Opinion ID: 220512
Heading Depth: 2
Heading Rank: 2

Heading: Retention of the Top Four/Eight Voices Test

Text: As noted, the local television ownership rule specifies that an entity may own two television stations in a single market if (1) the signal contours do not overlap; or (2) at least one of the stations is not ranked among the top four and at least eight independently owned stations would remain operating in the market after the combination. 2008 Order ¶ 87. Several Deregulatory Petitioners challenge this part of the rule. Sinclair argues that the FCC fails to articulate why it has chosen eight voices as necessary to promote competition. Sinclair Br. 34. This is not true. The FCC explained that it chose eight voices to ensure that each market includes four stations affiliated with the four major networks in each market ( i.e., ABC, NBC, CBS, and Fox), plus at least an equal number of independently owned-and-operated broadcast television stations that are not affiliated with a major network. Preserving the independent ownership in each local market of four stations ... will help to ensure that local television stations, spurred by competition, will provide dynamic and vibrant alternative fare, including local news and public affairs programming.... [T]he Commission ... has found that there is generally a significant gap between the top four stations in a market and the remaining stations. In light of this concentration among the top four stations in most markets, we believe that it is prudent to require the presence of at least four (rather than two) competitors not affiliated with a major network in order to ensure vibrant competition in the local television marketplace. 2008 Order ¶ 99. This was clearly a line-drawing exercise (which is the agency's responsibility, AT & T, 220 F.3d at 627), and the FCC has reasonably explained its decision to draw the line at eight voices. Sinclair also argues that retaining this rule violates the D.C. Circuit Court's mandate in Sinclair Broadcast Group v. FCC, 284 F.3d 148 (D.C.Cir.2002). In that case, the Court held that the FCC had failed to demonstrate that its exclusion of non-broadcast media from the eight voices exception is `necessary in the public interest' under § 202(h) of the 1996 [Telecommunications] Act, and rejected its diversity-of-viewpoint rationale. Id. at 165. Here, the FCC has offered a new and reasonable rationale for this policy choice  competition. As it explained: The local television ownership rule counts only broadcast television stations as voices because the local television ownership rule is designed to preserve competition in the local television market. The radio/television cross-ownership rule, by contrast, is designed to protect viewpoint diversity and thus takes into account a broader range of voices than does the local television rule. Furthermore, we count more voices in the radio/television cross-ownership rule than in the newspaper/broadcast cross-ownership rule because newspapers and television station combinations involve the two most important types of sources for news and information. 2008 Order ¶ 80 n. 259. Contrary to NAB's claim, the FCC concluded that the rule does not depend on the effect of other video programming because the purpose of the rule is to promote competition among the stations themselves. FCC Br. 82 (citing 2008 Order ¶ 101). Finally, the FCC also provided rational explanations for preserving its top four exception. Sinclair and CBS argue that the record lacks evidence that mergers or joint operations of top four stations harm competition (and fail to account for marketplace realities), and thus that this portion of the rule is unsupportable. Sinclair Br. 42-48; CBS Br. 39-46. But, consistent with its 2003 Order, the FCC found that combinations of top four stations should be prohibited because mergers of those stations would be the most deleterious to competition that would often result in a single firm with a significantly larger market share than the others and would reduce incentives to improve programming that appeals to mass audiences. 2008 Order ¶ 102. It also found, as it did in its 2003 Order, that a significant `cushion' of audience share percentage points continues to separate the top four stations from the fifth-ranked stations. Id. We upheld the same determination in Prometheus I, 373 F.3d at 417-18 ([W]e must uphold an agency's line-drawing decision when it is supported by the evidence in the record.... Here there is ample evidence in the record to support the Commission's restriction on combinations among the top-four stations as opposed the top-three or some other number.). We do so again here.