Rodgers, Cruz Seek FCC IG Probe on Standard/Tegna HDO on Bias Grounds

House Commerce Committee Chair Cathy McMorris Rodgers, R-Wash., and Senate Commerce Committee ranking member Ted Cruz, R-Texas, asked the FCC’s Office of Inspector General Tuesday to “investigate Chairwoman Jessica Rosenworcel’s unprecedented actions against” the proposed Standard General/Tegna deal, including the Media Bureau’s February hearing designation order seen as a de facto denial of the transaction (see 2302240068). Standard, Tegna and many advocates for their deal again asked for an FCC vote on the matter, holding ex parte meetings with Republican Commissioners Brendan Carr and Nathan Simington (see 2305120056).

“No less than five aspects of” the Media Bureau’s referral to the ALJ “and the circumstances surrounding it suggest that it was motivated by a biased desire to defeat” Standard/Tegna, Cruz and Rodgers said in a letter to acting FCC IG Sharon Diskin. Those factors “strongly suggest that the true reason underlying” FCC actions on the deal “was a biased desire to prevent” it “from moving forward.” If “that is true, then the FCC is serving as a partisan cudgel, rather than fulfilling its mission to ensure a robust and competitive market,” the lawmakers said. The FCC didn’t comment.

Cruz and Rodgers claim Rosenworcel “refused to respond to reasonable congressional inquiries" about Standard/Tegna. In an April letter to Rosenworcel, both raised concerns about the FCC’s actions (see 2304050082). Her response “failed” to answer “most of the questions, claiming that she was prevented by pending legal matters that rendered her selectively speechless in the face of congressional oversight,” the lawmakers said. Rosenworcel referred to language in the HDO, the FCC’s responses to a legal challenge in the U.S. Court of Appeals for the D.C. Circuit (see 2304210058) and other existing documents.

Rosenworcel “refused to engage with” Standard and Tegna before the Media Bureau issued the HDO and FCC officials “repeatedly informed Standard General … they would present the applicants with any concerns, allowing the applicants time to address them,” Cruz and Rodgers said. “Yet after the DOJ completed its review without mounting any challenges, the FCC went radio silent: reportedly, in the three months prior to issuing the HDO, the Media Bureau either declined or ignored Standard General’s sixteen attempts to engage with it.” The lawmakers claim the FCC had “at least eight meetings” with deal opponents during that period.

Referring “such a large transaction to an ALJ without a Commission-level vote is itself extraordinary,” Cruz and Rodgers said. “Neither of the FCC’s two justifications for doing so … has ever before been asserted as a basis for blocking a broadcast license transfer. Moreover, the Commission’s own internal standards limit the Media Bureau from taking such novel action on delegated authority.” The HDO “conveniently extends the FCC’s review beyond” Standard/Tegna’s “15-month acquisition window,” the lawmakers said: “Had the FCC processed the” transaction on “the same timeline as all other comparable transactions … it would have completed its review in less than six months, well within the acquisition window.”

FCC staff “provided incorrect information regarding the process by which the ALJ designation may be reversed,” Cruz and Rodgers said. Rosenworcel’s aides previously told Senate Commerce staff “there was no mechanism for reversing the HDO or bringing the matter back before the full FCC for a decision. That statement was misleading at best: at least two FCC rules permit immediate reversal of an HDO released under delegated authority and a chairman can bring the HDO up for a vote at any time.”

An OIG investigation isn't something a sitting FCC chair can ignore and is an escalation over typical congressional oversight, said former FCC Chairman Mark Fowler in an interview. Fowler publicly condemned the agency’s handling of Standard/Tegna in March. “The more I learn about it, the more I think it should be called the Federal Corruption Commission,” Fowler said. The FCC declined to comment on Fowler's remarks.

A potentially monthslong probe is unlikely to affect the fate of the deal, which is expected to break up after financing runs out next week. Democratic lawmakers sought a similar investigation of then-Chairman Ajit Pai’s handling of the Sinclair/Tribune deal in November 2017. An OIG report on the matter wasn’t issued until August 2018, and exonerated Pai (see 1802150031). Challenges brought by the Standard/Tegna broadcasters in the U.S. Court of Appeals for the D.C. Circuit raised many similar issues to Cruz’s letter, but the court ruled twice in the FCC’s favor (see 2304210058).