Sen. Cruz, Rep. McMorris Rodgers Call On FCC Inspector General to Probe Handling of Standard General-TEGNA Acquisition

May 16, 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.) today sent a letter to the Federal Communications Commission Acting Inspector General asking that she open an investigation into whether FCC Chairwoman Jessica Rosenworcel’s unprecedented actions against the Standard General-TEGNA transaction, including the decision to have the FCC’s Media Bureau designate the transaction for an Administrative Law Judge (“ALJ”) hearing, were motivated by a biased desire to block the deal.

Sen. Cruz and Rep. McMorris Rodgers wrote:

“As the Chair of the Committee on Energy and Commerce and the Ranking Member of the Committee on Commerce, Science, and Transportation (“Senate Commerce Committee”), we write to request that you, as the Acting Inspector General of the Federal Communications Commission (“FCC”), investigate Chairwoman Jessica Rosenworcel’s unprecedented actions against Standard General’s application to acquire TEGNA (the “Standard General-TEGNA transaction”), specifically, the decision to have the FCC’s Media Bureau send the Standard General-TEGNA transaction to an Administrative Law Judge (“ALJ”). No less than five aspects of that decision and the circumstances surrounding it suggest that it was motivated by a biased desire to defeat the Standard General-TEGNA transaction. If that is true, then the FCC is serving as a partisan cudgel, rather than fulfilling its mission to ensure a robust and competitive market.  

In requesting an investigation, Sen. Cruz and Rep. McMorris Rodgers raised five key points suggesting that the true reason underlying Chairwoman Rosenworcel’s unilateral decision to send the Standard General-TEGNA transaction to an ALJ was a biased desire to prevent the deal from moving forward, writing:

“First, Chairwoman Rosenworcel refused to engage with the applicants prior to the Media Bureau’s issuance of a Hearing Designation Order (“HDO”). We understand that during the Department of Justice’s (“DOJ”) monthslong review of the Standard General-TEGNA transaction, FCC staff repeatedly informed Standard General that if and when the DOJ’s review concluded, they would present the applicants with any concerns, allowing the applicants time to address them. Yet after the DOJ completed its review without mounting any challenges, the FCC went radio silent: reportedly, in the three months prior to issuing the HDO, the Media Bureau either declined or ignored Standard General’s sixteen attempts to engage with it. During this same period, the FCC, including the Media Bureau, had at least eight meetings with individuals and entities who opposed the Standard General-TEGNA transaction.

“Second, the decision to refer such a large transaction to an ALJ without a Commission-level vote is itself extraordinary. This is the first time the FCC has designated for an ALJ hearing a transaction of this size that no antitrust regulator has challenged. Neither of the FCC’s two justifications for doing so—the potential effect on station jobs and retransmission consent rates—has ever before been asserted as a basis for blocking a broadcast license transfer. Moreover, the Commission’s own internal standards limit the Media Bureau from taking such novel action on delegated authority.

“Third, the HDO conveniently extends the FCC’s review beyond the Standard General- TEGNA transaction’s 15-month acquisition window. Had the FCC processed the Standard General-TEGNA transaction on the same timeline as all other comparable transactions (none of which were designated for a hearing), it would have completed its review in less than six months, well within the acquisition window.

“Fourth, FCC staff provided incorrect information regarding the process by which the ALJ designation may be reversed. When Chairwoman Rosenworcel’s staff briefed the bipartisan staff of the Senate Commerce Committee, they said that there was no mechanism for reversing the HDO or bringing the matter back before the full FCC for a decision. That statement was misleading at best: at least two FCC rules permit immediate reversal of an HDO released under delegated authority and a chairman can bring the HDO up for a vote at any time.

“Fifth and finally, Chairwoman Rosenworcel refused to respond to reasonable congressional inquiries regarding this transaction. On April 5, 2023, we wrote Chairwoman Rosenworcel seeking answers regarding the decision to send the Standard General-TEGNA transaction to an ALJ for review without a Commission-level vote. Her response to our letter was satisfactory only in that it met the deadline. She failed to respond to most of the questions, claiming that she was prevented by pending legal matters that rendered her selectively speechless in the face of congressional oversight.”

The full text of the letter is available HERE.

In a previous letter, Sen. Cruz and Rep. McMorris Rodgers requested information explaining why the FCC broke Commission rules and precedent in sending the transaction to an ALJ for review without a Commission-level vote.