Opinion ID: 220512
Heading Depth: 3
Heading Rank: 2

Heading: Analysis of Compliance with the APA Standard

Text: No party disputes that Chairman Martin's Op-Ed/Press Release did not satisfy the APA's notice requirements. The proposal was not published in the Federal Register, the views expressed were those of one person and not the Commission, and the Commission voted days after substantive responses were filed, allowing little opportunity for meaningful consideration of the responses before the final rule was adopted. In effect conceding these points, the FCC states that the Op-Ed/Press Release is immaterial to its compliance with the APA's notice requirement. FCC Br. 38 n. 10. As noted earlier, the Commission relies on paragraph 32 of the FNPR to satisfy its notice obligations under the APA. Id. at 37. It argues that [a] notice that contains no rule proposals complies with the APA so long as it is `sufficient to fairly apprise interested parties of all significant subjects and issues involved.' Id. (quoting NVE, Inc. v. Dep't of Health & Human Servs., 436 F.3d 182, 191 (3d Cir.2006)). However, an agency also must `describe the range of alternatives being considered with reasonable specificity. Otherwise, interested parties will not know what to comment on, and notice will not lead to better-informed agency decision-making.' Horsehead Res. Dev. Co., Inc. v. Browner, 16 F.3d 1246, 1268 (D.C.Cir.1994) (internal citations omitted). On these facts, we cannot conclude that the Commission met this obligation, as we fail to see how the FNPR, with its two general questions related to the NBCO rule, and the irregular comment period that followed, satisfy the APA. The FNPR makes plain that the FCC was planning significant revision to the NBCO rule and looking for an alternative to the Diversity Index for measuring diversity. Paragraph 32 of the FNPR asks only whether cross-ownership limits should vary depending upon the characteristics of local markets, and, if so, what characteristics should be considered ... ? While the new rule varies limits depending on characteristics of markets  specifically, market size and the number of media voices  it was not clear from the FNPR which characteristics the Commission was considering or why. The phrase characteristics of markets was too open-ended to allow for meaningful comment on the Commission's approach. In addition, many central elements of the rule are not based on characteristics of markets at all. For example, key aspects of the rule rely on: the amount of local news produced by an individual station involved in a potential merger and how that term is defined; the definition of major media voices, including what counts as a major newspaper; how market concentration is measured; whether a station is failing; whether a station exercises independent news judgment and how that term is defined; and whether a case-by-case approach or a categorical approach to proposed mergers would better serve the public interest. The FNPR also did not solicit comment on the overall framework under consideration, how potential factors might operate together, or how the new approach might affect the FCC's other ownership rules. These were significant omissions. Our dissenting colleague suggests that the FNPR subsumes the entire record surrounding the 2002 Biennial Review, including the 2002 Notice, the 2003 Order, and our decision in Prometheus I. As noted above, the FCC did not argue this. Rather, it contended that the four corners of [the FNPR were] sufficient under the APA. Tr. 88. But even if the FNPR implicitly incorporated those sources, it still did not provide sufficient notice of the Commission's new approach to cross-ownership. During the 2006 Quadrennial Review, the FCC departed entirely from its approach in the 2003 Order and adopted a rule with significant elements that were not previously noticed in 2002 [24] or analyzed in the 2003 Order or our remand. Although it was clear from those sources, taken together, that the Commission was planning to overhaul its approach to newspaper/broadcast cross-ownership, they did not contain enough information about what it was planning to do, or the options it was considering, to provide the public with a meaningful opportunity to comment. Until Chairman Martin's November 2007 personal Op-Ed/Press Release, the public did not know even what options he was considering, let alone the Commission. In further support of our conclusion, we note that the FNPR is sparse in comparison to the Commission's May 2010 Notice of Inquiry initiating its 2010 Quadrennial Review of the ownership rules. See 2010 Quadrennial Regulatory Review  Review of the Commission's Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, Notice of Inquiry, 25 F.C.C.R. 6086, 2010 WL 2110771 (May 25, 2010) (the 2010 NOI ). The 2010 NOI is much more specific and covers many more issues. It contains many pages of questions regarding potential approaches to the NBCO rule, discusses data motivating the Commission's questions, and inquires into various regulatory options. For example, it asks: With regard to the newspaper/broadcast cross-ownership rule, should the Commission treat newspaper-television combinations differently from newspaper-radio combinations, as we do in the 2006 presumptive standard? Are some goals or metrics more relevant for one or the other type of combinations? Are particular market participants more heavily affected by the rule? Which elements of market structure are most important for measuring the effects of this rule on our policy goals? Would relaxing the newspaper/broadcast cross-ownership rule result in economies of scale and scope that could help newspapers to survive? Alternatively, do the problems faced by newspapers result from extraneous factors that make relief in this area irrelevant? For example, statistics show that fewer people are reading newspapers and, instead, are increasingly getting news and information from nontraditional sources. Statistics also demonstrate an increase in the degree of penetration of new media, including online websites, and social media. Given the fragmentation of sources of news, would structural relief help newspapers sufficiently to result in a net gain in local news and information? Should any such relief operate via a revised rule or via a waiver standard? If the latter, what type of waiver standard should be applicable? Is the presumptive standard adopted in the 2006 Quadrennial Review Order able to further our competition, diversity, and localism goals as well as result in economies of scale and scope that could help newspapers survive? Is a rule that relies on presumptions preferable in order to achieve our goals? What factors should a relaxed rule or waiver standard take into account? Should any relaxation of the rule continue to account for the number of voices in a community? For instance, is there a basis in the current marketplace for finding that cross-ownerships only in the largest markets would be in the public interest? Should it take into account market share of the media entities that would be combined? If the number of voices is relevant, how should voices be defined for this purpose? 2010 NOI ¶ 87; see also id. at ¶¶ 90-100 (detailing structural inquiries regarding use of bright line rules, case-by-case approach, hybrid approach, and broad cross-media approach); id. at ¶¶ 101-06 (inquiring into effect of digital contours and national broadband plan on NBCO and other ownership rules). Moreover, a comparison of the comments submitted during the official comment period (July 24, 2006-January 16, 2007) and the responses to the Chairman's Op-Ed/Press Release (November 13, 2007-December 11, 2007) indicates that interested parties were prejudiced by the inadequacy of the FNPR. During the official comment period, some commenters noted that their submission would be limited because the FNPR makes no proposals and suggests no options. Comments of UCC et al, MB Docket No. 06-121 at 60 (Oct. 23, 2006) ( 10/23/06 UCC Comments ). Indeed, in an 87-page submission, there was only one paragraph on how a relaxed approach to cross-ownership might work if the FCC eliminated the existing ban, but over 11 pages discussing data on the benefits of retaining a ban and several more pages regarding closing loopholes in the ban. 10/23/06 UCC Comments at 61-74. These comments, like many others, were largely limited to discussing whether the ban should be retained or eliminated. See, e.g., Comments of Bonneville International Corp., MB Docket No. 06-121 at 15 (Oct. 23, 2006) (arguing that the ban should be eliminated); Comments of Belo Corp., MB Docket No. 06-121 at 9-10 (Oct. 23, 2006) (same); Comments of AFL-CIO, MB Docket No. 06-121 at 57 (Oct. 23, 2006) (urging retention of the ban); Comments of American Federation of Radio and Television Artists, MB Docket No. 06-121 at 20-22 (Oct. 23, 2006) (same). This occurred, we suspect, in large measure because a discussion of the actual issues involved  including the factors, presumptions, and exceptions the FCC was considering  was impossible based on the sparse FNPR. In contrast, responses to Chairman Martin's Op-Ed/Press Release began to raise for the first time substantive issues with his new approach to cross-ownership. For example, the response submitted by Consumers Union, Consumer Federation of America and Free Press on December 11, 2007 (12/11/07 Response) began to discuss the following issues, among others, that had not been noticed in the FNPR: the eight-voices test and considerations regarding how it should be employed in a newspaper/broadcast cross-ownership rule; options for how market concentration should be measured if it is to be used as a factor in allowing mergers (which they argue is a new metric that had to be noticed under Prometheus I and was still too vague in the Op-Ed/Press Release for a meaningful response); the implications of the distinction between increased local news on a particular station (or merged entity) and increased local news production in the overall market (which they argue should be the appropriate level of analysis); and other perceived ambiguities in Chairman Martin's proposal that they argued could change the effects of the rule considerably depending on how various terms are defined and how the factors and presumptions work together. 12/11/07 Response at 12-39. Regardless whether the FCC eventually rejected the views expressed in those responses (as it would have been free to do after considering them fully and with plausible reasoning after adequate notice), they merit consideration in a rulemaking of great public concern. The APA requires that the public have a meaningful opportunity to submit data and written analysis regarding a proposed rulemaking. 5 U.S.C. § 553(c). Yet, commenters did not have sufficient time to do so after the Op-Ed/Press Release. The Chairman gave only 28 days for response, not the usual 90 days. As Consumers Union, Consumer Federation of America, and Free Press stated, [s]ince the time frame allowed for a response to the Chairman's off-the-cuff proposal was short, we rely primarily on the evidence already in the record. 12/11/07 Response at 17. After the FCC began to formulate an approach to this important and complex rule, the public was entitled to a new opportunity to comment in which commenters would [] have their first occasion to offer new and different criticisms which the Agency might find convincing. BASF Wyandotte Corp. v. Costle, 598 F.2d 637, 642 (1st Cir.1979); see also Natural Res. Def. Council, 279 F.3d at 1186. In addition, the FCC had an obligation to remain open-minded about the issues raised and engage with the substantive responses submitted. Rural Cellular Ass'n, 588 F.3d at 1101 (in order to satisfy [the APA], an agency must ... remain sufficiently open-minded); McLouth Steel Products, 838 F.2d at 1325. The timeline reveals, however, that the Commission could not have done so. Two weeks before the Chairman's response period closed, and before most of the responses were received, a draft of the order was circulated internally. The final vote occurred within a week of the response deadline. This is not the agency engagement the APA contemplates. In this context, we have little choice but to conclude that the FCC did not, through the FNPR, fulfill its obligation to make its views known to the public in a concrete and focused form so as to make criticism or formulation of alternatives possible. Home Box Office, 567 F.2d at 36. The two sentences in paragraph 32 of the FNPR are simply too general and open-ended to have fairly apprised the public of the Commission's new approach to cross-ownership. Criticism and the formulation of alternative options only began to be possible after the Chairman's Op-Ed/Press Release, and there is no dispute those documents did not satisfy the APA's requirements. For these reasons, we vacate and remand the NBCO rule for failure to comply with the APA's notice and comment requirements. [25] We expect the Commission to comply with this remand in the context of its ongoing 2010 Quadrennial Review. [26]