FCC Commissioners Blast Sinclair Settlement as ‘Abdication of Responsibility’

Republican majority finds Sinclair acted in 'good faith' despite record $48 million fine

Sipa USA via AP

Democratic FCC commissioners have blasted the agency’s Republican majority for approving a record $48 million fine against Sinclair Broadcast Group that opponents say allows the broadcast giant to avoid tougher scrutiny of its actions.

Earlier this month, the FCC disclosed an agreement with Sinclair that settles three ongoing investigations into its actions and calls for the company to abide by the terms of a 17-page consent decree that was released Friday.

Sinclair critics say that even with the high fine, the settlement lets Sinclair off the hook easy. The company had been in danger of facing challenges to its right to own broadcast licenses, in light of the conduct that prompted the FCC probes. The FCC vote on whether to approve the fine and settlement with Sinclair was 3-2 down party lines.

The FCC’s formal order goes so far as to assert that Sinclair used a “good faith interpretation” of FCC rules in question in the investigation involving Sinclair’s effort to acquire Tribune Media. That finding was a surprise to Sinclair watchers given FCC chairman Ajit Pai’s remarks on May 6 when news of the settlement was first released.

“Sinclair’s conduct during its attempt to merge with Tribune was completely unacceptable,” Pai said in a statement on May 6. A representative for Pai did not immediately respond to a request for comment.

The formal order released Friday states that Sinclair disclosed additional information during the long probe that demonstrated its effort to comply with FCC rules. The controversy over Sinclair’s handling of its station divestiture plan following the Tribune acquisition spurred the FCC to refer the matter to legal hearing, which forced Sinclair to drop its bid for Tribune.

“Following review of this subsequent information, we find that Sinclair structured its transaction based upon a good faith interpretation of the Commission’s rules and precedent regarding sharing agreements and the requirements for disclosure on the application form,” the FCC stated in the order accompanying the consent decree that was issued Friday.

The order further shields Sinclair from the threat of advocates mounting a challenge to the company’s right to control broadcast licenses on the public airwaves because of overall character concerns.

“We find that there is no substantial and material question of fact as to whether a character qualifying issue arises from the applications designated in the (hearing),” the order stated.

Democratic commissioners Geoffrey Starks and Jessica Rosenworcel blasted their commission colleagues for what they described as a closed-door process that did not subject Sinclair to the kind of public scrutiny warranted by its behavior.

Sinclair was under investigation for failing to adequately identify paid programming on its air. It also faced a probe over claims that it violated FCC rules in negotiations of retransmission consent deals with MVPDs and for significant misrepresentations to the commission as Sinclair was trying to secure approval for its $3.9 billion acquisition of Tribune Media. That deal was eventually scuttled by FCC opposition and outrage spurred by Sinclair’s proposal that it would divest some Tribune stations at below market prices to entities with strong ties to the company.

“Sunlight is the best disinfectant,” Starks said in a statement issued Friday. “The majority’s conclusion that there is no substantial and material question of fact as to whether a character qualifying issue arises from the Sinclair conduct is not warranted, and the decision to allow Sinclair to pay a penalty in lieu of fully accounting for its admitted lack of candor in the Sinclair-Tribune transaction is an abdication of our responsibility to enforce our rules and to require that broadcast licensees act in the public interest, not in furtherance of their own interests.”

Rosenworcel echoed Starks’ concerns.

“In this consent decree the Federal Communications Commission ignores its rules and bends the facts in order to assist Sinclair Broadcast Group with sweeping its past digressions under the rug,” she said. Sinclair Broadcast Group has a history of difficulty complying with FCC rules, as demonstrated by multiple forfeiture orders, notices of apparent liability, and admonishment from this agency. I respect the desire of the company to remedy past behavior but find suspect this agency’s willingness to contort the law and its rules to allow them to do so.”

The consent decree requires Sinclair to establish a compliance officer who is obligated to report to Sinclair’s board of directors annually on the company’s progress in meeting the terms of the consent decree.

Republican commissioner Michael O’Rielly disputed the suggestion that the settlement was merely a slap on the wrist. And he asserted there is no cause for reviewing Sinclair’s broadcast licenses.

“To be clear, the text is precise that Sinclair acted in good faith in its interpretation of Commission rules and precedent and that there is no character qualification issue arising from the underlying applications,” O’Rielly said. “Agreeing to a record financial settlement and extensive compliance requirements — far from the slap on the wrist that critics bemoan — will allow Sinclair to focus on broadcasting and serving the many Americans who rely on its stations for up to date health and safety information and local news, especially during this time.”

O’Rielly urged his dissenting colleagues to “move on.” Commissioner Brendan Carr said the opposition has political overtones because of Sinclair’s history of supporting conservative viewpoints on its air.

“To be sure, there are some political actors, including in Congress, that have long and repeatedly called for the FCC to go after Sinclair based on those politicians’ disagreement with the viewpoints expressed in Sinclair’s broadcasts,” Carr said. ” We don’t do that at the FCC — or at least a majority of us do not do that. We reach our decisions based on the facts and the law.”