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Media Ownership Rules, and Perhaps Much More, at Stake in FCC v. Prometheus

This case could be the harbinger of an administrative-law revolution.
December 8, 2020
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Some of the Supreme Court’s most consequential cases are technical. They neither attract many headlines nor excite vehement emotions. Not even the protesting class notices them, never mind the public at large.

One example is Gundy v. United States (2019), which affirms prior decisions holding that Congress may delegate sweeping authority to administrative agencies. Another is Chevron v. Natural Resources Defense Council (1984), which says that a court should generally defer to an administrative agency’s interpretation of an ambiguous statute.

Although the average person has not heard of these decisions, every well-informed lawyer knows them to be central to modern administrative law. They let Congress delegate legislative tasks to agencies—instructing them, for instance, to regulate “in the public interest”—and tell the judiciary to defer, within reason, to an agency’s choices about how to interpret and enforce those directives. This delegation-plus-deference framework has caused, or at least enabled, governmental power to flow toward a “fourth branch” of government—the “administrative state.”

Next month the Court will hear arguments in Federal Communications Commission v. Prometheus Radio Project. Certain to be, at minimum, a noteworthy telecommunications case, Prometheus has the potential to become a lasting commentary on Gundy and Chevron, and itself an exemplary important-but-not-famous decision.

On the surface, the case is about the FCC’s attempts to modify or repeal various local-media ownership rules. That is no small issue. Many of the rules were issued decades ago, when concentration in local-media markets was a legitimate concern. There was a time when owning multiple outlets in the same city—say, both a newspaper and a television station—could give a media company substantial control over the area’s information ecosystem.

Those rules were already largely irrelevant by 1996, when Congress passed the Telecommunications Act, a law centered around the promotion of free-market development of media and the Internet. The act directs the FCC to periodically review its media-ownership rules, and to modify or repeal the ones that it “determine[s]” are, “as a result of competition,” no longer “necessary in the public interest.”

Heeding Congress’s command, the FCC tried to loosen local-media merger and cross-ownership restrictions. It issued its first set of reforms in 2003. To this day, however, nothing has happened. A single, divided panel of the Third Circuit (which has retained exclusive jurisdiction over the matter) has blocked the FCC’s efforts three times. In its latest decision, the court instructed the FCC to look more closely at whether the existing media ownership rules promote race and gender diversity.

The advancement of such diversity is of course a laudable goal, but it is not something the act requires the FCC to consider when assessing restrictions that local broadcasters, but not their online competitors, must comply with. The judges are imposing their policy preferences in place of the law.

They could not have found a worse industry to hold back. In the 17 years since the court issued its first decision, print newspapers have lost 70 percent of their advertising revenue. Broadcasters, meanwhile, have lost most of their viewers to cable (which in turn is now losing customers to streaming services). To remain competitive, local media providers desperately need the freedom to adopt efficient ownership structures and achieve economies of scale.

So Prometheus’s practical impact is clear: the Supreme Court is being asked to let the FCC at last ease rules that disadvantage struggling local media. Let us turn to the case’s more subtle, but quite significant, implications for administrative law as a whole.

Gundy, Chevron, and a number of other landmark Supreme Court decisions stand on an assumption that Congress could not legislate, and that the executive could not function, without the help of an array of expert agencies. The delegation-plus-deference framework aims to give those agencies room to craft policies that competently address the problems of an increasingly complex society.

The agencies cannot create such policies—they cannot fulfill a mandate to regulate “in the public interest”—if judges block regulation (and deregulation) for no better reason than personal disapproval. If judges get to throw their policy wrenches in the regulatory motor, as the Third Circuit did here, the delegation-plus-deference system malfunctions. In place of decision-by-expert agency-specialist, it devolves into decision-by-roving-judicial-generalist. And, in place of a relatively predictable regulatory process, there is a protracted tug-of-war between the agencies and the courts, with each side cheered on by swarms of lawyers.

The delegation-plus-deference framework is meant to operate as a complexity coping mechanism. The Third Circuit’s approach in Prometheus, by contrast, is a complexity generator. The court is making the regulatory process longer, messier, more expensive, more perplexing, more uncertain, and more wasteful.

In Gundy, three Justices proposed (and a fourth said he is willing to consider) placing new limits on Congress’s delegation power. Justices Gorsuch and Thomas, meanwhile, have denounced Chevron with inflexible resolution. And the Court’s two newest members, Justices Kavanaugh and Barrett, both seem like potential skeptics of boundless delegation and broad deference.

Is the Court about to require the legislature to write more of the law itself? And might it soon start holding the agencies more closely to legislative commands? Perhaps so. It is reasonable to suspect that a newly formed majority would like to constrain fourth-branch governance, and to bolster the three-branch structure of the Framers’ design.

No party in Prometheus is asking that Gundy or Chevron be overturned. But the case presents a chance, for any justice intent on doing so, to cite the Third Circuit’s behavior as evidence that the delegation-plus-deference framework is not working. And an opinion indicting that framework for failing at its one job—helping the government handle complexity—could serve as a preview of the framework’s imminent demise.

A bit speculative? Sure. Still, keep an eye on Prometheus. One day it might be known as the harbinger of an administrative-law revolution.

Corbin Barthold

Corbin Barthold is internet policy counsel at TechFreedom. Twitter: @corbinkbarthold.