Prometheus Radio Project v. FCC

Prometheus Radio Project v. FCC is the general title of a series of cases heard by the U. S. Court of Appeals for the Third Circuit from 2003 to 2019. A media activist group, Prometheus Radio Project, challenged new media ownership rules put forth by the Federal Communications Commission (FCC) in 2002. In the first court challenge in 2004, the Third Circuit overruled an attempt by the FCC to raise the limits of media ownership within markets and relax cross ownership (radio, television, and newspaper) prohibitions, and determined that a diversity index used by the FCC had been formulated inconsistently. The Circuit Court enjoined the FCC from enacting its new rules and ordered the Commission to reconsider how it justifies raising ownership limits. The FCC then endeavored to adjust its rules as ordered by the Third Circuit. That court revisited the case in 2011 and ruled that changes had been made satisfactorily, and the injunction against enacting the media ownership rules was lifted. Further changes to FCC media ownership regulations led to rehearings in 2016 At the time of the original Prometheus dispute, the FCC also enforced a ban on media cross ownership, in which any owner of a broadcasting station could not also own the same city's newspaper. As required by the Telecommunications Act of 1996, the FCC must review its percentage ownership limit every two years. Before 2002, this limit was 35%, meaning that no single owner could control more than that percentage of broadcasting stations nationwide or within a single local market. The Commission, under Chairman Michael Powell, retained its rules that encouraged media localism and diversity, but decided to raise the ownership limit to 45% in a significant relaxation of the previous rule. The Commission also eliminated previous cross ownership restrictions except in small local media markets, determining that in larger local markers a single owner could own the city's newspaper in addition to a percentage of the broadcasting stations. On the matter of diversity in media ownership. the FCC created a diversity index to determine how any merger between media companies would affect competition in a market. This index was based on the Herfindahl Hirschman Index (HHI), which in turn is used by the Federal Trade Commission and Department of Justice to measure market concentration in any industry. The FCC determined that such a measurement would be necessary for small local media markers with shrinking numbers of media owners. The media activist group Prometheus Radio Project, which supported local media ownership and opposed the ongoing concentration of the American media market, objected to the FCC's rule changes in 2003 and petitioned for judicial review at the Third Circuit Court of Appeals. A direct petition to this court was made possible by federal regulations regarding requests for review of agency actions with implications in multiple regions of the country.

Initial arguments were heard by the Third Circuit in August 2003. Due to subsequent court actions, this case has come to be known as Prometheus I. Prometheus Radio Project requested an injunction against future enactment by the FCC of its newly formulated media ownership rules, arguing that the new rules violated provisions of the Telecommunications Act of 1996 that mandated media localism and required all administrative decisions to be made in the public interest. The activist group also argued that the FCC's newly created diversity index was built upon unsupported assumptions about the modern characteristics of local media markets. Meanwhile, Ambro determined that the FCC would face little harm if it was told not to enact new rules which had not yet been put into effect, while the parties worked on finding a resolution to the dispute. Thus, the FCC should be given leeway in how it interprets rules to enhance this unclear concept.

While Prometheus I was at trial, the U. S Congress passed the 2004 Consolidated Appropriations Act, which modified one provision of the 1996 Telecommunications Act by changing the nationwide percentage ownership limit for television stations from 35% to 39%. This made the FCC decision to include TV stations in its general ownership limit of 45% (as contested by Prometheus) partially moot. Yet another review by the Third Circuit, known as Prometheus IV, took place in 2019. In the words of the court, "here we go again" as it had now been seventeen years since the original disputed rule change. Meanwhile, the leadership at the FCC had changed several times, and in 2017 new chairman Ajit Pai, an opponent of media ownership regulations, adjusted the percentage limits yet again. According to Aaron Perzanowski, Congress needs to reassert itself as the final arbiter of media policy, because "Media concentration, because it results in an ever decreasing number of sources of publicly available information, poses a serious threat to the development of an informed public." Other researchers have concluded that the inconclusive results of the Prometheus saga indicate the need for new outlooks on media diversity, especially in light of more recent media technologies and corporate consolidation. As noted by Stephanie DeClerk: "Hopefully, the FCC will begin to recognize the drawbacks of media ownership deregulation" and will begin to "create new media rules for the [twenty first] century that foster diversity and protect local media". David Pritchard et al. have argued that arguments both for and against cross ownership regulations have become moot, due to evidence that different media outlets can have diverse viewpoints even if they have the same owner. A similar conclusion was reached by Daniel Ho and Kevin Quinn, who noted "In short, [media] consolidation does not inexorably lead to convergence or divergence."