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On April 17, 2025, the U.S. Court of Appeals for the Fifth Circuit vacated a $57 million forfeiture order issued by the FCC against AT&T, ruling that the FCC violated the Constitution by imposing the penalty without first bringing the case to a federal court. The decision in AT&T v. FCC could significantly alter the FCC’s ability to impose monetary penalties through its internal enforcement process, and it may signal a broader judicial rethinking of administrative enforcement powers across federal agencies. The central question in AT&T was whether the FCC could lawfully impose a forfeiture penalty under its consumer privacy rules without first securing a judgment from a federal court. The Fifth Circuit answered in the negative, holding that AT&T was entitled to have the case heard by a jury in a federal court, rather than resolved solely through the FCC’s internal processes. The Fifth Circuit’s analysis heavily relies on the Supreme Court’s reasoning in Jarkesy v. SEC, where it held that the imposition of civil penalties for securities fraud by the SEC without a jury trial violates the Seventh Amendment. The FCC argued that, because AT&T is a common carrier and is therefore “affected with a public interest,” the forfeiture order fell within the “public rights” exception, which is a doctrine allowing an administrative agency to resolve certain matters internally, rather than in the courts, if they involve “public rights” instead of private ones. Under longstanding constitutional principles, claims involving private rights, such as disputes over property, contracts, or liability between the government and a private party, must generally be resolved in the courts. By contrast, public rights involve matters that historically have been determined by the executive or legislative branches, such as revenue collection, foreign commerce, immigration, tariffs, public lands, and patents. In AT&T, the Fifth Circuit concluded that the FCC’s attempt to impose its penalty against AT&T resembled the former, not the latter. The court rejected the FCC’s “common carrier” argument, reasoning that the “public rights exception” is a narrow one, and a presumption therefore exists in favor of a “private rights” determination. Deciding otherwise, the court explained, “would blow a hole in what is meant to be a narrow exception” because “[m]yriad enterprises might be said to implicate the ‘public interest.’” The Fifth Circuit also addressed a procedural argument under Section 504 of the Communications Act, which permits the DOJ to recover a forfeiture imposed by the FCC in federal court if the alleged violator refuses to pay the FCC. The Commission argued that this proceeding satisfies the Seventh Amendment because Section 504 provides for a “trial de novo,” or a fresh judicial look at the matter. But the Fifth Circuit was unconvinced, explaining that in a Section 504 trial in the Fifth Circuit, the court is prohibited from considering the defendant’s legal arguments and may consider only the factual basis for the enforcement action. The court described Section 504 as a “back-end” trial that offers little protection against reputational harm or the risk of future enhanced penalties based on an FCC finding that may later be overturned — all before the licensee ever reaches a courtroom. While the public rights doctrine has traditionally allowed an agency to resolve certain matters internally, the Fifth Circuit’s decision leaves the FCC, and other agencies, facing uncertainty about how far it can go without involving federal courts. One open question is whether courts will begin parsing agency enforcement actions, permitting an agency to resolve certain matters internally, such as licensing violations, only if the matter is sufficiently removed from a “suit at common law” and therefore not subject to Seventh Amendment protections. Another question is how the Fifth Circuit’s decision might affect the FCC’s ability to pursue enforcement actions against other types of FCC-regulated entities, particularly in areas involving the licensing of public spectrum, such as wireless and broadcast services. But the issue is far from settled. A nearly identical case involving T-Mobile is currently pending in the D.C. Circuit. The D.C. Circuit could reach a different conclusion than the Fifth, which would set up a circuit split that would increase the likelihood of Supreme Court review. If the Fifth Circuit’s logic gains traction in other circuits or is affirmed by the Supreme Court, the FCC may need to fundamentally adjust how it pursues enforcement. Instead of resolving forfeitures in-house, the FCC could be forced to bring those claims to a district court, a shift that would increase the cost and complexity of enforcement and may lead the FCC to be more selective in the types of violations it chooses to pursue. Of course, the increased cost and complexity would also burden regulated entities facing FCC enforcement. The AT&T decision may not be the last word, but it does offer a clear signal: the courts are not automatically deferring to administrative structures that bypass the judiciary when private rights and financial penalties are involved. As always, feel free to reach out to an FHH attorney with any questions about how this decision may affect your compliance obligations or interactions with the FCC.

FHH attorneys Frank Montero and Seth Williams will present a webinar for the Media Financial Management Association’s town hall series.  Their presentation, titled Advertising Marijuana and other “Vices” Under the Trump/Carr FCC, will take place March 20, 2025, at 2:00 PM EDT. The presentation will last about an hour, including time for questions. Those interested in attending can register at http://www.mediafinance.org/town-hall-webinars and use promo code XTRA32025. We hope to see you there! 

On January 7, 2025, the FCC released an Order announcing adjustments to its Schedule of Application Fees, which will become effective 30 days after the Order’s publication in the Federal Register. Congress mandates that the FCC make these adjustments every two years, and this year’s changes reflect a 17.41% inflationary increase in the Consumer Price Index (CPI) since the FCC’s 2022 adjustment. The updated Fee Schedule affects a broad range of FCC applications, including those for broadcasters, wireless licensees, satellite services, and more.  Commissioner Brendan Carr issued a concurring statement, expressing frustration with the fact that some applications will soon “cost hundreds, or in some cases, thousands of dollars more than they did just a few years ago.” Commissioner Carr also acknowledged, however, that the FCC has little discretion when making these adjustments.    You can find the full text of the Commission’s Order here.   As always, do not hesitate to contact an FHH attorney if you have any questions. 

Tags:  Broadcast, TV, MVPD, Cable, Satellite, FCC, Retransmission Consent, Medi The FCC adopted rules on January 3 that require Multichannel Video Programming Distributors, including cable or satellite providers (“MVPDs” or “Reporting Entities”) to report certain broadcast station blackouts.  The rules will be effective 30 days after publication in the Federal Register, but MVPDs will not be required to comply until the FCC develops a reporting portal. Reportable Events Under the new rules, Reporting Entities must report qualifying blackouts (“Broadcast Station Blackouts”).  Broadcast Station Blackouts are blackouts in which:  (1) an MVPD ceases retransmission of a commercial television broadcast station’s signal due to a lapse in the broadcast station’s retransmission consent; and (2) the blackout lasts longer than 24 hours.  The rule applies to retransmission of full power, Class A, and LPTV stations. Required Submissions Under the new rules, Reporting Entities are required to submit an Initial Blackout Notification and a Final Blackout Notification. Reporting Entities must submit an Initial Blackout Notification no later than two business days after a blackout has become reportable.  In effect, the initial notification is due two business days after the blackout enters its 24th hour.  An Initial Blackout Notification must include: (1) the name of the reporting entity; (2) a list of all commercial stations no longer being retransmitted (including, for every primary and multicast stream, the call sign, Facility ID and network affiliation); (3) identification of the DMA in which affected subscribers reside; (4) the time and date of the initial interruption to programming; and (5) a good faith estimate of the number of subscribers affected. Reporting Entities must submit a Final Blackout Notification no later than two business days after the MVPD resumes carriage of the station.  The Final Blackout Notification must state, for each station identified in the initial notification, the date on which retransmission resumed.  If no final notification is filed within three years of the initial notification, the FCC will consider the station(s) as no longer carried by the MVPD. Broadcasters May Submit Supplemental Notices If a broadcaster named in an MVPD’s notifications believes that any substantive information in the reports is incomplete or incorrect, the broadcaster may voluntarily submit a supplemental notice.  Broadcasters must identify the exact fields of the MVPD report that contain errors and provide information that the broadcaster considers to be complete and correct.  The MVPD will be notified of the broadcaster’s submission.  All reporters are required to correct information that they believe to be incorrect. Electronic Submissions The FCC will establish an online reporting portal modeled after the Commission’s Network Outage Reporting System (NORS) through which reporters will file electronically.  Although information in notifications submitted through the portal will become publicly available on the FCC’s website, the FCC will treat estimated subscriber counts as presumptively confidential. The FCC will release further details and instructions via Public Notice at least 30 days prior to the effective date of the requirements.   For further information regarding the new requirements, carriage disputes, or retransmission consents, please contact your Fletcher, Heald & Hildreth attorney.

The Federal Communications Commission (“FCC” or “Commission”) has issued a public notice, DA 24-1065, which announces the opening of a filing window for applications for construction permit for new noncommercial educational (“NCE”) TV stations in 12 specified communities in various areas of the United States.  This window opens at 12:01 a.m. EST on December 4, 2024, and will close at 6:00 p.m. EST on December 11, 2024.    As is normally the case, all applications must be filed electronically in the Commission’s Licensing and Management System (“LMS”), and the deadlines will be strictly enforced.  Note that the opening time and deadline time are Eastern Standard Time, not local time.  Unlike some prior filing windows, applications filed early, as well as those filed late, will be dismissed.  In order to be eligible to file in this NCE TV window, all applicants must be non-profit educational organizations, and not individuals.  If such a non-profit educational organization is neither a school nor a governmental entity, it must also be able to certify that a majority of its governing board or leadership are local members representative of a broad cross-section of community elements.  Any address used to establish a member’s localism must be that of the member’s business or residence and not a post office box, lawyer’s office or the like.  In order to be considered broadly representative, the governing board or leadership must represent at least four different elements of the community.  Examples of the different groups that are considered elements of the community are businesses, labor, minority and ethnic groups, military, professions, religion, and organizations for youth, the elderly, or women.  A further threshold requirement for all applicants is that they must propose to advance an educational objective through its programming.  While not all of the planned programming must be instructive or otherwise educational, the applicant must show that the station will be used primarily for the advancement of an educational program.  If an applicant has had its educational program approved in the past, it may simply refer to that prior approval.  Other certifications which must be provided are that the application is financially qualified and that it has reasonable assurance that the specified transmitter site is available to it.  Financial qualification means that the applicant has sufficient funds available to it to construct and operate the proposed station for three months without further revenue.  Reasonable assurance of site availability means that, if the applicant does not own the site, that is has contacted the land or tower owner and reached a basic agreement in principle that, all things being equal, after the construction permit is granted, the owner will make the site available.  Absolute agreement on final terms is not required, but a basic meeting of the minds is.  Once the window closes, the Commission will determine which applications are mutually exclusive with each other.  It then will apply its NCE point system selection criteria to determine the winning applicants for each allotment.  Those points may be awarded on the basis of being an established local applicant, diversity of ownership, being part of a statewide network providing programming to schools, and technical parameters.  Applicants must be able to document any claims of comparative qualifications and must submit any required documentation with their applications in order to have those qualifications credited.  All comparative factors are fixed as of the window filing deadline and may not be improved, but only diminished, after that time.  In order to provide a stable database while the NCE TV filing window is open, the FCC has imposed a filing freeze, effective 12:01 a.m. EST on December 3, 2024, for all major and minor change applications for TV and Class A TV stations and all channel change petitions for full-power TV stations.  This freeze will remain in effect until the close of the NCE TV filing window.   If you are interested in filing during this window or have any questions, please contact your FHH attorney, who will be happy to assist you.