Fed. Commc'ns Comm'n v. Prometheus Radio Project

• Decision Date: 01 April 2021
• Docket Number: Nos. 19-1231,19-1241,s. 19-1231
• Citation: 141 S.Ct. 1150,209 L.Ed.2d 287
• Parties: FEDERAL COMMUNICATIONS COMMISSION, et al., Petitioners v. PROMETHEUS RADIO PROJECT, et al.; National Association of Broadcasters, et al., Petitioners v. Prometheus Radio Project, et al.
• Court: U.S. Supreme Court

141 S.Ct. 1150

209 L.Ed.2d 287

FEDERAL COMMUNICATIONS COMMISSION, et al., Petitioners

v.PROMETHEUS RADIO PROJECT, et al.;

National Association of Broadcasters, et al., Petitioners

v.Prometheus Radio Project, et al.

Nos. 19-1231

19-1241

Supreme Court of the United States.

Argued January 19, 2021

Decided April 1, 2021

Malcolm L. Stewart, Deputy Solicitor General, for the petitioners in No. 19–1231.

Helgi C. Walker, Washington, DC, for the petitioners in No. 19–1241.

Ruthanne M. Deutsch, Washington, DC, Brian Wolfman Director, Appellate Courts Immersion Clinic Assoc. Professor of Law Georgetown University Law Center, Washington, D.C., for the respondents.

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, 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, DC, for the petitioners.

Eve Klindera Reed, Jeremy J. Broggi, Wiley Rein LLP, Washington, DC, Counsel for Petitioner Nexstar Inc. f/k/a Nexstar Broadcasting, Inc.

Helgi C. Walker, Counsel of Record, Jacob T. Spencer, Max E. Schulman, Gibson, Dunn & Crutcher LLP, Washington, DC, Counsel for Petitioner National Association of Broadcasters.

Kenneth E. Satten, Craig E. Gilmore, Wilkinson Barker Knauer, LLP, Washington, DC, Counsel for Petitioners Bonneville International and The Scranton Times L.P.

David D. Oxenford, Wilkinson Barker Knauer, LLP, Washington, DC, Counsel for Petitioner Connoisseur Media LLC.

Kevin F. King, Andrew Soukup, Rafael Reyneri, Covington & Burling LLP, Washington, DC, Counsel for Petitioners Fox Corporation and News Media Alliance.

Sally A. Buckman, Paul A. Cicelski, Lerman Senter PLLC, Washington, DC, Counsel for Petitioner News Corporation.

Miles S. Mason, Jeetander T. Dulani, Jessica T. Nyman, Pillsbury Winthrop Shaw, Pittman LLP, Washington, DC, Counsel for Petitioner Sinclair Broadcast Group, Inc.

Cheryl A. Leanza, Best Best & Krieger LLP, Ruthanne M. Deutsch, Counsel of Record, Hyland Hunt, Deutsch Hunt PLLC, Washington, DC, for Respondent 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.

Andrew Jay Schwartzman, Washington, DC, for Respondent Benton Institute for Broadband & Society (f/k/a the Benton Foundation), National Hispanic Media Coalition, National Organization for Women Foundation, Media Alliance and Media Counsel Hawai'i.

Dennis Lane, Stinson LLP, for Respondent Multicultural Media, Telecom and Internet Council, Inc. and the National Association of Black Owned Broadcasters.

Jessica J. González, Matthew F. Wood, Carmen D. Scurato, Free Press, Yosef Getachew, Common Cause, Marcia S. Cohen, National Organization, for Respondent Women Foundation.

Justice KAVANAUGH delivered the opinion of the Court.

Under the Communications Act of 1934, the Federal Communications Commission possesses broad authority to regulate broadcast media in the public interest. Exercising that statutory authority, the FCC has long maintained strict ownership rules. The rules limit the number of radio stations, television stations, and newspapers that a single entity may own in a given market. Under Section 202(h) of the Telecommunications Act of 1996, the FCC must review the ownership rules every four years, and must repeal or modify any ownership rules that the agency determines are no longer in the public interest.

In a 2017 order, the FCC concluded that three of its ownership rules no longer served the public interest. The FCC therefore repealed two of those rules—the Newspaper/Broadcast Cross-Ownership Rule and the Radio/Television Cross-Ownership Rule. And the Commission modified the third—the Local Television Ownership Rule. In conducting its public interest analysis under Section 202(h), the FCC considered the effects of the rules on competition, localism, viewpoint diversity, and minority and female ownership of broadcast media outlets. The FCC concluded that the three rules were no longer necessary to promote competition, localism, and viewpoint diversity, and that changing the rules was not likely to harm minority and female ownership.

A non-profit advocacy group known as Prometheus Radio Project, along with several other public interest and consumer advocacy groups, petitioned for review, arguing that the FCC's decision was arbitrary and capricious under the Administrative Procedure Act. In particular, Prometheus contended that the record evidence did not support the FCC's predictive judgment regarding minority and female ownership. Over Judge Scirica's dissent, the U. S. Court of Appeals for the Third Circuit agreed with Prometheus and vacated the FCC's 2017 order.

On this record, we conclude that the FCC's 2017 order was reasonable and reasonably explained for purposes of the APA's deferential arbitrary-and-capricious standard. We therefore reverse the judgment of the Third Circuit.

I

The Federal Communications Commission possesses broad statutory authority to regulate broadcast media "as public convenience, interest, or necessity requires." 47 U.S.C. § 303 ; see also § 309(a). Exercising that authority, the FCC has historically maintained several strict ownership rules. The rules limit the number of radio stations, television stations, and newspapers that a single entity may own in a given market. See FCC v. National Citizens Comm. for Broadcasting , 436 U.S. 775, 780–781, and nn. 1–3, 783–784, 98 S.Ct. 2096, 56 L.Ed.2d 697 (1978). The FCC has long explained that the ownership rules seek to promote competition, localism, and viewpoint diversity by ensuring that a small number of entities do not dominate a particular media market. See id. , at 780–781, 808, 98 S.Ct. 2096 ; In re 2002 Biennial Regulatory Review—Notice of Proposed Rulemaking , 17 FCC Rcd. 18503, 18515–18527 (2002).

This case concerns three of the FCC's current ownership rules. The first is the Newspaper/Broadcast Cross-Ownership Rule. Initially adopted in 1975, that rule prohibits a single entity from owning a radio or television broadcast station and a daily print newspaper in the same media market. The second is the Radio/Television Cross-Ownership Rule. Initially adopted in 1970, that rule limits the number of combined radio stations and television stations that an entity may own in a single market. And the third is the Local Television Ownership Rule. Initially adopted in 1964, that rule restricts the number of local television stations that an entity may own in a single market.

The FCC adopted those rules in an early-cable and pre-Internet age when media sources were more limited. By the 1990s, however, the market for news and entertainment had changed dramatically. Technological advances led to a massive increase in alternative media options, such as cable television and the Internet. Those technological advances challenged the traditional dominance of daily print newspapers, local radio stations, and local television stations. See, e.g., In re 2002 Biennial Regulatory Review—Report and Order and Notice of Proposed Rulemaking , 18 FCC Rcd. 13620, 13647–13667 (2003) ( 2002 Review ).

In 1996, Congress passed and President Clinton signed the Telecommunications Act. To ensure that the FCC's ownership rules do not remain in place simply through inertia, Section 202(h) of the Act directs the FCC to review its ownership rules every four years to determine whether those rules remain "necessary in the public interest as the result of competition." § 202(h), 110 Stat. 111–112, as amended § 629, 118 Stat. 99–100, note following 47 U.S.C. § 303. After conducting each quadrennial Section 202(h) review, the FCC "shall repeal or modify" any rules that it determines are "no longer in the public interest." Ibid. Section 202(h) establishes an iterative process that requires the FCC to keep pace with industry developments and to regularly reassess how its rules function in the marketplace. See In re 2002 Biennial Regulatory Review—Report , 18 FCC Rcd. 4726, 4732 (2003).

Soon after Section 202(h) was enacted, the FCC stated that the agency's traditional public interest goals of promoting competition, localism, and viewpoint diversity would inform its Section 202(h) analyses. 2002 Review, 18 FCC Rcd., at 13627 ; see also In re 1998 Biennial Regulatory Review , 15 FCC Rcd. 11058, 11061–11062 (2000). The FCC has also said that, as part of its public interest analysis under Section 202(h), it would assess the effects of the ownership rules on minority and female ownership. 2002 Review, 18 FCC Rcd., at 13627, 13634, and n. 67 ; see also In re 2010 Quadrennial Regulatory Review—Notice of Inquiry , 25 FCC Rcd. 6086, 6106 (2010) ; cf. In re Amendment of Section 73.3555 [formerly Sections 73.35, 73.240 and 73.636] of the Commission's Rules Relating to Multiple Ownership of AM, FM and Television Broadcast Stations , 100 F. C. C. 2d 74, 97 (1985).

Since 2002, the Commission has repeatedly sought to change several of its ownership rules—including the three rules at issue here—as part of its Section 202(h) reviews. See 2002 Review, 18 FCC Rcd., at 13622–13623 (eliminating strict caps on newspaper/broadcast and radio/television cross-ownership and modifying the Local Television Ownership Rule); In re 2006 Quadrennial Regulatory Review—Report and Order and Order on Reconsideration , 23 FCC Rcd. 2010, 2021 (2008) (relaxing the Newspaper/Broadcast Cross-Ownership Rule). But for the last 17 years, the Third Circuit has rejected the FCC's efforts as unlawful under the APA. See Prometheus Radio Project v. F.C.C. , 373 F.3d 372 (2004) ; Prometheus Radio Project v. FCC , 652 F.3d 431 (2011) ; see also 824 F.3d 33...