Broadcasters Won’t Immediately Challenge UHF Discount Rule in Court, Attorneys Say
Though an FCC rulemaking proposal to eliminate the UHF discount could eventually lead to legal challenges, broadcasters will likely wait for an actual order to be passed before heading to court, several attorneys and a broadcast executive told us in interviews this week. They said broadcasters will wait for an order even though the NPRM proposes applying the new ownership calculation to any new ownership group not in existence or pending by the release of the NPRM, rather than pegging the cutoff to the release of an actual order (CD Sept 27 p1). FCC Commissioner Ajit Pai condemned the timing of the cutoff because it means the proposed law could have real-world effects before going through the full rulemaking process, but broadcasters are still likely to let the NPRM go through the normal commenting process and see what emerges rather than go for an early court challenge, several attorneys said. “I don’t think you'd get much value from a legal challenge” to a law that is still in the proposal stage, said Fletcher Heald broadcast attorney Donald Evans in an interview.
Generally, courts will throw out challenges to rules that have yet to be enacted, said Wiltshire Grannis attorney and former FCC General Counsel Christopher Wright. “The court would treat the rule as nonfinal,” said Evans, which would likely lead to any such court challenge being thrown out. A broadcaster determined to take the NPRM to court might try to claim special circumstances and ask for “extraordinary relief,” but would likely need to demonstrate that the UHF discount NPRM is already causing it “irreparable harm.” Though the broadcast executive told us the NPRM will likely have a chilling effect on broadcast M&A and Pai said the NPRM “effectively tells the private marketplace to behave as though the UHF discount has already been eliminated,” Wright said, persuading a court to strike down the law before it’s enacted would be “a long shot."
Broadcasters looking to attack the NPRM and its grandfathering cutoff have easier options than the courts anyway, said Evans. Filing comments “vigorously opposing” the NPRM is likely to be more effective than an early court challenge would be, Evans said. However, several analysts have predicted an eventual order eliminating the UHF discount is likely to be passed (CD Sept 26 p4) and broadcasters are considering their legal options for that eventuality, the broadcast executive said.
Legal challenges are likely because eliminating the discount would constrain broadcaster growth, and they face competition from large multichannel video programming distributers such as Time Warner Cable and Comcast, said Drinker Biddle broadcast attorney Howard Liberman. “They're not the only game in town,” said Liberman. “They probably want to keep growing.”
If an order eliminating the discount goes to court, he said, the challengers may face an uphill battle because of the likely narrow focus of the rule. Broader rules are easier to challenge, because opponents have more room to claim that some aspect of them didn’t have adequate notice or wasn’t addressed in the comments filed with the commission, said Liberman. “The court of appeals is more likely to sustain the FCC” when its rules have a tighter focus and a record of comments, said Liberman.
In his dissent, Pai said a possible method of relief for broadcasters would be to raise the 39 percent ownership cap as the discount is eliminated. Acting Chairwoman Mignon Clyburn also said Friday the commission might eventually examine the ownership cap. However, the broadcast executive said it’s extremely unlikely the FCC would change the cap under a primarily Democratic commission, saying the idea wasn’t even put up for comment in the NPRM, despite Pai’s objections. -- Monty Tayloe (mtayloe@warren-news.com)