Health & Medicine Policy Research Group v. Federal Communications Commission

807 F.2d 1038, 257 U.S. App. D.C. 123
CourtCourt of Appeals for the D.C. Circuit
DecidedDecember 23, 1986
DocketNo. 85-1837
StatusPublished
Cited by5 cases

This text of 807 F.2d 1038 (Health & Medicine Policy Research Group v. Federal Communications Commission) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Health & Medicine Policy Research Group v. Federal Communications Commission, 807 F.2d 1038, 257 U.S. App. D.C. 123 (D.C. Cir. 1986).

Opinion

Opinion for the Court filed by

Circuit Judge STARR.

STARR, Circuit Judge:

This case presents a challenge to the FCC’s grant of a waiver from its cross-[125]*125ownership rules in connection with the assignment of six television station licenses from Metromedia Radio & Television, Inc. to Fox Television Stations, Inc.1 Specifically, the FCC granted Fox a temporary waiver from its rule prohibiting ownership of both a television station and a newspaper within the same geographical area, thereby providing Fox with a two-year period within which to dispose of its pre-existing ownership interest in the newspapers. Appellants, a consortium of individuals and public interest groups, unsuccessfully complained to the FCC that the upshot of a waiver would be to reduce the diversity of broadcast voices in the affected areas. This appeal followed. See 47 U.S.C. § 402 (1982). Inasmuch as we are persuaded that granting the waiver was properly within the FCC’s discretion, we affirm.

I

The media empire that once was popularly known as Metromedia has now been largely dismantled. This case involves the sale of one significant portion of Metromedia’s once proud stable of broadcast properties. In May 1985, Fox entered into an agreement with Metromedia to purchase seven of the latter’s television stations in as many major U.S. cities, namely New York, Chicago, Los Angeles, Washington, D.C., Dallas, Houston, and Boston. See Joint Appendix (J.A.) at 377-85. Pursuant to this agreement, Metromedia and Fox filed applications for FCC approval of the former’s assignment of its licenses to Fox in June 1985.2

In its application, Fox requested a waiver of the FCC’s “cross-ownership rules,” which, as their name suggests, prohibit (among other things) a broadcast licensee from owning a daily newspaper within the same area. 47 C.F.R. § 73.3555(c) (1985). A waiver from the strictures of cross-ownership prohibition was necessary because Fox’s owner, K. Rupert Murdoch, owned newspapers in two of the seven cities. Specifically, Mr. Murdoch controlled the New York Post and the Chicago Sun-Times, daily newspapers within the broadcast area of the New York and Chicago television stations.3 In support of its request, Fox attached a twelve-page statement as to why a waiver would be in the public interest. Fox’s primary contention was that a waiver would avoid a “distress sale” of the two newspapers, a recognized basis for waiver. J.A. at 28-39.

Fox’s application in general, and its waiver request in particular, met with substantial opposition. Appellants filed a lengthy petition to deny, pointing out a number of alleged improprieties infecting Fox’s application and, most relevantly to this appeal, asserting that granting a waiver would be inappropriate. See J.A. at 46-93. These arguments, and responses to them, were more fully developed through a series of oppositions, replies, and supplemental petitions. See, e.g., J.A. at 132-73, 178-202, 227-48. In particular, one of Fox’s submissions set forth a further discussion supplementing its original twelve-page submission as to why waiver of the cross-ownership rules would be consonant with the public interest. J.A. at 151-66. Fox also attached to this submission a supporting affidavit from its investment banker (and board member) expressing the view that a waiver would be necessary to permit an orderly disposition of the two newspapers. J.A. at 170-72.

In due course, the FCC denied appellants’ petitions. In addition to approving [126]*126the Metromedia-Fox assignment, the Commission granted Fox a two-year waiver of the applicable cross-ownership rule. In re Applications of Metromedia Radio & Television, Inc., 59 Rad.Reg.2d (P & F) 1196 (1985).

After disposing of several points not germane to our purposes, the Commission turned to the waiver issue. The Commission first reviewed the arguments pressed by each party and then set forth the following conclusion:

[W]e believe [the cross-ownership rule] may be temporarily waived consistent with the public interest. The existence of the numerous media outlets serving New York, Chicago and surrounding areas supports our conclusion that no undue concentration of the media would result from a limited waiver. Further, we recognize that market factors associated with sales of daily newspapers may be different from those affecting broadcast properties making them more difficult to sell and therefore believe a waiver for a period of 24 months would be appropriate here. That period represents a reasonable balance between the policies expressed in the [cross-ownership] rule and our belief that, in divestiture cases, reasonable accommodations may be made to avoid the risk of distress sales.

59 Rad.Reg.2d (P & F) at 1205 (footnotes omitted). On appeal, the challengers, not surprisingly, take issue with the Commission’s conclusion. Appellants' primary argument is that Fox made an inadequate showing to qualify for a waiver.4

II

The FCC-granted waiver permits Fox to maintain, for a two-year period, a cross-ownership pattern that would otherwise be prohibited. 47 C.F.R. § 53-3555(c) (1985). At bottom, the cross-ownership rules are designed to serve the public interest through encouraging diversity of media voices by requiring diversity of media ownership. The Commission was concerned about local media monopolies, where one individual or company owned some combination of a radio station, a television station, or a newspaper within the same area. To reduce the undesirable homogeneity of views that could presumably eventuate from such combinations, the Commission promulgated various proscriptions of media cross-ownership. For example, in 1970 the Commission prohibitéd ownership of both a radio and television station within the same area. See 47 C.F.R. § 73,3555(a) (1985); see also First Report and Order, 22 F.C. C.2d 306 (1970) (original promulgation of radio-television cross-ownership rules).

At the same time, the Commission proposed a similar ban on television-newspaper cross-ownerships. See Further Notice of Proposed Rulemaking, 22 F.C.C.2d 339 (1970). The rulemaking procedures for these television-newspaper rules continued for five years and culminated in January 1975 with the issuance of the regulatory [127]*127predecessor to the current rule. See Second Report and Order, 50 F.C.C.2d 1046 (1975), aff'd sub nom. FCC v. National Citizens Commission for Broadcasting, 436 U.S. 775, 98 S.Ct. 2096, 56 L.Ed.2d 697 (1978); id. at 1099, App. F (text of original cross-ownership rule). To limit the dislocations these cross-ownership rules would inevitably cause, the FCC “grandfathered” most then-existing combinations. Id. at 1080. The Commission indicated that these rules would “apply to new ownership patterns however created, whether by initial application and construction or by acquisition.” Id. at 1076.

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807 F.2d 1038, 257 U.S. App. D.C. 123, Counsel Stack Legal Research, https://law.counselstack.com/opinion/health-medicine-policy-research-group-v-federal-communications-cadc-1986.