The U.S. Third Circuit Court of Appeals has struck down the FCC’s 2017 changes to the ownership rules.

In a 2-1 decision, the court stated that the FCC “did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities.” Those rule changes included eliminating the newspaper/broadcast cross-ownership rule preventing a company from operating a newspaper and a broadcast outlet in the same market, eliminating the ownership subcaps so a television station no longer counts towards the limit of eight radio stations (maximum of five on each band) that a company can own, the requirement that at least eight independently owned television stations must remain in the market following the combination of two television stations in a market, the ban against common ownership of two top-four rated tv stations in a market to allow waivers on a case-by-case basis, and liminating the JSA Attribution Rule requiring television stations to count a station it sells more than 15% of ad time for under the ownership cap.

With the decision, which can be read here, the FCC will be required to rewrite the rule change should its appeal of the appeal not be granted.

Three FCC commissioners released statements on the decision. Chairman Ajit Pai commented against the decision:

“For more than twenty years, Congress has instructed the Federal Communications Commission to review its media ownership regulations and revise or repeal those rules that are no longer necessary. But for the last fifteen years, a majority of the same Third Circuit panel has taken that authority for themselves, blocking any attempt to modernize these regulations to match the obvious realities of the modern media marketplace. It’s become quite clear that there is no evidence or reasoning—newspapers going out of business, broadcast radio struggling, broadcast TV facing stiffer competition than ever—that will persuade them to change their minds. We intend to seek further review of today’s decision and are optimistic that the views set forth today in Judge Scirica’s well-reasoned opinion ultimately will carry the day.”

Jessica Rosenworcel, who was one of two dissenting voters in 2017 stated:

Media ownership matters because what we see on our screens says so much about who we are as individuals, as communities, and as a nation. But over my objection, the FCC has been busy dismantling the values embedded in its ownership policies. Today, the Third Circuit Court of Appeals agreed. The court rightly sent the FCC’s handiwork back to the agency because the FCC’s analysis was so “insubstantial.” The FCC shouldn’t be in the business of cutting corners when it comes to honoring our long-held values when updating media ownership policies.”

Geoffrey Starks, who joined the FCC after the original vote wrote in favor of the decision as well, while commenting that it should require the FCC to restart the 2018 Quadrennial Review of ownership limits.

“As Judge Ambro wrote in today’s opinion: ‘Here we are again.’ I share the Court’s exasperation and frustration. Four times they’ve told us that we need to do better on our analysis with regard to diversity – and it is time to do so now. For nearly all of the 21st century, the FCC has ignored its statutory obligation to promote diversity in broadcasting. Instead, inexplicably, time and again its efforts seem designed to support greater media consolidation – a goal that is not present in our statute. Today, the Third Circuit rejected the agency’s deregulatory efforts because of a failure to consider the impact of these policy changes on station ownership by women and people of color. Unfortunately, the miniscule number of diverse owners in this country speaks for itself.

“Today’s opinion is clear: the FCC’s approach to setting our media ownership rules needs a dramatic overhaul. We must recommit to our goals of promoting competition, localism, and diversity. We can no longer get by with the bad data and shoddy analysis – problems that have been highlighted far too often by courts and interested observers in recent years. The Court here suggests that ‘new empirical research’ may be required to fully satisfy our rulemaking requirements. I wholeheartedly agree. Needless to say, today’s decision will require us to go back to the drawing board on our underway 2018 Quadrennial Review, which relies upon much of the same analysis as the orders vacated by the Court today.”

The National Association of Broadcasters also came out against the decision with NAB Executive Vice President of Communications Dennis Wharton commenting,

“NAB is disappointed with the appellate court’s 2-1 decision vacating the FCC’s measured decision reforming outdated media ownership rules. It’s shocking that the same panel of judges has supplanted Congress’s and an expert federal agency’s views with its own for more than 15 years.

“The media marketplace has undergone massive changes over the past few decades, let alone since 2004. We strongly encourage the FCC to appeal this misguided decision so that broadcasters can compete on an even playing field with tech giants and pay TV conglomerates.”