Hours after announcing the approval of Skydance‘s merger with Paramount, FCC Chairman Brendan Carr touted the company’s commitment to “addressing bias & restoring fact-based reporting” at CBS News, among other things.
“These changes would represent an important step towards earning back Americans’ trust,” Carr wrote on X Thursday evening.
Then Carr also added, “Will be watching.”
In the aftermath of the merger’s approval, there has been plenty of consternation, angst and even anger as to how it all went down, from Skydance’s agreement to settle a Donald Trump lawsuit, to the company’s commitments that impact the CBS news division, to the power of the FCC to use its authority over mergers to extract corporate commitments.
“Tragic,” said former FCC chairman Tom Wheeler, who served in the second Obama term, adding that what Carr is doing is the “coercive use of policy to achieve political goals.”
In its order approving the merger, the FCC noted that Skydance made a commitment to ensuring that CBS’ “news and entertainment programming embodies a diversity of viewpoints across the political and ideological spectrum and that CBS’s reporting is fair, unbiased, and fact-based.” It also agreed to put in place an ombudsman who will receive complaints of bias.
While Skydance said that the commitments were voluntary, because they were included in the FCC order, they have legal heft, according to Wheeler and other communications law experts, albeit there are doubts as to the FCC’s ability to enforce them.
The FCC reviews mergers to determine whether it was in the “public interest.” That term can have a number of meanings, and even though Carr has suggested a proceeding to define it, that hasn’t happened.
“He hasn’t and won’t because it is the vagueness that creates the power. It becomes how the enforcer defines it,” Wheeler said.
He added, “It is the broad vague terminology that anyone can interpret for their own purposes, and that is where we are.”
At a Multicultural Media, Telecom and Internet Council event on Friday, former FCC Commissioner Mignon Clyburn, who served as acting chair, said that Carr, in reviewing the transaction and conducting other investigations of media companies, has abandoned the agency’s “traditional role.” “When you look out over the 90 year history, this has been unprecedented,” she said.
Reed Hundt, who served as FCC chair under Bill Clinton, said that “in my mind, the fundamental question is, should there be any public interest standard at all? It is a way for any commissioner to pressure a license holder in the media realm…It shouldn’t be a weapon that anybody could use. It should be a guideline for the industry that can be followed.”
Former commissioner Michael O’Rielly, who served under the Obama and first Trump administrations, said that the use of the public interest standard to wield influence over companies and transactions has been “a long time coming.”
He pointed to the FCC review of Standard General’s proposed merger with station group Tegna. FCC chair Jessica Rosenworcel, an appointee of President Joe Biden, sent the transaction to an administrative law judge. With the delay, the merger was eventually scrapped in 2023. Rosenworcel cited concerns over the merger raising prices or leading to a loss of jobs; Standard General claimed that congressional Democrats, including then-House Speaker Nancy Pelosi, were putting “improper pressure” on the FCC.
A difference from Tegna-Standard General, though, is Trump and his lawsuit. He sued CBS last fall over the way that 60 Minutes edited an interview with Kamala Harris. Even though Paramount Global’s attorneys previously called the lawsuit meritless, as did other legal experts, they agreed to settle for $16 million.
Some Democratic lawmakers, including Sen. Elizabeth Warren (D-MA) and Rep. Frank Pallone (D-NJ) are vowing investigations of the companies. Warren and other Democrats have raised the issue of whether anti-bribery laws were violated.
As Carr points to Skydance’s commitments as a victory in his and Trump’s efforts over mainstream media “gatekeepers,” the question is what tools they would have to actually have should there be a complaint.
Andrew Jay Schwartzman, senior counselor at the Benton Institute for Broadband and Society, said that while Skydance is “obligated to comply” with the commitments, “The problem is that it is almost impossible to enforce them.”
The primary avenue for complaints would be when Skydance’s broadcast licenses come up renewal, but those don’t come up until 2028, and it takes months to review a contested application, putting it toward the end of the Trump term, Schwartzman noted.
He added that “the legal standard for revocation is so high that the FCC never even tries, except when a mom and pop station goes dark and they want to free up the spectrum for someone else.”
Meanwhile, a federal appeals court in April cast doubt on the FCC’s ability to impose fines in enforcement actions, although that decision is under appeal.
The FCC also has limited authority when it comes to news programming. In earlier filings, Skydance and Paramount argued that a conservative group’s proposed conditions on the transaction, placing benchmarks on content neutrality, would run afoul of the First Amendment. While the FCC does have a news distortion policy, the agency says its authority is narrow and is limited to instances where a broadcast outlet has “deliberately distorted a factual news report.” And given that the FCC in 1987 did away with its Fairness Doctrine, which mandated that broadcasters provide alternate points of view, courts likely would be skeptical of any effort by the agency to judge whether something is biased or not.
That’s why an FCC chair’s leverage is at the time of a merger review, which is something that has raised concerns over how future transactions will be treated,
Carr “has been effective in winning political victories in the context of merger reviews, but those neither require a full explanation nor a court approval,” Blair Levin, policy adviser to New Street Research who was chief of staff to Hundt, wrote in a research note earlier this week.
He wrote that media outlets now face a “Trump transaction tax and trap,” or “the cost for a transaction approval outside the normal parameters of competition or public interest analysis.”
Levin raised the prospect that with Trump suing The Wall Street Journal and Rupert Murdoch over a Jeffrey Epstein story, the president would likely link that to any Fox Corp. effort to engage in broadcast transactions. The same goes for Comcast and Disney, he wrote. The result is that broadcasters become less attractive to buyers “due to uncertainty and delay,” Levin wrote.
Skydance has suggested that its commitment for an ombudsman is not unprecedented. Its general counsel, Stephanie Kyoko McKinnon, noted that the FCC, in evaluating Comcast’s proposed acquisition of NBCUniversal in 2011, found that an ombudsman was a “mechanism effective in preventing editorial bias in the operation of the NBC broadcast network.”
At the time, the concern was that NBC News maintain its journalistic independence from corporate influence. Previous owner GE had established an ombudsman to “further ensure” that the news division was independent, the FCC noted then, and Comcast offered to retain that role, even though they contended that there was “no legal requirement that they do so.” Citing the ombudsman role, the FCC did not place any news conditions on the transaction other than an agreement to journalistic independence of the news operations.
In an interview with CNBC on Friday, Carr said that “the procedures that we put in place in this deal have lots of precedent,” including the ombudsman role. “We are trying to take a trust but verify perspective here. I think this is going to go a long way in restoring trust in media.”
“That is not what this looks like. This looks a lot like a censor to me,” said Rep. Glenn Ivey (D-MD), said at the Multicultural Media, Telecom and Internet Council event. “…They are using the censorship power to undermine legitimate political disagreement.”
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