Sinclair Broadcast Group, Inc. v. Federal Communications Commission

Argued January 14, 2002 On Petition for Review of an Order of the Federal Communications Commission Opinion concurring and dissenting in part filed by Circuit Judge Sentelle. Recently, in Fox TV Stations v. FCC, 280 F.3d 1027 (D.C. Cir. 2002), the court addressed the national television ownership caps, remanding the national caps for justification by the Federal Communications Commission and vacating the cable-broadcast cross-ownership rule. Id., at 1033. In so doing, the court construed s 202(h) of the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (""1996 Act""), to ""carr[y] with it a presumption in favor of repealing or modifying the ownership rules."" Id., at 1048. The local television ownership rule now on review allows common ownership of two television stations in the same local market if one of the stations is not among the four highest ranked stations in the market and eight independently owned, full-power, operational television stations remain in that market after the merger. See Review of the Commission's Regulations Governing Television Broadcasting, Report and Order, FCC 99-209 (rel. Aug. 6, 1999), 64 Fed. Reg. 50,651 (Sept. 17, 1999) (""Local Ownership Order""), on recons., FCC 00-431 (rel. Jan. 19, 2001), 66 Fed. Reg. 9039 (Feb. 6, 2001) (""Reconsideration Order"") (codified at 47 C.F.R. 73.3555(b) (2002)). Sinclair Broadcasting Group, Inc. (""Sinclair"") challenges the local ownership rule on three principal grounds: it contends that (1) limiting common ownership of television stations in a local market to those with eight independent voices is arbitrary and capricious, (2) failing to fully grandfather existing local marketing agreements violates s 202(g) of the 1996 Act, is impermissibly retroactive, and constitutes an unlawful taking of property in violation of the Fifth Amendment; and (3) the restrictions violate the First Amendment. We hold that the Commission has failed to demonstrate that its exclusion of non-broadcast media in the eight voices exception is not arbitrary and capricious. Accordingly, we remand the local ownership rule to the Commission for further consideration.