Trump Throws His FCC Under The Bus For Pointing Out Sinclair May Have Lied During Its Merger Sales Pitch

from the damn-you-for-doing-your-job dept

So back in 2015 you might recall that Republicans threw a tremendous hissy fit when the then Obama administration surprisingly threw its full support behind Title II classification of ISPs and real net neutrality. It was surprising in large part because Obama's first FCC boss pick, Julius Genachowski, was comically wishy washy, often refusing to take hard positions on much of anything. It was also surprising because Genachowski's replacement, Tom Wheeler, appeared to be the type of person to change their mind after being presented with hard evidence, a notably unfashionable trait in DC these days.

The histrionic claim at the time, you might recall, was that Obama had broken some long-established law by expressing a preference for a direction of FCC policy. This despite the fact that there is no law preventing the White House from doing so, and history is filled with examples of both sides of the aisle doing just that (from George W. Bush urging former FCC Chairman Michael Powell to eliminate media ownership rules, to when Bill Clinton urged former Chairman Reed Hundt to ban hard liquor advertising on TV).

Fast forward to this week when President Trump decided to have a little hissy fit about the FCC's decision to kick the Sinclair Tribune merger over to an administrative law judge, largely because even Ajit Pai's FCC couldn't sign off on some of the logistical nonsense Sinclair was engaged in to try and seal the deal:

So sad and unfair that the FCC wouldn’t approve the Sinclair Broadcast merger with Tribune. This would have been a great and much needed Conservative voice for and of the People. Liberal Fake News NBC and Comcast gets approved, much bigger, but not Sinclair. Disgraceful! — Donald J. Trump (@realDonaldTrump) July 25, 2018

So one, you'll notice that the same folks that threw a hissy fit because of Obama's public support of net neutrality are suddenly nowhere to be found when the shoe's on the other foot (though again, Trump's Tweet is perfectly legal). Two, the FCC didn't block the deal, it simply passed an order passing off review to an administrative law judge. Why? Because, as the FCC's Hearing Designation Order (pdf) argues, Sinclair was engaged in all kinds of bullshit in a bid to fool regulators that the deal would fall under the current media ownership cap designed to protect smaller local news competitors (and quality discourse) from major industry domination.

That included efforts to try and pretend the merger (which would result in Sinclair reaching 72% of homes) would fall under the media ownership cap (which states no single broadcaster can reach any more than 39% of homes) by engaging in bogus broadcast station "divestitures." More specifically, Sinclair proposed a number of what critics say are "sham" transactions that involved "divesting" local broadcasters to shell companies or Sinclair partners still arguably controlled by Sinclair.

Some of these companies had zero experience in broadcasting (Like Steven Fader, CEO of a car dealership), would have nabbed the stations at seriously discounted rates, and there was every indication that Sinclair would either still control these divested stations, or simply buy them back for a song post merger. The distortions and falsehoods were so bad that even Pai, whose allergy to factual data was made glaringly obvious during the net neutrality repeal, was forced to balk, admitting that, as structured, Sinclair's merger pitch likely would have violated Sections 309(a) and 310(d) of the Communications Act of 1934.

Again if you've watched Pai routinely twist reality itself, his forced retreat should give you some idea how badly Sinclair botched its merger approval application. And while the fact that an FCC investigation into potential corruption and cooperation with Sinclair may have also motivated Pai's sense of political self-preservation to kick in, it still wound up being an overall good move, even if potentially for the wrong reasons. Especially if you've had a chance to see the kind of facts-optional nonsense Sinclair routinely forces its local broadcast stations to air in creepy, lobotomized unison.

That said, shoveling merger approval off to an administrative law judge, while sometimes fatal, doesn't guarantee the merger dies. As former FCC boss Tom Wheeler noted this week in a blog post, the administrative hearing could still be used as an "administrative smokescreen," with the broader deal still being approved thanks to a year's worth of efforts by Pai to weaken media ownership rules. Trump's Tweet would appear to be an attempt to pressure the Pai FCC toward approving the remainder of the deal anyway, regardless of how misleading Sinclair's sales pitch has been.

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Filed Under: ajit pai, donald trump, fcc, mergers

Companies: sinclair, sinclair broadcasting