At long last, it appears that we will soon have a complete FCC, as the Senate has approved the nomination of Tom Wheeler to be the next FCC Chairman, and Michael O’Rielly for the other vacancy on the FCC. The nomination of Mr. Wheeler had been held up by Senator Ted Cruz on grounds that he feared the FCC taking action to implement provisions of the Disclose Act (which we wrote about here). Senator Cruz was particularly concerned that a new FCC might adopt rules that would require disclosure not just of a political ads sponsor, but also of the chief financing sources of the sponsor. Mr. Wheeler apparently assured Senator Cruz that the adoption of such a rule was not high on his agenda, the hold on the nomination was dropped, and the new Chairman was confirmed. He should take office very soon – with press reports suggesting that it will be on Monday. What issues should broadcasters expect the new FCC to tackle?
There are many big issues for broadcasters that are under consideration but not decided, and we would expect that the new FCC chair would want to quickly start to deal with them. The biggest issue is no doubt the Incentive Auctions – looking at the reclaiming of spectrum from TV broadcasters to allow it to be re-sold to wireless companies for wireless broadband and other uses. We last wrote about that incredibly complex proceeding here. The FCC under Chairman Genachowski had looked to have rules in place before the end of this year to reclaim the spectrum and to sell it to the wireless companies. The former chair had hoped to have the auction itself occur in 2014. With the delays in the confirmation of the Chairman, and the recent government shutdown, many observers are expecting the rules will be pushed back to next year, and the auction itself to the year after – but all that remains to be seen.
The other big pending issue is the potential revision of the broadcast multiple ownership rules. There are three big issues pending in the ownership area – the elimination of the broadcast-newspaper cross ownership prohibition, the status of Joint Sales and Shared Services Agreements, and the UHF discount. We wrote about the UHF discount issue here – as the FCC recently proposed to eliminate the discount, which would effectively cause many television companies to be at or above the current caps that limit television station owners to owning stations in markets that reach no more than 39% of the TV households in the US. UHF stations currently count for half the audience in the market that they serve – a remnant of analog broadcasting days. The elimination of the UHF discount would effectively double the audience count of most companies, and could have a profound impact on the recent trading market for TV stations.
The battle that DC “public interest” groups have been waging against consolidation of any sort have led to the FCC’s reluctance to relax the broadcast-newspaper cross-interest rules, even though the value and reach of newspapers has radically changed since this prohibition was adopted in the 1970s. See our last article on that issue, here. The JSA/SSA issue has also been one that we have written about many times (see, for instance, this story), as these public interest groups and cable companies (who fear that these agreements give TV stations too much power in retransmission negotiations) oppose the continuation of these arrangements. TV stations, on the other hand, see them as crucial to the survival of many stations, especially in smaller markets, and see the impact of local consolidation as simply a counterweight to the power of other multichannel video providers in each television markets.
But, in addition to these extremely high-profile issues, there are a number of other outstanding proceedings that the new FCC might choose to address. These include the following:
- Indecency (see our article here about the FCC’s request for comment on what to do about the indecency policy since its remand to the FCC by the Supreme Court)
- TV public interest obligations and the online public file (see our articles on the FCC’s request for comments on the existing obligations for TV stations in connection with their online public files and the extension of the obligation with respect to their political files to smaller stations, and our article here about the pending proceeding on the call for the regularization and perhaps quantification of the reporting of the public interest programming of broadcasters).
Even outstanding longer have been proceedings to look at other issues. Some of these may be addressed by the new Commission, others may continue to languish:
- EEO review – there have been requests for reconsideration of the FCC’s EEO program pending for over 10 years, dealing with requests to allow more reliance on Internet sources (see the article we wrote here about fines issued to stations that relied solely on Internet recruitment sources to fill station job openings).
- Noncommercial biennial ownership report filing requirements (see our article here on the issues outstanding as to biennial ownership reports)
- Sponsorship identification (see our article about the open proceeding on sponsorship ID issues here)
- Various diversity issues including the use of TV Channels 5 and 6 for FM broadcasting (probably to remain pending until the incentive auction and repacking of the TV band is completed)
In addition to these specific proceedings, sometimes the most important decisions made by a new Chairman are in tone and direction of the agency, and in the appointment of new leaders for the various offices in the FCC. While many of the leaders of parts of the FCC that we all are used to dealing with may remain in place, there are always some shakeups in any new administration.
Lots for the new Chair to take care of. So watch to see what happens!