239a, 242a.
`c. Thereafter, the FCC adopted a radio-only
`incubator program. In the Incubator Order, the FCC
`developed a new definition of eligible entities,
`combining its previous revenue-based criterion with a
`
`
`
`12
`
`new-entrant criterion. Id. at 255a, 262a–264a. The
`FCC also permitted established broadcasters to obtain
`waivers of local ownership caps in large markets after
`helping new broadcasters in much smaller markets.
`App. 10a.
`5. Petitions for Review of the Reconsideration
`Order and the Incubator Order were initially assigned
`to the D.C. Circuit, but that court granted a motion—
`unopposed by
`Industry Petitioners and
`the
`Government—to transfer the cases to the Third
`Circuit. See Order, News Media Alliance v. FCC, No.
`16-1395 (D.C. Cir. Jan. 11, 2017). The Third Circuit
`then consolidated the cases with petitions for review
`of the 2016 Order.
`The Third Circuit unanimously affirmed
`substantial elements of the agency’s decisions. After
`rejecting FCC and industry intervenor claims that
`Respondents lacked standing, it upheld the top-four
`restriction
`in
`local TV ownership, because the
`Commission had engaged in “exactly the kind of line-
`drawing … to which courts are the most deferential.”
`App. 22a. It affirmed the Incubator Order’s decision
`about which markets qualified incumbents for benefits
`as adequately noticed and not arbitrary. Id. at 23a–
`27a. And it found that the FCC did not unreasonably
`delay action on a proposed procurement rule to
`improve broadcaster vendor diversity. Id. at 35a–36a.
`The court found, however, that relaxation of the
`ownership rules was fatally flawed because the FCC
`“did not adequately consider the effect its sweeping
`rule changes will have on ownership of broadcast
`media by women and racial minorities.” Id. at 4a.
`
`
`
`13
`
`Specifically, the FCC’s statistical analysis was “so
`insubstantial that it would receive a failing grade in
`any introductory statistics class.” Id. at 30a–31a. The
`court identified two main problems.
`First, “any ostensible conclusion as to female
`ownership was not based on any record evidence” at
`all. Id. at 30a (emphasis in original). This represented
`a complete failure “to consider an important aspect of
`the problem,” because the “only ‘consideration’ the
`FCC gave to the question” was its ipse dixit conclusion.
`Id.
`
`Second, the FCC’s analysis of minority ownership
`data was “insubstantial.” Id. at 31a. The agency
`compared two data sets “created using entirely
`different methodologies,” an “exercise in comparing
`apples to oranges,” which it did not “recognize[] . . . or
`take[] any effort to fix.” Id. Further, even if the data
`were taken at face value, the FCC reached “woefully
`simplistic” conclusions based on raw station counts
`and not percentages, thus failing to control for
`increases in the total number of licensees over time.
`Id. The FCC “did not actually make any estimate” of
`the impact of past deregulation because it failed to
`even “attempt to assess … how many minority-owned
`stations there would have been in 2009 had there been
`no deregulation.” Id. at 31a–32a. The FCC thus made
`no attempt to control for these or other “possible
`confounding variables.” Id. at 31a. The court explained
`that because the FCC relied on data rather than “its
`general expertise” or
`(with
`limited exceptions)
`“support from commenters,” it could not rest its
`decision on “faulty and insubstantial data.” Id. at 33a.
`
`
`
`14
`
`The court found the Commission’s own historical
`embrace of ownership diversity as an essential
`component of the public interest made it “an important
`aspect of the problem.” Id. at 33a (quoting State Farm,
`463 U.S. at 43). Still, the Third Circuit recognized that
`the Commission “might well be within its rights to
`adopt a new deregulatory framework (even if the rule
`changes would have some adverse effect on ownership
`diversity) if it gave a meaningful evaluation of that
`effect and then explained why it believed the trade-off
`was justified for other policy reasons.” Id. at 34a. But
`because the Commission rested the rule on the
`premise that “consolidation will not harm ownership
`diversity,” the court held, the Commission could not
`rely on facially inadequate analysis to support that
`premise. Id.
`Because the FCCs insufficient analysis of the
`effect of the rule changes on ownership diversity
`permeated the 2016 Order, Reconsideration Order,
`and Incubator Order alike, the Third Circuit vacated
`those orders and retained jurisdiction.
`Judge Scirica dissented in part. He agreed that
`ownership diversity was a component of the “values
`that guide the FCC’s ‘public interest’ analysis under
`Section 202(h).” Id. at 42a. But he would have
`concluded that the “FCC reasonably predicted on the
`record before it that the new rules would not diminish
`or harm minority and women ownership.” Id. at 49a.
`He posited that recent changes to encourage better
`data submission might “make the FCC’s data more
`reliable, benefiting future quadrennial reviews.” Id. at
`52a. Rather than delaying or vacating the rules, he
`
`
`
`15
`
`would have directed the FCC to follow through on its
`announced intent “to take up a variety of diversity-
`related proposals in its 2018 quadrennial review” and
`to “study the effects of the latest rules on ownership
`diversity.” Id.
`6. While the Third Circuit’s decision was pending,
`the FCC initiated the next quadrennial review. 2018
`Quadrennial Regulatory Review Notice, 33 FCC Rcd.
`12111 (2018) (“2018 Review Notice”). It sought
`extensive comment on every aspect of the local radio
`and television rules and the rule governing TV
`network affiliation but made no tentative conclusions.
`The agency repeatedly affirmed the Commission’s goal
`of ownership diversity but did not propose any major
`initiatives for improving its data on ownership
`diversity. Id. at 12116–17, 12127, 12138–39.
`
`REASONS FOR DENYING THE PETITION
` Petitioners seek error correction of the Third
`Circuit’s application of settled administrative law
`standards to an agency record that is already being
`supplanted. That sort of fact-bound question does not
`warrant this Court’s review, as the Government has
`emphasized when
`twice
`successfully opposin
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