Speaker 1: You're listening to Bloomberg Law with June Grassoe from Bloomberg Radio.
Speaker 1: A cry for survival of camp from planet itself, A
Speaker 1: cry that can't be any more desperate or any more clear.
Speaker 1: Now arise of political extremism, white supremacy, domestic terrorism that
Speaker 1: we must confront and we will defeat. President Joe Biden
Speaker 1: was clear about the importance of his environmental agenda in
Speaker 1: his inaugural speech, and then just hours later, he kick
Speaker 1: started his ambitious climate goals by rejoining the Paris Climate Accord,
Speaker 1: resending the construction permit for the Keystone Excel oil pipeline,
Speaker 1: and directing federal agencies to review the Trump administration's environmental
Speaker 1: rollbacks of the past four years. Joining me is environmental
Speaker 1: law professor Pat Parento of the Vermont Law School. Pat,
Speaker 1: let's talk about Biden's first steps. How important is rejoining
Speaker 1: the Paris Accord? And have we missed a lot of time? Yeah?
Speaker 1: We did miss some time, and we've lost some momentum.
Speaker 1: And some of the commitments that were made in Paris
Speaker 1: have really not been realized, and China has not followed
Speaker 1: through as aggressively as they had indicated. When Obama negotiated
Speaker 1: with Shigiping before Paris, so we've lost some momentum in
Speaker 1: some time, but nothing that we can't recapture if we
Speaker 1: can move fast enough. Biden now has to come up
Speaker 1: with what are called the nationally Determined Contributions, which is
Speaker 1: basically our commitment to reduction in greenhouse gases by so
Speaker 1: before the end of the year, because the next meeting
Speaker 1: of the cop parties to the convention is in Glasgow,
Speaker 1: Scotland in November. So you know, he's got carry, He's
Speaker 1: got Jeanne McCarthy, he's got a real strong team. In fact,
Speaker 1: I've never seen a stronger team focused on climate throughout
Speaker 1: his entire cabinet. So he's got the people, he's got
Speaker 1: the ideas. A lot of what he needs to do
Speaker 1: he can do through executive orders and through rulemaking, but
Speaker 1: of course rulemaking by E. P A and others will
Speaker 1: take time. But he's got to come up with this
Speaker 1: number for how we're going to reduce our carbon and
Speaker 1: other greenhouse gas footprints. And he's got to convince the
Speaker 1: other nations of the world that it's real that he
Speaker 1: can make it happen, either through his own authority or
Speaker 1: somehow working with Congress. Now that the Democrats at least
Speaker 1: have a slim really majority in both houses, there's some
Speaker 1: ability to get some stuff through Congress, including some investments
Speaker 1: that we desperately need and clean energy and transportation. So
Speaker 1: some kind of combination of executive actions and legislation he
Speaker 1: can work out with Congress is going to have to
Speaker 1: happen this year. Maybe not all of it in the
Speaker 1: first hundred days, but certainly within the first year. I
Speaker 1: think before the meeting in Glasgow, he's got to convince
Speaker 1: the world that he has the ability to follow through
Speaker 1: on his promises and make them happen. That's what we've
Speaker 1: got to see. The Trump administration pushed through all kinds
Speaker 1: of new rules environmental rollbacks in its final days, so
Speaker 1: much so that California Attorney General Javier Bassara sued the
Speaker 1: Trump administration nine times on Tuesday to combat those last
Speaker 1: minute environmental rollbacks. How difficult will it be for the
Speaker 1: Biden administration to roll back the rollbacks, Well, the last
Speaker 1: minute rollback that just have happened within the last literally
Speaker 1: few weeks. Biden can freeze. In fact, his chief of
Speaker 1: staff has already announced an executive order freezing all of
Speaker 1: those rollbacks for now, and then they'll be reevaluated by
Speaker 1: EPA or whatever other agencies you know. In the Department
Speaker 1: of Interior as a whole bunch of rules, they've got
Speaker 1: all those leases, you know, like the oil and gas
Speaker 1: leases in the Arctic Wildlife Refuge and other places. So
Speaker 1: there are a lot of sort of immediate things that
Speaker 1: Biden can put a hold on and then reconsider and
Speaker 1: dropped eventually, or change one or the other. The ones
Speaker 1: that are more difficult, obviously, are the rules that have
Speaker 1: already taken effect, like the power plant rules. The good
Speaker 1: news there is this amazing decision from the d C
Speaker 1: Circuit Court yesterday and eighty five page opinion trashing the
Speaker 1: Trump power plant rules, throwing them out completely, sending ETA
Speaker 1: back to square one, which gives the Biden administration a
Speaker 1: terrific opportunity to redesign what used to be the Clean
Speaker 1: power Plan. I think we're going to see something somewhat different,
Speaker 1: maybe a lot different from the Clean power Plant But
Speaker 1: this opinion that the d C Circuit handed down is
Speaker 1: kind of a blueprint for how to design a really
Speaker 1: strong greenhouse gas rule for power plants to replace the
Speaker 1: really bad rule that Trump came up with. So each
Speaker 1: one of these issues and rules and decisions, you know,
Speaker 1: is going to have a different process for how they
Speaker 1: have to be fixed, and how Trump's rolled back has
Speaker 1: to in itself be rolled back. So it's gonna take time,
Speaker 1: and it's going to have to be done carefully, but
Speaker 1: it can be done, and eventually, I do think we're
Speaker 1: probably gonna see a rollout of some of the strongest,
Speaker 1: well strongest in relation to what Trump tried to do
Speaker 1: anyway strongest set of rules, and not just for climate,
Speaker 1: but across the board. You know, Biden's talking about environmental
Speaker 1: justice issues all the time and sort of racial justice
Speaker 1: issues more broadly. So one of the things I expect
Speaker 1: to see is increasing protection for these communities of color
Speaker 1: that have been disproportionately affected by pollution for way too long.
Speaker 1: And he's not just going to focus on these really
Speaker 1: high profile rules that we've been talking about, but there's
Speaker 1: a lot of sort of conventional pollution, air pollution, and
Speaker 1: water pollution. You know, if you think about the flint
Speaker 1: situation with lead in people's drinking water, that's a pervasive
Speaker 1: problem around the country. So I anticipate that we're going
Speaker 1: to see a lot of activity in the environmental regulatory
Speaker 1: space over the next four years. Did he cancel the
Speaker 1: Keystone XL pipeline or he did he just stop it? Well,
Speaker 1: he canceled it in the sense that he rejected or
Speaker 1: revoked Trump's border crossing presidential permit, and without that they
Speaker 1: can't bring the oil in from Alberta. So in effect
Speaker 1: it's been canceled. And I just read that the company
Speaker 1: hasn't a trans Canada has announced that they're stopping construction,
Speaker 1: and of course that has the the unfortunate effect of
Speaker 1: putting some We have a lot of work, right, So
Speaker 1: so Biden has got some fence mending to do with
Speaker 1: the unions, but he has canceled the pipeline. It's dead.
Speaker 1: And also with Canada because it puts Minister Trudeau in
Speaker 1: a bad situation, and also Alberta. Canada said it's prepared
Speaker 1: to use every legal means to get compensation. Yeah, that's
Speaker 1: what used to be NAFTA. It's got a new name now.
Speaker 1: But that trade agreement with Canada and Mexico in the
Speaker 1: US does have some provisions in it that might give
Speaker 1: a claim to the companies and to Alberta, saying you've
Speaker 1: closed your market for our you know, oil, and that's
Speaker 1: the violation of the treaty of the compact. And so
Speaker 1: we'll see how that goes. Right that that's going to
Speaker 1: be an interesting question is to where that if it
Speaker 1: does get filed, where that gets litigated. We'll have to
Speaker 1: watch for that. Let's turn to the Supreme Court now,
Speaker 1: because this week the Justice has appeared open to the
Speaker 1: oil industry's arguments in a high stakes case that will
Speaker 1: set the course for climate litigation across the country. It's
Speaker 1: a procedural disput you that centers on a really technical question.
Speaker 1: Tell us about that question. Yeah, So the technical issue
Speaker 1: is when the cities and states that have sued the
Speaker 1: oil companies in state court. Um, when they do that,
Speaker 1: the oil companies then come in and remove those cases
Speaker 1: from state court to federal court. And then the cities
Speaker 1: and states go to federal court and say no, no,
Speaker 1: they belong in state courts. Send them back, which is
Speaker 1: called reman And now the question is when the federal
Speaker 1: courts reman these cases back the state court. Is the
Speaker 1: review of that decision to reman limited to a single
Speaker 1: ground for federal jurisdiction, which is called the federal officer doctrine.
Speaker 1: You don't really need to know too much about that.
Speaker 1: So why is it so important for environmentalists to be
Speaker 1: in state court rather than in federal court. The main
Speaker 1: reason is that the state courts are going to be
Speaker 1: more disposed to let the case go to trial, and
Speaker 1: of course in a state court proceeding the jury in
Speaker 1: these cases, because these are going to be jury cases.
Speaker 1: They're seeking large damages in the billions of dollars damages
Speaker 1: from climate change and for the costs of adaptation, building seawalls,
Speaker 1: and so forth. And in state courts, those juries, you know,
Speaker 1: are going to be drawn from a pool of people
Speaker 1: that are being affected by these these impacts, and and
Speaker 1: verdicts in state courts don't require unanimous decisions of the juries,
Speaker 1: whereas they do require unanimous decisions in federal courts. So
Speaker 1: that's one big difference. Another one is the oil companies
Speaker 1: think that federal courts are going to be more disposed
Speaker 1: to simply dismiss the case and not even let it
Speaker 1: get to trial. And they're they're they're thinking is federal
Speaker 1: courts are going to see these claims which are based
Speaker 1: on a global pollution problem like climate change as really
Speaker 1: not being something that the court should even entertain that
Speaker 1: they should be that that's the kind of problem that
Speaker 1: only Congress should deal with. And I don't know if
Speaker 1: all companies are right about that, by the way, but
Speaker 1: they think they think they have a better chance of
Speaker 1: convincing a federal judge to throw these cases out than
Speaker 1: they do convincing these individual state court judges around the
Speaker 1: country who are much closer to the communities that are
Speaker 1: being impacted. So explain just just briefly what the Fourth
Speaker 1: Circuit did. The Fourth Circuit said, you came to this
Speaker 1: court arguing that there was the involvement of the federal
Speaker 1: government directly in the activity that you were engaged in,
Speaker 1: not just the production of the oil and gas, but
Speaker 1: the marketing of it, the promotion of it. And it
Speaker 1: turns out, not surprisingly, there is no federal involvement in that.
Speaker 1: That's strictly something that the companies do and are in
Speaker 1: charge of. So when the Fourth Circuit looked at the
Speaker 1: question is there really the involvement of the federal government
Speaker 1: and concluded there wasn't, the Fourth Circuit sent the case
Speaker 1: back to the state court, and it didn't consider any
Speaker 1: other grounds for why the case should belong in in
Speaker 1: in federal court. And that's what the oil companies are
Speaker 1: now arguing to the Supreme Court was wrong. They're saying
Speaker 1: the Fourth Circuit should have led us make a bunch
Speaker 1: of other arguments for why the case belongs in federal court.
Speaker 1: And so that's what that's the narrowest question the Supreme
Speaker 1: Court has to decide. Are they going to let the
Speaker 1: oil companies make more arguments for why the cases belong
Speaker 1: in federal court or not? That's that's all. That's that
Speaker 1: issue um in the Baltimore case. It doesn't get to
Speaker 1: the real question is their liability, uh, for what the
Speaker 1: oil companies have done. The Supreme Court argument, it was
Speaker 1: pretty clear that none of the justices we're interested in
Speaker 1: that in trying to reach the ultimate merits of the
Speaker 1: cases or even in issuing a sweeping decision that all
Speaker 1: of the cases belong in federal court. There was no
Speaker 1: no support for that argument from the oil companies that
Speaker 1: I could hear. So what did you hear of? What
Speaker 1: did you hear from the justices as to where they
Speaker 1: stand on this? I do think it probably looked there's
Speaker 1: only eight justices because Alito has recused himself because he
Speaker 1: owns a bunch of conical oil stock. But I do
Speaker 1: think there's probably a majority to agree that the Fourth
Speaker 1: Circuit should have allowed the oil companies to make these
Speaker 1: other arguments. If that's true, then they'll send the case
Speaker 1: back to the Fourth Circuit to let the oil companies
Speaker 1: make these other arguments. It will delay the progress of
Speaker 1: these cases for sure. They won't be able to move
Speaker 1: forward in federal court until this is resolved, but it
Speaker 1: won't end them. It won't be a ruling on the merits.
Speaker 1: It'll it'll be a delay. It will be costly. It'll
Speaker 1: be costly for both, by the way, the oil companies
Speaker 1: and the cities and states. Maybe the oil companies have
Speaker 1: more money, you know, to spend on this litigation than anybody.
Speaker 1: I don't know. But it will be costly and it
Speaker 1: will take time. But it's not going to be the
Speaker 1: end of the cases. For the textuals on the court.
Speaker 1: For example, Kavanaugh, is it all about the meaning of
Speaker 1: the word order? Yeah, that's what he That's what the
Speaker 1: at least Kavanaugh Gorcich. You never can tell. With Thomas
Speaker 1: and maybe Roberts. Roberts is still I think in play
Speaker 1: from what I could tell. He asked vic Cher, who
Speaker 1: was arguing for the City of ball some more. He said,
Speaker 1: I'm going to give you three minutes to convince me
Speaker 1: you're right. So that that says, yeah, that says uninterrupted,
Speaker 1: he said, So that says that he's uncertain, which is,
Speaker 1: you know, an opportunity to convince him. So we'll have
Speaker 1: to see. But yeah, I think it's an interesting issue
Speaker 1: on the textualists point, because both sides are arguing the
Speaker 1: same thing, but both sides are arguing the text is clear. Um,
Speaker 1: you know, the city's the City of Baltimore is saying,
Speaker 1: it's clear that the only basis for review is this
Speaker 1: federal officer question, and it's clear that Congress wanted to
Speaker 1: limit the review of federal courts to just that basis
Speaker 1: and not everything that the defendants could think of. Whereas
Speaker 1: Kavanaugh and Gorsets in particular said, well, this word order.
Speaker 1: You know, once there's an order issue to remand the
Speaker 1: case the state court, then you should be able to
Speaker 1: argue any reason why that order is flawed, whether or
Speaker 1: not it involves this this crazy federal officer question or not.
Speaker 1: You should be able to argue in one court, the court,
Speaker 1: you know, the Court of Appeals, Um, all the reasons
Speaker 1: why sending it back to the state court is wrong.
Speaker 1: So that's where that's where the case turns. Are you
Speaker 1: just going to look at the issuance of the order
Speaker 1: and why it's wrong, or are you going to look
Speaker 1: at the text of the provision in question and congress
Speaker 1: is intent, which seems to be to limit the basis
Speaker 1: for federal removal to this federal officer question. And what
Speaker 1: was the opposition to that from the liberal justices or
Speaker 1: was there there wasn't too much the justice so to
Speaker 1: Mayor said, what about the fact that Congress in two
Speaker 1: thousand and eleven UM, when it looked at this very
Speaker 1: statutory provision, decided not to change it. And the backdrop
Speaker 1: to that, as everybody was arguing, was a whole bunch
Speaker 1: of circuit court decisions that were consistent with what City
Speaker 1: of Baltimore is now arguing again that review is limited
Speaker 1: to this single question a federal officer and you can't
Speaker 1: bootstrap a whole bunch of other arguments into that. So
Speaker 1: both Soda Mayor and Kagan, we're you know, asking what
Speaker 1: I call softball question um to vic share that you know,
Speaker 1: the Council for the city, um, and they just let
Speaker 1: Vic you know, roll out his whole argument and after
Speaker 1: that they said thank you. So they were trying to give,
Speaker 1: you know, the Council for Baltimore every opportunity to explain
Speaker 1: why they're reading of the statute was consistent with congress
Speaker 1: Is intent. That's the way I read it. Thanks for
Speaker 1: being on the Bloomberg Laws Show. Pat. That's Pat Parento,
Speaker 1: a professor of environmental law at the Vermont Law School.
Speaker 1: A fine dating back two decades finally reached the Supreme
Speaker 1: Court this week. Should the Federal Communications Commission be allowed
Speaker 1: to relax the limits the ownership of local broadcast stations
Speaker 1: and newspapers, even though it could lead to a wave
Speaker 1: of consolidation. Justice Neil Gorse had said that the rules
Speaker 1: are outdated. We're stuck with rules from the nineties, seventies
Speaker 1: that twenty years ago, twenty five years ago. Kyra said,
Speaker 1: we're outdated, and when when is the FCC gonna be
Speaker 1: able to try and experiment? But the Third Circuit Court
Speaker 1: of Appeals had blocked the changes and ordered the FCC
Speaker 1: to study the impact easing the rules could have on
Speaker 1: female and minority ownership in the media industry. One problem
Speaker 1: seemed to be the lack of evidence of what might
Speaker 1: happen something Justice Stephen Bryer found frustrating. Why in Heaven's
Speaker 1: name did you not are groups that support you? Given
Speaker 1: the tremendous number of people who I'm happy are interested
Speaker 1: in this, Why aren't there some studies or something? There
Speaker 1: are ten thousands law professors and economics professors suit look
Speaker 1: for studies to do. Why isn't there something joining me?
Speaker 1: Is match Schettenhelm netigation and government analysts for Bloomberg Intelligence.
Speaker 1: Matt tell us about these rules that the FCC wants
Speaker 1: to relax. So this case involves rules that in some
Speaker 1: cases have been around since the nineties seventies that limit
Speaker 1: how many stations both TV and radio stations that a
Speaker 1: broadcast company can own in a local market, so for example,
Speaker 1: the New York market or the Chicago market. And for
Speaker 1: years broadcasters have been pushing the SCC to loosen those
Speaker 1: rules to make the situation more competitive with media like
Speaker 1: the Internet. And so this case is really about the
Speaker 1: FEC's repeated efforts to ease up those rules and let
Speaker 1: stations own more stations in a local market and also
Speaker 1: own multiple forms of media. The SEC rules have long
Speaker 1: restricted the ownership of both newspapers and broadcast stations, as
Speaker 1: well as the ownership of radio and TV stay stations
Speaker 1: by the same company. Now, the same three judge panel
Speaker 1: of the Third Circuit Court of Appeals has been preventing
Speaker 1: the FCC from loosening its ownership restrictions for something like
Speaker 1: twenty years. Why yeah, That's the remarkable thing about this
Speaker 1: case is that the same three judge panel has hung
Speaker 1: onto the case for, as you said, over seventeen years,
Speaker 1: and it's really been two judges of those three, and
Speaker 1: there's always been one of the three dissenting. And the
Speaker 1: main reason has been that these two judges have said
Speaker 1: that the FCC hasn't done enough to look at how
Speaker 1: relaxing its rules would impact diversity of ownership. The FCC
Speaker 1: has long said that one factor it takes into consideration
Speaker 1: is how broadcast stations would be owned by emails and minorities,
Speaker 1: and latching onto that, these two judges have said, since
Speaker 1: you consider that important, FEC, why aren't you doing more
Speaker 1: to sure that there is ownership? And these two judges
Speaker 1: have effectively said you're not doing enough and until you
Speaker 1: do more to ensure that sort of ownership, we're not
Speaker 1: going to let you lack the rules. So what's the
Speaker 1: FECs argument the Supreme Court. The basic argument is that
Speaker 1: these two judges have sort of gone beyond their jurisdiction,
Speaker 1: that this is ultimately a policy call, not for judges
Speaker 1: but for administrative agencies. And the Federal Communications Commission is
Speaker 1: passed with balancing a number of factors. One of those
Speaker 1: factors is diversity of ownership, which these two judges have
Speaker 1: focused on, but the FEC says there's a number of
Speaker 1: other things that it also has to consider, and most
Speaker 1: importantly for this SEC is considerations of competition and the
Speaker 1: idea that maybe it's best to facilitate broadcasting as an
Speaker 1: industry to ease up on these limits. And so the
Speaker 1: FEC looked at diversity of ownership, but it's balance that
Speaker 1: against the number of other factors, and it says, ultimately,
Speaker 1: we as an agency should get to make this call,
Speaker 1: not two unelected judges from the Third Circuit. And that's
Speaker 1: the case that the SEC pushed pretty aggressively to the
Speaker 1: Supreme Court, who is on the other side of this case.
Speaker 1: So the cases is being brought by public interest groups
Speaker 1: that that really have have long emphasized the importance of
Speaker 1: diversity of ownership, and so they have had great success
Speaker 1: in pushing their case at the Third Circuit and they
Speaker 1: continue to present that fight to the court. Tell me,
Speaker 1: when you look at media ownership, but is it true
Speaker 1: that there isn't enough minority or female owned stations. So
Speaker 1: that's a great question, and that's one of the things
Speaker 1: that when the FEC did it's rulemaking on whether it
Speaker 1: should relax its rules, it asked for data on exactly
Speaker 1: that question, and it said, tell us what is the
Speaker 1: act and what is the status of ownership of these stations.
Speaker 1: And the SEC's response after it it went through all
Speaker 1: that data, we don't have great answers in terms of
Speaker 1: it got very little in the record in terms of
Speaker 1: the impact of reducing its rules. Arts. I think these
Speaker 1: public interest groups have made the case, and I think
Speaker 1: it can be documented that there is very limited ownerships
Speaker 1: by females and by minority owners of broadcast stations. But
Speaker 1: the real question in the case has been does easing
Speaker 1: the rules have any impact on that? And that's where
Speaker 1: the SEC after waiting through all the data, so we
Speaker 1: can't say conclusively that relaxing the rules is going to
Speaker 1: make this situation worse, and we think it will actually
Speaker 1: have the potential to make it better by improving the
Speaker 1: market position for broadcasters. Generally, during the oral arguments, did
Speaker 1: you get a feel for what the justices seemed most
Speaker 1: concerned about, what issue was foremost in their minds, so
Speaker 1: coming into this case, you know, with the Supreme Court
Speaker 1: choosing to accept the case at all, that was a
Speaker 1: very good sign, I think for the FEC and for broadcasters,
Speaker 1: because if the Court was satisfied with what the Third
Speaker 1: Circuit has done, it could have just let this case
Speaker 1: fit and not take it all. The mere act of
Speaker 1: taking the case suggest there's concerns, and I think the
Speaker 1: argument supported that we have a six to three Supreme
Speaker 1: Court in terms of the nominating party of the president,
Speaker 1: and it's a more business friendly court here. I think
Speaker 1: what we saw from the argument was exactly what we expected.
Speaker 1: There was, generally, I think a focus on maybe this
Speaker 1: Third Circuit Court has gone too far to be sure.
Speaker 1: There was some sympathy from Justices Soto, Mayor and Tagan
Speaker 1: with the public interest group position here, but it's very
Speaker 1: difficult to see that position earning five votes on Mr
Speaker 1: Frames Court, and I saw very little from the conservative
Speaker 1: side of the Suspreme Court in terms of their questions
Speaker 1: to suggest that there will be five votes to support
Speaker 1: the Third Circuit here. So, and in fact, it seems
Speaker 1: as if Justice Neil Gorstch was pretty direct in saying
Speaker 1: that the rules are old. He said, we're stuck with
Speaker 1: rules from the nineties seventies that twenty years ago, twenty
Speaker 1: five years ago, Congress said we're outdated. He seems pretty
Speaker 1: vehement about the point exactly. And I think that position
Speaker 1: is going to carry a lot of weight with the
Speaker 1: conservative side of the Court, that it's a very uphill
Speaker 1: argument for the public interests group to prevail. I do
Speaker 1: think there's a possibility of a dissenting opinion from Justice
Speaker 1: So to my or potential Justice Kagan joining her, maybe
Speaker 1: Justice Briar, But when you look at the other six
Speaker 1: justices on the Court, it's difficult to envision any of
Speaker 1: them jumping on board with that position. So it's not impossible.
Speaker 1: In the oral argument doesn't assure anything about the outcome,
Speaker 1: and sometimes we're surprised, but right now, in terms of likelihood,
Speaker 1: you would say that the SEC and the broadcasters are
Speaker 1: in a pretty strong position. So what happens now that
Speaker 1: Joe Biden is president. I mean President Trump had this
Speaker 1: focus from day one on deregulation, and Joe Biden has
Speaker 1: a different kind of focus, So what happens at the FCC.
Speaker 1: That's exactly right. So the next step will be Joe
Speaker 1: Biden will name his own SEC chairman. Trump's SEC chairman,
Speaker 1: A G. Pie is stepping down now, and it will
Speaker 1: be a difference in appro from this FCC. I don't
Speaker 1: think the primary focus will be easing ownership rules. I
Speaker 1: think it's going to be a focus on the sorts
Speaker 1: of issues that came up at the Court this week.
Speaker 1: Encouraging diversity of ownership is going to be a big
Speaker 1: focus for this SEC. At the same time, I do
Speaker 1: think there is is sort of a bipartisan agreement that
Speaker 1: these rules are really old. They are in some cases,
Speaker 1: you know, decades old, and they do need some updating.
Speaker 1: So I think even the Democrats at the SEC, and
Speaker 1: whether the chairman is Jessica ros and Warsaw or Jeffrey Starts,
Speaker 1: I do think that there will be some support for
Speaker 1: easing those caps on how many stations you can own.
Speaker 1: It's not as good of news for broadcasters as it
Speaker 1: might have been under a Trumps FCC. I still think
Speaker 1: winning this case will create some positive momentum in terms
Speaker 1: of easing those station limits in the years ahead, just
Speaker 1: not as aggressively as we would have seen under a
Speaker 1: Trump SEC. So just clarify, everyone seems to agree with you.
Speaker 1: The Supreme Court is going to rule for the f SEC.
Speaker 1: Are rule changes then put into place right away? What happens,
Speaker 1: So yeah, in part, some rule changes will take effect immediately.
Speaker 1: So the Trumps FCC did a couple things, as I said,
Speaker 1: It got rid of the ban on cross ownership of
Speaker 1: newspapers and broadcast stations. It also got rid of the
Speaker 1: ban on owning TV and radio stations, and it loosened
Speaker 1: the rule on how many TV stations you can own
Speaker 1: in the market. Those changes which the Third Circuit put
Speaker 1: on hold, those will immediately take affect. The other part
Speaker 1: of it is that the SEC has an open rulemaking
Speaker 1: to go further and to further relax as rules. The
Speaker 1: SEC is taking comments on that record, and it's really
Speaker 1: ready to act, but it's been on pause until this
Speaker 1: court case is resolved. I think after the court rules.
Speaker 1: The now Democratic led SEC can finish that rulemaking and
Speaker 1: in theory proceed with easing the caps even beyond what
Speaker 1: the Trump SEC was able to do. I think the
Speaker 1: number one focus is likely to be the radio station limits,
Speaker 1: where we've seen some sympathy from the Democrats to finish
Speaker 1: easing those rules as well. So so it's a mixed bag.
Speaker 1: Some rule changes take effect immediately based on what the
Speaker 1: Trump SEC did, but we're also likely to see the
Speaker 1: SEC move had with further relaxation of the rules, just slowly.
Speaker 1: So let me ask you this man. It seems that
Speaker 1: just by the nature of what's going to happen that
Speaker 1: you're going to be able to own more stations in
Speaker 1: the market, that that will lead to more consolidation in media.
Speaker 1: That's right, and the broadcasters make the case that that
Speaker 1: that can be a good thing in many cases, and
Speaker 1: in local markets, a number of broadcasters are struggling, and
Speaker 1: there can be great efficiencies from one company owning multiple
Speaker 1: stations in a market in terms of the advertising dollars
Speaker 1: that they can bring in, in terms of the local
Speaker 1: staffing that they can do in that market. Efficiencies can
Speaker 1: be gained by ownership of multiple stations. Now both of
Speaker 1: that would say, yeah, but what are you losing in
Speaker 1: terms of a diversity of voices and a focus on
Speaker 1: different perspectives in your media. There's a risk of lass
Speaker 1: on that side. Sure, so that's the balancing that the
Speaker 1: SEC has long been trying to do. But the broadcasters say, look,
Speaker 1: it's not quite imbalanced right now. There's been too much
Speaker 1: preservation of these rules that are a little bit out
Speaker 1: of date, especially with the rise of new media, which
Speaker 1: isn't harnessed with any of these sorts of rules. It's
Speaker 1: not fair and it's not reasonable to expect broadcasters to
Speaker 1: succeed as competitors if they're harnessed with these sorts of limitations.
Speaker 1: Were the stations involved here, the broadcasters involved here? Were
Speaker 1: they what's considered conservative media? Is this a victory for
Speaker 1: conservative media? I don't think I would say that. I
Speaker 1: think this is all broadcast station, all companies that own
Speaker 1: broadcast station, So it's it really doesn't divide along political lines.
Speaker 1: This is the entire industry. The National Association of Broadcasters
Speaker 1: supported this case, and so this is really a victory
Speaker 1: for broadcasting. It's not a victory yet. We need to
Speaker 1: with the court says, but this would be a victory
Speaker 1: for the industry as a whole because it it gives
Speaker 1: the industry more freedom to move ahead with, as you said, consolidation.
Speaker 1: But what they would emphasize is the efficiencies in delivering
Speaker 1: their service that they've been unable to provide in recent
Speaker 1: years under these litigations. Thanks Matt. That's Matt Shettenhelm, litigation
Speaker 1: and government analysts for Bloomberg Intelligence. And that's it for
Speaker 1: the sedition of the Bloomberg Lawn podcast. I'm June Grosso.
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