Court Disallows FCC’s Minority Preference Rules

A federal appeals court has ruled as unconstitutional federal rules that give minorities preference in the purchase of “distressed” radio and television stations.

A panel of the U.S. Court of Appeals for the District of Columbia, in a 2-1 vote Friday, said the Federal Communications Commission’s “distress sale” rules, which allow quick sales at reduced rates of defunct or disenfranchised stations to minorities, violate the equal protection provisions of the Fifth Amendment to the Constitution.

The court remanded to the FCC a 1984 commission decision that denied Alan Shurberg and Shurberg Broadcasting a chance to compete for the purchase of WHCT-TV in Hartford, Conn., from the station’s owner, Faith Center.

The FCC had based its decision on its 1978 policy that allows licenses for bankrupt or disabled stations to be transferred to entities that have a significant minority ownership interest. Such transfers are made without FCC consideration of competing applications.

But the appeals court said the FCC policy did not meet previous Supreme Court tests of minority set-aside programs, including one that preferences be given to minorities only after race-neutral efforts to increase minority ownership had failed.

“The distress sale policy is not narrowly tailored to remedy past discrimination,” Judge Laurence H. Silberman said in the majority opinion, “because its effect is unrelated to the need for such a remedy, and it provides no procedures for ensuring that the policy’s beneficiaries have actually suffered from the effects of past discrimination.”

Dissenting Opinion

“There is no indication, moreover, that the FCC sought to employ race-neutral programs to aid minorities before resorting to a racial set-aside,” the court said, adding that the FCC policy also “imposes a heavy burden on innocent minorities by completely depriving them of opportunities to compete for unique television outlets.”

The FCC itself, in a 1987 case involving its “comparative preference” policy of giving special treatment to women seeking FM station licenses, had questioned the validity of that policy and had asked the court to remand the issue to the FCC for further study.

Before the FCC could act to change its policy, Congress in December, 1987, passed, and then-President Reagan signed, an appropriations measure that prohibited the use of funds to study or change the distress sale policy.

In a 43-page dissenting opinion to Friday’s ruling, Chief Judge Patricia M. Wald said the distress sale policy legally worked to ensure diversity in programming and ownership.