The other shoe has finally dropped on the Sinclair-Tribune deal.
The FCC's new Administrative Law Judge, Jane Halprin, has granted Sinclair's request that she terminate the hearing on its aborted deal to buy Tribune stations, but said the allegation Sinclair may have misled the commission was a serious charge that warrants further scrutiny in another context.
The FCC's Enforcement Bureau had said it did not oppose dropping the hearing given that the deal was no longer before the commission.
Some Democrats had pushed for the hearing anyway, but Halprin said that would be an "academic exercise" given the dissolution of the deal.
But Halprin also said the concern by the FCC chairman and commissioners, who voted unanimously to designate the deal for hearing before the ALJ, that Sinclair lacked candor was a serious charge that "reasonably warrants" a thorough examination" in another context, perhaps when its licenses come due since lack of candor goes to its fitness to be a licensee.
But she said that "absent a specific transaction or other proceeding to provide context for this unresolved character issue, conducting a hearing at this time would not be a prudent use of commission time and resources."
While the "lack of candor" concern remained a potential issue, Halprin said the other three issues in the hearing designation order (HDO)--whether the overall deal violated FCC rules, whether it was in the public interest, and whether it should be granted--HDO's are the kiss of death for deals--were mooted since there was not longer any deal.
“The Commission made the right decision when it designated this transaction for a hearing, and we appreciate the ALJ’s work on this matter," said an FCC spokesperson, who had no comment on whether the FCC would open a separate Media Bureau investigation into the "lack of candor" assertion.
Free Press was not reticent about such an investigation.
“The FCC’s administrative law judge could have dismissed the proceeding on procedural grounds without further comment, but instead she issued a strong rebuke regarding Sinclair’s dishonest representations to the FCC, and all but insisted that the agency examine Sinclair’s lack of candor at the next opportunity," said Free Press Policy Manager Dana Floberg. “Free Press is calling on the FCC to examine Sinclair’s dishonesty in early renewal proceedings. If the agency finds that Sinclair lied to the Commission, it should revoke Sinclair’s broadcast licenses and return the public airwaves to broadcasters that will serve their communities and comply with the law and with FCC rules."
"Today’s Administrative Law Judge ruling on serious 'lack of candor' allegations against Sinclair affirmed that '[h]onesty with the Commission is a foundational requirement' for our licensees and this conduct would be 'appropriately considered' next time Sinclair files a new transaction or license renewal," said FCC Commissioner Geoffrey Starks."As a former enforcement official, I take seriously the need to investigate misconduct and hold folks accountable. Lying is among the most severe offenses a licensee can commit. As Judge Halprin notes, 'providing false statements' to the Commission has historically 'been a basis for license revocation.'”"Eight months have passed since Sinclair’s alleged deception was revealed. Public filings show Sinclair is due to renew some of its licenses in 2020. Some want us to act sooner. This is a serious issue. We need answers."
“This morning, the FCC's Administrative Law Judge dismissed the proceeding that arose from the now-abandoned Sinclair-Tribune merger. In doing so, however, Judge Halprin emphasized that the most serious charge against Sinclair -- that it lied to the FCC -- was neither ‘nullified nor excused’ by this dismissal," said American Cable Association President Matt Polka. ACA opposed the deal on the grounds that Sinclair would use its increased size and power to strike unfair retrans deals. "Instead, because the charge is now ‘untethered’ to a specific transfer application, it ‘would be more appropriately considered in the context of a future proceeding in which Sinclair is seeking FCC approval, for example, involving an application for a license assignment, transfer, or control.’ “Fortunately, such a proceeding already exists—one in which the public will have the opportunity to participate. Four months ago, ACA asked the FCC to expedite the next set of license renewals so that the FCC can resolve these questions sooner rather than later. We continue to urge the FCC to do so. As Judge Halprin made clear today, the FCC will have to grapple with Sinclair’s behavior one way or the other. All parties -- including Sinclair itself -- will benefit if this happens sooner rather than later.”