# Prometheus Radio Project v. Federal Communications Commission

> Court of Appeals for the Third Circuit · June 24, 2004 · 373 F.3d 372

URL: https://www.frixlaw.com/law-library/cases/9816427

## Case

- **Full name:** PROMETHEUS RADIO PROJECT v. FEDERAL COMMUNICATIONS COMMISSION; United States of America Prometheus Radio Project, Media General, Inc., National Association of Broadcasters, Network Affiliated Stations Alliance, ABC Television Affiliates Association, CBS Television Affiliates Association and NBC Television Affiliates, Fox Entertainment Group, Inc. and Fox Television Stations, Inc., Viacom Inc., National Broadcasting Company, Inc., and Telemundo Communications Group, Inc., Sinclair Broadcast Group, Inc., Media Alliance, Paxson Communications Corporation, National Council of the Churches of Christ in the United States, Tribune Company, Paxon Communications Corporation, Emmis Communications Corporation, Center for Digital Democracy and Fairness & Accuracy in Reporting, Clear Channel Communications, American Hispanic Owned Radio Association, Civil Rights Forum on Communications Policy, League of United Latin American Citizens, Minority Business Enterprise Legal Defense and Education Fund, Minority Media and Telecommunications Council, National Asian American Telecommunications Association, National Association of Latino Independent Producers, National Coalition of Hispanic Organizations, National Council of La Raza, National Hispanic Media Coalition, National Indian Telecommunications Institute, National Urban League, Native American Public Telecommunications, Inc., PRLDEF-Institute for Puerto Rican Policy, Unity: Journalists of Color, Inc. and Women’s Institute for Freedom of the Press
- **Court:** Court of Appeals for the Third Circuit
- **Decided:** June 24, 2004
- **Citations:** 373 F.3d 372
- **Precedential status:** Published
- **Opinion:** Opinion of the court by Ambro
- **Judges:** Ambro, Fuentes, Scirica
- **Cited by:** 3 later opinions in the Frix Law Library

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## Opinion text

OPINION OF THE COURT
AMBRO, Circuit Judge.
Table of Contents
I. Background .... 382
A. The 1934 Communications Act and Early Broadcast Ownership Regulation. 382
B Deregulation Initiatives 383
C. The Telecommunications Act of 1996 .. 384
D. Regulatory Review Since 1996.. 384
E. The Commission’s 2003 Report and Order ... 386
F The Order’s Modification of Broadcast Media Ownership Rules ... 386
1. Local Television Ownership ... 386
2. Local Radio Ownership ... 387
3 & 4. Newspaper/Broadcast and Radio/Television Cross-Ownership .. 387
5. National Television Ownership... 388
6. Dual Network Rule ... 388
G. Procedural History of the Current Appeals ... 388
H. Subsequent Legislation. .. 389
II. Jurisdiction and Standard of Review ... 389
A. Standard of Review Under the Administrative Procedure Act 389
B. Standard of Review Considerations Under Section 202(h) ... 390
*380 1. “Determine whether any such rules are necessary in the public interest.”. rH 05 CO
2. “Repeal or modify any regulations it determines to be no longer in the public interest.” ^ 05 CO
C. Conclusion. LO 05 CO
III. Mootness and the National Television Ownership Rule. .395
IV. Cross-Ownership Rules . CO CD -q
A. Regulatory Background and the 2002 Biennial Review CO CO -3
B. The Commission’s decision not to retain a ban on newspaper/broadcast cross-ownership is justified under § 202(h) and is supported by record evidence. 00 05 CO
1. Newspaper/broadcast combinations can promote localism. 00 05 CO
2. A blanket prohibition on newspaper/broadcast combinations is not necessary to protect diversity. 399
C. The Commission’s decision to retain some limits on common ownership of different-type media outlets was constitutional and did not violate § 202(h). 400
1. Continuing to regulate cross-media ownership is in the public interest. 400
2. Continuing to regulate cross-media ownership does not violate the Fifth Amendment. 401
3. Continuing to regulate cross-media ownership does not violate the First Amendment. 401
D. The Commission did not provide reasoned analysis to support the specific Cross-Media Limits that it chose. 402
1. Overview of the Commission’s Diversity Index Methodology-403
2. The Commission did not justify its choice and weight of specific media outlets. 404
3. The Commission did not justify its assumption of equal market shares. OO O
4. The Commission did not rationally derive its Cross-Media Limits from the Diversity Index results. 05 O
5. The Commission should provide better notice on remand. rH rH
V. Local Television Ownership Rule . CM rH
A. Regulatory Background and the 2002 Biennial Review. CO rH
B. We uphold several threshold challenges to the Commission’s overall regulatory approach.
1. Limiting local television station ownership is not duplicative of antitrust regulation.
2. Media other than broadcast television may contribute to viewpoint diversity in local markets.
3. Consolidation can improve local programming. H-i CJT
4. The Commission adequately noticed its decision to allow triopolies. CD rH
C. We uphold the Commission’s decision to retain the top-four restriction. CD rH
D. We remand the specific numerical limits for the Commission’s further consideration.
E. We remand the Commission’s repeal of the Failed Station Solicitation Rule. O oq
VI. Local Radio Ownership Rule. to H
A. Regulatory Background and the 2002 Biennial Review. CO H
B. We uphold the Commission’s new definition of local markets. CO CO
1. The Commission justified using Arbitron Metro markets .... to CO
2. The Commission justified including noncommercial stations . to Ü1
C. We uphold the Commission’s transfer restriction. CO Oí
*381 1. Transfer restriction is “in the public interest.”.427
2. Transfer restriction is reasoned decisionmaking.427
3. Transfer restriction is constitutional.428
D. We affirm the attribution of Joint Sales Agreements.429
1. Attribution of JSAs is “necessary in the public interest.”.429
2. Attribution of JSAs is reasoned decisionmaking. 429
3. Attribution of JSAs is constitutional..430
E. We remand the numerical limits to the Commission for further justification.430
1. The Commission’s numerical limits approach is rational and in the public interest .431
2. The Commission did not support its decision to retain the existing numerical limits with reasoned analysis.432
a. The Commission did not sufficiently justified “five equal-sized competitors” as the right benchmark.432
b. The Commission did not sufficiently justified that the existing numerical limits actually ensure that markets will have five equal-sized competitors.433
c. The Commission did not support its decision to retain the AM7FM subcaps.434
VII. Conclusion.435
In these consolidated appeals we consider revisions by the Federal Communications Commission to its regulations governing broadcast media ownership that the Commission promulgated following its 2002 biennial review. On July 2, 2003, the Commission announced a comprehensive overhaul of its broadcast media ownership rules. It increased the number of television stations a single entity may own, both locally and nationally; revised various provisions of the regulations governing common ownership of radio stations in the same community; and replaced two existing rules limiting common ownership among newspapers and broadcast stations (the newspaper/broadcast cross-ownership rule and the radio/television cross-ownership rule) with a single set of “Cross-Media Limits.” See Report and Order and Notice of Proposed Rulemaking, 18 F.C.C.R. 13,620, 2003 WL 21511828 (2003) (the “Order”).
Several public interest and consumer advocacy groups (collectively, the “Citizen Petitioners”) 1 petitioned for judicial review of the Order in various courts of appeals, contending that its deregulatory provisions contravened the Commission’s statutory mandates as well as the Administrative Procedure Act, 5 U.S.C. §§ 551 et seq. (the “APA”). Associations of networks, broad *382 casters, and newspaper owners 2 also challenged the Order, arguing that pro-regulatory revisions as well as the absence of further deregulation violate the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) (the “1996 Act”), the APA, and the United States Constitution. The Judicial Panel on Multidistriet Litigation, acting pursuant to the random selection procedures of 28 U.S.C. § 2112 (a), consolidated the petitions in this Court. On September 3, 2003, we stayed implementation of the rules pending our review.
For the reasons stated below, we affirm the power of the Commission to regulate media ownership. In doing so, we reject the contention that the Constitution or § 202(h) of the 1996 Act somehow provides rigid limits on the Commission’s ability to regulate in the public- interest. But we must remand certain aspects of the Commission’s Order that are not adequately supported by the record. Most importantly, the Commission has not sufficiently justified its particular chosen numerical limits for local television ownership, local radio ownership, and cross-ownership of media within local markets. Accordingly, we partially remand the Order for the Commission’s additional justification or modification, and we partially affirm the Order. The stay will continue pending our review of the Commission’s action on remand. 3
I. Background
A. The 1934 Communications Act and Early Broadcast Ownership Regulation
In 1934 Congress authorized the Commission to grant licenses for private parties’ exclusive use of broadcast frequencies. Recognizing that the finite radio frequency spectrum inherently limits the *383 number of broadcast stations that can operate without interfering with one another, Congress required that broadcast licensees serve the public interest, convenience, and necessity. Communications Act of 1934, 47 U.S.C. § 309 (a); see also id. §§ 307(a), 310(d), 312.
“In setting its licensing policies, the Commission has long acted on the theory that diversification of mass media ownership serves the public interest by promoting diversity of program and service viewpoints, as well as by preventing undue concentration of economic power.” FCC v. Nat’l Citizens Comm. for Broad., 436 U.S. 775, 780 , 98 S.Ct. 2096 , 56 L.Ed.2d 697 (1978) (“NCCB”). The Commission’s early regulations reflected its presumption that a single entity holding more than one broadcast license in the same community contravened public interest. See Genesee Radio Corp., 5 F.C.C. 183 , 186-87 (1938). In 1941, the Commission announced that it would not license more than one station in the same area to a single network organization. See Nat’l Broad. Co. v. United States, 319 U.S. 190, 206-08, 224-27 , 63 S.Ct. 997 , 87 L.Ed. 1344 (1943) (upholding the rule). At the same time, the Commission prohibited common ownership of stations within the same broadcast service (AM radio, FM radio, and television) in the same community. See Rules Governing Standard and High Frequency Broadcast Stations, 5 Fed. Reg. 2382 , 2384 (June 26, 1940) (FM radio); Rules Governing Standard and High Frequency Broadcast Stations, 6 Fed. Reg. 2282 , 2284-85 (May 6, 1941) (television); Rules Governing Standard and High Frequency Broadcast Stations, 8 Fed. Reg. 16065 (Nov. 27, 1943) (AM radio). Regulations limiting an entity to the common ownership of seven AM radio stations, seven FM radio stations, and seven television stations survived judicial scrutiny in 1956. See United States v. Storer Broad. Co., 351 U.S. 192 , 76 S.Ct. 763 , 100 L.Ed. 1081 (1956). In the 1970s the Commission adopted its first cross-ownership bans, which prohibited, on a prospective basis, the common ownership of television and radio stations serving the same market, as well as combinations of radio or broadcast stations with a daily newspaper in the same community. Amendment of Sections 73.35, 73.24,0 and 73.636 of the Commission Rules Relating to Multiple Ownership of Standard, FM and Television Broadcast Stations, 22 F.C.C.2d 306 , ¶ 5, 1970 WL 18044 (1970); Amendment of Sections 73.34, 73.240 and 73.636 of the Commission’s Rules Relating to Multiple Ownership of Standard, FM, and Television Broadcast Stations, 50 F.C.C.2d 1046 , 1975 WL 30457 (1975). The Supreme Court upheld the newspaper/broadcast cross-ownership ban as a “reasonable means of promoting the public interest in diversified mass communications.” NCCB, 436 U.S. at 802 , 98 S.Ct. 2096 .
B. Deregulation Initiatives
The 1980s saw a deregulatory trend for media ownership. The Commission raised its national ownership limits to permit common ownership of 12 stations in each broadcast service (though still prohibiting station combinations that would reach more than 25% of the national audience). Amendment of Section 73.3555 (formerly 73.35, 73.240, and 73.636) of the Commission’s Rules Relating to Multiple Ownership of AM, FM, and Television Broadcast Stations, 100 F.C.C.2d 74 ¶¶38, 39, 1985 WL 260060 (1985). The Commission also determined that UHF television stations should not be deemed to have the same audience reach as VHF stations, 4 due *384 to “the inherent physical limitations of [the UHF] medium,” and therefore applied a 50% “discount” to UHF audiences as counted under the national audience limitation. Id. ¶¶ 42-44. In other words, UHF stations count only half of their audiences in determining compliance with the national television ownership rule.
In 1989 the Commission eased its “one to a market” radio/television cross-ownership rules by allowing waiver requests for radio/television cross-ownership in the 25 largest television markets. The Commission stated that it would look favorably upon requests for waivers where there would be 30 independently owned broadcast “voices” remaining in the market after consolidation. Amendment of Section 73.3555 of the Commission’s Rules, the Broadcast Multiple Ownership Rules, 4 F.C.C.R. 1741, ¶ 1, 1989 WL 510875 (1989). In 1992, the Commission relaxed local and national radio ownership restrictions and adopted a tiered approach to radio concentration that allowed a single entity to own more radio stations in the largest markets (up to three AM and three FM stations, subject to a local audience reach limitation of 25% and a national cap of 30 AM stations and 30 FM stations) and fewer in the smallest markets. Revision of Radio Rules and Policies, 7 F.C.C.R. 6387, ¶ 27, 1992 WL 690638 (1992).
C. The Telecommunications Act of 1996
In 1996 Congress overhauled the Communications Act by enacting the Telecommunications Act of 1996. The 1996 Act contemplated a “pro-competitive, deregula-tory national policy framework designed to accelerate rapidly private sector development of advanced telecommunications and information technologies and services to all Americans by opening all telecommunications markets to competition.” S.Rep. No. 104-230, at 1-2 (1996). The 1996 Act eliminated all limits on national radio ownership and raised the national television audience reach cap from 25% to 35%. 1996 Act §§ 202(a), (c)(1)(B), 110 Stat. at 110-11. Congress also eased local radio ownership limits, establishing a four-tier sliding scale limit of numerical caps that allowed for as many as eight co-owned radio stations in the largest markets. Id. § 202(b)(1), 110 Stat. at 110.
The 1996 Act did not contain a new local television rule, but it directed the Commission to “conduct a rulemaking proceeding to determine whether to retain, modify, or eliminate” its existing local television ownership limitations. Id. § 202(c)(2), 110 Stat. at 111. It also expanded the applicability of the one-to-a-market radio/television cross-ownership restriction waiver to the fifty largest markets. Id. § 202(d), 110 Stat. at 111.
Finally, the 1996 Act instructed the Commission to review biennially its broadcast ownership rules “to determine whether any of such rules are necessary in the public interest as the result of competition.” Id. § 202(h), 110 Stat. at 111-12. Section 202(h) also required the Commission to “repeal or modify any regulation it determines to be no longer in the public interest.” Id.
D. Regulatory Review Since 1996
In 1999 the Commission responded to Congress’s directive under § 202(c) of the 1996 Act to review its local television rule and announced that it would relax its pro *385 hibition on the common ownership of television stations with overlapping signals. The Commission’s new rule would allow two commonly owned television stations (a television station “duopoly”) in the same Designated Market Area (“DMA” or “market”) as long as (1) neither station was ranked among the four largest (“top-four”) stations in the market and (2) eight independently owned stations remained in the market post-merger. Review of the Commission’s Regulations Governing Television Broadcasting, 14 F.C.C.R. 12,903, ¶ 8, 1999 WL 591820 (1999) (“1999 Television Rule Review”). In the same rulemaking, the Commission also relaxed the one-to-a-market radio/television cross-ownership restriction and allowed radio/television station combinations to exist within three-tiered limits that depend on the size of the market. Id. ¶ 9. 5
Meanwhile, in 1998 the Commission began the first biennial review of its broadcast ownership regulations as required under § 202(h). In 2000 it announced that it would retain the national television ownership rule (the 35% limit provided in the 1996 Act) and its cable/broadcast cross-ownership rule after determining that both rules remained “necessary in the public interest.” 1998 Biennial Regulatory Review — Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, 15 F.C.C.R. 11,058, ¶ 4, 2000 WL 791562 (2000) (“1998 Biennial Regulatory Review”) 6 On appeal, however, the United States Court of Appeals for the D.C. Circuit held that the Commission had not sufficiently explained its reasons for retaining either of these rules. Fox Television Stations v. FCC, 280 F.3d 1027, 1043-44, 1051-52 (D.C.Cir.2002) (“Fox I”), modified on reh’g, 293 F.3d 537 (D.C.Cir.2002) (“Fox II”). As for the national television ownership rule, the Court determined that the agency had taken a “wait and see” approach in evaluating its competition and diversity effects, which was impermissible in light of § 202(h)’s mandate to repeal or modify rules found no longer necessary in the public interest. Id. at 1042. It remanded the rule to the Commission for additional justification. Id. at 1049. The Court vacated the cable/broadcast cross-ownership rule, however, finding that the Commission’s decision to retain it was arbitrary and capricious and contrary to § 202(h). Id. at 1053.
A few months later, the same Court reviewed the local television multiple-ownership rule. Sinclair Broad. Group, Inc. v. FCC, 284 F.3d 148 (D.C.Cir.2002). The petitioner challenged the “eight independent voices” exception, contending that it lacked foundation or connection to the Commission’s goal of promoting diversity in local markets. Id. at 152 . The Court determined that the Commission had ade *386 quately justified its decision to retain the local television rule under the APA and § 202(h), but that it had not provided a rational basis for the exclusion of non-broadcast media from the eight voices exception. Id. at 165. It remanded the rule for the Commission’s further justification. Id. at 169.
E. The Commission’s 2003 Report and Order
In September 2002 a Notice of Proposed Rulemaking (the “Notice”) announced that the Commission would review four of its broadcast ownership rules pursuant to § 202(h): the 35% national audience reach limit remanded in Fox; the local television rule remanded in Sinclair; the radio/television cross-ownership rule; and the dual network rule. 2002 Biennial Regulatory Review Notice of Proposed Rulemaking, 17 F.C.C.R. 18,503, ¶ 6, 2002 WL 31108252 (2002). The Notice also advised that the Commission was incorporating into its biennial review pending proceedings on two additional rules: its rule limiting radio station ownership in local markets and its rule prohibiting newspaper/broadcast cross-ownership. Id. ¶ 7.
The Commission established a Media Ownership Working Group (“MOWG”), which commissioned twelve studies ranging from consumer surveys to economic analyses of media markets. These reports were released for public comment in October 2002. Interested parties filed thousands of pages of comments, consisting of legal, social, and economic analyses, empirical and anecdotal evidence, and industry and consumer data to respond to the issues identified in the Commission’s Notice. Notably, nearly two million people weighed in by letters, postcards, e-mails, and petitions to oppose further relaxation of the rules. Statement of Commissioner Jonathan S. Adelstein, Dissenting, 18 F.C.C.R. 13,974, 13,977, 2003 WL 21251887 (July 2, 2003). The Commission also heard public comment at a February 2003 “field hearing” in Richmond, Virginia. 7
On June 2, 2003, the Commission adopted the Order modifying its ownership rules to provide a “new, comprehensive framework for broadcast ownership regulation” by a vote of 3-2. 8 Order ¶ 3. The Order was released on July 2, 2003.
F. The Order’s Modification of Broadcast Media Ownership Rules
After reaffirming the Commission’s three traditional policy objectives in promoting the public interest — competition, diversity, and localism — Order ¶ 8, the Commission considered whether each of the six rules remained in the public interest and proposed modifications where it believed necessary. With respect to each of the rules, the Commission determined as follows.
1. Local Television Ownership
The existing local television ownership rule allowed television station duopolies, so long as at least one of the stations was not ranked among the market’s four largest stations and so long as at least eight independently owned and operated full-power television stations would remain in the market post-merger. 47 C.F.R. § 73.3555 (b). The Order modified this rule to permit television station triopolies *387 in markets with 18 or more television stations and television station duopolies in markets with 17 or fewer television stations. Order ¶ 134. These limits are subject to the restriction (effectively a ban subject to a waiver provision) that a single firm may not own more than one top-four station in a market. This restriction forecloses common station ownership in markets with fewer than five television stations. Id. ¶ 186. The existing rule effectively precludes duopolies in most markets; only the largest 70 markets of the nation’s 210 DMAs could comply with the “eight voices” test. Adelstein Dissenting, 18 F.C.C.R. at 13,998. The new rule would allow triopolies in the nine largest DMAs, which represent 25.2% of the population. Duopolies could exist under the new rule in the largest 162 markets, representing 95.4% of the nation’s population. Id. at 13,997-98.
2. Local Radio Ownership
Although the Order retained the existing numerical limits on radio ownership that Congress established in § 202(b) of the 1996 Act, 9 it modified other aspects of the rule. First, it changed the method for determining radio markets by replacing the “contour-overlap” method (described in detail in Part VLB infra) with the geography-based market delineations created by Arbitron, a company that generates market data for radio advertisers. Order ¶ 239. Additionally, the Commission would now include noncommercial stations in the station count for each market. Id. The Commission grandfathered any existing radio station combinations rendered noncompli-ant under the newly defined markets, id. ¶ 484, but generally restricted transfer of these combinations, id. ¶487. The Commission also changed the local radio ownership rule by deciding to attribute “Joint Sales Agreements” (agreements under which a licensee sells advertising time on its station to a broker station for a fee) toward the brokering entity’s numerical limit. Id. ¶ 239.
3 & 4. Newspaper/Broadcast and Radio/Television Cross-Ownership
The Commission has prohibited common ownership of a full-service television broadcast station and a daily public newspaper in the same community since 1975. Amendment of Sections 73.35, 73.240, and 73.636 of the Commission’s Rules Relating to Multiple Ownership of Standard, FM, and Television Broadcast Stations, 50 F.C.C.2d 1046 , 1975 WL 30457 (1975). Additionally, the Commission regulates the number of television and radio stations that may be commonly owned with limits that vary with the size of the market. 47 C.F.R. § 73.3555 (c).
The Order announced the Commission’s decision to repeal both cross-ownership rules (television/newspaper, radio/television) and replace them with a single set of Cross-Media Limits. The Commission determined that neither eross-ownOTship pro *388 hibition remained necessary in the public interest to ensure competition, diversity, or localism. Order ¶¶ 330, 371. The new Cross-Media Limits prohibit newspaper/broadcast combinations and radio/television combinations in the smallest DMAs, ie., those with three or fewer full-power commercial or noncommercial television stations. Id. ¶454. In contrast, in the largest markets — those with more than eight television stations — common ownership among newspapers and broadcast stations is unrestricted. Id. ¶ 473. In medium-sized markets — those with between four and eight television stations — one entity may own a newspaper and either (a) one television station and up to 50% of the radio stations that may be commonly owned in that market under the local radio rule or (b) up to 100% of the radio stations allowed under the local radio rule. Id. ¶ 466.
In structuring its Cross-Media Limits, the Commission drew upon a methodological tool named the “Diversity Index,” which the Commission developed as a measure of viewpoint diversity in local markets to identify those “at-risk” markets where consolidation would have a deleterious effect. Id. ¶¶ 391, 442. The Diversity Index, explained more fully in Part IV.D.l below, is a highly modified version of the formula for measuring market concentration — the Herfindahl-Hirsehman Index— applied by the Department of Justice and Federal Trade Commission to analyze mergers. Id. ¶ 428.
5. National Television Ownership
The national television ownership rule prohibits entities from owning television stations that in the aggregate reach a certain percentage of our country’s households. 47 C.F.R. § 73.3555 (e)(1). Section 202(c) of the 1996 Act directed the Commission to delete the then-existing twelve-station cap and raise the audience reach limit from 25% to 35%. After the D.C. Circuit Court remanded the Commission’s decision in the 1998 biennial review to retain the limit at 35%, Fox I, 280 F.3d at 1049 , the Commission decided to increase the audience reach limit to 45%. Order ¶499. The Commission also declined to repeal or modify its existing 50% discount for UHF stations’ audiences as counted toward the audience reach limit. Id. ¶ 500.
6. Dual Network Rule
Under the dual network rule, a television station may affiliate with more than one network except that it may not affiliate with more than one of the four largest networks, ABC, CBS, Fox, and NBC. 47 C.F.R. § 73.658 (g). The rule effectively permits common ownership of networks to the exclusion of the top four. Order ¶ 592. The Commission determined that the dual network rule remained necessary in the public interest, and thus did not repeal or modify it. Id. 10
G. Procedural History of the Current Appeals
Within days of the publication of the Order, several organizations filed petitions for review of the Commission’s revised rules in various courts of appeals, some contending that the Commission had gone too far in revising the rules, and others asserting that the Commission had not gone far enough. Some of these organizations, including the Prometheus Radio Project, filed their petitions in this Court. Under 28 U.S.C. § 2112 (a), petitions to review administrative orders filed in different circuit courts within the first ten days of the appeal period trigger a lottery conducted by the Judicial Panel on Multidis- *389 trict Litigation. On August 19, 2003, the Panel announced that our Court had been selected in the lottery and consolidated the appeals here. We entered a stay of the effective date of the proposed rules after a hearing on September 3, 2003. Prometheus Radio Project v. FCC, No. 03-3388, 2003 WL 22052896 (3d Cir. Sept. 3, 2003). We then denied the Deregulatory Petitioners’ motion, joined by the Commission, to transfer venue to the D.C. Circuit Court on September 16, 2003. Prometheus Radio Project v. FCC, No. 03-3388 (3d Cir. Sept. 16, 2003) (order denying motion to transfer). After pushing back briefing and oral argument at the request of the parties, on February 11, 2004, we heard approximately eight hours of oral argument addressing the merits of Petitioners’ claims.
H. Subsequent Legislation
In January 2004, while the petitions to review the Order were pending in this Court, Congress amended the 1996 Act by increasing from 35% to 39% the national television ownership rule’s audience reach cap in § 202(c). Consolidated Appropriations Act, 2004, Pub. L. No. 108-199, § 629 , 118 Stat. 3 , 99 (2004). The legislation also amended § 202(h) in two ways: (1) making the Commission’s biennial review obligation quadrennial; and (2) insulating from § 202(h) review “rules relating to the 39 percent national audience reach limitation.” 118 Stat. at 100. Prior to oral argument, Petitioners filed letter briefs addressing' the 'effect of these amendments on their challenges to the Order.
II. Jurisdiction and Standard of Review
This is an appeal of an agency decision under the Communications Act of 1934, 47 U.S.C. §§ 151 et seq. Our jurisdiction is based on 47 U.S.C. § 402 (a) and 28 U.S.C. § 2342 (1). Our standard of review is governed by the APA and the 1996 Act provision authorizing the Commission’s periodic regulatory review. 11
A. Standard of Review Under the Administrative Procedure Act
Our standard of review in the agency rulemaking context is governed first by the judicial review provision of the APA, 5 U.S.C. § 706 . Under it, we “hold unlawful or set aside agency action, findings, and conclusions” that are found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law ... [or] unsupported by substantial evidence.” Id. § 706(2)(a), (e); N.J. Coalition for Fair Broad. v. FCC, 574 F.2d 1119 , 1125 (3d Cir.1978).
The scope of review under the “arbitrary and capricious” standard is “narrow, and a court is not to substitute its judgment for that of the agency.” Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 , 103 S.Ct. 2856 , 77 L.Ed.2d 443 (1983) (“State Farm”). Nevertheless, we must ensure that, in reaching its decision, the agency *390 examined the relevant data and articulated a satisfactory explanation for its action, including a “rational connection between the facts found and the choice made.” Id. (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 , 83 S.Ct. 239 , 9 L.Ed.2d 207 (1962)). Normally, we may find an agency rule is arbitrary and capricious where
the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. The reviewing court should not attempt itself to make up for such deficiencies; we may not supply a reasoned basis for the agency’s action that the agency itself has not given.
Id. (citing SEC v. Chenery Corp., 332 U.S. 194, 196 , 67 S.Ct. 1575 , 91 L.Ed. 1995 (1947)); see also Robert Wood Johnson Univ. Hosp. v. Thompson, 297 F.3d 273, 280 (3d Cir.2002). Put another way, we reverse an agency’s decision when it “is not supported by substantial evidence, or the agency has made a clear error in judgment.” AT&T Corp. v. FCC, 220 F.3d 607, 616 (D.C.Cir.2000) (citing Kisser v. Cisneros, 14 F.3d 615, 619 (D.C.Cir.1994)).
We will, however, “uphold a decision of less than ideal clarity if the agency’s path may reasonably be discerned.” State Farm, 463 U.S. at 43 , 103 S.Ct. 2856 (quoting Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 286 , 95 S.Ct. 438 , 42 L.Ed.2d 447 (1974)). But an agency that departs from its “former views” is “obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance” in order to survive judicial scrutiny for compliance with the APA. State Farm, 463 U.S. at 41-42 , 103 S.Ct. 2856 .
Finally, the traditional APA standard of review is even more deferential “where the issues involve ‘elusive’ and ‘not easily defined’ areas such as programming diversity in broadcasting.” Sinclair, 284 F.3d at 159 . Yet even when an administrative order involves policy determinations on such elusive goals, a “rationality” standard is appropriate. See NCCB, 436 U.S. at 796-97 , 98 S.Ct. 2096 (finding that the Commission acted rationally in determining that diversification of ownership would enhance the possibility of increasing diverse viewpoints). Additionally, when an agency has engaged in line-drawing determinations and our review is necessarily deferential to agency expertise, see AT&T Corp., 220 F.3d at 627 , its decisions may not be “patently unreasonable” or run counter to the evidence before the agency. Sinclair, 284 F.3d at 162 .
B. Standard of Review Considerations Under Section 202(h)
The Order was promulgated as part of the periodic review requirements of § 202(h) of the 1996 Act. Consequently, our review standard is informed by that provision, which, at the time of the Order’s release, read:
(h) Further Commission Review. The Commission shall review its rules adopted pursuant to this section and all of its ownership rules biennially 12 as part of its regulatory reform review under section 11 of the Communications Act of *391 1934 and shall determine whether any of such rules are necessary in the public interest as the result of competition. The Commission shall repeal or modify any regulation it determines to be no longer in the public interest.
110 Stat. 111 -12. Section 11 of the Communications Act, to which § 202(h) refers, was also added by the 1996 Act to ensure that the Commission review periodically its regulations governing telecommunications services to “determine whether any such regulation is no longer necessary in the public interest as a result of meaningful economic competition between providers of such service” and “repeal or modify any regulation it determines to be no longer necessary in the public interest.” 47 U.S.C. § 161 .
The text and legislative history of the 1996 Act indicate that Congress intended periodic reviews to operate as an “ongoing mechanism to ensure that the Commission’s regulatory framework would keep pace with the competitive changes in the marketplace” resulting from that Act’s relaxation of the Commission’s regulations, including the broadcast media ownership regulations. 2002 Biennial Regulatory Review, 18 F.C.C.R. 4726, ¶¶ 16, 17 (2003) (citing preamble to the 1996 Act; H.R. Conf. Rep. No. 104-458 (1996)). Put another way, the periodic review provisions require the Commission to “monitor the effect of ... competition ... and make appropriate adjustments” to its regulations. Id. ¶ 5.
As noted, the first sentence of § 202(h) requires the Commission to “determine” whether media concentration rules are “necessary in the public interest as the result of competition.” The second sentence contains a separate instruction to the Commission: to “repeal or modify” those rules “no longer in the public interest.” 110 Stat. 111 -12. We analyze each of these instructions in turn.
1. “Determine whether any such rules are necessary in the public interest.”
Recognizing that competitive changes in the media marketplace could obviate the public necessity for some of the Commission’s ownership rules, the first instruction requires the Commission to take a fresh look at its regulations periodically in order to ensure that they remain “necessary in the public interest.” This raises the question of what is “necessary.”
In the context of § 11 of the Communications Act, 47 U.S.C. § 161 -which, like § 202(h), requires the Commission periodically to review its telecommunications regulations and determine whether they "remain necessary in the public interest"the Commission has interpreted "necessary" to mean "useful," "convenient" or "appropriate" rather than "required" or "indispensable." Setting out its rationale for this interpretation in the 2002 Biennial Regulatory Review, 18 F.C.C.R. 4726, ¶11 14-22, 2003 WL 1192543 (2003), the Commission determined that the 1996 Act's legislative history indicated that Congress meant "no longer necessary" to mean "no longer in the public interest" and "no longer meaningful." 18 F.C.C.R. 4726, 1117 (citing H.R. Conf. Rep. No. 104-458, at 185 (1996)).
Next, the Commission found that an "indispensable" construction of "necessary" as to § 11 would be unreasonably inconsistent with the Communications Act's grant of general rulemaking authority to the Commission. Id. at 1118 n. 31. Under 47 U.S.C. § 201 (b) the Commission is authorized to "prescribe such rules and regTlla-tions [regarding services and charges of communications common carriers] as may be necessary in the public interest to carry *392 out the provisions of this Act.” In AT&T Corp. v. Iowa Utilities Board, the Supreme Court interpreted this provision as a grant of “general rulemaking authority.” 525 U.S. 366, 374 , 119 S.Ct. 721 , 142 L.Ed.2d 835 (1999). Characterizing this interpretation “not as a limitation on the Commission’s authority, but a confirmation of it,” the Commission concluded that the standard of review applicable to its rule-making authority under § 201 is a “plain public interest” standard. 18 F.C.C.R. 4276, ¶¶ 18 n. 31, 22 (citing 525 U.S. at 374, 378 , 119 S.Ct. 721 ). The Commission reasoned that the same standard must also apply to the review process required under § 11 in order to avoid absurd results. If the rulemaking and review standards were different, the Commission could promulgate any rule that is useful, but then, at the next periodic review, would have to revoke any of those rules that do not also meet a higher standard of “indispensable.” Id. ¶ 18 & n. 33. Under such a system, periodic review would either be inefficient or irrelevant, as the Commission could effectively sidestep the more stringent review standard by subsequently reissuing any “useful” rule that it had to repeal for failing to be “indispensable.” Id. ¶ 18.
Lastly, the Commission rejected arguments that there is controlling judicial precedent for an “indispensable” construction of “necessary.” It acknowledged that the Supreme Court and the D.C. Circuit Court of Appeals have upheld such constructions, see id. ¶ 19 (citing Iowa Utils. Bd., 525 U.S. at 374, 378 , 119 S.Ct. 721 ; GTE Serv. Corp. v. FCC, 205 F.3d 416 (D.C.Cir.2000)), but countered that these cases “simply demonstrate that terms such as ‘necessary’ ... must be read in their statutory context.” Id. Furthermore, the Commission found judicial support for its interpretation of “necessary” in the D.C. Circuit Court’s decision in Sinclair, 284 F.3d at 159 , regarding the Commission’s periodic review of its local television ownership rule under § 202(h). The Commission noted that the Sinclair Court did not expressly adopt any particular definition of “necessary,” but, in affirming the Commission’s § 202(h) finding that the rule furthers diversity and is thus necessary in the public interest, id. at 160, it “did not articulate a new or higher public interest yardstick.” 18 F.C.C.R. 4726, ¶20. 13 Nor did the D.C. Circuit Court’s decision in Fox foreclose its interpretation of “necessary,” the Commission determined, because on rehearing the Court deleted language in its initial decision that the Commission had applied too lax a standard in reviewing its broadcast media ownership rules under § 202(h). 14 Id. ¶ 14 (citing Fox II, 293 F.3d at 540 ).
For these reasons, the Commission determined that § ll’s requirement that it review its telecommunications regulations to determine whether they remain “necessary in the public interest” does not require it to employ a more stringent standard than “plain public interest” found in other parts of the Communications Act. Id. ¶¶ 18, 22 (citing 47 U.S.C. § 201 (b) as an example).
*393 Recently, the D.C. Circuit Court upheld, in the context of § 11, the Commission’s interpretation of “necessary” contained in the 2002 Biennial Regulatory Review. Cellco P’ship v. FCC, 357 F.3d 88 (D.C.Cir.2004). Recognizing that “necessary” is a “chameleon-like” word whose “meaning ... may be influenced by its context,” the Célico Court determined that it would uphold any reasonable interpretation that did not contravene the express provisions of the Communications Act. Id. at 94, 96 (citing Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43 , 104 S.Ct. 2778 , 81 L.Ed.2d 694 (1984)). It went on to determine that the Commission’s interpretation is both reasonable and consistent with the Communications Act, endorsing the Commission’s view that “necessary” must mean the same thing in the periodic review context as in the rule-making context in order to avoid absurd results. Id. at 98.
Célico also acknowledged that the Commission’s interpretation of “necessary” is consistent with the many courts that have endorsed a “useful” or “appropriate” interpretation over an “essential” or “indispensable” one. Id. at 97 (citing, inter alia, NCCB, 436 U.S. at 795 -96 98 S.Ct. 2096 ; McCulloch v. Maryland, 17 U.S. (4 Wheat.) 316, 413 , 4 L.Ed. 579 (1819); Cellular Telecomm. & Internet Ass’n v. FCC, 330 F.3d 502, 510 (D.C.Cir.2003) (specifically rejecting an “indispensable” connotation of “necessary” as used in the Communications Act’s enforcement forbearance provision, § 10(a))).
Finally, the Célico Court rejected suggestions that the Commission’s interpretation was inconsistent with its prior decisions in Sinclair and Fox. As noted above, Sinclair did not expressly adopt any particular definition of “necessary” and Fox I’s suggestion of a heightened standard was expressly retracted by Fox II, 293 F.3d at 540 . Cellco limited Fox I’s statement that “necessary” implied a presumption in favor of modification or elimination of existing regulations, see 280 F.3d at 1048 , to the context in which it was made: discussing whether vacating or remanding the national television ownership rule was the appropriate remedy. Cellco, 357 F.3d at 98. And while Sinclair apparently endorsed this language from Fox I, see 284 F.3d at 159 , the Cellco Court characterized Sinclair as merely “piggybacking]” on Fox I without “adopting] a general presumption in favor of modification or elimination of regulations when considering a substantive challenge to the adequacy of the Commission’s determinations.” Cellco, 357 F.3d at 98. In sum, the D.C. Circuit Court determined that the definition of “necessary” was not constrained by either its Fox or Sinclair decision. It remained an open issue for the Commission to decide in the first instance, as it did when it released the 2002 Biennial Regulatory Review. Id.
For the same reasons proffered by the Commission and endorsed by the D.C. Circuit Court to reject the “indispensable” definition of “necessary” under § 11, we do so under § 202(h). Though § 11 and § 202(h) are separate statutory provisions, they are both periodic review provisions from the same statute. As evidence of their relatedness, § 202(h) imposes periodic review obligations “as part of its regulatory reform review under section 11 of this Communications Act of 1934,” 110 Stat. at 111. 15 We see no reason to adopt a different definition of “necessary” under § 202(h) than under § 11. Moreover, interpreting § 202(h)’s first sentence to require the Commission to review its rules to *394 determine whether they are indispensable in the public interest would lead to incongruous results when compared to the instruction in § 202(h)’s second sentence, which requires the Commission to “repeal or modify any regulation it determines to be no longer in the public interest.” 16 For the “determine” instruction to be meaningful, “necessary” must embody the same “plain public interest” standard that Congress set out in the “repeal or modify” instruction. 17 Lastly, as explained by the Célico Court, the “convenient,” “useful,” or “helpful” definition of “necessary” is not foreclosed to the Commission by any judicial precedent, including Fox and Sinclair. So in interpreting the Commission’s obligation under § 202(h) to review its broadcast media ownership rules to determine whether they are “necessary in the public interest,” we adopt what the Commission termed “the plain public interest” standard under which “necessary” means “convenient,” “useful,” or “helpful,” not “essential” or “indispensable.”
2. “Repeal or modify any regulations it determines to be no longer in the public interest.”
Turning to the second instruction of § 202(h), the Commission is required to “repeal or modify” rules that are “no longer in the public interest.” Having concluded that the first instruction requires the Commission to determine whether any existing rule fails to satisfy the “plain public interest” standard, the relationship between the first and second instruction is evident. Under the second instruction, the Commission must repeal or modify the regulations that it has determined under the first instruction do not satisfy that same standard.
While we acknowledge that § 202(h) was enacted in the context of deregulatory amendments (the 1996 Act) to the Communications Act, see Fox I, 280 F.3d at 1033 ; Sinclair, 284 F.3d at 159 , we do not accept that the “repeal or modify in the public interest” instruction must therefore operate only as a one-way ratchet, ie., the Commission can use the review process only to eliminate then-extant regulations. For starters, this ignores both “modify” and the requirement that the Commission act “in the public interest.” What if the Commission reasonably determines that the public interest calls for a more stringent regulation? Did Congress strip it of the power to implement that determina *395 tion? The obvious answer is no, and it will continue to be so absent clear congressional direction otherwise. 18
What, then, makes § 202(h) “deregula-tory”? It is this: Section 202(h) requires the Commission periodically to justify its existing regulations, an obligation it would not otherwise have. A regulation deemed useful when promulgated must remain so. If not, it must be vacated or modified.
Misguided by the Fox and Sinclair Courts’ “deregulatory presumption” characterization and lacking the benefit of Cell- co’s subsequent clarification, the Commission concluded that § 202(h) “appears to upend traditional administrative law principles” by not requiring it to justify affirmatively a rule’s repeal or modification. Order ¶ 11. This overstates the case. Rather than “upending” the reasoned analysis requirement that under the APA ordinarily applies to an agency’s decision to promulgate new regulations (or modify or repeal existing regulations), see State Farm, 463 U.S. at 43 , 103 S.Ct. 2856, § 202 (h) extends this requirement to the Commission’s decision to retain its existing regulations. This interpretation avoids a crabbed reading of the statute under which we would have to infer, without express language, that Congress intended to curtail the Commission’s rulemaking authority and to contravene “traditional administrative law principles.” 19
C. Conclusion
Though our standard of review analysis is lengthy, it is in the end amenable to a straightforward summing-up: In a periodic review under § 202(h), the Commission is required to determine whether its then-extant rules remain useful in the public interest; if no longer useful, they must be repealed or modified. 20 Yet no matter what the Commission decides to do to any particular rule-retain, repeal, or modify (whether to make more or less stringent)-it must do so in the public interest and support its decision with a reasoned analysis. We shall evaluate each aspect of the Commission's Order accordingly.
III. Mootness and the National Television Ownership Rule
The national television ownership rule caps the number of television stations *396 that a single entity may own on a national basis. In the 1996 Act, Congress limited the number of commonly owned stations to those reaching no more than 35% of the national audience.1996 Act § 202(c)(1)(B), 110 Stat. 111 . In its first biennial review, the Commission retained the 35% cap as “necessary in the public interest,” but the D.C. Circuit Court held that the Commission had not adequately justified this decision. Fox I, 280 F.3d at 1048 . On remand and in connection with its 2002 biennial review proceeding, the Commission increased the cap from 35% to 45%. Order ¶ 583. The Commission also decided to retain its method of discounting by 50% the audiences of UHF stations toward the cap. Id. ¶ 586.
Subsequently, however, Congress enacted a new national television ownership cap. In its 2004 Consolidated Appropriations Act, it modified § 202(c)(1)(B) of the 1996 Act to provide that “[t]he Commission shall modify its rules for multiple ownership ... by increasing the national audience reach limitation for television stations to 39%.” See Pub. L. No. 108-199, § 629 , 118 Stat. 3 , 99 (2004). Because the Commission is under a statutory directive to modify the national television ownership cap to 39%, challenges to the Commission’s decision to raise the cap to 45% cap are moot. 21 Cf. PLMRS Narrowband Corp. v. FCC, 182 F.3d 995, 1002 (D.C.Cir.1999) (challenges to Commission’s later-modified order are moot).
Although the 2004 Consolidated Appropriations Act did not expressly mention the UHF discount, challenges to the Commission’s decision to retain it are likewise moot. Congress instructed the Commission to “increase the national audience reach limitation for television stations to 39%.” 118 Stat. at 99. Since 1985 the Commission has defined “national audience reach” to mean “the total number of television households” reached by an entity’s stations, except that “UHF stations shall be attributed with 50 percent of the television households” reached. 47 C.F.R. § 73.3555 (e)(2)(i); Multiple Ownership of AM, FM and Television Broadcast Stations, 50 Fed. Reg. 4666 , 4676, 1985 WL 260060 (Feb. 1, 1985). We assume that when Congress uses an administratively defined term, it intended its words to have the defined meaning. See, e.g., Bragdon v. Abbott, 524 U.S. 624, 631 , 118 S.Ct. 2196 , 141 L.Ed.2d 540 (1998). Furthermore, because reducing or eliminating the discount for UHF station audiences would effectively raise the audience reach limit, we cannot entertain challenges to the Commission’s decision to retain the 50% UHF discount. Any relief we granted on these claims would undermine Congress’s specification of a precise 39% cap.
As additional evidence of the mootness of challenges to the UHF discount, we note that the 2004 Consolidated Appropriations Act also added a sentence to § 202(h): “This subsection does not apply to any rules relating to the 39% national audience limitation.” 118 Stat. at 100. *397 The UHF discount is a rule “relating to” the national audience limitation. See 47 C.F.R. § 73.3555 (e)(2) (providing for the UHF discount in a section qualified “for the purposes of this paragraph (e),” the national television ownership rule paragraph). Congress apparently intended to insulate the UHF discount from periodic review, a position that is consistent with our reading of the legislation as endorsing the almost 20-year-old regulatory definition of “national audience reach” that provides for the UHF discount.
Although we find that the UHF discount is insulated from this and future periodic review requirements, we do not intend our decision to foreclose the Commission’s consideration of its regulation defining the UHF discount in a rulemaking outside the context of Section 202(h). The Commission is now considering its authority going forward to modify or eliminate the UHF discount and recently accepted public comment on this issue. 69 Fed. Reg. 9216 -17 (Feb. 27, 2004). Barring congressional intervention, see, e.g., S. 1264, 108th Cong. § 12 (2003) (proposing phase-out and 2008 sunset of the UHF), the Commission may decide, in the first instance, the scope of its authority to modify or eliminate the UHF discount outside the context of § 202(h).
IV. Cross-Ownership Rules
The Commission’s decision to repeal its newspaper/broadcast cross-ownership rules 22 in favor of new Cross-Media Limits has been attacked on all fronts. Some petitioners support the repeal but argue that the Cross-Media Limits are too restrictive. Others challenge the repeal decision and argue that the new limits are too lenient. We conclude that the Commission’s decision to replace its cross-ownership rules with the Cross-Media Limits is not of itself constitutionally flawed and does not violate § 202(h). But we cannot uphold the Cross-Media Limits themselves because the Commission does not provide a reasoned analysis to support the limits that it chose.
A. Regulatory Background and the 2002 Biennial Review
Since the 1970s, the Commission has enforced two separate limits on the common ownership of different-type media outlets in local markets. One cross-ownership'rule prohibits the common ownership of a full-service television-broadcast station and a daily public newspaper in the same community. 47 C.F.R. § 73.3555 (d). The other limits the number of television and radio stations to the following combinations: (1) in.markets where at least 20 independently owned media, voices would remain post-merger, two television stations and six radio stations or one television station and seven radio stations; (2) in markets where at least 10 independent voices would remain, two television stations and four radio stations; and (3) in other markets, two television stations (subject to the local television ownership rule) and one radio station. Id. § 73.3555(c).
The Commission’ considered both cross-ownership rules during its 2002 biennial review under § 202(h). In the Order, the Commission announced that because neither rule remained necessary in the public interest, it was repealing them and replacing them with a single set of Cross-Media Limits. The three-tiered Cross-Media Limits regulate common ownership depending on the size of the market: small (those with three or fewer full-power commercial or noncommercial television sta *398 tions), mid-sized (between four and eight television stations), and large (more than eight television stations). In small markets, newspaper/broadcast combinations and radio/television combinations are prohibited. Order ¶ 454. In medium-sized markets, an entity may own a newspaper and either (a) one television station and up to 50% of the radio stations that may be commonly owned in that market under the local radio rule or (b) up to 100% of the radio stations allowed under the local rule. Id. ¶ 466. In large markets, cross-ownership is unrestricted. Id. ¶ 473.
B. The Commission’s decision not to retain a ban on newspaper/broadcast cross-ownership is justified under § 202(h) and is supported by record evidence.
The Commission determined that the rule prohibiting newspaper/broadcast cross-ownership was no longer necessary in the public interest for three primary reasons: (1) the ban is not necessary to promote competition in local markets because most advertisers do not view newspapers and television stations as close substitutes, Order ¶ 332; (2) the ban undermines localism by preventing efficient combinations that would allow for the production of high-quality local news, id. ¶ 343; and (3) there is not enough evidence to conclude that ownership influences viewpoint to warrant a blanket cross-ownership ban, thus making it unjustifiable on diversity grounds, id. at Ii 364, (and moreover, the presence of other media sources-such as the Internet and cable-compensate for the viewpoint diversity lost to consolidation, id. ¶ 365). The Citizen Petitioners object to the local-ism and diversity components of the Commission's rationale. We conclude differently, as reasoned analysis supports the Commission's determination that the blanket ban on newspaper/broadcast cross-ownership was no longer in the public interest. Part II.C supra.
1. Newspaper/broadcast combinations can promote localism.
The Commission measured the promotion of localism by considering “the selection of programming responsive to local needs and interests, and local news quantity and quality.” Order ¶ 78. Evidence that existing (grandfathered) newspaper-owned broadcast stations produced local news in higher quantity with better quality than other stations convinced the Commission that the ban on newspaper/broadcast combinations undermined its localism interest. The Commission principally relied on the findings of its MOWG study that newspaper-owned television stations provide almost 50% more local news and public affairs programming than other stations, an average of 21.9 hours per week. Id. ¶ 344 (citing Thomas C. Spavins et al., The Measurement of Local Television News and Public Affairs Programs (MOWG Study No. 7) at 3 (Sept.2002)). The Commission also found corresponding advantages in quality of local coverage provided by newspaper-owned stations, as shown by ratings (measuring consumer approval) and industry awards (measuring critical approval). Id. ¶ 344-45 (citing, among other things, findings by the Project for Excellence in Journalism that newspaper-owned stations “were more likely to do stories focusing on important community issues and to provide a wide mix of opinions, and they were less likely to do celebrity and human interest features”).
The Citizen Petitioners argue that the MOWG study was flawed because it examined all newspaper/broadcast station combinations, including “intermarket” combinations (entities that own a newspaper and broadcast stations in different cities), as *399 well as “intramarket” combinations (entities that own a newspaper and a broadcast, station in the same city). But the Citizens Petitioners do not suggest that a study entirely focused on intramarket combinations would have different results. The six intramarket combinations that were included in the study (grandfathered exceptions to the cross-ownership ban) averaged more local news and public affairs programming as compared to the overall average (26 weekly hours compared to 21.9) and higher ratings for their 5:30 p.m. and 6:00 p.m. news programs (9.8 and 11 compared to 7.8 and 8.2). MOWG Study No. 7 app. A; Comments of Newspaper Association of America, MB Docket No. 02-277 at 15 (Jan. 2, 2003).
The Citizen Petitioners also protest the Commission’s reliance on anecdotal evidence of pro-localism combinations and its disregard of anecdotal evidence to the contrary. Significantly, however, the Commission used anecdotal evidence 23 merely to illustrate its statistical findings — it did not rely on anecdote as the sole basis for its conclusions about localism. Moreover, the Commission properly discounted anecdotal evidence of a Canadian newspaper conglomerate’s detrimental effect on local-ism. Can West, which controls 30% of Canada’s daily newspaper circulation, requires its newspaper editors to publish editorials from headquarters, which it forbids local editorials to contradict. But the Commission explained that the Can West example shows the peril of national ownership and corporate centralization of media services, which is not relevant to the Commission’s regulations on local combinations. Order ¶ 352. In summary, the Citizen Petitioners’ arguments do not unsettle the Commission’s conclusion that the newspaper/broadcast cross-ownership ban undermined localism.
2. A blanket prohibition on newspaper/broadcast combinations is not necessary to protect diversity.
The Commission offered two rationales for its conclusion that a blanket prohibition on newspaper/broadcast combinations is no longer necessary to ensure diversity in local markets. First, it found that “[Commonly-owned newspapers and broadcast stations do not necessarily speak with a single, monolithic voice.” Id. ¶ 361. Given conflicting evidence in the record 24 on whether ownership influences viewpoint, the Commission reasonably concluded that it did not have enough confidence in the proposition that commonly owned outlets *400 have a uniform bias to warrant sustaining the cross-ownership ban. Id. ¶ 864.
Second, the Commission found that diverse viewpoints from other media sources in local markets (such as cable and the Internet) compensate for viewpoints lost to newspaper/broadcast consolidations. Id. ¶ 366. We agree record evidence suggests that cable and the Internet supplement the viewpoint diversity provided by broadcast and newspaper outlets in local markets. 25 As discussed more fully below, we believe that the Commission gave too much weight to the Internet in deriving the Cross-Media Limits. But separate from the question of degree, we conclude that it was acceptable for the Commission to find that cable and the Internet contribute to viewpoint diversity.
C. The Commission’s decision to retain some limits on common ownership of different-type media outlets was constitutional and did not violate § 202(h).
The Deregulatory Petitioners support the Commission’s repeal of the newspaper/broadcast cross-ownership ban but object to its decision to retain any restriction on the common ownership of newspaper and broadcast media outlets. First they argue that any limits on newspaper/broadcast cross-ownership violate § 202(h), because, as the Commission acknowledges, the evidence suggests that the cross-ownership restrictions are not in the public interest. They also argue that the Cross-Media Limits violate the First and Fifth Amendments of the United States Constitution. We disagree on all counts.
1. Continuing to regulate cross-media ownership is in the public interest.
The Commission’s finding that a blanket prohibition on newspaper/broadcast cross-ownership is no longer in the public interest does not compel the conclusion that no regulation is necessary. See Order ¶ 364. As described above, the Commission found evidence to undermine the premise that ownership always influences viewpoint, 26 but it did not find the opposite to be true. And while the Commission found that other media sources contributed to viewpoint diversity in local markets, it could not have found that the Internet and cable were complete substitutes for the viewpoints provided by newspapers and broadcast stations. See MOWG Study No. 3 (finding that the Internet and cable rank as sources' of local news, but they do not outrank newspapers and broadcast television). Given the Commission’s goal of balancing the public’s interests in competition, localism, and diversity, it reasonably concluded that repealing the cross-owner *401 ship ban was necessary to promote competition and localism, while retaining some limits was necessary to ensure diversity. 27
2. Continuing to regulate cross-media ownership does not violate the Fifth Amendment.
The Deregulatory Petitioners argue that the Cross-Media Limits violate the Equal Protection Clause of the Fifth Amendment because they single out newspaper owners for special restrictions that do not apply to other media outlets. This argument is foreclosed, however, by the Supreme Court’s decision in NCCB that endorsed the constitutionality of the 1975 newspaper/television cross-ownership ban. 436 U.S. at 801-02 , 98 S.Ct. 2096 . Rather than concluding that newspaper owners were singled out for different treatment, the Court determined that “the regulations treat newspaper owners in essentially the same fashion as other owners of the major media of mass communication” by imposing limits on them as well as owners of television and radio stations. Id. at 801 , 98 S.Ct. 2096 . We decline the Deregula-tory Petitioners’ invitation to disregard Supreme Court precedent because of changing times. Surely there are more media outlets today (such as cable, the Internet, and satellite broadcast) than there were in 1978 when NCCB was decided. But it cannot be assumed that these media outlets contribute significantly to viewpoint diversity as sources of local news and information. See Part IV.D.2 infra. Even if it could, it is the Supreme Court’s prerogative to change its own precedent. See State Oil Co. v. Khan, 522 U.S. 3, 20 , 118 S.Ct. 275 , 139 L.Ed.2d 199 (1997) (stating that only the Supreme Court can overrule its own precedent); Am. Civil Liberties Union of N.J. v. Black Horse Pike Reg’l Bd. of Educ., 84 F.3d 1471, 1484 (3d Cir.1996) (stating that we are obliged to follow Supreme Court precedent “until instructed otherwise by a majority of the Supreme Court”).
3. Continuing to regulate cross-media ownership does not violate the First Amendment.
The Deregulatory Petitioners argue that the Commission’s decision to retain restrictions on the common ownership of newspapers and broadcast stations contravenes the First Amendment because it limits the speech opportunities of newspaper owners and broadcast station owners, and hence limits the public’s access to information. Yet again their challenge is foreclosed by NCCB , where the Supreme Court affirmed the Commission’s authority, despite a First Amendment challenge, to regulate broadeasVnewspaper cross-ownership in the public interest. Due to the “physical scarcity” of the broadcast spectrum, the Court scrutinized the regulation to discern a rational basis. 436 U.S. at 799 , 98 S.Ct. 2096 . The Commission’s action, it held, was “a reasonable means of promoting the public interest in diversified mass communications.” Id.’ at 802, 98 S.Ct. 2096 .
The Deregulatory Petitioners suggest, as they did in mounting their Fifth Amendment challenge, that the expansion of media outlets since NCCB’s day requires a rethinking of the scarcity rationale and the lower level of constitutional review it entails. Again we decline their invitation to disregard precedent, and we are not alone. See FCC v. League of Women Voters of Cal., 468 U.S. 364 , 376 & n. 11, 104 S.Ct. 3106 , 82 L.Ed.2d 278 (1984) *402 (upholding the scarcity rationale until Congress speaks to the issue); Fox I, 280 F.3d at 1046 (“First, contrary to the implication of the networks’ argument, this court is not in a position to reject the scarcity rationale even if we agree that it no longer makes sense. The Supreme Court has already heard the empirical case against that rationale and still ‘declined to question its continuing validity.’ ” (citing Turner v. FCC, 512 U.S. 622, 638 , 114 S.Ct. 2445 , 129 L.Ed.2d 497 (1994))).
Even were we not constrained by Supreme Court precedent, we would not accept the Deregulatory Petitioners' contention that the expansion of media outlets has rendered the broadcast spectrum less scarce. In NCCB, the Court referred to the "physical scarcity" of the spectrum-the fact that many more people would like access to it than can be accommodated. 436 U.S. at 799 , 98 S.Ct. 2096 . The abundance of non-broadcast media does not render the broadcast spectrum any less scarce. See, e.g., Ruggiero v. FCC, 278 F.3d 1323, 1325 (D.C.Cir.2002), rev'd en banc, 317 F.3d 239 (D.C.Cir.2003) (citing the Commission's statement that "[niow radio service is widely available throughout the country and very little spectrum remains available for new full-powered stations.").
In this context, we will apply a rational basis standard to the Commission’s restrictions on the common ownership between newspaper and broadcast stations, and uphold them if they are rationally related to a substantial government interest. See NCCB, 436 U.S. at 799-800 , 98 S.Ct. 2096 ; see also Am. Family Ass’n v. FCC, 365 F.3d 1156, 1168 (D.C.Cir.2004). In NCCB , the Supreme Court endorsed a substantial government interest in promoting diversified mass communications. Id. at 795, 802 , 98 S.Ct. 2096 . The Supreme Court held that the Commission had “acted rationally in finding that diversification of ownership would enhance the possibility of achieving greater diversity of viewpoints.” Id. at 796 , 98 S.Ct. 2096 . Here, as in NCCB , the Commission justified its continued restrictions on common ownership of newspapers and broadcast stations as promoting the public interest in viewpoint diversity. Order ¶ 355. The Court has said that limiting common ownership is a reasonable means of promoting the public interest in viewpoint diversity. NCCB, 436 U.S. at 796 , 436 U.S. 775 . Therefore, applying NCCB , we hold that the Commission’s continued regulation of the common ownership of newspapers and broadcasters does not violate the First Amendment rights of either.
D. The Commission did not provide reasoned analysis to support the specific Cross-Media Limits that it chose.
The Commission concluded that cross-ownership limits were necessary in specific situations to guard against "an elevated risk of harm to the range and breadth of viewpoints that may be available to the public." Order ¶ 442. But recognizing that ownership limits impede the speech opportunities for both broadcasters and newspapers, the Commission endeavored to craft new limits "as narrowly as possible." Id. ¶ 441. In that vein, the Commission sought to identify "at risk" local markets-those with high levels of viewpoint concentration-where continued regulation was necessary. By focusing its regulation on those markets, the Commission hoped to avoid needlessly overregulating markets with already ample viewpoint diversity.
But for all of its efforts, the Commission's Cross-Media Limits employ several irrational assumptions and inconsistencies. We do not object in principle to the Corn- *403 mission’s reliance on the Department of Justice and Federal Trade Commission’s antitrust formula, the Herfindahl-Hirsch-mann Index (“HHI”), as its starting point for measuring diversity in local markets. In converting the HHI to a measure for diversity in local markets, however, the Commission gave too much weight to the Internet as a media outlet, irrationally assigned outlets of the same media type equal market shares, and inconsistently derived the Cross-Media Limits from its Diversity Index results. For these reasons, detailed below, we remand for the Commission to justify or modify further its Cross-Media Limits.
1. Overview of the Commission’s Diversity Index Methodology
The Commission designed a methodology called the Diversity Index to identify “at risk” markets where limits on cross-media ownership should be retained. The Diversity Index was “inspired by” the HHI, which the Department of Justice and the Federal Trade Commission use to measure proposed mergers’ effect on competition in local markets. Id. ¶ 394. A market’s HHI score is the sum of market shares squared. A highly competitive market will have a lower HHI score than a concentrated one. For example, compare the HHI score of a market with 10 equal-sized competitors (10 [competitors] x 10 [each competitor’s market share percentage]2 = 1000) to the HHI score of a market with only five equal-sized competitors (5 x 202 = 2000). 28 The Department of Justice and the Federal Trade Commission categorize markets with HHI scores above 1800 as “highly concentrated.” If a proposed merger would exceed that level of concentration, the agencies believe that it would be harmful to the competition in that market. At its core, the Diversity Index here uses the same sum of market share-squared formula.
First, the Commission selected which media outlets to include in its analysis of viewpoint diversity in local markets based on consumers’ reported preferences for sources of local news and information. The Commission determined that broadcast television, daily and weekly newspapers, radio, and Internet (via cable connection and DSL, dial-up, or other connections) are the relevant contributors to viewpoint diversity in local markets. See Neilsen Media Research, Consumer Survey on Media Usage (MOWG Study No. 8) (Sept. 2002). Based on the popularity of each media source, the Commission assigned each a relative weight: broadcast TV 33.8%, daily newspapers 20.2%, weekly newspapers 8.6%, radio 24.9%, Internet (cable) 2.3% and Internet (DSL, dial-up, or other connection) 10.2%. Order ¶¶ 412, 415, 427.
Next, the Commission selected many sample markets 29 for which it would determine a Diversity Index score. In each of those markets, it counted the number of outlets within each media type and assigned each outlet an equal market share. (For example, the New York City market has 23 television stations, so each one was attributed an equal 4.3% 30 market share.) *404 The Commission calculated the ownership share by multiplying the number of outlets owned by an entity by the market share. (Univision owns three television stations in New York, so its ownership share was 3 x 4.3% = 13.0%.) Each ownership share was then given its relative weight by media type. (Univision’s 13.0% share was thus subject to the 33.8% multiplier for television stations). The Commission then squared all of the weighted ownership shares; their sum was the market’s total Diversity Index score. But in markets with cross-owned shares (outlets of different media types owned by the same entity) the entity’s weighted ownership shares were summed together before they were squared. (ABC owned one television station and four radio stations in New York, so the Commission added its weighted ownership share for the television station (4.3% x 33.8% = 1.45%) to its weighted ownership share for the radio stations (6.7% x 24.9% = 1.67%) for a combined ABC ownership share of 3.12%. The square of 3.12 was included in the summation). See generally Order app. C.
After the Commission calculated Diversity Index scores for markets of different sizes, it determined how those scores would change in several different consolidation “scenarios.” To illustrate, the Commission determined that markets with five television stations had an average Diversity Index score of 911. If a newspaper and television station combined in a market of that size, that score would increase by 223, to 1134. The other combination scenarios were: (1) one television station and all of the radio stations allowed to be commonly owned under the local radio rule; (2) one newspaper and all of the radio stations allowed to be commonly owned under the Iocal radio rule; (3) one newspaper, one television station, and half of the number of radio stations allowed to be commonly owned under the local radio rule; (4) two television stations; (5) one newspaper and two television stations; and (6) one newspaper, two television stations, and all of the radio stations allowed under the local radio rule. Order app. D.
Finding that all of the consolidation scenarios resulted in relatively high increases to the average Diversity Index scores for the smallest markets (those with three or fewer television stations), the Commission prohibited newspaper/television, newspaper/radio, and radio/television combinations in those markets. Order ¶¶ 456, 459, 460. In the large markets (nine or more stations), all of the consolidation scenarios resulted in acceptable increases to the average Diversity Index scores, so the Commission imposed no limits on cross-media ownership in those markets. In the midsized markets (between four and eight television stations), the Commission found that all of the scenarios, except the two involving a newspaper and television duopoly, should be allowed, based on their modest increases to- the average Diversity Index scores for those markets. Id. ¶ 466.
2. The Commission did not justify its choice and weight of specific media outlets.
Petitioners from both sides of the regulatory spectrum attack the Commission’s selection of media outlets for inclusion in the Diversity Index formula. The Citizen Petitioners argue that the Commission gave too much weight to the Internet at the expense of television and daily newspapers, thereby understating the level of concentration and overstating the level of di *405 versity in a market. The Deregulatory Petitioners, on the other hand, argue that the Diversity Index understates the actual amount of diversity in a market by ignoring important media outlets, primarily cable television. As explained below, we affirm the Commission’s reasoned decision to discount cable. But we think that the same rationale also applies to the Internet. Therefore, its decision to count the Internet as a source of viewpoint diversity, while discounting cable, was not rational.
The Commission properly excluded cable because of serious doubts as to the extent that cable provided independent local news — the Commission’s recognized indicator of viewpoint diversity in local markets. Order ¶ 394 (“News and public affairs programming is the clearest example of programming that can provide viewpoint diversity .... [and] the appropriate geographic market for viewpoint diversity is local.”). While the responses to one question in the Commission’s survey suggested that cable is a significant source of local news, see MOWG Study No. 8 tbl. 8, the Commission did not find this credible because the responses to other survey questions suggested that respondents were counting broadcast signals that are transmitted as cable channels as sources of local news on cable. See id. tbl. 18 (from a list of popular national cable news channels and a choice for “local cable news channels,” almost half of the respondents chose “other” as their source for cable network news, indicating that cable news channels were probably confused with broadcast networks’ news). The survey’s indication that cable is an independent source of local news was also undercut by external evidence, including Neilsen ratings, that local cable channels are the least watched of any broadcast or cable stations in the market. Order ¶ 414. Furthermore, the Commission noted that local cable channels are not available everywhere, but only in select markets. Id. ¶ 414 n. 924; see also UCC Comments at 30-31 (reporting that only 10 to 15% of cable systems include channels that provide local and public affairs program ming — i.e., public, educational, and governmental access channels — and that there are only 22 local news cable channels in the country, five of which serve the New York City area). Thus, the Commission justifiably excluded cable from its Diversity Index calculations.
Similarly, the responses to one of the Commission survey questions suggested that the Internet is a source of local news. See MOWG Study No. 8 31 tb1.1 (18.8% of respondents listed the Internet as a source of local news). But the survey did not identify which websites respondents used as sources of local news. 32 There is a *406 critical distinction between websites that are independent sources of local news and websites of local newspapers and broadcast stations that merely republish the information already being reported by the newspaper or broadcast station counterpart. The latter do not present an “independent” viewpoint and thus should not be considered as contributing diversity to local markets. Accordingly, the Commission should have discounted the respondents who primarily rely on these websites from its total number of respondents who indicated that they use the Internet to access local news. 33
Furthermore, just as the Commission discounted responses indicating that cable was an independent source of local news because this finding conflicted with other record evidence, it should have discounted the Internet responses as well. The Commission does not cite, nor does the record contain, persuasive evidence that there is a significant presence of independent local news sites on the Internet. According to the record, most sources of local news on the Internet are the websites for newspapers and broadcast television stations. See, e.g., UCC Comments at 33 (62% of Internet users get local news from newspaper websites, 39% visit television station websites). And the examples the Commission does cite — the Drudge Report and Salon.com — have a national, not local, news focus. 34 Order ¶ 427.
The Commission suggests that “the virtual universe of information sources” on the Internet qualifies it as a source of viewpoint diversity. Order ¶ 427. But to accept this rationale we would have to distort the Commission’s own premise that local news is an indicator of viewpoint diversity. E.g., id. ¶ 391 (Diversity Index measures “the relative importance of these media as a source of local news”). 35 Search-engine sponsored pages such as Yahoo! Local and about.com, 36 which were *407 suggested by eommenters as sources of local news and information, may be useful for finding restaurant reviews and concert schedules, but this is not the type of “news and public affairs programming” that the Commission said was “the clearest example of programming that can provide viewpoint diversity.” Id. ¶ 394.
To accept its “universe of information” characterization of the Internet’s viewpoint diversity, we would also have to disregard the Commission’s professed intent to focus its consideration of viewpoint diversity on media outlets. Id. ¶¶ 20, 391. In terms of content, “the media” provides (to different degrees, depending on the outlet) accuracy and depth in local news in a way that an individual posting in a chat room on a particular issue of local concern does not. But more importantly, media outlets have an entirely different character from individual or organizations’ websites and thus contribute to viewpoint diversity in an entirely different way. They provide an ag-gregator function (bringing news/information to one place) as well as a distillation function (making a judgment as to what is interesting, important, entertaining, etc.). 37 Individuals (such as political candidates) and entities (such as local governments or community organizations) may use the Internet to disseminate information and opinions about matters of local concern (such as the extension of a bike path on the Schuylkill River in Center City Philadelphia, see dissent Part IV.A.1), but these individuals and organizations are not, themselves, media outlets. We agree that the Internet “helps citizens discharge the obligations of citizenship in a democracy,” Order ¶ 393, when someone can go cityof-glenfalls.com to find the city council’s next agenda or use sfgov.org to learn how to get a marriage license in San Francisco. See Comments of the Hearst Corporation, MM Docket No. 01-235 at 11 & n. 36, apps. A & C (Dec. 3, 2001) (“Hearst Comments”) (listing these website addresses, among others, as examples of local government websites). But local governments are not, themselves, “media outlets” for viewpoint-diversity purposes. Like many entities, they just happen to use a particular media outlet — the Internet — to disseminate information.
Similarly, advertiser-driven websites such as hvnet.com and sfadvertiser.com, see Hearst Comments at apps. A & C, hardly contribute to viewpoint diversity. Like local governments, the sponsors of these websites are not “media outlets” just because they have “local information” that they want the public to have — if they were, their advertisements in telephone directories would also have to count toward viewpoint diversity. Compare Order ¶ 424 (explaining that the Commission would not count toward viewpoint diversity a local newspaper’s comics and classified ads because, while the subscriber is “undoubtedly getting a valuable service, it is not clear that the service has anything to do with news and current affairs”).
The Commission attempts to justify different treatment for cable and the Internet by suggesting that local cable news channels are only available in select markets, while the Internet is available everywhere. Not only is this distinction demonstrably false (as even the Commission acknowledged that almost 30% of Americans do not have Internet access, Order ¶ 365), it is irrelevant. That the Internet *408 is more available than local cable news channels does not mean that it is providing independent local news. On remand the Commission must either exclude the Internet from the media selected for inclusion in the Diversity Index or provide a better explanation for why it is included in light of the exclusion of cable. See Sinclair, 284 F.3d at 163-65 (unexplained inconsistency was arbitrary and capricious).
3. The Commission did not justify its assumption of equal market shares.
Both the Citizen Petitioners and the Deregulatory Petitioners object to the Commission’s decision to assign all outlets within the same media type (that is, television stations, daily papers, or radio stations) an equal market share. The assumption of equal market shares is inconsistent with the Commission’s overall approach to its Diversity Index and also makes unrealistic assumptions about media outlets’ relative contributions to viewpoint diversity in local markets. 38
The Commission’s decision to assign equal market shares to outlets within a media type does not jibe with the Commission’s decision to assign relative weights to the different media types themselves, about which it said “we have no reason to believe that all media are of equal importance.” Order ¶ 409; see also id. ¶ 445 (“Not all voices, however, speak with the same volume.”). It also negates the Commission’s proffered rationale for using the HHI formula in the first place — to allow it to measure the actual loss of diversity from consolidation by taking into account the actual “diversity importance” of the merging parties, something it could not do with a simple “voices” test. Id. ¶ 396. Finally, assigning equal market shares to outlets that provide no local news almost certainly presents an understated view of concentration in several markets, thus contravening the Commission’s goal of making “the most conservative assumption possible” about viewpoint diversity. Id. ¶ 400.
Additionally, there is no dispute that the assignment of equal market shares generates absurd results. For example, in New York City, the Dutchess Community College television station and the stations owned by ABC each receive an equal 4.3% market share. Or compare the Dutchess Community College station’s weighted share of 1.5% (4.3% times the 33.8% multiplier for television) to a mere 1.4% weighted, combined share assigned to the New York Times Company’s co-owned daily newspaper and radio station. Order app. C. A Diversity Index that requires us to accept that a community college television station makes a greater contribution to viewpoint diversity than a conglomerate that includes the third-largest newspaper in America 39 also requires us to abandon both logic and reality.
The Commission’s attempt to justify its failure to consider actual market share of outlets within a media type is not persua *409 sive. It suggests that actual-use data use data is not relevant because “current behavior is not necessarily an accurate predictor of future behavior.” Order ¶ 423. But this truism did not prevent the Commission from preferring actual-use data in assigning relative weight to the different media types. The Commission also suggests that, compared to consumer preferences for a general media type (which are generally stable), consumers’ preferences for particular media outlets are fluid because they depend on the media outlet’s chosen format or quantity or quality of content, which are easily changed. Id. ¶ 422. But while variance in the local news content of individual media outlets is conceivable — e.g., the home shopping television station could start carrying local news — -the Commission does not provide any evidence that media outlets acttially undergo any such radical content change, let alone that they regularly do so. Simply put, the Commission needs to under-gird its predictive judgment that stations can freely change the level of their news content with some evidence for that judgment to survive arbitrary and capricious review. Fox I, 280 F.3d at 1051 .
Lastly, the Commission attempts to justify its refusal to employ actual-use data by arguing that collecting “information on viewing/listening/reading of local news and current affairs material” would make it “necessary first to determine which programming constituted news and current affairs,” which in turn “would present both legal/Constitutional and data collection problems.” Order ¶ 424. With respect to “legal/Constitutional” problems, the Commission is apparently concerned about categorizing programming as news or “non-news.” But the Commission obtained actual-use data in MOWG Study No. 8 without any “legal/Constitutional problems.” There it avoided having to make content-distinguishing judgments simply by asking respondents where they got their local news. And the Commission’s reference here to data collection problems is vague and unexplained; there is no suggestion that obtaining actual-use data for outlets within a media type would be prohibitively more onerous than obtaining the same data for the media types themselves, as it did in MOWG Study No. 8.
Because the Commission’s reasons for eschewing actual-use data in assigning market shares to outlets within a media type and assuming equal market shares are unrealistic and inconsistent with the Commission’s overall approach to the Diversity Index and its proffered rationale, we remand for the Commission’s additional consideration of this aspect of the Order.
4. The Commission did not rationally derive its Cross-Media Limits from the Diversity Index results.
After the Commission calculated the average Diversity Index scores for markets of various sizes, it set out to determine whether the increase in those scores resulting from different consolidation scenarios would have an acceptable or unacceptable effect. The Commission’s results, contained in appendix D of the Order, are replicated here for ease of reference. (We have used boldface type to indicate those increases in Diversity Index scores that the Commission found acceptable in crafting the Cross-Media Limits.)
*410 [[Image here]]
As illustrated by the chart’s figures that are not in boldface type, the Commission prohibited all cross-media consolidation in the smallest markets where, under any of their sample consolidation scenarios, 40 the increase in Diversity Index would be excessive. The Commission decided to permit all of the scenarios in the largest markets, finding the Diversity Index increases to be acceptable. In the mid-sized markets, the Commission allowed most of the consolidation scenarios but prohibited consolidations involving a newspaper and a television duopoly.
The Deregulatory Petitioners suggest that the Commission should have prohibited only cross-ownership mergers that would lead to an increase of more than 400 points, consistent with the practice of the Department of Justice to block mergers that would increase the local market’s HHI score by over 400 points. As illustrated by the chart above, this approach would have generated far more permissive Cross-Media Limits. The Citizen Petitioners argue, on the other hand, that the Commission should have prohibited cross-ownership mergers that lead to an increase of more than 100 points, the increase that triggers the Department of Justice’s “further review.” But the decision of where to draw the line between acceptable increases and unacceptable increases is almost always the Commission’s to make. Deference to the Commission’s judgment is highest when assessing the rationality of the agency’s line-drawing en *411 deavors. See NCCB, 436 U.S. at 814-15 , 98 S.Ct. 2096 ; AT&T Corp., 220 F.3d at 627 . The Commission rationalized its decision to make conservative assumptions in order to “protect[its] core policy objective of viewpoint diversity.” Order ¶ 399; see also Sinclair, 284 F.3d at 153 (Commission determined that antitrust merger guidelines “might be too low as their purpose lay in defining the point at which antitrust scrutiny is required, and not in encouraging a wide array of voices and viewpoints”).
Although the Commission is entitled to deference in deciding where to draw the line between acceptable and unacceptable increases in markets’ Diversity Index scores, we do not affirm the seemingly inconsistent manner in which the line was drawn. As the chart above illustrates, the Cross-Media Limits allow some combinations where the increases in Diversity Index scores were generally higher than for other combinations that were not allowed. Consider the mid-sized markets (four to eight stations), where the Commission found that a combination of a newspaper, a television station, and half the radio stations allowed under the local radio rule would increase the average Diversity Index scores in those markets by 408 (four stations), 393 (five), 340(six), 247 (seven), and 314 (eight) points respectively. These permitted increases seem to belong on the other side of the Commission’s line. They are considerably higher than the Diversity Index score increases resulting from other combinations that the Commission permitted, such as the newspaper and television combination, 242 (four stations), 223 (five), 200(six), 121 (seven), and 152 (eight). They are even higher than those resulting from the combination of a newspaper and television duopoly — 376 (five stations), 357(six), 242 (seven), and 308 (eight)— which the Commission did not permit. The Commission’s failure to provide any explanation for this glaring inconsistency is without doubt arbitrary and capricious, and so provides further basis for remand of the Cross-Media Limits. 41
5. The Commission should provide better notice on remand.
Our decision to remand the Cross-Media Limits also gives the Commission an opportunity to cure its questionable notice. Under the APA, an agency must publish notice of either the terms or substance of the proposed rule or a description of the subjects and issues involved. 5 U.S.C. § 553 (b)(3). We have held that “the adequacy of the notice must be tested by determining whether it would fairly apprise interested persons of the ‘subjects and issues’ before the agency.” Am. Iron & Steel Inst. v. EPA, 568 F.2d 284 , 293 (3d Cir.1977). The Citizen Petitioners argue that, in order to “fairly apprise” the public, the Commission is also obligated to provide notice of its underlying methodology, the reasoning from which it derived the proposed rule. The Commission’s notice *412 only indicated that it was considering “creating a new metric” to “reformulate [its] mechanism for measuring diversity and competition in a market,” and that it was contemplating “designing] a test that accords different weights to different outlet types.” Notice, 17 F.C.C.R. 18,503, ¶¶ 113-15. The Citizen Petitioners argue that the Commission should have publieally noticed the Diversity Index once it determined that was the methodology on which it would rely to derive the Cross-Media Limits. See McLouth Steel Prods. Corp. v. Thomas, 838 F.2d 1317 (D.C.Cir.1988) (failure to describe a particular “model” for computing contamination levels was not adequate notice); United States v. Nova Scotia Food Prods. Corp., 568 F.2d 240, 251 (2d Cir.1977) (agency’s failure to provide notice of the data from which it derived regulation foreclosed “criticism of the methodology used or the meaning to be inferred from the data”).
The Commission argues that the Diversity Index was formulated as a response to comments, and it need not seek additional public comment on data formulated as a response to earlier comments. 42 We are mindful that the APA’s notice obligations are not supposed to result in a notice-and-eomment “revolving door.” “Rulemaking proceedings would never end if an agency’s response to comments must always be made the subject of additional comments.” Cmty. Nutrition Inst. v. Block, 749 F.2d 50, 58 (D.C.Cir.1984). But courts have also suggested that an agency may withhold notice of its comment-derived data only in the absence of prejudice. Id. (“The response may, moreover, take the form of new scientific studies without entailing the procedural consequences appellants would impose, unless prejudice is shown.”); see also Solite Corp. v. EPA, 952 F.2d 473, 484 (D.C.Cir.1991) (allowing agency to use “ ‘supplementary’ data, unavailable during the notice and comment period, that ‘expand[s] on and confirm[s]’ information contained in the proposed rulemaking and addresses ‘alleged deficiencies’ in the preexisting data, so long as no prejudice is shown” (citing Cmty. Nutrition Inst., 749 F.2d at 57-58 ) (alteration in original)). As the Diversity Index’s numerous flaws make apparent, the Commission’s decision to withhold it from public scrutiny was not without prejudice. As the Commission reconsiders its Cross-Media Limits on remand, it is advisable that any new “metric” for measuring diversity and competition in a market be made subject to public notice and comment before it is incorporated into a final rule.
Y. Local Television Ownership Rule
Both the Citizen Petitioners and the De-regulatory Petitioners challenge the Commission’s modification to the local television ownership rule, which would allow triopolies in markets of 18 stations or more and duopolies in other markets, subject to a restriction on combinations of the four largest stations in any market. We uphold the top-four restriction but remand the numerical limits for the Commission to harmonize certain inconsistencies and better support its assumptions and rationale. We also remand for the Commission to reconsider or justify its decision to expand the rule’s waiver provision — applicable to sales of failed, failing, or unbuilt television stations — by eliminating the requirement that waiver applicants notice the station’s availability to out-of-market buyers.
*413 A. Regulatory Background and the 2002 Biennial Review
As part of the 1996 Act, Congress directed the Commission to conduct a rule-making to determine whether to “retain, modify, or eliminate” its local television ownership rule, which at the time prohibited the common ownership of two television stations with overlapping Grade B signal contours. 43 § 202(c)(2), 110 Stat. 111 ; Amendment of Sections 73.35, 73.21.0, and 73.636 of the Commission’s Rules Relating to Multiple Ownership of Standard, FM and Television Broadcast Stations, 45 F.C.C. 1476 , ¶ 3 (1964) (establishing the restriction on the common ownership of televisions stations).
In response to Congress’s directive, the Commission promulgated a rule allowing an entity to own two television stations in the same DMA, provided that: (1) the Grade B field-strength contours of the stations do not overlap; and (2)(a) at least one of the stations is not ranked among the four highest-ranked stations in the DMA, and (b) at least eight “voices” — that is, independently owned, operational, commercial or noncommercial full-power broadcast television stations — would remain in the DMA after the proposed combination. 1999 Television Rule Review, 14 F.C.C.R. 12,903, ¶ 8; 47 C.F.R. § 73.3555 (b). The D.C. Circuit Court reviewed this so-called “duopoly rule,” and in 2002 remanded it for the Commission to justify its decision to count only broadcast television stations as voices to the exclusion of other non-broadcast media. Sinclair, 284 F.3d at 162 .
The Commission consolidated Sinclair's remand order with its 2002 biennial review under § 202(h). The Order announced the Commission’s decision to abandon the duopoly rule in favor of a rule that would permit common ownership of two commercial stations in markets that have 17 or fewer full-power commercial and noncommercial stations, and common ownership of three commercial stations in markets that have 18 or more stations. Both limits are subject to a restriction 44 on the common ownership of stations ranked among the market’s largest four based on audience share. Order ¶ 186. The Commission also decided to expand its criteria for waiving the rule’s ownership restrictions for proposed combinations that involve failed, failing, or unbuilt stations by eliminating the requirement that waiver applicants provide notice of the sale to out-of-market buyers. Id. ¶ 225.
B. We uphold several threshold challenges to the Commission’s overall regulatory approach.
Before we consider the specific modifications to the local television rule, we address some threshold challenges to the Commission’s regulatory approach.
1. Limiting local television station ownership is not duplicative of antitrust regulation.
We reject the Deregulatory Petitioners’ contention that the Commission’s *414 local television rule is duplicative of antitrust enforcement (by the Department of Justice and the Federal Trade Commission) and, thus, not in the public interest. The Commission ensures that license transfers serve public goals of diversity, competition, and localism, while the antitrust authorities have a different purpose: ensuring that merging companies do not raise prices above competitive levels. See, e.g., Clayton Act, § 7, 15 U.S.C. § 18 (restraining mergers that would lessen competition in a market); Dep’t of Justice and Federal Trade Comm’n, Horizontal Merger Guidelines § 0.1 (1997 rev. ed.) (“Merger Guidelines”) (seeking to protect consumers by ensuring mergers do not result in anticompetitive prices).
The Deregulatory Petitioners contend that the Commission’s new regulations are not derived from its professed reliance on audience preference, which the Commission suggests distinguishes its regulatory approach from that of the antitrust authorities. Order ¶ 65 (pointing out that it considers audience preferences plus advertising data as indicators of competition, while the antitrust authorities focus on prices). But the Commission’s local television ownership rule does reflect audience preferences in at least three ways. First, the Commission decided to focus its competition analysis on the delivered program market (as opposed to the video programming market or the video advertising market) because that is the market that “directly affects viewers.” Id. ¶ 141. Second, as discussed in Part V.C below, the Commission used audience preference data to support its conclusion that common ownership of local television stations can improve program quality. Id. ¶ 150. Third, as also discussed in Part V.C, the Commission justified the top-four restriction on evidence of an audience share “cushion” between the top-four stations and the fifth-ranked station in most markets. Id. ¶ 195. Thus, we reject the De-regulatory Petitioners’ suggestion that the local television ownership rule does not reflect the Commission’s concern for audience preferences.
Finally, we note that the Commission reviews all license transfers, 47 U.S.C. § 310 (d), while the antitrust agencies typically review only large mergers. See 15 U.S.C. § 18a(a) (a merger must only be reported to the FTC and DOJ if the size of the transaction exceeds $200 million or if the assets of one party exceed $10 million and the assets of the other party exceed $100 million). Eighty-five percent of station mergers that have taken place since 2000 would not have been subject to antitrust review because the parties’ assets fell below these thresholds. Br. of Intervenor UCC at 37 (citing BIA Financial Network, Television Market Report (2d ed. 2003)). In this context, it hardly seems that the Commission’s local television station ownership rule is duplicative of other agencies’ antitrust enforcement.
2. Media other than broadcast television may contribute to viewpoint diversity in local markets.
Recognizing that allowing more television concentration in local markets could detract from viewpoint diversity, the Commission rationalized its decision to deregulate with its finding that media other than broadcast television contribute to viewpoint diversity. Order ¶ 171. This is a departure from the Commission’s rationale for the existing rule — the issue remanded by the Sinclair Court — that only television stations are relevant to its diversity analysis.
We agree with the Commission’s conclusion that broadcast media are not the only media outlets contributing to viewpoint diversity in local markets. Yet because we *415 remand the Commission’s numerical limits, as explained in Part V.D below, we need not decide the degree to which non-broadcast media compensate for lost viewpoint diversity to justify the modified rule. Rather, we leave it for the Commission to demonstrate that there is ample substitut-ability from non-broadcast media to warrant the particular numerical limits that it chooses on remand.
We note that the record contains only weak evidence that cable can substitute for broadcast television as a source of viewpoint diversity. For example, the Commission found that among cable subscribers (a class that already omits one-third of American households) only 30% have access to local cable news channels. See Order ¶ 414 n. 924; see also supra Part IV.D.2 (describing why the Commission concluded that a majority of survey respondents’ purported reliance on cable as a source of local news was probably based on confusion with broadcast news); Reply Comments of the UCC, MM Docket No. 01-235 at 5 (Feb. 15, 2002), UCC Comments at 30-31. With respect to the Internet, while record evidence indicates a negative correlation between respondents’ reliance on broadcast television and the Internet as news sources (suggesting that people who use the Internet for local news do so at the expense of television), the Internet is also limited in its availability and as a source of local news. Compare MOWG Study No. 8 at 3, 34; with UCC Reply Comments at 10 and MOWG Study No. 8 tbl. 097. Therefore, it seems that the degree to which the Commission can rely on cable or the Internet to mitigate the threat that local station consolidations pose to viewpoint diversity is limited.
3. Consolidation can improve local programming.
The Commission supported its decision to relax the existing “eight voices” rule with findings that common ownership of television stations in local markets can result in “consumer welfare enhancing efficiencies” by eliminating redundant expenses and increasing opportunities for cross-promotion and related programming. Order ¶ 147. To promote localism, the Commission found that these efficiencies translated into improved local news and public interest programming. 45 Id. ¶ 164. Evidence supporting this conclusion included findings that commonly owned television stations are more likely to carry local news than other stations and air a similar quality and quantity of local news as other stations. See Bruce M. Owen et al., Effect of Common Ownership or Operation on Television News Carriage, Quantity and Quality, in Comments of Fox Entertainment Group, Inc. et al., MB Docket 02-277 (Jan. 2, 2003). And a study of seven commonly owned broadcast television stations indicates that consolidation generally improved audience ratings — the studied stations increased their audience shares by an average of 3.2% over the share they enjoyed prior to entering into co-ownership with another station. Order ¶ 150 & n. 295 (citing Mark R. Fratrik, Television Local Marketing Agreement and Local Duopolies; Do They Generate New Competition and Diversity? (Jan. 2003), appendix to Comments of Coalition Broadcasters et al., MM Docket 02-277 (Jan. 2, 2003)). In light of this evidence, we reject the Citizen Petitioners’ conten *416 tion that the Commission’s finding of local-ism benefits from consolidation was unsupported.
4. The Commission adequately noticed its decision to allow triopo-lies.
We also reject the Citizen Petitioners’ contention that the Commission failed to provide adequate notice that it was considering a rule that would allow triopolies. The APA requires agencies to publish a notice of proposed rulemaking that contains “either the terms or substance of the proposed rule or a description of the subjects and issues involved.” 5 U.S.C. § 553 (b). The Notice advised parties that any reevaluation of the television ownership rule would take account of the remand ordered by Sinclair, which left it to the Commission to reexamine its “voices” test as well as “the numerical limit, given that there is a relationship between the definition of voices and the choice of a numerical limit.” Notice, 17 F.C.C.R. 18,503, ¶ 76 (citing Sinclair, 284 F.3d at 162 ). Specifically, the Commission asked for comment on “different economic incentives” relating to diverse viewpoints in newscasting that might exist “among stand-alone stations, duopolies, or triopolies.” Id. ¶ 80. This leaves little doubt that the Notice provided a sufficient “description of the subjects and issues involved” in the Commission’s decision to allow triopolies.
C. We uphold the Commission’s decision to retain the top-four restriction.
Though the Commission recognized that the combination of television stations within the same market could yield efficiencies that benefit consumers, the Commission also recognized that station combinations only have an overall public “welfare-enhancing” effect when the consolidation does not create a “new largest” entity. Order ¶ 194 (citing, inter alia, R. Preston McAfee & Michael Williams, Horizontal Mergers and Antitrust Policy, 40 J. Indus. Econ. 181-87 (June 1992)). Thus, the Commission determined that it had to limit allowable station combinations to those that would not create excessive market power in a “new largest” entity. Finding that a significant “cushion” of audience share percentage points generally separates top-four stations from the fifth-ranked stations, the Commission decided that a top-four restriction would ensure that station consolidations did not lead to excessive market power. Id. ¶ 195-96. The Commission also recognized that efficiencies are less prevalent when financially strong stations merge with each other. Id. ¶ 197. For example, top-four stations are already more likely to be originating local news 46 and to have made the transition to digital television. Id. ¶¶ 198-99.
The Deregulatory Petitioners assert that the top-four restriction prevents small-market stations from yielding any of the benefits of consolidation. They argue that by effectively precluding any consolidation in markets with fewer than five stations, the Commission deprives the benefit of consolidation from stations — those in small markets — who need it most. But the Commission’s local television rule is protective of small-market stations. The numerical limits already allowed, in effect, *417 extra 47 concentration to ensure that small-market stations would realize the efficiency benefits of consolidation. As for the smallest markets with fewer than five stations — where the top-four restriction operates to preclude any consolidation — it was not unreasonable for the Commission to conclude, as it did, that the detriment of concentrated market power — e.g., reduced incentive to improve programming of mass appeal — outweighed the efficiency benefits. Id. ¶¶ 197, 200. And, while we recognize that the Commission “cannot save an irrational rule by tacking on a waiver procedure,” ALLTEL Corp. v. FCC, 888 F.2d 551, 561 (D.C.Cir.1988), we note that the modified rule allows the Commission to waive the top-four restriction in small markets where those consolidations would be beneficial overall. 48
The Deregulatory Petitioners also object to the top-four restriction because, they argue, it unjustifiably treats all top-four ranked stations the same. The essence of their objection is the Commission’s finding of a “general separation” between the top-four stations and other stations. They point out that in many markets, especially small-and medium-sized ones, 49 the third and fourth-ranked stations could combine without exceeding the audience share of the first or second-ranked stations. Thus, they contend, there is a more substantial “separation” between the third and fourth-ranked stations than between the fourth and fifth-ranked stations. 50
But we must uphold an agency’s line-drawing decision when it is supported by the evidence in the record. Sinclair, 284 F.3d at 162 ; AT&T Corp., 220 F.3d at 627 . Here there is ample evidence in the record *418 to support the Commission’s restriction on combinations among the top-four stations as opposed to the top-three or some other number. The Commission found a “cushion” of audience share percentage points between the fourth and fifth-ranked stations in most markets. Order ¶ 195. Networks’ national audience statistics, which are generally reflected in local market rankings of affiliated stations, also show a substantial 60% drop in audience share between the fourth and fifth-ranked networks. In the ten largest markets, the top-four stations combined control at least 69% (and an average of 83%) of the local commercial share in their respective markets, and in all of the ten largest markets a combination between the third and fourth-ranked stations would produce a new largest station. Local Television Ownership and Market Concentration Study, in UCC Reply Comments at attachment 5. 51 Furthermore, the Commission found that permitting mergers among top-four ranked stations generally leads to large HHI increases.
Thus we conclude that the Commission’s decision to retain the top-four restriction is supported by record evidence. Accordingly, we extend deference. See Sinclair, 284 F.3d at 162 .
D. We remand the specific numerical limits for the Commission’s further consideration.
The Commission decided to construct its numerical limits to ensure that most markets would have six equal-sized competitors because the HHI score of a six-member market — 1667 (6 x (100 -e 6)2 ) — is below the Department of Justice and Federal Trade Commission’s 1800 threshold for highly concentrated markets for antitrust purposes. Order ¶¶ 192-93 (citing Merger Guidelines § 1.51(c)). Thus the Commission decided to allow triopolies in markets of 18 stations or more (18 -h- 3 = 6 equal-sized competitors) and duopolies in markets of 17 or fewer (both limits subject to the restriction on a combination of top-four stations). Id. ¶ 193.
The Commission’s assumption of equal market shares received flak from both ends of the objecting spectrum. The Citizen Petitioners point out that television stations’ market shares vary widely and argue that it is arbitrary for the Commission to base its numerical limits on a rudimentary station “head count” of outlets. The Commission’s rationale for its triopoly rule requires that we accept a combination of the first, fifth, and sixth-ranked stations as the competitive equal of a combination of the 16th, 17th, and 18th-ranked stations, just because each combination consists of the same number of stations. While the Citizen Petitioners demonstrate the Commission’s flawed rationale with examples of what the modified rule allows, the Deregu-latory Petitioners demonstrate the same flaw by pointing out what the modified rule forbids. There is no logical reason, they argue, why it should be impermissible to have five duopolies and one triopoly (a total of six competitors) 52 in a market with *419 13 stations when it is possible that the triopoly could have a lower combined market share than any or all of the duopolies.
The Commission defends its equal market shares approach with the suggestion that market share, which varies with each season’s new programs, is too “fluid” to be the basis for its regulations. Id. ¶ 193. But elsewhere in the local television ownership rule the Commission found that the market share was stable enough to rely on for support of its top-four restriction. 53 Id. ¶ 195. And not only is the Commission’s “market share is too fluid” rationale inconsistent with other aspects of the rule, it is unsupported. The Order cites no evidence to support its assumption that market share fluctuates more in television-broadcasting than in other industries. Nor does it refute the Citizen Petitioners’ suggestion that this is unlikely to be the case because, unlike most other industries, television station owners face a barrier to market entry (requirement of a license) and the number of market participants (television station owners) is in decline.
The Citizen Petitioners also object to the' numerical limits because they allow markets that are already highly concentrated to become even more concentrated. For example, Philadelphia is a market "with more than 18 stations, so the modified rule would allow the duopolist Viacom to acquire a third station and potentially increase its audience share from 25% to 34%. Philadelphia’s HHI score is already 2037, well above the Commission’s 1800 target, and a Viacom triopoly would raise the score to 2487. We acknowledge that the Commission never intended the numerical limits to represent a “mechanical application of the DOJ/FTC Merger Guidelines.” Id. 11197. . But it expressly chose its six equal-sized competitor benchmark to ensure that markets would not exceed the Merger Guidelines’ 1800 threshold for highly competitive markets. 54 Id. ¶ 192. After justifying 1800 as the target, the Commission relaxed the local television ownership rule to allow more concentration in markets that already exceed the target-which is not just some markets, but most. UCC Reply Comments attachment 5 (28 out of 33 markets studied had HHIs that exceeded 1800, based on 2001 data). 55
*420 The deference with which we review the Commission’s line-drawing decisions extends only so far as the line-drawing is consistent with the evidence or is not “patently unreasonable.” Sinclair, 284 F.3d at 162 . The Commission’s numerical limits are neither. No evidence supports the Commission’s equal market share assumption, and no reasonable explanation underlies its decision to disregard actual market share. The modified rule is similarly unreasonable in allowing levels of concentration to exceed further its own benchmark for competition (1800)-a glaring inconsistency between rationale and result. We remand the numerical limits for the Commission to support and harmonize its rationale.
E. We remand the Commission’s repeal of the Failed Station Solicitation Rule.
The Citizen Petitioners also challenge the Commission’s repeal of the Failed Station Solicitation Rule (“FSSR”), 47 C.F.R. 73.3555 n.7, which required a waiver applicant to provide notice of the sale to potential out-of-market buyers before it could sell the failed, failing, or unbuilt television station to an in-market buyer. 56 Order ¶ 225.
The Commission promulgated the FSSR in its review of the local television rule that Congress had required under § 202(c) of the 1996 Act. To alleviate concerns that its decision to allow duopolies would undermine television station ownership by minorities, the Commission created the FSSR to ensure that qualified minority broadcasters had a fair chance to learn that certain financially troubled — and consequently more affordable — stations were for sale. 1999 Television Rule Review, 14 F.C.C.R. 12,903, ¶¶ 13-14, 74. In the current Order, however, the Commission does not explain that preserving minority ownership was the purpose of the FSSR, nor does it argue that the FSSR was harmful or ineffective toward this purpose. The only support for its decision to eliminate the FSSR is its prediction that “the efficiencies associated with operation of two same-market stations, absent unusual circumstances, will always result in the buyer being the owner of another station in that market.” 57 Order ¶ 225.
By failing to mention anything about the effect this change would have on potential minority station owners, the Commission *421 has not provided “a reasoned analysis indicating that prior policies and standards are being deliberately changed, not casually ignored.” Greater Boston TV Corp. v. FCC, 444 F.2d 841 , 852 (D.C.Cir.1970). Furthermore, while the Commission had promised in 1999 to “expand opportunities for minorities and women to enter the broadcast industry,” 1999 Television Rule Review, 14 F.C.C.R. 12,903, ¶ 14, the FSSR remained its only policy specifically aimed at fostering minority television station ownership. In repealing the FSSR without any discussion of the effect of its decision on minority television station ownership (and without ever acknowledging the decline in minority station ownership notwithstanding the FSSR), the Commission “entirely failed to consider an important aspect of the problem,” and this amounts to arbitrary and capricious rule-making. 58 State Farm, 463 U.S. at 43 , 103 S.Ct. 2856 ; see also Copps Dissenting, 18 F.C.C.R. at 13,970-71 (chastising the Commission for “fail[ing] to conduct rigorous analysis of today’s rules on minorities and women”); Adelstein Dissent, 18 F.C.C.R. at 13,997 (same). For correction of this omission, we remand. 59
VI. Local Radio Ownership Rule
Petitioners challenge the Commission’s decision to modify its local radio ownership rule, which limits the number of commercial radio

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9816427. Public record. Not legal advice.