Court strikes down FCC’s Top-Four television ownership rule

The U.S. Court of Appeals for the Eighth Circuit delivered a significant victory to television broadcasters Wednesday, vacating the Federal Communications Commission’s rule prohibiting ownership of more than one top-four-rated station in a market while leaving radio ownership restrictions intact.

The St. Louis-based court found the FCC’s justification for retaining the Top-Four Prohibition “arbitrary and capricious” and “unsupported by the record,” marking a rare judicial rebuke of the agency’s media ownership policies.

The ruling stems from challenges to the FCC’s December 2023 order completing its long-delayed 2018 quadrennial review of broadcast ownership rules.

Under the Telecommunications Act of 1996, the FCC must review its broadcast ownership rules every four years to determine whether they remain “necessary in the public interest as the result of competition.” The Commission completed its 2018 review by a 3-2 vote, retaining existing regulations rather than modernizing them to reflect current market conditions.

The three-judge panel determined that the FCC’s rationale for maintaining the television rule contradicted available evidence. The Commission had argued that top-four combinations would result in excessive market concentration, but the court found this assertion “factually questionable,” noting that record evidence showed combinations between third- and fourth-ranked stations would not necessarily have that effect.

The court also rejected the FCC’s claim that the four major broadcast networks are “generally” affiliated with the top-four stations in any market, finding the assertion unsupported by cited sources. The agency’s contention that top-four stations are most likely to originate local news relied on a 22-year-old report citing even older data, which the court deemed insufficient.

The ruling vacates the Top-Four Prohibition but withholds implementation for 90 days, giving the FCC an opportunity to provide adequate justification for retaining the rule. The court also struck down an amendment to “Note 11” that had tightened anti-circumvention measures, ruling the Commission exceeded its statutory authority.

Despite arguments that radio faces intense competition from digital audio platforms, the court upheld the Local Radio Ownership Rule. The panel found that the FCC had adequately considered and rejected arguments that economies of scale justify loosening radio restrictions.

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“NAB is extremely pleased with the Eighth Circuit’s decision to vacate the previous FCC’s arbitrary and outdated top-four prohibition,” said NAB President and CEO Curtis LeGeyt. “This is a major step forward for local television broadcasters seeking to compete and thrive in a vastly transformed media marketplace.”

The decision comes as FCC Chairman Brendan Carr, who dissented from the 2023 order, has signaled support for modernizing ownership rules. Earlier this month, Carr launched a proceeding seeking public comment on eliminating the national television ownership cap that limits broadcasters to reaching no more than 39 percent of U.S. TV households.