Sen. Cruz, Rep. McMorris Rodgers Request Answers from FCC on Action Effectively Blocking Planned Standard General Acquisition of TEGNA

April 5, 2023

WASHINGTON, D.C. – U.S. Senate Commerce Committee Ranking Member Sen. Ted Cruz (R-Texas) and House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-Wash.) are seeking answers regarding a decision by the Federal Communications Commission (FCC) that effectively blocks the Standard General-TEGNA transaction. In a letter sent today to FCC Chair Jessica Rosenworcel, the lawmakers want to know why the FCC broke Commission rules and precedent in sending the transaction to an Administrative Law Judge for review without a Commission-level vote.

Sen. Cruz and Rep. McMorris Rodgers wrote:

“On February 24, 2023, Standard General’s plans to acquire TEGNA’s 61 full-power TV stations and two full-power radio stations were thwarted when the FCC’s Media Bureau, purportedly acting under Commission-delegated authority, issued a Hearing Designation Order (“HDO”) that referred the transaction to an Administrative Law Judge (“ALJ”) hearing. In the past 30 years, no broadcast license transfer has gone through the hearing process in less than 358 days (the average time is 799 days). With the deadline for financing of the Standard General-TEGNA deal expiring on May 22, 2023,  the Media Bureau’s action effectively kills the transaction.

“The Media Bureau’s decision to send the transaction to an ALJ hearing violates Commission rules and precedents in several ways. First, to keep the Commission accountable to Congress and the public, a full Commission vote is required for certain matters, particularly those involving novel issues and/or significant legal or policy consequences.  Designating a multi-billion-dollar transaction such as the Standard General-TEGNA transaction for an ALJ hearing is precisely the type of serious decision for which commissioners must take responsibility. The last time the FCC referred a major transaction to an ALJ, the decision was made at the Commission level, and the FCC should not have departed from that precedent.  Second, the Media Bureau’s HDO relied on novel interpretations of the Commission’s public interest standard and appeared to ignore—if not contradict—the Commission’s precedent that ‘an increase in retransmission consent rates, by itself’ does not constitute a public interest harm.  Third, under Commission precedent, the Media Bureau should have provided the full Commission 48 hours’ notice before issuing the HDO on February 24, 2023. It did not.

Sen. Cruz and Rep. McMorris Rodgers also raised concerns regarding previous reporting suggesting that a former TEGNA bidder’s political connections with influential Democrats may have played a role in the FCC’s decision to stray from precedent, writing:

“Given these departures from precedent, it is no surprise that the decision has raised questions about the Commission’s fairness. According to numerous public reports, outside interests pushed Commission officials to block this transaction in order to pave the way for an alternative buyer, namely Byron Allen.  For example, the Wall Street Journal reported that Mr. Allen’s Allen Media Group had previously tried, unsuccessfully, to acquire TEGNA in the fall of 2021.  Coincidentally, Mr. Allen is a major Democratic donor. In 2021, he donated $2,900 to Nancy Pelosi’s campaign fund, $5,000 to PAC to the Future, $44,000 to the Nancy Pelosi Victory Fund, and $255,500 to the Democratic Congressional Campaign Committee, among others.  After the Standard General-TEGNA transaction was announced in 2022, he donated $250,000 to the House Majority PAC and $100,000 to the Senate Majority PAC. Some have observed that the well-connected Mr. Allen is ‘the most likely beneficiary if the Standard General deal falls through.’”  

In addition, Sen. Cruz and Rep. McMorris Rodgers request the FCC give details about previous Hearing Designation Orders involving similar matters and specifics regarding the FCC’s handling of the Standard General-TEGNA transaction, including whether or not anyone in the chairwoman’s office had any contact with Byron Allen or anyone affiliated with Allen Media Group.

The full text of the letter is available HERE.