“Although it did ostensibly comply with our prior requirement to consider this issue on remand, its analysis is so insubstantial that we cannot say it provides a reliable foundation for the Commission’s conclusions,” the judges wrote in their decision.

In a 3-2 party-line vote in 2017, the FCC eliminated a ban on the ownership of a TV station and newspaper in the same market. It also eased rules that required two merging stations to show that, after their combination, at least eight independently owned outlets remained in that market. The FCC also said that it would review, on a case-by-case basis, whether to allow a combination of two of the top four stations in a market.

“The FCC must now do the job it’s long refused to do: properly weigh all of the evidence showing the impact of media consolidation on local communities,” said Jessica J. Gonzalez, VP Strategy and senior counsel at Free Press, a public interest group that was among the plaintiffs challenging the FCC’s actions. “It’s time we had real data on the agency’s decades-long neglect of ownership diversity, and then policies designed to fix that problem for real.”

Andrew Schwartzman, senior counselor for the Benton Institute for Broadband and Society, said, “At first glance, this is a huge victory for the listening and viewing public. The Court of Appeals has found that the FCC has yet again failed to assess how changing its ownership limits affects people of color and women. Diverse ownership benefits everyone, and rejection of the FCC’s deregulation is a small step in restoring a system that promotes such diversity.”

Other plaintiffs included Common Cause, the Communications Workers of America, the Media Mobilizing Project, the Prometheus Radio Project and the United Church of Christ Office of Communication, as well as attorneys from the Georgetown Law Institute of Public Representation.

FCC chairman Ajit Pai indicated that the agency will seek further review.

He noted that the Third Circuit has rejected previous attempts to revise media ownership rules. This was the fourth time that the FCC’s proposed changes to media ownership rules have been challenged over the past 15 years.

“It’s become quite clear that there is no evidence or reasoning—newspapers going out of business, broadcast radio struggling, broadcast TV facing stiffer competition than ever—that will persuade them to change their minds,” he said in a statement.

Dennis Wharton, a spokesman for the National Association of Broadcasters, said, “The media marketplace has undergone massive changes over the past few decade, let alone since 2004. We strongly encourage the FCC to appeal this misguided decision so that broadcasters can compete on an even playing field with tech giants and pay TV conglomerates.”

Congress mandates that the FCC review its media ownership rules every four years.