Tom DeLay helped create TV ownership cap—he says Trump FCC has no authority to repeal it

Congress acted again after the FCC decided in 2003 to raise the limit from 35 percent to 45 percent. The FCC’s 2003 change was controversial, and Congress overrode the FCC decision in January 2004 with a provision inserted into the Consolidated Appropriations Act of 2004. Specifically, Congress amended the Telecommunications Act to require the FCC to enforce a cap of 39 percent. The law change also said the FCC cannot repeal or modify the cap during its quadrennial reviews of media rules. Both Democratic and Republican FCC leaders have asserted authority to change the cap. Under Democratic Chairman Tom Wheeler, the Obama-era FCC concluded in 2016 that “the Commission has the authority to modify the national audience reach cap” as long as it doesn’t do so during the quadrennial review. The Wheeler FCC ended up repealing a rule related to the cap, but that decision was reversed by the FCC the next year, during the first Trump administration. The 39 percent cap has thus survived for over two decades, but Carr scheduled an FCC vote to repeal the 39 percent limit and replace it with a “case-by-case review” of each proposed merger. This would make it easier for the FCC to pick and choose which station groups get to expand, potentially helping Carr achieve his goal of securing more positive news coverage for President Trump. Carr already seems to be using the case-by-case approach even though his FCC hasn’t formally adopted it yet. In March, the FCC granted a waiver letting Nexstar Media Group buy Tegna in a deal that let it reach over half of TV households. The Wheeler FCC issued similar legal conclusions about the FCC’s authority to change the cap, but that doesn’t necessarily mean Carr would beat challenges in court. Carr would be the first FCC chairman to test whether the agency can eliminate the cap entirely. He may have to show that the FCC has explicit authority to remove the cap in light of a 2024 Supreme Court ruling that sharply narrowed the leeway federal agencies are given to interpret ambiguous laws. DeLay said he has “sympathy for Carr’s objectives” and would have preferred to give the FCC more authority over the cap during negotiations with Stevens. “In fact, I would have happily given the FCC authority to review the cap in 2004, but Stevens would never have gone along with that,” DeLay wrote. “It was his intention to rein in the FCC. My end of the deal was that the cap would be raised to 39 percent, and in return, Stevens received certainty that the FCC wouldn’t and couldn’t raise it higher.” Stevens died in 2010. “If you had told me in 2004 that I would one day find myself defending Stevens’s side of the argument, I would have found it ironic,” DeLay wrote. “But I was in the room when the deal was struck, and today, I feel compelled to uphold my end of the bargain after Ted’s passing.” DeLay quoted former FCC Commissioner Mike O’Rielly, a Republican, as saying that the 39 percent cap is “a statute, not a suggestion.” O’Rielly opposed changing the cap during both Democratic and Republican administrations. He said at a December 2017 FCC meeting, “I do not believe that the Commission has the authority to modify the national audience reach cap… it is up to Congress to make that determination, not the commission. This was the clear intent of Congress when it partially rolled back the FCC’s proposed cap increase of 45 percent in 2004.” When O’Rielly said that, the FCC under Republican Chairman Ajit Pai was voting to begin a review of the cap and the UHF discount, a provision specifying that only half of the households reached by a UHF station are counted toward the cap. O’Rielly said the FCC had no authority to change the 39 percent cap or to eliminate the UHF discount. The UHF discount was eliminated just a year earlier by the Wheeler FCC, with dissents from Pai and O’Rielly. After Pai became chairman, he led a vote to reverse Wheeler’s UHF decision but also called for a review of the 39 percent cap and the UHF discount. After all that wrangling, the Pai FCC left both provisions in place. Eliminating the UHF discount would have effectively made the national TV ownership rule stricter. The Wheeler FCC argued that the transition to digital television eliminated UHF’s technical disadvantage and that maintaining the carveout acted “only to undermine the national audience reach cap.” With the discount in place, a company that only owns UHF stations would be able to reach 78 percent of US households, the Wheeler FCC said. But while the 1996 Telecommunications Act did not explicitly prohibit future changes to the cap, the 2004 law shaped by the DeLay/Stevens compromise went further. It ordered the FCC to set the cap at a specific level and added language restricting the FCC’s ability to change the cap. As DeLay noted, the law forbids the FCC from changing the cap during its quadrennial media review. But the Carr proposal claims the FCC can change the cap at any other time. The law “simply separates the Commission’s decisions to review the national cap from the statutorily mandated review of other media ownership rules that are to occur every four years,” the Carr FCC says. To support this view, Carr quotes a sentence from a 2004 3rd Circuit appeals court ruling in which judges said the FCC can issue rule changes “outside the context of” the quadrennial review. One problem for Carr is that the quoted portion of the court ruling refers to “defining the UHF discount,” not to setting the cap at 39 percent or some other number. But Carr found backing in the Wheeler FCC’s 2016 order, which said the FCC “retains authority under the Communications Act to review any aspect of the national audience reach cap; it simply is not required to do so as part of the quadrennial review.” Although the Wheeler FCC was trying to strengthen the 39 percent cap by eliminating the exception for UHF stations, it argued that “no statute bars the Commission from revisiting the cap or the UHF discount,” indicating it had power to change both if it wished. Another potential problem for Carr is that Congress’s 2004 law change said the FCC cannot forbear from applying telecom regulations to TV station owners that exceed the 39 percent limit. This limiting language did not appear in the 1996 law. Carr’s proposal claims the forbearance language “does not preclude the Commission from altering the cap itself” and that the FCC’s “ability to forbear from enforcement of its rules is distinct from its power to alter or eliminate those rules.” The Carr proposal also said Congress’s instruction about regulatory forbearance was unclear because the FCC’s “forbearance authority does not apply to the regulation of broadcasters under Title III of the Communications Act.” In March, the Carr FCC used the same arguments when it granted the waiver letting Nexstar Media Group buy Tegna. It claimed it could issue a waiver even though the 39 percent cap was still in place, saying Congress instructed it to set that cap “through its rulemaking authority, which necessarily leaves the agency with the discretion to modify or waive its rules.” Nexstar completed its acquisition of Tegna, but a federal judge ordered the companies to stop integrating their assets and operations. The post-merger integration remains on hold while an antitrust lawsuit filed by DirecTV proceeds. The repeal plan is likely to pass 2–1 this week, with Carr and Republican Commissioner Olivia Trusty supporting it. Anna Gomez, the only Democrat on the FCC, has repeatedly said the FCC has no authority to abolish the cap. “The 39 percent cap is not an FCC rule that the commission can change on its own,” and repealing it is an “unlawful effort to hand control of the public airwaves to billionaire buddies of this administration,” Gomez said last month. A legal challenge could come from TV providers that have complained about the ability of national TV networks and broadcasters to demand higher fees to carry their channels. The American Television Alliance—a group whose members include CenturyLink, Charter, Dish, DirecTV, Verizon, and USTelecom—said after Carr unveiled his plan that “the commission’s attempt to repeal the broadcast ownership cap ignores Congress’s clear instructions… We are confident that reviewing courts will quickly overturn this misguided action.”