No. 19-1231
`In the Supreme Court of the United States
`
`FEDERAL COMMUNICATIONS COMMISSION
`AND UNITED STATES OF AMERICA, PETITIONERS
`
`
`
`v.
`
`PROMETHEUS RADIO PROJECT, ET AL.
`
`
`
`ON WRIT OF CERTIORARI
`TO THE UNITED STATES COURT OF APPEALS
`FOR THE THIRD CIRCUIT
`
`BRIEF FOR THE PETITIONERS
`
`
`
`
`
` JEFFREY B. WALL
`Acting Solicitor General
`Counsel of Record
`MAKAN DELRAHIM
`Assistant Attorney General
`MALCOLM L. STEWART
`Deputy Solicitor General
`MICHAEL F. MURRAY
`Deputy Assistant Attorney
`General
`AUSTIN L. RAYNOR
`Assistant to the Solicitor
`General
`
`Department of Justice
`Washington, D.C. 20530-0001
`SupremeCtBriefs@usdoj.gov
`(202) 514-2217
`
`THOMAS M. JOHNSON, JR.
`General Counsel
`ASHLEY S. BOIZELLE
`Deputy General Counsel
`JACOB M. LEWIS
`Associate General Counsel
`JAMES M. CARR
`WILLIAM SCHER
`Attorneys
`Federal Communications
` Commission
`Washington, D.C. 20554
`
`
`
`
`

`

`QUESTION PRESENTED
`
`In Section 202(h) of the Telecommunications Act of
`1996, as amended, 47 U.S.C. 303 note, Congress di-
`rected the Federal Communications Commission (FCC
`or Commission) to review its rules concerning common
`ownership of media outlets every four years to “deter-
`mine whether any of such rules are necessary in the
`public interest as the result of competition,” and to “re-
`peal or modify any regulation [the FCC] determines to
`be no longer in the public interest.” Since 2003, the
`Commission has repeatedly determined that certain
`ownership rules are no longer necessary in light of dra-
`matically changed market conditions and accordingly
`has sought to relax those rules, but the same divided
`panel of the United States Court of Appeals for the
`Third Circuit has vacated each of those efforts in sub-
`stantial part. In the decision below, the panel majority
`vacated the FCC’s revised ownership rules and other
`regulatory changes solely on the ground that the agency
`had not adequately analyzed their potential effect on
`minority and female ownership of broadcast stations,
`without contesting the Commission’s core findings on
`competition. The question presented is as follows:
`Whether the court of appeals erred in vacating as ar-
`bitrary and capricious the FCC orders under review,
`which, among other things, relaxed the agency’s owner-
`ship restrictions to accommodate changed market con-
`ditions.
`
`
`
`(I)
`
`

`

`PARTIES TO THE PROCEEDING
`Petitioners were respondents in the court of appeals.
`They are the Federal Communications Commission and
`the United States.
`Respondents were petitioners and intervenors in the
`court of appeals. They are: Benton Institute for Broad-
`band and Society, Bonneville International Corporation,
`Common Cause, Connoisseur Media LLC, Free Press,
`Fox Corporation, Independent Television Group, Media
`Alliance, Media Council Hawaii, Movement Alliance
`Project (f/k/a Media Mobilizing Project), Multicultural
`Media, Telecom and Internet Council, National
`Association of Black-Owned Broadcasters, National
`Association of Broadcast Employees and Technicians-
`Communications Workers of America, National Asso-
`ciation of Broadcasters, National Hispanic Media Coa-
`lition, National Organization for Women Foundation,
`News Corporation, News Media Alliance, Nexstar
`Broadcasting, Inc., Office of Communication Inc. of the
`United Church of Christ, Prometheus Radio Project,
`Scranton Times L.P., and Sinclair Broadcast Group
`Inc.*
`
`
`* The petition for a writ of certiorari did not list National Hispanic
`Media Coalition (NHMC) as a party to the proceeding because, due
`to a docketing error, it did not appear on the dockets below. That
`error has since been corrected. The brief in opposition did list
`NHMC as a party. In contrast, although the petition listed Cox Me-
`dia Group LLC as a party, that entity has since filed a letter declin-
`ing to participate in further proceedings before this Court.
`
`(II)
`
`

`

`TABLE OF CONTENTS
`
`Page
`
`Opinions below .............................................................................. 1
`Jurisdiction .................................................................................... 1
`Statutory provisions involved ...................................................... 2
`Statement ...................................................................................... 2
`A. Statutory background ............................................... 3
`B. 2002 biennial review .................................................. 5
`C. 2006 quadrennial review ........................................... 7
`D. 2010 and 2014 quadrennial reviews ......................... 9
`Summary of argument ............................................................... 17
`Argument:
`I. The FCC has broad statutory authority to regulate
`media ownership in the public interest ....................... 21
`A. The APA requires judicial deference to
`reasoned agency judgments ................................... 21
`B. Judicial deference is especially warranted
`when the FCC regulates in the public interest
`under Section 202(h) ............................................... 23
`II. In fashioning the orders at issue in this case, the
`Commission made reasonable policy judgments
`based on the available facts .......................................... 27
`A. The Reconsideration Order.................................... 28
`B. The 2016 and Incubator Orders ............................. 32
`III. The court of appeals’ contrary holding reflects
`serious analytic flaws..................................................... 32
`A. The court of appeals disregarded the statutory
`text ............................................................................ 33
`B. The court of appeals substituted its judgment
`for that of the agency .............................................. 36
`C. The decision below undermines the proper
`functioning of Section 202(h) reviews ................... 43
`D. The court of appeals’ remedy was overbroad....... 47
`Conclusion ................................................................................... 49
`Appendix — Statutory provisions ........................................... 1a
`
`(III)
`
`

`

`IV
`
`TABLE OF AUTHORITIES
`
`Cases:
`
`Page
`
`American Airlines, Inc. v. Civil Aeronautics Bd.,
`359 F.2d 624 (D.C. Cir.), cert. denied,
`385 U.S. 843 (1966).............................................................. 46
`Baltimore Gas & Elec. Co. v. Natural Res. Def.
`Council, Inc., 462 U.S. 87 (1983) ....................................... 41
`Burlington Truck Lines, Inc. v. United States,
`371 U.S. 156 (1962)........................................................ 21, 27
`Capital Network Sys., Inc. v. FCC, 3 F.3d 1526
`(D.C. Cir. 1993) ................................................................... 30
`Department of Commerce v. New York,
`139 S. Ct. 2551 (2019) ......................................................... 23
`FCC v. Fox Television Stations, Inc.,
`556 U.S. 502 (2009)........................................................ 22, 35
`FCC v. National Citizens Comm. for Broad.,
`436 U.S. 775 (1978)................................... 3, 16, 17, 24, 36, 44
`FCC v. RCA Commc’ns, Inc., 346 U.S. 86 (1953) ......... 24, 36
`FCC v. WNCN Listeners Guild, 450 U.S. 582
`(1981) ............................................................. 16, 19, 24, 25, 34
`FERC v. Electric Power Supply Ass’n,
`136 S. Ct. 760 (2016) ........................................................... 21
`FPC v. Hope Nat. Gas Co., 320 U.S. 591 (1944) ................. 27
`FPC v. Transcontinental Gas Pipe Line Corp.,
`365 U.S. 1 (1961) ................................................................. 44
`Little Sisters of the Poor Saints Peter & Paul Home
`v. Pennsylvania, 140 S. Ct. 2367 (2020) ........................... 35
`Massachusetts v. EPA, 549 U.S. 497 (2007) ....................... 30
`Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State
`Farm Mut. Auto. Ins. Co., 463 U.S. 29
`(1983) ............................................................. 19, 21, 22, 27, 36
`National Broad. Co. v. United States,
`319 U.S. 190 (1943)......................................... 3, 23, 24, 27, 46
`
`
`
`

`

`V
`
`Cases—Continued:
`
`Page
`
`Perez v. Mortgage Bankers Ass’n, 575 U.S. 92
`(2015) .................................................................................... 35
`Prometheus Radio Project v. FCC, 373 F.3d 372
`(3d Cir. 2004), as amended (June 3, 2016),
`cert. denied, 545 U.S. 1123 (2005) ............................ passim
`Prometheus Radio Project v. FCC, 652 F.3d 431
`(3d Cir. 2011), cert. denied, 567 U.S. 951 (2012) ...... 8, 9, 45
`Prometheus Radio Project v. FCC, 824 F.3d 33
`(3d Cir. 2016) ........................................................... 11, 25, 45
`Sierra Club v. Costle, 657 F.2d 298
`(D.C. Cir. 1981) ................................................................... 41
`Stilwell v. Office of Thrift Supervision,
`569 F.3d 514 (D.C. Cir. 2009) ................................. 15, 22, 36
`Telocator Network of Am. v. FCC, 691 F.2d 525
`(D.C. Cir. 1992) ..................................................................... 4
`United States v. Storer Broad. Co., 351 U.S. 192
`(1956) ...................................................................................... 3
`Vermont Yankee Nuclear Power Corp. v. Natural
`Res. Def. Council, Inc., 435 U.S. 519 (1978) ............... 19, 35
`
`Statutes:
`Administrative Procedure Act,
`5 U.S.C. 701 et seq. .............................................................. 21
`5 U.S.C. 706(2)(A) ...................................................... 21, 1a
`Departments of Commerce, Justice, and State, the
`Judiciary, and Related Agencies Appropriations
`Act, 2004, Pub. L. No. 108-199, Div. B, Tit. VI,
`§ 629(3), 118 Stat. 100 ........................................................... 4
`Telecommunications Act of 1996,
`Pub. L. No. 104-104, 110 Stat. 56 ........................................ 4
`47 U.S.C. 303 note (§ 202(h)) ............................ passim, 7a
`47 U.S.C. 161 ...................................................................... 2, 2a
`47 U.S.C. 303 .................................................................... 23, 3a
`
`
`
`

`

`VI
`
`Statutes—Continued:
`
`Page
`
`47 U.S.C. 303(f ) .................................................................. 3, 3a
`47 U.S.C. 309(a) ........................................................... 3, 23, 8a
`
`Miscellaneous:
`
`
`
`Amendment of Sections 73.34, 73.240, & 73.636 of
`the Commission’s Rules Relating to Multiple
`Ownership of Standard, FM, & Television Broad.
`Stations, In re, 50 FCC 2d 1046, amended on
`reconsideration, 53 FCC 2d 589 (1975) ......................... 5, 30
`Fourth Report on Ownership of Broad. Stations,
`35 FCC Rcd 1217 (2020) ..................................................... 31
`Promoting Diversification of Ownership in the
`Broad. Servs., In re:
`23 FCC Rcd 5922 (2008) ................................................... 8
`24 FCC Rcd 5896 (2009) ................................................. 31
`S. Conf. Rep. No. 230, 104th Cong., 2d Sess. (1996) ............ 4
`The 2002 Biennial Regulatory Review, In re,
`18 FCC Rcd 4726 (2003) ........................................... 5, 25, 26
`2002 Biennial Regulatory Review, In re,
`18 FCC Rcd 13,620 (2003) .......................................... 5, 6, 33
`2006 Quadrennial Regulatory Review, In re:
`21 FCC Rcd 8834 (2006) ................................................... 7
`23 FCC Rcd 2010 (2008) ................................................... 8
`2010 Quadrennial Regulatory Review, In re:
`25 FCC Rcd 6086 (2010) ................................................. 10
`26 FCC Rcd 17,489 (2011) .......................................... 9, 10
`2014 Quadrennial Regulatory Review, In re,
`29 FCC Rcd 4371 (2014) ............................................ passim
`
`
`
`
`
`
`

`

`In the Supreme Court of the United States
`
`
`
`No. 19-1231
`
`FEDERAL COMMUNICATIONS COMMISSION
`AND UNITED STATES OF AMERICA, PETITIONERS
`
`v.
`PROMETHEUS RADIO PROJECT, ET AL.
`
`
`
`ON WRIT OF CERTIORARI
`TO THE UNITED STATES COURT OF APPEALS
`FOR THE THIRD CIRCUIT
`
`
`
`BRIEF FOR THE PETITIONERS
`
`
`
`OPINIONS BELOW
`The opinion of the court of appeals (Pet. App. 1a-56a)
`is reported at 939 F.3d 567. The orders of the Federal
`Communications Commission are reported at 31 FCC
`Rcd 9864 (J.A. 101-576), 32 FCC Rcd 9802 (NAB Pet.
`App. 64a-310a), and 33 FCC Rcd 7911 (J.A. 577-704).1
`
`JURISDICTION
`The judgment of the court of appeals was entered on
`September 23, 2019 (Pet. App. 280a-282a). The court of
`appeals entered an amended judgment on September
`27, 2019 (Pet. App. 283a-285a). Petitions for rehearing
`were denied on November 20, 2019 (Pet. App. 277a-
`279a). On February 12, 2020, Justice Alito extended the
`time within which to file a petition for a writ of certiorari
`
`1 NAB Pet. App. refers to the petition appendix in consolidated
`case No. 19-1241.
`
`(1)
`
`

`

`2
`
`to and including March 19, 2020. On March 11, 2020,
`Justice Alito further extended the time to and including
`April 18, 2020, and the petition was filed on April 17,
`2020. The petition for a writ of certiorari was granted
`on October 2, 2020. The jurisdiction of this Court rests
`on 28 U.S.C. 1254(1).
`
`STATUTORY PROVISIONS INVOLVED
`Section 202(h) of the Telecommunications Act of
`1996, as amended, 47 U.S.C. 303 note, provides:
`
`The [Federal Communications] Commission shall re-
`view its rules adopted pursuant to this section and all
`of its ownership rules quadrennially as part of its
`regulatory reform review under section 11 of the
`Communications Act of 1934 [47 U.S.C. 161] and
`shall determine whether any of such rules are neces-
`sary in the public interest as the result of competi-
`tion. The Commission shall repeal or modify any
`regulation it determines to be no longer in the public
`interest.
`
`Other relevant statutory provisions are reproduced in
`the appendix to this brief. App., infra, 1a-8a.
`
`STATEMENT
`Congress has vested the Federal Communications
`Commission (FCC or Commission) with broad authority
`to regulate broadcast markets in the public interest.
`Pursuant to that authority, the FCC has long acted to
`promote competition and viewpoint diversity by re-
`stricting the ability of broadcasters to own multiple out-
`lets in a single market. In Section 202(h) of the Tele-
`communications Act of 1996, as amended, 47 U.S.C. 303
`note, Congress has directed the FCC to review its own-
`ership rules every four years to “determine whether
`any of such rules are necessary in the public interest as
`
`
`
`

`

`3
`
`the result of competition,” and to “repeal or modify any
`regulation it determines to be no longer in the public
`interest.” Ibid.
`This case concerns the FCC’s repeated efforts over
`a period of 17 years—thwarted by a series of decisions
`by the same divided panel of the United States Court of
`Appeals for the Third Circuit—to loosen ownership re-
`strictions that the agency has determined are no longer
`necessary in light of dramatic changes to the media
`landscape. In the decision below, the panel majority did
`not question the agency’s findings that the restrictions’
`original competition and viewpoint-diversity rationales
`no longer justified their retention. It nevertheless va-
`cated the revised rules solely on the ground that the
`agency had not adequately analyzed the rules’ likely ef-
`fect on minority and female ownership of broadcast sta-
`tions.
`
`A. Statutory Background
`For more than 85 years, the Commission has pos-
`sessed broad statutory authority to regulate broadcast-
`ers in the public interest, both by issuing individual li-
`censes and by promulgating rules. See 47 U.S.C. 303(f );
`47 U.S.C. 309(a). Before the Internet existed, when the
`media marketplace was dominated by a small number
`of print and broadcast sources of information, the FCC
`exercised that authority by limiting common ownership
`of multiple media outlets. For example, the Commis-
`sion limited the number of broadcast stations a single
`entity could own, see National Broad. Co. v. United
`States, 319 U.S. 190, 208 (1943); United States v. Storer
`Broad. Co., 351 U.S. 192, 193 (1956), and banned com-
`mon ownership of a daily newspaper and broadcast sta-
`tion located in the same community, see FCC v. Na-
`tional Citizens Comm. for Broad., 436 U.S. 775, 779
`
`
`
`

`

`4
`
`(1978) (NCCB). These restrictions were designed to
`prevent undue economic concentration and promote
`viewpoint diversity. See Prometheus Radio Project v.
`FCC, 373 F.3d 372, 382-386 (3d Cir. 2004), as amended
`(June 3, 2016) (Prometheus I), cert. denied, 545 U.S.
`1123 (2005). The FCC historically reviewed its regula-
`tory approach as needed to ensure that it continued to
`promote the public interest. See, e.g., Telocator Net-
`work of Am. v. FCC, 691 F.2d 525, 550 n.191 (D.C. Cir.
`1992).
`Against this backdrop, the Telecommunications Act
`of 1996 (1996 Act), Pub. L. No. 104-104, 110 Stat. 56, es-
`tablished “a pro-competitive, de-regulatory national pol-
`icy framework” that Congress viewed as better suited
`to the rapidly evolving communications market. S. Conf.
`Rep. No. 230, 104th Cong., 2d Sess. 1 (1996). Consistent
`with that framework, Section 202(h) of the 1996 Act reg-
`ularized the FCC’s traditional review processes. As
`amended, Section 202(h) directs the FCC to reevaluate
`its ownership rules every four years to determine
`whether they remain “necessary in the public interest
`as the result of competition.” 47 U.S.C. 303 note. 2 If the
`Commission determines that any of the ownership rules
`are “no longer in the public interest,” it “shall repeal or
`modify” them. Ibid. “The text and legislative history of
`the 1996 Act indicate that Congress intended periodic
`reviews to operate as an ‘ongoing mechanism to ensure
`that the Commission’s regulatory framework would
`
`
`2 The 1996 Act originally required biennial review but was later
`amended to require quadrennial review. See Departments of Com-
`merce, Justice, and State, the Judiciary, and Related Agencies Ap-
`propriations Act, 2004, Pub. L. No. 108-199, Div. B, Tit. VI, § 629(3),
`118 Stat. 100.
`
`
`

`

`5
`
`keep pace with the competitive changes in the market-
`place.’ ” Prometheus I, 373 F.3d at 391 (quoting In re
`The 2002 Biennial Regulatory Review, 18 FCC Rcd
`4726, 4732 (2003) (2003 Report)).
`
`B. 2002 Biennial Review
`1. In its 2002 biennial review proceeding, the Com-
`mission identified “diversity, competition, and localism”
`as the “policy goals” that would guide its analysis of the
`“public interest” under Section 202(h). In re 2002 Bien-
`nial Regulatory Review, 18 FCC Rcd 13,620, 13,645
`(2003) (2002 Review); 47 U.S.C. 303 note. It further
`identified five relevant types of diversity: “viewpoint,
`outlet, program, source, and minority and female own-
`ership diversity.” 2002 Review, 18 FCC Rcd at 13,627;
`see id. at 13,627-13,645. Of the five, the Commission
`deemed viewpoint diversity “a paramount objective,”
`“because the free flow of ideas under-girds and sustains
`our system of government.” Id. at 13,631.
`In analyzing whether its “current broadcast owner-
`ship rules [we]re necessary to achieve these goals,”
`2002 Review, 18 FCC Rcd at 13,627, the FCC con-
`fronted a media landscape in which “[t]here [we]re far
`more types of media available,” “far more outlets per-
`type of media,” and “far more news and public interest
`programming options available to the public * * * than
`ever before,” id. at 13,667. Given this changed environ-
`ment, the Commission determined that wide-ranging
`regulatory reforms were needed. Among other things,
`the FCC eliminated its ban (originally adopted in 1975)
`on common ownership of daily newspapers and broad-
`cast stations in a single market. Id. at 13,748; see In re
`Amendment of Sections 73.34, 73.240, & 73.636 of the
`Commission’s Rules Relating to Multiple Ownership of
`Standard, FM, & Television Broad. Stations, 50 FCC
`
`
`
`

`

`6
`
`2d 1046, 1075, amended on reconsideration, 53 FCC 2d
`589 (1975) (Multiple Ownership). The Commission
`found that the ban was no longer necessary to promote
`competition or viewpoint diversity given the prolifera-
`tion of new media sources, 2002 Review, 18 FCC Rcd at
`13,748-13,754, 13,760-13,767, and that the efficiencies
`resulting from cross-ownership could promote localism,
`id. at 13,753-13,760. The FCC replaced the blanket ban
`with new, market-specific limits. Id. at 13,775. The
`Commission also repealed the Failed Station Solicita-
`tion Rule (FSSR), which had required certain owners of
`failed television stations to attempt to secure out-of-
`market buyers for their stations before selling to in-
`market buyers. Id. at 13,708.
`2. A divided three-judge panel of the Third Circuit
`vacated and remanded the FCC’s order in substantial
`part. Prometheus I, supra. The panel unanimously
`held that “reasoned analysis supports the Commission’s
`determination that the blanket ban on newspaper/
`broadcast cross-ownership was no longer in the public
`interest.” 373 F.3d at 398; see id. at 398-400. Two
`judges concluded, however, that the FCC had not ade-
`quately justified the specific substitute limits it had se-
`lected. Id. at 402-411. The panel also vacated and re-
`manded the FCC’s repeal of the FSSR. The court noted
`that “preserving minority ownership was the purpose of
`the FSSR,” and it concluded that the agency had acted
`arbitrarily and capriciously by failing to “mention any-
`thing about the effect this change would have on poten-
`
`
`
`

`

`7
`
`tial minority station owners.” Id. at 420. The panel re-
`tained jurisdiction over the remand proceedings. Id. at
`435.3
`Chief Judge Scirica dissented in part. He concluded
`that the panel majority had impermissibly “second-
`guess[ed]” the FCC’s “reasoned policy judgments” and
`had failed to accord proper deference to the Commis-
`sion’s “predictive judgments,” particularly “[g]iven the
`dynamic nature of the industry.” Prometheus I, 373
`F.3d at 435, 439. He viewed it as more “prudent” to per-
`mit the new rules to take effect, “monitor the resulting
`impact on the media marketplace, and allow the Com-
`mission to refine or modify its approach in its next quad-
`rennial review.” Id. at 439. Chief Judge Scirica warned
`that the court was “[s]hort-circuiting the statutory re-
`view process,” thereby “depriv[ing] both the Commis-
`sion and Congress [of ] the valuable opportunity to eval-
`uate the new rules and the effects of deregulation on the
`media marketplace.” Id. at 438.
`
`C. 2006 Quadrennial Review
`1. Following the Third Circuit’s remand, the Com-
`mission initiated its 2006 quadrennial review with a no-
`tice of proposed rulemaking intended in part to address
`the issues raised in the panel’s opinion. See In re 2006
`Quadrennial Regulatory Review, 21 FCC Rcd 8834,
`8835 (2006). The FCC “urge[d] commenters to explain
`the effects, if any, that their ownership rule proposals
`will have on ownership of broadcast outlets by minori-
`ties, women and small businesses.” Id. at 8837.
`
`3 The panel also noted that the FCC had “deferred consideration”
`of a number of “other proposals for advancing minority and disad-
`vantaged businesses and for promoting diversity in broadcasting.”
`Prometheus I, 373 F.3d at 421 n.59. It directed the Commission to
`address those proposals on remand. Ibid.
`
`
`

`

`8
`
`In its final rulemaking, the Commission noted the
`continued evolution of media markets. In re 2006 Quad-
`rennial Regulatory Review, 23 FCC Rcd 2010, 2022
`(2008). It observed that “[t]he steep reduction in news-
`paper circulation in recent years has triggered a cas-
`cade of negative impacts,” and that regulatory changes
`were appropriate to ensure that cross-ownership re-
`strictions would “not unduly stifle efficient combina-
`tions that are likely to preserve or increase the amount
`and quality of local news available to consumers via
`newspaper and broadcast outlets.” Id. at 2026, 2030.
`The FCC further explained that the proliferation of me-
`dia sources meant that certain “combinations no longer
`pose[d] the same threat to diversity that they once did.”
`Id. at 2032; see id. at 2031-2032. In light of these
`changes, the FCC again sought to “relax the 32-year-
`old newspaper/broadcast cross-ownership ban,” this
`time in favor of a case-by-case approach guided by pre-
`sumptions and a four-factor test. Id. at 2030; see id. at
`2018-2019.
`In a separate order designed to promote broadcast-
`ownership diversity, including ownership by women and
`minorities, the FCC adopted various measures to in-
`crease opportunities for “eligible entities,” which it de-
`fined to include certain small businesses. In re Promot-
`ing Diversification of Ownership in the Broad. Servs.,
`23 FCC Rcd 5922, 5925 (2008); see id. at 5925-5927. The
`Commission also sought comment on whether it should
`adopt an expressly race-conscious definition of “eligible
`entit[y],” noting that any such definition would need to
`satisfy strict scrutiny. Id. at 5950; see id. at 5950-5951.
`2. On review, the same divided Third Circuit panel
`again vacated the Commission’s regulatory changes in
`significant part. Prometheus Radio Project v. FCC, 652
`
`
`
`

`

`9
`
`F.3d 431, 470 (2011) (Prometheus II), cert. denied, 567
`U.S. 951 (2012). The majority invalidated the FCC’s
`repeal of the blanket newspaper/broadcast cross-
`ownership ban on the ground that the agency had not
`provided adequate notice and opportunity for comment.
`Id. at 445-454. The court also invalidated the “eligible
`entity” definition as arbitrary and capricious. Noting that
`the definition was designed to “increas[e] broadcast
`ownership by minorities and women,” id. at 469, the court
`faulted the Commission for failing to “explain how the
`eligible entity definition adopted would” achieve that
`goal, id. at 470, and ordered the agency to consider a
`race-based definition on remand, id. at 471 & n.42. The
`court retained jurisdiction over the remanded issues.
`Id. at 472.
`Judge Scirica again dissented in part. Prometheus
`II, 652 F.3d at 472-475. He would have held that the
`agency had complied with notice-and-comment require-
`ments, and he criticized the majority for “preserv[ing]
`an outdated and twice-abandoned ban” on newspaper/
`broadcast cross-ownership. Id. at 472; see id. at 472-
`473. Judge Scirica also dissented from the court’s deci-
`sion to retain jurisdiction over the remand proceedings.
`Id. at 473.
`
`D. 2010 and 2014 Quadrennial Reviews
`1. a. The FCC began the 2010 quadrennial review
`with a series of workshops, including one on “how the
`media ownership rules affect the Commission’s goal of
`promoting minority and female ownership and other is-
`sues relating to diversity in broadcasting.” In re 2010
`Quadrennial Regulatory Review, 26 FCC Rcd 17,489,
`17,492 n.10 (2011) (2011 Notice). In subsequent notices
`of inquiry and then of proposed rulemaking, the agency
`sought public input on the effect of the media ownership
`
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`10
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`rules on minority and female ownership, and it “in-
`vite[d] commenters to support their comments with
`sound empirical evidence demonstrating a link between
`structural rules and our diversity goal.” In re 2010
`Quadrennial Regulatory Review, 25 FCC Rcd 6086,
`6106 (2010); see, e.g., id. at 6100, 6108-6109; 2011 Notice,
`26 FCC Rcd at 17,494, 17,511, 17,518, 17,532, 17,538.
`The FCC also invited comment on 11 peer-reviewed
`studies that it had commissioned “[t]o provide data on
`the impact of market structure on the Commission’s
`policy goals of competition, localism and diversity.”
`2011 Notice, 26 FCC Rcd at 17,556; see id. at 17,561-
`17,564 (describing “studies relating to diversity” and
`“minority and women ownership issues”) (capitalization
`and emphasis omitted).
`The agency subsequently consolidated the 2010 and
`2014 quadrennial reviews and issued a further notice of
`proposed rulemaking. See In re 2014 Quadrennial Reg-
`ulatory Review, 29 FCC Rcd 4371 (2014) (2014 Review)
`(excerpted at J.A. 58-100); see also J.A. 60. In the 2014
`Review, the Commission observed that it did “not be-
`lieve the record evidence shows that the [newspaper/
`broadcast] cross-ownership ban has protected or pro-
`moted minority or female ownership of broadcast sta-
`tions in the past 35 years, or that it could be expected to
`do so in the future.” J.A. 83; see J.A. 97 (same for ra-
`dio/television cross-ownership rule). The FCC further
`noted that it did “not believe that a study could extrap-
`olate with any degree of confidence the effect that
`changing the Commission’s cross-ownership rules
`would have on minority and female ownership levels,
`and any attempt to do so would be misleading.” J.A. 95
`
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`11
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`n.595. The agency nevertheless sought further com-
`ment on these issues. See, e.g., J.A. 83, 90, 95 n.595, 97.4
`In 2016, the FCC promulgated a final order. See 31
`FCC Rcd 9864 (2016 Order) (J.A. 101-576). The Com-
`mission relaxed certain discrete aspects of the newspaper/
`broadcast cross-ownership rule, concluding that the rec-
`ord “fail[ed] to demonstrate” that doing so was “likely
`to result in harm to minority and female ownership.”
`J.A. 292; see J.A. 291-292 (summarizing modifications
`to rule). The agency otherwise generally retained the
`newspaper/broadcast cross-ownership rule, as well as
`the radio/television cross-ownership rule and the local
`television ownership rule, which restricts the television
`stations an entity can own in a single market. It did so
`for the stated purposes of “promot[ing] competition”
`and “viewpoint diversity,” and “not with the purpose of
`preserving or creating specific amounts of minority and
`female ownership”—though it found that the rules “pro-
`mote opportunities for diversity” as a general matter.
`J.A. 171-172, 293, 310.
`The FCC rejected the argument that tightening the
`local television ownership rule would “promote increased
`opportunities for minority and female ownership,” de-
`scribing that contention as “both speculative and unsup-
`ported by existing ownership data.” J.A. 174. In reach-
`ing that conclusion, the FCC relied in part on a compar-
`ison of minority ownership levels before and after prior
`
`4 In 2015, interested parties petitioned for review, arguing (among
`other things) that the Commission had unreasonably delayed in
`adopting a new definition of “eligible entity.” Prometheus Radio
`Project v. FCC, 824 F.3d 33, 37 (3d Cir. 2016). The same Third Cir-
`cuit panel agreed and remanded with an order for the FCC to act
`promptly, again emphasizing the Commission’s “obligation to pro-
`mote ownership by minorities and women.” Id. at 48; see id. at 37.
`The panel retained jurisdiction over the remanded issues. Id. at 60.
`
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`12
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`relaxations of certain ownership rules in the 1990s.
`That comparison showed a long-term increase in minor-
`ity ownership levels. See J.A. 174-176 (comparing his-
`torical National Telecommunications and Information
`Administration (NTIA) data and recent FCC Form 323
`data); see also J.A. 214-216.
`In response to the Third Circuit’s remand, the
`agency also analyzed the possibility of adopting a race-
`or gender-specific “eligible entity” definition. It con-
`cluded that the record evidence did not satisfy the ex-
`acting constitutional standards for adopting such an ap-
`proach. J.A. 389-429. The FCC instead reinstituted the
`revenue-based definition from its prior order. J.A. 370-
`388. Rather than justify this definition on the ground
`that it would promote minority and female ownership,
`the agency explained that the definition was indisputa-
`bly well-tailored to promote media ownership by small
`businesses and new entrants—a different, but also wor-
`thy, diversity goal. J.A. 375-376, 378-388. The agency
`predicted that the definition would further both compe-
`tition and viewpoint diversity. J.A. 379.
`b. On reconsideration motions filed by various par-
`ties, the Commission determined that changed market
`conditions justified a broader overhaul of its ownership
`rules. See 32 FCC Rcd 9802 (Reconsideration Order)
`(NAB Pet. App. 64a-310a). Among other things, the
`agency repealed its newspaper/broadcast cross-ownership
`and radio/television cross-ownership rules and modified
`the local television ownership rule