On April 1, 2021 the U.S. Supreme Court decided FCC v. Prometheus Radio Project, holding that the Federal Communication Commission’s (FCC) 2017 decision to repeal or modify three of its media-ownership rules was not arbitrary or capricious for purposes of the Administrative Procedure Act (APA), reversing a split decision by the Third Circuit.
In the 1960s and 1970s the FCC adopted a series of rules limiting the number of media outlets a single entity can own within a particular media market. In light of the competitive pressures created by cable television and the internet, however, in 1996 Congress required the FCC to begin reviewing these ownership rules every four years, to determine if the rules still served the public interest, and to then repeal or modify the rules if the FCC determined they did not.
In 2017, the FCC reviewed the three ownership rules at issue, determined that they no longer promoted “competition, localism, and viewpoint diversity,” and accordingly repealed two of the rules and modified the other. The FCC also determined that loosening these rules “was not likely to harm minority or female ownership.”
A group of public-interest and consumer-advocacy groups asked the Third Circuit to review the FCC’s decision, arguing primarily that the FCC’s conclusion about “minority and female ownership” lacked a sound evidentiary basis and was therefore “arbitrary and capricious” under the APA. The Third Circuit agreed and vacated the FCC’s 2017 decision.
In today’s decision, the Supreme Court reversed the Third Circuit and reinstated the FCC’s 2017 decision. The Court emphasized that judicial review of agency decisions is “deferential,” requiring a “court simply [to] ensure that the agency has acted within a zone of reasonableness and, in particular, has reasonably considered the relevant issues and reasonably explained the decision.” Noting that nothing in federal law “require[d] the FCC to conduct its own empirical or statistical studies before exercising its discretion,” the Court held that the FCC fairly construed the limited evidence before it to find that changing the at-issue ownership rules would not harm minority and female media ownership. The Court concluded that, because “[t]he FCC considered the record evidence on competition, localism, viewpoint diversity, and minority and female ownership, and reasonably concluded that the three ownership rules no longer serve the public interest,” its decision was neither arbitrary nor capricious for purposes of the APA.
Justice Kavanaugh delivered the opinion for a unanimous Court. Justice Thomas filed a concurring opinion.