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Supreme Court sides with Republicans in dispute over cost of campaign ads

The Supreme Court sided with Republicans Wednesday and gave political parties and their fundraising committees lower rates for broadcast campaign ads.

Over two dissents, the justices granted a fast-track appeal from the Trump administration and the National Republican Congressional Committee and upheld the use of the GOP-friendly rule in the midterm election.

In a brief order, the court said the issue should be left to the Federal Communications Commission.

The outcome has given Republican candidates an advertising edge in the final weeks of the campaign.

Federal law says a “legally qualified candidate” running for election is entitled to a “lower unit charge” for campaign ads in the 60 days prior to an election.

However, on March 30, the FCC, under Republican control, announced that broadcasters must extend the lower rates to political parties and their joint fundraising committees.

The FCC notice did not explain the basis for this change, and it refused to hold a commission hearing to debate the issue.

But the change was seen as benefiting Republicans.

Democratic candidates have raised more money from direct but limited contributions from individuals, while Republicans have raised far more through party committees that are funded by wealthy donors.

The non-partisan Campaign Legal Center said the FCC’s rule change was “contrary to the text and purpose of the federal statute and would effectively grant super PACs an advertising discount.”

Anna Gomez, the lone Democrat on the FCC, issued a statement objecting to the change.

“The American public should not have sweeping election-year rule changes forced on them in the dark, on the eve of the election, without a single opportunity for public input,” she said.

Democratic Senate candidates Sherrod Brown of Ohio, Jon Ossoff of Georgia and Roy Cooper from North Carolina objected to the FCC rule change in April and and asked for a review.

When no action was taken, they filed suit in federal court. They argued the FCC had no authority to change the law that gave only candidates, not fundraising committees, the benefit of the lower ad rates.

Since then, the two sides have gone back and forth in the courts, with both accusing the other of seeking a late change in the rules.

The U.S. 4th Circuit Court of Appeals in Virginia ruled for the Democrats in a pair of 2-1 decisions.

“Suffice to say that any ‘chaos’ is the FCC’s fault, not ours,” Judge Robert B. King, a Clinton appointee, said on Oct. 7. It “has endeavored to create from whole cloth a new rule entirely outside the purview of judicial review.”

But the Supreme Court stepped in twice to overturn the 4th Circuit and rule for the Republicans.

In a Sept. 4 order, the court said in an unsigned order the 4th Circuit intervened too soon. The law “makes clear that an aggrieved party must wait for the Commission to resolve its application for review by order before filing a petition for judicial review.”

Only Justice Ketanji Brown Jackson dissented.

In September, the FCC did nothing other than to ask for public comments on its March rule change.

Frustrated with the delay, the 4th Circuit issued a second order requiring the FCC to act by Oct. 9.

Last week, in response to an appeal from Solicitor Gen. D. John Sauer, Chief Justice John G. Roberts put the 4th Circuit order on hold.

On Wednesday, the full court said the 4th Circuit Court should have left the issue to the FCC.

“Our system of separation of powers does not allow the judiciary to meddle in the workings of a coordinate branch of the government in this manner,” the court said an unsigned opinion.

In dissent, Jackson and Justice Sonia Sotomayor voted to deny the administration’s appeal.

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ABC says it’s second-guessing news coverage decisions due to FCC’s TV license review

Editorial decisions at ABC News are being influenced by the Federal Communications Commission’s early license review of its TV stations, the network’s legal team told a U.S. District Court judge Tuesday.

The Disney-owned network is seeking a restraining order to stop the FCC’s action, which its attorneys said was unprecedented and an attempt by the Trump White House to chill free speech.

Disney attorney Beth Wilkinson said the FCC’s action is having an impact on ABC News coverage in the weeks leading up to the midterm elections, as the network tries to avoid further action from the agency that regulates over-the-air broadcast TV licenses.

“We are making different editorial decisions,” Wilkinson said during the court hearing in Washington. “We are watching everything that we do because every time we do something — even not broadcasting this presidential speech — brings out the anger in the administration and the retaliation from the agency.”

Wilkinson was referring to President Trump’s frustration over ABC’s decision not to air his July 16 speech about voter fraud. The network chose to run it on its news streaming platform. FCC Chairman Brendan Carr criticized the move and said it would be considered in the license renewal process.

Wilkinson cited Carr’s complaint as an example of how the review is being driven by Trump’s unhappiness over the network’s coverage across its news programs, its late-night show “Jimmy Kimmel Live” and its topical daytime chat show “The View.” The FCC’s action, she said, is the administration “retaliating with their government power against ABC’s right to protected speech.”

Assistant U.S. Atty. Dimitar P. Georgiev argued for the FCC that ABC is trying to avoid the commission’s regulatory process by taking the case to the U.S. District Court. Georgiev said the license renewal was initiated because of a dispute over documents in the commission’s investigation into alleged discriminatory hiring practices at Disney.

Judge Loren L. AliKhan did not issue a ruling. She asked the FCC to provide further documentation on its claim. Disney will have until Oct. 14 to respond.

Trump has frequently threatened to have TV station licenses pulled when he believes he is treated unfairly on news and talk programs. He has also successfully extracted multimillion-dollar settlements from CBS and ABC after suing the networks over news content he said had treated him unfairly.

ABC is the first network to take the FCC to court over the threats.

Wilkinson noted that Carr said during a visit to Trump’s Mar-a-Lago Club in Palm Beach, Fla., that “broadcasters that are running hoaxes and news distortions, also known as fake news, have a chance now to correct course before their license renewals come up.” 


The licenses for eight ABC-owned TV stations, including KABC in Los Angeles, were originally scheduled for renewal between 2028 and 2031.

Carr has said ABC’s daily talk show “The View” should not be exempt from the FCC’s equal time rule that requires broadcasters to bring on opposing candidates to provide balanced coverage. Wilkinson noted that the program — which was given the exemption in 2002 — has avoided using clips of politicians during its popular “Hot Topics” segment at the top of the program.

Carr also said earlier this year that stations could be subject to discipline if they “don’t operate in the public interest” after criticisms from the White House about coverage of the Iran war.

Carr called for the ABC license review in April, days after Kimmel delivered gags about the White House Correspondents’ Assn. dinner attended by Trump for the first time as president and described First Lady Melania Trump as having a “glow like an expectant widow.”

The satirical remarks drew criticism after a man later breached security at the Washington Hilton event while armed with a shotgun, handgun and several knives. The dinner was cut short and rescheduled.

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FCC approves foreign owners for a merged Paramount-Warner Bros.

The Federal Communications Commission on Thursday granted Paramount Skydance’s request to allow Middle Eastern royal families to hold a substantial stake in a merged Paramount-Warner Bros. Discovery.

The sovereign wealth funds of Saudi Arabia, Qatar and Abu Dhabi are slated to indirectly own nearly 50% of the equity in David Ellison’s proposed mega-studio, Paramount-Warner Bros. That will give them a hefty stake in CBS, CNN, Comedy Central, HBO and two historic Hollywood film studios.

Ellison needed FCC approval because the deal will change the ownership structure of CBS.

As part of the Communications Act of 1934, Congress placed restrictions on foreign ownership of broadcast outlets because of concerns about national security. Current rules prevent foreign investors from owning more than 25% of a company that holds a U.S. broadcast license — unless the FCC determines that foreign ownership would serve a public interest.

CBS owns more than two dozen TV stations with FCC licenses, including KCBS-TV Channel 2 and KCAL-TV Channel 9 in Los Angeles.

“Upon review of [Paramount’s] Petition and consideration of the record of this proceeding, we find that the public interest would be served by granting the Petition,” FCC said in its ruling, noting that Paramount has said the proposed ownership changes would “not result in a transfer of control of Paramount.”

Instead, “Ellison family will retain a majority of the voting interests and control of Paramount,” the FCC said.

FCC Chairman Brendan Carr, an appointee of President Trump, has been supportive of Paramount’s takeover of Warner Bros. Trump and his lieutenants, including Defense Secretary Pete Hegseth, have been cheering for Ellison to control CNN, a Warner property.

Anna M. Gomez, the lone Democratic FCC commissioner, slammed the agency’s decision, saying it “just let some of the most repressive governments in the world indirectly control nearly all of a combined Paramount-Warner Bros.”

“An investment this large in one of America’s biggest media companies doesn’t just buy equity, it secures influence over what gets said and what gets made,” Gomez said. “That’s why I called for this new and novel issue to go to a full commission vote given what’s at stake. Instead, the FCC snuck this ruling out as a staff-level decision, with no public vote and no accountability for a call of this magnitude.”

Ellison’s billionaire father, Oracle co-founder Larry Ellison, in February agreed to personally guarantee the $47 billion in equity needed to buy out Warner Bros. Discovery’s existing shareholders for $81 billion. Ellison and longtime Skydance investor, RedBird Capital Partners, then entered into agreements to assign some of their purchase rights to the sovereign wealth funds.

The funds plan to invest $24 billion in the Paramount-Warner deal. Saudi Arabia’s Public Investment Fund is set to contribute $10 billion while the Qatar Investment Authority and Abu Dhabi’s L’imad Holding Co. will separately add $7 billion.

Paramount has separately lined up debt financiers to help pull off the leveraged buyout of Warner Bros. Discovery — Hollywood’s biggest merger in decades. The deal has been stalled by an antitrust challenge brought by California Atty. Gen. Rob Bonta and 11 other Democratic attorneys general, representing such states as New York, New Jersey, Colorado, Nevada and Oregon.

The foreign ownership rule was adopted nearly a century ago because members of Congress wanted to make sure that hostile foreign players were barred from using U.S. airwaves to spread propaganda, particularly in times of war.

“We appreciate the FCC’s careful review and are pleased that it has granted Paramount’s petition,” Paramount said in a statement, adding the Trump administration’s Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector had separately recommended approval of the deal, subject to several conditions to protect the data of the company’s U.S. based consumers.

Paramount said that, once the deal closes, the Ellison family and RedBird would “collectively hold the largest equity stake in the combined company and 100% of the voting shares, with no other equity participant having any governance rights.”

Paramount has two classes of stock — an ownership structure that will be replicated in a merged Paramount-Warner Bros.

The Ellison family owns 77.5% of Paramount’s voting Class A common stock. RedBird indirectly holds the remaining 22.5% of the Class A shares. The Ellison family separately has 40% of the non-voting Class B shares.

“At a time when the media industry faces unprecedented competitive pressure from dominant big tech companies, a combined Paramount-WBD will have the scale and resources necessary to compete, invest, innovate, and deliver premium content to audiences worldwide,” Paramount said in its statement.

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