Say it is illegal abuse of discretion

A couple of diversity groups are challenging the FCC's proposed incubator program.

Specifically, the Multicultural Media, Telecom and Internet Council (MMTC) and the National Association of Black Owned Broadcasters (NABOB), have petitioned the U.S. Court of Appeals for the District of Columbia to review one element of the program—its comparability standards of ownership rule waivers—which they said was arbitrary and capricious and an abuse of discretion, and thus illegal.

The FCC Aug. 2 adopted a report and order (a final decision) establishing a framework for an incubator program that will grant existing radio stations media regulatory relief if they successfully help minority or female owners to buy a full-power station, or put struggling owners on firmer footing—it only applies to radio at the outset but could be transitioned to TV.

Related: FCC Votes to Launch Incubator Program

The program was proposed as part of the FCC's November 2014 media ownership regulation rollback remand, which gives diverse and minority new market entrants or struggling stations operational and financial help, while the established broadcaster gets a waiver of local ownership restrictions in that, or a comparable, market. That waiver can then be transferred to a new owner with that waiver acting like an energy credit that could become its own coin of the consolidation realm.

The incubator program was adopted as part of the FCC's review of media ownership rules, and responsive to a remand from a different court that it had to take media ownership diversity into its calculations for any ownership decision.

MMTC and NABOB support the underlying goal of helping diversify media ownership and the incubator program specifically. But they have problems with the FCC's definition of "comparable" radio market. For example, the FCC's own diversity committee pointed out that a "small" market with 45-plus full power radio stations qualifies for incubation, while a "comparable" market could be New York because it also has 45-plus stations, a point MMTC and NABOB also made in their filing.

They point out that the FCC's initial proposal of an incubator program did not include the "comparability standard," and instead talked about similarly sized markets.

MMTC and NABOB say allowing a purchase in a larger, not similarly sized, market is what is out of line and needs vacating and remanding back to the FCC for a fix.