By Lorraine Bailey, Courthouse News Service

  (CN) — The Federal Communications Commission has unreasonably delayed updating broadcast rules to promote minority and female ownership, the Third Circuit ruled.

The FCC is obligated to review its broadcast ownership rules every four years, with the aim of limiting consolidation in the industry.

However, the agency's 2010 review is still not complete, and has been rolled over into its 2014 review.

In addition, a successful legal challenge to its 2006 diversity-related rules still has not been resolved by new rulemaking.

In a prior ruling, the Third Circuit ordered the FCC to redefine "eligible entities," a term the agency gives to broadcast owners eligible for certain preferences.

The FCC has a statutory obligation to promote minority and female broadcast ownership, but has sought — and thus far, failed — to find a viable race- and gender-neutral definition.

By using a definition that does not explicitly reference race or gender, the agency seeks to avoid strict scrutiny of its decisions in court and instead trigger the more lenient rational basis review.

The agency currently uses a revenue-based definition for "eligible entities."

The FCC considered a definition based on "overcoming disadvantages," which could include physical disabilities, unequal access to credit or higher education, or exclusion from social associations, as well as race and gender. But it still feared that decisions made under such criteria would be subject to heightened scrutiny.

However, the Third Circuit found no evidence that broadcast companies with lower revenues were significantly more likely to be owned by women or minorities.

Twelve years later, the FCC still has no satisfactory definition to meet its statutory obligation to promote minority and female broadcast owners, the Third Circuit found Wednesday.

"Although courts owe deference to agencies, we also recognize that, '[a]t some point, we must lean forward from the bench to let an agency know, in no uncertain terms, that enough is enough,'" Judge Thomas Ambro said, writing for the three-judge panel. "For the Commission's stalled efforts to promote diversity in the broadcast industry, that time has come."

The Philadelphia-based appeals court said the FCC's delay in meeting its obligation was unreasonable. The court made no effort to guide the agency's decision, only stating that the rulemaking "must be completed."

The panel also ordered the FCC to update a rule dating back to 1975 that prohibits the common ownership of a daily newspaper and a television or radio station in the same market.

The agency determined more than a decade ago that the rule was outdated, but has been unable to come up with a viable alternative, so the old rule remains in effect.

Ambro declined to vacate the rule, saying such a move would be "the administrative law equivalent of burning down the house to roast the pig, and we decline to order it."

However, he warned the FCC to finalize a new rule by the end of the year, or risk burning down the house the next time the parties meet in court.

"This is our third go-round with the commission's broadcast ownership rules and diversity initiatives. Rarely does a trilogy benefit from a sequel," Ambro wrote. "To that end, we are hopeful that our decision here brings this saga to its conclusion. However, we are also mindful of the likelihood of further litigation. As a result, this panel retains jurisdiction over the remanded issues."

To Learn More:

Prometheus Radio Project v. LLC (U.S. Court of Appeals, Third Circuit)

Women Found to Still Be Heavily Underrepresented in Media (by Noel Brinkerhoff and Steve Straehley, AllGov)

Number of Black-Owned Commercial TV Stations Goes from 18 to 0 in 7 Years (by Noel Brinkerhoff, AllGov)