Key Points:

• An appeals court has determined the FCC lacked evidence to justify limiting same-market ownership of top-four rated TV stations.
• The judges ruled that outdated data undermined FCC claims on local news production and network affiliation.
• The court gave the FCC 90 days to respond before vacated rules expire, pressuring the agency’s delayed review.
• The NAB welcomed the ruling but criticized the court for not overturning radio ownership restrictions.

The U.S. Court of Appeals for the Eighth Circuit on Wednesday issued a mixed ruling on a report delivered by the Federal Communications Commission (FCC) two years ago that affirmed certain ownership restrictions for broadcast radio and TV stations while overturning a key regulation regarding duopolies in most markets.

In the decision on Wednesday, the appellate court sided with the FCC in retaining certain radio and TV station ownership limits but vacated parts of the “Local Television Ownership Rule” that limited how many TV stations an individual broadcaster may directly own in a single market.

The rule largely prohibited broadcasters from owning two or more of the “top four” rated TV stations in a market unless they obtained a waiver from the FCC. Congress requires the FCC to review that rule and others regarding broadcast TV and radio ownership every four years — a deadline that the FCC has repeatedly missed over the past decade.

The 2023 report was actually linked to the agency’s statutory requirement to evaluate its ownership rules in 2018. The National Association of Broadcasters and a handful of broadcast companies sued the agency to force the report. The FCC approved the report by a 3-2 vote that was cast along party lines.

In approving the report, the FCC defended the rule’s continuation and expanded the methodology for defining what consists of a “top four” station to include low-power stations and multicast streams. On Wednesday, the appellate court said the FCC lacked justification to expand the rule.

“The FCC’s justifications for the Top-Four Prohibition run counter to the evidence before the agency,” the panel wrote. Broadcasters had submitted data showing that in many markets, the leading station’s audience share far exceeds the combined total of its next three competitors, undercutting claims that top-four combinations reduce diversity or harm competition.

The court also rejected the FCC’s arguments that top-four stations are the primary producers of local news and the exclusive affiliates of major networks. The panel said the agency relied on outdated research and failed to provide sufficient empirical support.

Additionally, the court vacated a 2023 revision that prohibited broadcasters from acquiring second top-four network affiliations via multicast streams or low-power stations—closing what the Commission described as “loopholes.” The court ruled that the FCC’s reasoning was insufficient and potentially stifled innovation, especially in small and mid-sized markets.

The Eighth Circuit gave the FCC 90 days to respond before the vacated provisions formally expire, setting the stage for potential agency action under its ongoing 2022 quadrennial review, which is also late.

In a statement, NAB CEO Curtis LeGeyt praised the court’s decision, calling the FCC’s rules under the 2023 report “arbitrary and outdated.”

“This is a major step forward for local television broadcasters seeking to compete and thrive in a vastly transformed media marketplace,” LeGeyt said.

But the NAB is not thrilled with the entirety of the court’s decision, feeling that the judges did not go far enough in vacating other ownership rules that apply to radio stations.

“We are disappointed that the court stopped short of addressing the decades-old radio ownership restrictions that defy economic reality and weaken broadcasters’ ability to compete, invest in local journalism and serve their communities,” LeGeyt said.

Ultimately, the court’s decision on all points may not matter, as FCC Chairman Brendan Carr has signaled his interest in updating the agency’s ownership rules with an eye toward deregulation. The NAB has petitioned Carr and the FCC to eliminate broadcast radio and TV ownership rules entirely.

“Fortunately, FCC Chairman Brendan Carr has long been a champion for empowering local stations, and we look forward to working with this FCC to modernize its local radio ownership rules and ensure local broadcasters can thrive in the communities they serve across the nation,” LeGeyt said.

The court’s decision is expected to accelerate the FCC’s review process and could prompt new rulemaking with significant implications for broadcast consolidation and competition across local markets.

The full order from the Eighth Circuit Court of Appeals is available to view by clicking or tapping here.