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Stolz v. Federal Communications Commission

United States Court of Appeals, District of Columbia Circuit

February 16, 2018

Edward R. Stolz, II, d/b/a Royce International Broadcasting Company, Appellant
v.
Federal Communications Commission, Appellee Entercom Communications Corp. and Entercom License, LLC, Intervenors

          Argued September 11, 2017

         On Appeal From Orders of the Federal Communications Commission

          Dennis J. Kelly argued the cause and filed the briefs for appellant.

          William J. Scher, Counsel, Federal Communications Commission, argued the cause for appellee. With him on the brief were Howard J. Symons, General Counsel at the time the brief was filed, David M. Gossett, Deputy General Counsel, and Richard K. Welch, Deputy Associate General Counsel. Jacob M. Lewis, Associate General Counsel, entered an appearance.

          Michael E. Dash, Jr., Carrie A. Ward, Dennis P. Corbett, and Jessica DeSimone Gyllstrom were on the brief for intervenors Entercom Communications Corp. and Entercom License, LLC, in support of appellee.

          Before: Millett, Circuit Judge, and Edwards and Williams, Senior Circuit Judges.

          OPINION

          Millett, Circuit Judge.

         Edward Stolz agreed to sell a radio station he owned to Entercom Communications Corporation and, upon approval by the Federal Communications Commission ("FCC"), to transfer the station's broadcast license to Entercom. Implementation of the agreement soon broke down, and Stolz and Entercom have spent the ensuing two decades clashing before the FCC and state and federal courts. This long-running dispute should draw closer to a conclusion today as we deny Stolz's appeal and dismiss as moot his central claim challenging Entercom's legal eligibility to acquire the station.

         I

         A

         Congress invested the FCC with exclusive authority to grant, deny, and approve the transfer of broadcast licenses to operate radio stations. 47 U.S.C. §§ 301, 303, 307-310. As a result, when a broadcast station owner wants to transfer ownership of a station to a third party, the FCC must approve the assignment of the station's broadcast license to the new owner. Id. § 310(d). The FCC may approve assignments only "upon finding * * * that the public interest, convenience, and necessity will be served thereby." 47 U.S.C. § 310(d). That public interest includes "promoting diversity of program and service viewpoints" and "preventing undue concentration of economic power." FCC v. National Citizens Committee for Broadcasting, 436 U.S. 775, 780 (1978).

         To that end, the FCC limits the number of radio stations that a single entity can own within a local market. 47 C.F.R. § 73.3555(a). As relevant here, in a market with 45 or more radio stations, a single entity can only be licensed to operate up to "8 commercial radio stations in total and not more than 5 commercial stations in the same service (AM or FM)." Id. § 73.3555(a)(1)(i). In a market that contains 30 to 44 radio stations, a single entity may not hold licenses for "more than 7 commercial radio stations in total and not more than 4 commercial stations in the same service (AM or FM)." Id. § 73.3555(a)(1)(ii).

         In 2002, the FCC completed a comprehensive review of its media ownership rules. See In the Matter of 2002 Biennial Regulatory Review, Report and Order, 18 FCC Rcd. 13620 (2003) ("2002 Order"). Among other things, the 2002 Order retained the FCC's prior numerical limits on radio station ownership, but changed how the FCC would determine the size of a local market, and thus what ownership limits would apply to a given entity within that market. Id. at 13724 ¶ 273-274. Those same rules also apply to the assignment or transfer of broadcast licenses. Id. at 13724 ¶ 273 n.572.

         The 2002 Order included a grandfathering provision to prevent existing license holders from having to "divest their current interests in stations * * * to come into compliance with the new ownership rules." 18 FCC Rcd. at 13808 ¶ 484. The grandfathering provision also established "processing guidelines" to "govern pending and new commercial broadcast applications for the assignment or transfer" of radio licenses "as of the adoption date of this Order." Id. at 13813 ΒΆ 498. Pending assignment applications that had not yet been "act[ed] on" by the "Commission prior to the adoption ...


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