FCC Media Bureau kills diverse media ownership
I believe in the power of local news. Strengthening American democracy depends on more engaged and informed citizens at the local level. But in today’s fractured media environment, there are fewer credible options for consumers to turn to for their news. Local broadcast news can help fill this void.
My company, Standard General, is acquiring local broadcaster TEGNA because I want to build a new company that will be a leader in preserving and enhancing community news, investing in newsrooms and programming targeted to local audiences and adapting in a rapidly changing technical and competitive environment.
We’re ready to invest, but regulators in Washington, D.C. continue to hold us back.
The Federal Communications Commission’s Media Bureau recently announced it would refer the proposed transaction between Standard General and TEGNA for review by an administrative law judge.
This seemingly mundane regulatory action is an unprecedented overreach of authority that, if allowed to stand unchallenged, effectively blocks our purchase. Thus, any future applicant seeking to acquire TEGNA or any other TV station will have to be acceptable to the Media Bureau in its sole, absolute and unreviewable discretion. Given the Media Bureau by tradition is responsive to the Chair of the FCC, this completely obviates the purpose of a bipartisan commission ratified by Congress and turns the other Democratic and Republican commissioners into mere bystanders.
Indeed, this is the first time the FCC has ever acted through the Media Bureau in a manner designed to kill a pending transaction without referencing a single rule or regulation the transaction might violate and without any consideration of conditions that would address any outstanding concerns. It is also the first time the FCC has ever acted to effectively kill a TV merger without a vote by the full Commission.
Furthermore, this will turn the Public Interest standard on its head by restricting investment in and ownership of wide swaths of the economy to those deemed acceptable by regulators armed with this new precedent. The plan for Standard General to acquire TEGNA presumed careful review by the DOJ and FCC, but we had no reason to doubt final approval given that we were purchasing an existing company made smaller by a couple of upfront divestitures. While having a few public objectors is not uncommon, we were surprised by the level of vitriol and vague allegations made about “foreign influence,” despite me being a US citizen and my company being US-based. Counsel for NewsGuild-CWA shamelessly said the deal “does not promote ownership diversity as it is understood by the public interest and civil rights community,” implying that Asian-Americans are not included within the concept of diversity.
Nevertheless, we trusted the system and were confident we had followed all the rules and precedents. Our faith was tested as a review that was expected to last six months stretched to nearly a year. The customary public comment period went an unprecedented three rounds.
During this time, we tried repeatedly but with little success to engage the FCC and Media Bureau to get feedback on our responses to petitioners’ concerns. We were led to believe that there was nothing to discuss.
Then with no warning the hammer dropped: The Media Bureau ordered an administrative hearing, which pushes the process beyond the May 22 final deal termination date and effectively scuttles the deal without ever bringing it to a vote with no clear recourse.
The Media Bureau claimed the administrative judge needs to review additional evidence related to potential impacts on jobs and consumer prices. Yet the parties have already turned over millions of pages of evidence, sat through hours of depositions, responded to all comments and inquiries of fact and law and offered concrete commitments to address these very issues.
Put simply, the Media Bureau is being allowed to scuttle this deal because they don’t seem to think I should own these stations. Who knows why? And therein lies the danger. By arbitrarily defining Public Interest, the Media Bureau has effectively made itself judge and jury. This issue merits broader public attention and scrutiny, and our deal deserves a full vote by the Commission on its merits.
If this outcome stands, it is impossible to know where it ends.