Opinion ID: 688683
Heading Depth: 2
Heading Rank: 3

Heading: Propriety of Granting a Permanent Waiver

Text: 30 Appellants assert that the FCC failed to explain why it deviated from precedent and granted a permanent, rather than a temporary, waiver. See Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C.Cir.1970) (an agency's view of what is in the public interest may change, but an agency changing its course must supply a reasoned analysis indicating that prior policies are being deliberately changed, not casually ignored), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971). They allege that Fox failed to meet its heavy burden of proof to justify a permanent waiver, see News America Publishing, Inc. v. FCC, 844 F.2d 800, 803 n. 4 (D.C.Cir.1988); Health & Medicine Policy Research Group, 807 F.2d at 1042-43, by submitting information showing that a permanent waiver was necessary, rather than merely beneficial, to the Post's continued existence. Moreover, appellants contend that not only does the grant of a permanent waiver to Fox, part of the world's largest media company, effectively eviscerate the long established cross-ownership rule, it violates Congress's direction that no federal funds be used to repeal or reexamine the rule. See Pub.L. No. 102-395, 106 Stat. 11846 (1992). It is also contrary to the public interest, appellants argue, because the Post, under Murdoch, will and has already engaged in anti-competitive behavior by giving undue attention to a program on Fox's TV station. Further, appellants assert that the FCC's decision was arbitrary and capricious because it failed to evaluate the impact of the waiver on the black community by considering appellants' arguments and expert testimony that the New York media market is noncompetitive in its service of minority audiences. See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823-24, 28 L.Ed.2d 136 (1971) (court must determine whether agency's decision was based on consideration of all relevant factors); Weyburn Broadcasting Ltd. Partnership v. FCC, 984 F.2d 1220, 1227-28 (D.C.Cir.1993). 31 The FCC reasoned that granting the waiver would accommodate federal bankruptcy policies without undermining the cross-ownership rule's goals of competition and diversity. See, e.g., Telemundo, Inc. v. FCC, 802 F.2d 513, 518 (D.C.Cir.1986) (FCC should approve the most advantageous sale of a bankrupt's assets if it will not unduly interfere with FCC's mandate to ensure that licenses are used and transferred in accordance with the Communications Act). It further concluded that a permanent, rather than a temporary, waiver was appropriate based on the persuasive business reasons Fox offered showing that a permanent waiver was necessary to its long-term strategy for reviving the Post. For example, without a permanent waiver, Fox would be unable to conclude meaningful negotiations with the Post's labor unions, suppliers, distributors, creditors, and advertisers. Also, Murdoch could not be expected to sustain the huge operating losses and undertake the enormous commitment necessary to revitalize the Post without knowing whether he would ultimately be forced to sell the newspaper or the TV station. Granting a temporary waiver would have been meaningless and would not have achieved the goal of having a viable bidder for the paper, the FCC reasoned, because Murdoch would not pursue his bid for the Post in that circumstance and the bankruptcy court might be left with few, if any, viable offers to consider. Thus, in the FCC's view, granting the waiver helped the debtor, the creditors, and the bankruptcy court by removing uncertainties as to the viability of the primary bidder. 32 The FCC also concluded that a grant of the waiver was unlikely to have a significant impact on the diversity and competition concerns underlying the cross-ownership rule and that it has no authority to base its actions upon the anticipated content of the newspaper. It found that appellants' view of the New York market was not borne out since the record showed that not only is New York's media market uniquely competitive, the Post and Murdoch's TV station have a very small audience and advertising share of it. As for the charge that the Post had already engaged in anticompetitive behavior, the FCC determined that the evidence of this was insufficient since it merely consisted of a three-paragraph article claiming that the Post promoted a program to be aired on Fox's New York station. 33 Despite appellants' assertions, it is not clear that the FCC actually changed course in granting Fox a permanent waiver. Since the promulgation of the cross-ownership rule, the FCC has provided for waiver in exceptional circumstances, National Citizens Committee for Broadcasting, 436 U.S. at 786 n. 9, 98 S.Ct. at 2107 n. 9; Health & Medicine Policy Research Group, 807 F.2d at 1041 n. 4, such as where strict application of the rule would defeat rather than advance the goal of media diversity. News America Publishing, Inc., 844 F.2d at 803. In announcing the cross-ownership rule, the Commission specifically contemplated the possibility of permanent waivers. See Second Report & Order, 50 F.C.C.2d 1046, 1076 n. 24, 1085 (1975). Although the Commission has thus far granted permanent waivers only to preserve existing ownership patterns, see, e.g., Field Communications Corp., 65 F.C.C.2d 959 (1977), it has never ruled out the possibility of granting permanent waivers in other extraordinary circumstances. 1 Indeed, in Washington Star, the Commission did not reject the request for a permanent waiver but merely set it for a hearing to resolve certain issues. The applicant subsequently amended its request to seek instead a temporary waiver, so the FCC never reached the question of whether a permanent waiver would have been justified in those circumstances. See also Field Communications Corp., 65 F.C.C.2d 959 (1977) (Commission granted a permanent waiver of the cross-ownership rule where transaction did not actually create a new ownership pattern and noted that waivers can be appropriate based on the exigencies of the situation). Furthermore, because waivers for extraordinary circumstances have been contemplated since the rule's adoption, the FCC's determination that such circumstances obtain and warrant a waiver does not violate Congress's ban on repealing or reexamining the rule. 34 While appellants claim that Fox failed to submit adequate information to show that a permanent waiver was necessary, the FCC reasonably found that the evidence was sufficient based on Fox's submissions about the need for a long-term business plan for the Post. The FCC did explain in some detail why it granted a permanent waiver in this case, and its conclusion that Fox met the heavy burden for a permanent waiver and that the grant of the permanent waiver is in the public interest, is entitled to substantial judicial deference. See Health & Medicine Policy Research Group, 807 F.2d at 1043. Additionally, the fact that Murdoch previously had a temporary, two-year waiver and the Post floundered when he divested it, lends further support to the FCC's conclusion that a temporary waiver was not adequate. 35 Because a forecast of the direction in which future public interest lies necessarily involves deductions based on the expert knowledge of the agency, in such circumstances complete factual support in the record for the FCC's judgment or prediction is neither possible nor required. National Citizens Comm. for Broadcasting, 436 U.S. at 814, 98 S.Ct. at 2121-22. Furthermore, the FCC properly disregarded arguments about the editorial content of the Post because the application of the cross-ownership rule cannot lawfully be based on a party's political, economic, or social views. See id. at 801, 98 S.Ct. at 2115. Finally, the Commission did consider, but rejected, appellants' evidence of alleged anti-competitive conduct by the Post under Murdoch's control, and any future anti-competitive conduct can be raised and considered in the proceeding to renew the license for Fox's New York station.