Prometheus Radio Project v. Federal Communications Commission
824 F.3d 33
| 3rd Cir. | 2016Background
- This is the third major judicial review of the FCC’s broadcast-ownership rules and diversity initiatives (following Prometheus I and Prometheus II). The disputes concern: (1) the FCC’s definition of “eligible entity” for diversity preferences; (2) the FCC’s failure to complete its statutorily required quadrennial reviews under § 202(h); and (3) the FCC’s 2014 rule attributing certain same‑market television joint sales agreements (JSAs) toward ownership limits.
- Congress requires the FCC to review broadcast ownership rules every four years under § 202(h) and to repeal or modify rules that are no longer in the public interest. The last completed review was the 2006 cycle (2008 Order); the 2010 and 2014 reviews remain open.
- The FCC historically used an SBA revenue‑based definition of “eligible entity” (small business), but Prometheus II held that definition arbitrary and capricious and remanded, directing the FCC to consider SDB (socially and economically disadvantaged business) or alternative definitions and to address data gaps (Form 323 revisions) in the 2010 Quadrennial Review.
- The FCC delayed finalizing a new eligible‑entity definition for years, citing data and constitutional concerns; the court found the delay unreasonable and ordered the FCC to act promptly (with mediation to set a timetable).
- The FCC adopted a rule attributing same‑market television JSAs that sell more than 15% of a station’s advertising to the broker for ownership‑cap purposes; the Third Circuit vacated that rule because adopting an attribution expansion without completing the § 202(h) quadrennial review (i.e., without first justifying the underlying ownership caps) violated § 202(h).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Eligible‑entity definition delay | Prometheus/Citizen Petitioners: FCC unreasonably delayed adopting an SDB/ODP definition after Prometheus II remand; seek APA §706(1)/mandamus relief. | FCC: needs more data and constitutional analysis; still considering options and integrating with ongoing quadrennial review. | Court: Delay unreasonable; remands and orders FCC to act promptly and mediate with petitioners to set a schedule. |
| Quadrennial Review delay / remedy | Deregulatory Petitioners: FCC’s failure to complete 2010/2014 reviews justifies vacatur of all §202(h) ownership rules. | FCC: delay due to incomplete record; will complete review; vacatur would be disruptive. | Court: Vacatur of all rules inappropriate; petitioners waived alternative remedies; court declines mass vacatur but warns FCC to finish reviews by proposed deadline or face future remedies. |
| Television JSA attribution rule (2014) and §202(h) | Deregulatory Petitioners: FCC unlawfully amended ownership scope via attribution without completing §202(h) review of ownership caps. | FCC: attribution decisions are distinct from ownership‑level decisions and not subject to §202(h); attribution needed to prevent circumvention. | Court: Attribution modifies and tightens ownership rules and is subject to §202(h); vacates the JSA attribution rule and remands for compliance with §202(h). |
| Waiver / exhaustion under 47 U.S.C. §405(a) | Deregulatory Petitioners argued §202(h) challenge though they did not raise it earlier before the FCC. | FCC: challenge waived because Commission had no opportunity to pass on it. | Court: Not waived—Commissioner Pai’s lengthy dissent gave the Commission sufficient notice; court reaches the §202(h) challenge on the merits. |
Key Cases Cited
- Public Citizen Health Research Group v. Chao, 314 F.3d 143 (3d Cir. 2002) (framework for evaluating unreasonable agency delay and ordering agency action)
- Prometheus Radio Project v. FCC, 373 F.3d 372 (3d Cir. 2004) (Prometheus I) (§202(h) review requirements and discussion of ownership/dates)
- Prometheus Radio Project v. FCC, 652 F.3d 431 (3d Cir. 2011) (Prometheus II) (holding revenue‑based eligible‑entity definition arbitrary and remanding for consideration of SDB/other definitions)
- Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (U.S. 1983) (arbitrary and capricious standard for agency rulemaking)
- In re Core Communications, Inc., 531 F.3d 849 (D.C. Cir. 2008) (precedent on remand deadlines and refusing to rely on promises of imminent action)
- Oil, Chemical & Atomic Workers Union v. Occupational Safety & Health Admin., 145 F.3d 120 (3d Cir. 1998) (standard and factors for assessing agency delay under APA §706(1))