FCC's Tegna Decision Could Trigger Constitutional Challenge

There are definite rumblings inside the Beltway that the current FCC may have teed up a constitutional challenge to the long-standing public-interest standard for determining whether to approve or reject a broadcast merger.

NextTv.com reports the potential flashpoint was the FCC Media Bureau’s decision to designate the StandardGeneral-Tegna merger proposed for a hearing before an administrative law judge, a delay that often is a death knell for deals.

One obstacle to a court challenge based on the designation would be if the parties folded their tents before that hearing, which would mean there was no final Federal Communications Commission decision to challenge.

While the Justice Department or Federal Trade Commission review mergers based on antitrust issues, the Communications Act instructs the commission to go beyond strict competition issues to consider the deal’s impact on “the public interest, convenience and necessity.’

National Association of Broadcasters president Curtis LeGeyt and CEO, reacting to the FCC decision signaled something was definitely wrong with a standard that allows the FCC to extract concessions, whether or not they are within its expertise or mandate.

The FCC’s Media Bureau said it could not conclude that the deal was in the public interest and was designating it for hearing because: ‘(1) the Transactions are structured in a way that is likely to trigger a rate increase harmful to consumers, as a result of contractual clauses that take immediate effect after the consummation of the Transactions, and (2) the Transactions will reduce or impair localism, including whether they will result in labor reductions at local stations.”