Legal Docket - Monopolies in media

MARY REICHARD, HOST: It’s Monday, February 1st, already!? 2021 and we’re back for a new week of The World and Everything in It. Good morning! I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. 

The justices of the U.S. Supreme Court handed down one opinion last week. It contained a single sentence: “The writ of certiorari is dismissed as improvidently granted.”

DIG—and in legal circles the acronym “DIG” means, essentially, that the court regrets accepting the case in the first place, that oral argument was improvidently granted, and so now it’s dismissed without a ruling.

The dispute involved two dental supply companies that had been fighting over who decides what in an arbitration agreement the parties had signed.

The whole dispute was very difficult to follow, and Justice Stephen Breyer said as much:

BREYER: All right. I had a hard time because of the words “arbitration,” “arbitrability.” It’s sort of like, it’s hard to keep all this in my mind, okay?

REICHARD: Apparently, he wasn’t the only one. 

The court rarely explains why it DIGS a case. But I can tell you what’s typical: 

One, the case presented at oral argument didn’t line up with the question the justices agreed to decide. 

Two,  the case developed in a way that made it a poor vehicle to resolve the question presented. You know, bad facts, bad law?

Or three,  the justices couldn’t reach a consensus and thought DIGing it was better than a messy opinion that would end up not helping anybody.

EICHER: Given the time, effort, and expense of getting that far as the Supreme Court agreeing to hear your case, a DIG has got to be a discouragement. They now have the choice of accepting things as they are—or reconfiguring the case and trying again.

Alright. We have a single oral argument to tell you about today, a consolidated case.

On one side, the Federal Communications Commission. FCC is the agency that regulates communication by radio, tv, wire, satellite, and cable in the United States. 

A group of media companies joined the FCC in the lawsuit.

On the other side, the Prometheus Radio Project. That’s a self-described social-justice group that fights corporate media concentration.

REICHARD: The dispute is over a change to FCC rules. In 2017, the agency made it easier to “cross-own” media in the same local market. For example, someone might “cross-own”  a newspaper and a radio station, or a television station and also a radio station.

The old rules banned that. The old rules aimed to make different points of view available in local markets, in a time when relatively few media outlets existed.

Every four years, the FCC has to review its rules about who owns broadcast outlets. Federal law passed in 1996 says so, and it says the FCC “shall” repeal or modify any broadcast ownership rule that’s not “necessary in the public interest as the result of competition.”

EICHER: But the Prometheus Radio Project argues what matters here are administrative rules, not that statute. In its view: It’s in the public interest to consider diversity of ownership—meaning owners who are women or racial minorities. Prometheus argues that the FCC didn’t take into enough consideration how these changes would affect these groups.

Lawyer for the FCC is Deputy Solicitor General Malcolm Stewart. Justice Brett Kavanaugh asked him about both the law and administrative rules.

KAVANAUGH: Under the statute and the public interest standard, does the FCC have to consider the effect of relaxing the rules on women and minority ownership?

STEWART: No, we don’t believe so. The fact that it is a public interest consideration that could be taken into account in making other sorts of decisions doesn’t mean that we have to consider it in making every single regulatory decision we make, including relaxation of the cross-ownership rules.

REICHARD: Stewart pointed out the FCC actually did consider the effect on women and racial minorities; it found no harm. But it didn’t have to consider it. 

Listen to this exchange with Justice Clarence Thomas about how times have changed about another kind of diversity, viewpoint diversity.

THOMAS: Mr. Stewart, you indicate that the landscape in the area of viewpoint diversity has changed over the years. Could you talk a bit about that? I’m interested particularly in the effect mentioned in your briefs and some of the others as a result of some of the new Internet-based Platforms.

STEWART: I think the idea is that when the rules were first adopted, in many local communities, there might be three broadcast stations and one local newspaper and — basically, four independent voices within the community providing local news coverage and other forms of coverage. And if two of those outlets were owned by the same entity, that would be a substantial diminution in potential viewpoint diversity. Now when you have a plethora of Internet-based platforms, cable stations that can also provide local news coverage, the reduction in viewpoints within the broadcast sphere specifically is not going to be nearly so significant in light of the profusion of different viewpoints that will be available to the consumer.

Stewart’s pro-FCC argument seemed to be winning the day, except for Justice Sonia Sotomayor.

SOTOMAYOR: Mr. Stewart,  I’m a bit confused. We have a legion of cases that say you don’t have to rule in favor of one point of view or another, but when you’re rejecting something, you should give it adequate consideration. Isn’t that what we’re judging?

STEWART: I — I — I think there are two things I would say about that.

Well, Stewart replied, the FCC considers female and minority ownership a worthy goal. Still, that’s not a basis to restrict cross-ownership. 

Also arguing in support of the FCC’s relaxed rules was lawyer for the National Association of Broadcasters, Helgi Walker. Some discussion ensued around real-world consequences should the court decide one way or the other. 

Walker said worries about concentrated media ownership are exaggerated.

WALKER: …another real-world point is that, for instance, Amazon gets to own The Washington Post today. Nobody thinks that’s the end of democracy. It’s surely not the end of democracy if a local broadcaster can buy a local newspaper and keep it alive.

Competition is what keeps local media alive, she argued. Why limit it? Social justice concerns are important, but not paramount.

Arguing against the FCC’s relaxed rules was Ruthann Deutsch, for the Prometheus Radio Project. She’d cited very little research to say that the new rules hurt women and minorities. 

Justice Stephen Breyer called her on that, coming across like a cranky uncle:

BREYER: Now why in heaven’s name did you not, or groups that support you, given the tremendous number of people who I’m happy are interested in this — why aren’t there some studies or something? There are 10,000 law professors and economics professors who look for studies to do. Why isn’t there something?

DEUTSCH: Well, there is something on this issue which they ignored, even as they cited one —

BREYER: Okay, what?

DEUTSCH: The Free Press study.

BREYER: Free Press.

DEUTSCH: Why did they ignore it or?

BREYER: Okay, that’s — the free. Is there anything other than that?

Deutsch mentioned another one, but none of the justices seemed convinced by it. Still, 22 states support her take on things, saying local news has taken a real beating and we shouldn’t add media consolidation to the mix.

And here’s where who is in the White House makes a difference. The Democrats will soon control the FCC. 2021 is the next quadrennial rule review by the agency. 

If the Supreme Court rules in favor of the FCC here, it’s likely that a newly emboldened social justice contingent will bring more lawsuits to tilt the law and regulations their way.

The Wall Street Journal noted that Google’s share of local ad revenue in 2019 was around $17 billion. That’s equal to all local ad income of every television station in the country combined. The appeals court did not consider that data, which might have informed a decision about competition and the need to relax ownership rules. The Journal editorial cited overreach by that lower court being driven by a desired outcome.

Basically, putting one set of grievances ahead of all others to the detriment of the whole.

Things will likely change. But for now, based on how the argument went, it sounds like the FCC will win the opportunity to decide on its rules for ownership.

And that’s this week’s Legal Docket.

(AP Photo/J. Scott Applewhite, File) In this Nov. 6, 2020, file photo the Supreme Court is seen as sundown in Washington. 

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.