Focus Areas:    Administrative Law | Broadband | Chevron Doctrine | FCC | JSA | Telecom | Video Markets

Amicus brief of ICLE and Affiliated Scholars, Howard Stirk Holdings, LLC et al. v. FCC, D.C. Circuit

Brief of International Center for Law & Economics & Affiliated Scholars as Amici Curiae Supporting Petitioners, Howard Stirk Holdings, LLC. v. FCC (D.C. Cir. April 20, 2015) (No. 14-1090).

Summary

“‘Capricious’ is defined as ‘given to sudden and unaccountable changes of mood or behavior.’ That is just the word to describe the FCC’s decision in its 2014 Order to reverse a quarter century of agency practice by a vote of 3-to-2 and suddenly declare unlawful scores of JSAs between local television broadcast stations, many of which were originally approved by the FCC and have been in place for a decade or longer. The FCC’s action was not only capricious, but also contrary to law for two fundamental reasons.

First, the 2014 Order extends the FCC’s outdated ‘duopoly’ rule to JSAs that have never before been subject to it, many of which were blessed by the agency, without first determining whether that rule is still in the public interest. The ‘duopoly’ rule — first adopted in 1964 during the age of black-and-white TV — prohibits one entity from owning FCC licenses to two or more TV stations in the same local market unless there are at least eight independently owned stations in that market…The FCC’s 2014 Order makes a mockery of this congressional directive. In it, the Commission announced that, instead of completing its statutorily-mandated 2010 Quadrennial Review of its local ownership rules, it would roll that review into a new 2014 Quadrennial Review, while retaining its duopoly rule pending completion of that review because it had ‘tentatively’ concluded that it was still necessary. This Court should not accept this regulatory legerdemain. The 1996 Act does not allow the FCC to retain its duopoly rule in its current form without making the statutorily-required determination that it is still necessary. A ‘tentative’ conclusion that does not take into account the significant changes both in competition policy and in the market for video programming that have occurred since the current rule was first adopted in 1999 is not an acceptable substitute.

Second, having illegally retained the outdated duopoly rule, the 2014 Order then dramatically expands its scope by amending the FCC’s local ownership attribution rules to make the rule applicable to JSAs, which had never before been subject to it. The Commission thereby suddenly declares unlawful JSAs in scores of local markets, many of which have been operating for a decade or longer without any harm to competition. Even more remarkably, it does so despite the fact that both the DOJ and the FCC itself had previously reviewed many of these JSAs and concluded that they were not likely to lessen competition. In doing so, the FCC also fails to examine the empirical evidence accumulated over the nearly two decades some of these JSAs have been operating. That evidence shows that many of these JSAs have substantially reduced the costs of operating TV stations and improved the quality of their programming without causing any harm to competition, thereby serving the public interest…”

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