Supreme DilemmasFox, ownership actions may be double-edged sword for FCC 7/23/2012 12:01:00 AM Eastern
Usually, by the time the Supreme Court has its say
on a matter, everyone knows where they stand. But
while the high court is done for the summer, its decision
in Fox vs. FCC did leave some questions. Could this
partial victory for the commission ultimately work against
the FCC’s defense of network neutrality rules? And could the
Supremes’ decision not to hear broadcasters’ media ownership
challenge wind up costing TV stations
at incentive auction time?
That’s two yes votes, according to various
court watchers who say those decisions
could lead to either good or bad news for
the commission. They argue the Fox indecency
decision provides precedent for overturning
the FCC’s network neutrality rules
and can be used to take aim at programming
regulations that cable operators have
been pushing against with increasing force.
Scott Cleland, chairman of Netcompetition.
org, whose members include major
cable operators, said the Supreme Court’s
decision that the FCC had violated constitutional due process
protections by not providing sufficient guidance/notice about
what it would find indecent could and should inform a federal
appeals court currently considering telco challenges to the rules.
Cleland said both net neutrality and indecency are judgment
calls, with each difficult to define. Where the high
court’s indecency ruling comes in is that the court overturned
the FCC for applying a vague standard and expecting Fox
and ABC to have known what to do without clear guidance.
“It signals that they would have similar or more disdain
for the FCC applying a vague [network neutrality] standard,”
Cleland blogged in the wake of the June Supreme Court
decision. “This indirectly related unanimous Supreme Court
decision is also a helpful reminder that the court is unlikely
to cut the FCC broad slack under its ‘Chevron Deference’
precedent when the FCC is loose with due process,” he said.
But there is more grist for the legal mill in the decision,
according to Seth Cooper, a research fellow at the Free
State Foundation. Cooper, also in a blog posting, joined
with Free State Foundation president Randolph May to
argue that the indecency decision reaffirmed that government
speech regulation based on vague standards runs
afoul of due process. Cooper said that makes a host of FCC
content-related regs constitutionally suspect,
including program access and carriage
regulations, leased access requirements,
and must-carry/retrans rules.
Those are all regs that could come up for
inspection next week in a Senate Commerce
Committee hearing on video programming
and the 1992 Cable Act.
According to Dan Brenner, a veteran cable
attorney and partner at Hogan Lovells, a
decision the Supreme Court decided not to
make could also have a big impact on the
media landscape. According to Brenner’s
analysis of the Supreme Court’s decision not
to hear broadcasters’ appeal of the media ownership rules, the
denial could be particularly good news for the FCC’s effort to
convince broadcasters to clear off spectrum.
Broadcasters had challenged the FCC’s decision not to lift any
of its local market station caps. “By limiting the broadcast spectrum
any one licensee can hold in a market [and nationwide],
the cross-ownership rules unintentionally keep the price of that
spectrum lower than it might otherwise be,” Brenner said.
“The potential reverse auction candidates are most likely
to be single-station TV owners who are not market leaders
and who might have been able to sell their stations to a more
powerful in-market broadcaster,” Brenner wrote in his analysis.
“The court’s decision not to review those cross-ownership
rules…eliminates the possibility of a likely alternative buyer of
a TV station, which lowers the price of the TV spectrum license
and jettisons an alternative exit path for weak stations.”