On April 1, 2021, the U.S. Supreme Court issued a unanimous opinion in FCC v. Prometheus Radio Project, 141 S.Ct. 1150 (2021), affirming the FCC's deregulation of certain media ownership restrictions. The decision affirms the deference owed to FCC decision making, including its reliance on predictive judgment, in rulemaking proceedings.
In 2017, the Republican-controlled FCC determined that three of its radio, TV, and newspaper media ownership rules were no long necessary to promote competition, localism, and viewpoint diversity. Further, the FCC found insufficient evidence in the record to show that eliminating the rules would cause a decline of ownership of media outlets by minorities or women. The FCC relied largely on its determination that competitive forces in the marketplace – including Internet websites and cable TV programming – rendered the ownership restrictions obsolete and that the rules may, in fact, impair the ability of minority owned outlets to compete.
The issue before the Supreme Court was the degree of deference owed to the FCC's predictive judgment that eliminating the rules would not reduce ownership of media outlets by minorities and women. The Court noted that the FCC had asked for comments on this issue, but that little data and analysis had been filed in the record supporting retention of the rules. While some parties had provided historical data on the issue that they contended supported the rules, the FCC disagreed with that analysis while acknowledging that there were gaps in the record. According to the Court, the FCC's predictive judgment that the rule changes would have minimal effect on minority or women ownership was not arbitrary or capricious in light of the scant evidence presented in the record. As a result, the Court reversed the U.S. Court of Appeals for the Third Circuit, which had held that the FCC must base its predictive judgment on new empirical evidence or in-depth theoretical analysis. The Court instead found the FCC may make a “reasonable predictive judgment based on the evidence it had,” even if it “did not have perfect empirical or statistical data.”
Prometheus is a significant win for the FCC, holding that a reviewing federal court may not overturn FCC decisions under the “arbitrary and capricious” standard of the APA so long as the agency “acted within a zone of reasonableness and, in particular, has reasonably considered the relevant issues and reasonably explained the decision.”