President-elect Trump recently nominated sitting Federal Communications Commission (FCC) Commissioner Brendan Carr, a Republican, to serve as the agency’s new chair. The announcement is a welcome one as the Biden administration’s choice of current FCC Chair Jessica Rosenworcel, who announced she will soon be stepping down, provides a classic case in point.
Rosenworcel’s outrageous maneuvering to effectively kill an $8.6 billion merger between hedge fund Standard General and Tegna, a publicly traded conglomerate of 60 television stations, speaks to an agency susceptible to external political pressures and ideological considerations rather than an appropriate focus on market dynamics and consumer benefits.
South Korean-born and New York-raised Soohyung “Soo” Kim who built Standard General won a public auction to purchase Tegna in early 2022. Deb McDermott, head of Standard General’s media division, was in line to become the only female CEO of any top-10 television group.
But media mogul and Democrat mega-donor Byron Allen, whose black-owned Allen Media Group finished second in bidding for Tegna, still had a card to play. He donated $350,000 to Democratic congressional Super PACs in October 2022; that same month, then-U.S. House Speaker Nancy Pelosi penned a letter to Rosenworcel to register her “concerns” over Standard General’s merger with Tegna. Obligingly, the FCC’s Media Bureau directed Tegna to produce information regarding Allen’s losing bid. Senator Elizabeth Warren’s letter to Rosenworcel went a step further than Pelosi, actually encouraging her to use the FCC’s “full statutory authority to block” the deal.
Allen’s surrogates argued to the FCC that Kim’s acquisition of Tegna did not “promote ownership diversity.” According to Allen, the “only way to promote diversity” is through “wholly-owned African American” media companies.
The repulsive assertion that government approvals should be decided upon race – that Asian-Americans do not count as the right kind of diversity – found fertile ground in Biden’s FCC, which had made DEI ideology a top priority.
Rosenworcel herself had criticized “the shameful lack of racial and gender diversity in broadcast station ownership” and forcefully pushed for the FCC’s diversity efforts to prioritize minority and female ownership. It’s not hard to imagine that the same chair who argued that “[w]omen and minorities have struggled for too long to take the reins at media outlets,” would put her thumb on the scales to help Allen.
Despite its lack of constitutional authority to block deals, the FCC took the unprecedented step of referring the matter to a hearing before an administrative law judge. In extending the review process far beyond the typical 180-day "shot clock," Rosenworcel knew that the window on Standard General’s financing would close. To his credit, Commissioner Carr said, “I believe the application deserves a straight up-and-down vote.” But the deal was effectively killed with Rosenworcel’s pocket veto.
Ironically, Rosenworcel blocked what would have become the largest minority-owned, woman-led media group in American history, potentially limiting the diversity of voices and perspectives in local media markets across the country.
The FCC's irresponsible actions resulted in significant financial losses, not just for the companies involved, but potentially for consumers as well. Tegna shareholders reportedly suffered nearly $2 billion in losses. With any luck, Soo Kim will have his day in court.
Meanwhile, the FCC's handling of the Standard General-Tegna acquisition highlights the need for greater transparency and accountability in regulatory decision-making. When political influence and woke ideology overrides consumer interests and market dynamics, it undermines public trust in institutions meant to protect competition. As this Senate convenes confirmation hearings for whoever is nominated to chair the FCC, it's crucial that Senators scrutinize the FCC's recent actions to ensure that consumer welfare remains at the forefront of media regulation. The next chair must prioritize transparency, fairness, and a commitment to fostering a telecommunications industry that serves the best interests of all Americans.
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