NATPE - National Association of Television Program Executives

Washington Insight, November '08

Mon, 17 Nov 2008 17:55:02 +0100

With the landslide victory of President-elect Barack Obama combined with the significant increased plurality of Democrats in both the House and Senate, NATPE’s Washington Counsel Mickey Gardner tells us why we can expect a seismic change next year in the FCC’s regulation of the media and entertainment industries…

Structurally, the five-member FCC is likely to be down to three commissioners on Inaugural Day 2009. Following his swearing in, President Obama will designate one of the two Democratic commissioners, Michael Copps or Jonathan Adelstein, as the interim FCC chairman. The remaining commissioner, Republican Robert McDowell, will be working in a new environment – a divided 2-1 commission where McDowell will be the lone GOPer.

Regardless of who President Obama designates as the interim FCC chair, there should be an expedited confirmation process by the Democrat-controlled Senate for the two new FCC commissioners nominated by President Obama. While some pundits predict a long confirmation process for the new FCC chairman and Republican commissioner who will replace Debbie Tate, a protracted delay is not probable since these nominees will be seeking confirmation from a strongly Democrat-dominated Senate.

In addition to nominating replacements for Martin and Tate, the Obama White House will decide early in the New Year whether to reappoint Democratic commissioner Jonathan Adelstein, or alternatively to nominate a new Democrat. The strong probability here is that the very able and politically well-connected Adelstein will secure reappointment, and possibly even the chairmanship.

Another reality that will promote a seismic change in the FCC’s 2009 regulatory landscape is the fact that hostile FCC oversight by the 111th Congress is simply not likely. In contrast to the often rancorous oversight of the Republican Martin commission during the past several years, the Democrat-led Senate Commerce Committee as well as the House Energy and Commerce Committee should have little or no reason in 2009 to beat up on the Democrat-chaired FCC.

So the big question for 2009 is how will FCC-regulated industries stop the Democrat-led FCC from pursuing the well articulated re-regulatory agendas of both commissioners Copps and Adelstein? Moreover, how will these industries inhibit the re-regulatory priorities of Senate Democrats like Senators Inouye, Dorgan, Rockefeller and House Energy and Commerce Democrats led by John Dingell, Ed Markey, Anna Eshoo, Hilda Solis et al.?

In this Democrat-controlled environment, anything is possible including digital public interest rules for broadcasters, additional content regulations to limit violence on free television as well as cable, new localism and ascertainment requirements, expanded children’s television rules – and who knows what else? Moreover, while Senator Obama previously indicated his lack of interest in pursuing adoption of a new fairness doctrine, the Democrat-led trifecta that will exist in the Senate, the House and the White House clearly creates a very hospitable environment for re-imposition of some kind of a fairness doctrine.

The possibilities are mind-boggling – and the real potential for re-regulatory change has never been more propitious.

So whether you are an Obama supporter or not, if your business falls under the FCC’s jurisdiction, you can definitely expect change in 2009!

Washington Insight, December '08

Mon, 17 Nov 2008 17:55:02 +0100

NATPE’s Washington Counsel Mickey Gardner writes that while Washington D.C.’s always-fluid policy situation makes it risky to gaze into the crystal ball, it sure looks like the Obama administration and the FCC it shapes will be proactive in advancing its pro-consumer, pro-public-service agenda.

Importantly, the transition to a Democratic-controlled FCC could happen even before Inauguration Day, January 20, 2009. That’s because Republican commissioner Tate’s term will end when the 110th Congress adjourns, presumably later this month. The commission will then be deadlocked 2-2 with Republicans Kevin Martin and Rob McDowell balancing Democratic commissioners Michael Copps and Jonathan Adelstein. But, based on rumors that Chairman Martin will step down earlier than January 20, it’s possible that if and when that happens, the FCC in the final weeks of the Bush administration would be controlled by Democrats with a 2-1 vote.

After being sworn in on Inauguration Day, the new president will designate one of the two Democratic commissioners to be the interim FCC chairman. Early in his administration, President Barack Obama is expected to nominate a permanent FCC chairman – a chairman who should win prompt approval from the nearly veto-proof Democratic-controlled Senate. In addition, a new Republican appointee to the commission could be nominated when the president nominates his new FCC chairman.

Alternatively, the new GOP commissioner could be nominated later in 2009. In either case, both the new FCC chairman and the Republican nominee to the commission will need to be confirmed by the Senate Commerce Committee, which will be chaired in 2009 by Senator Jay Rockefeller (D-West Va.).

Policy items that the Obama FCC will face in 2009 include a long list of pending issues that were not resolved by the Martin Commission. Top on this list are: expanding public interest obligations for digital broadcasters, new localism requirements, media consolidation, and, importantly, the possibility of new or reduced indecency and violence rules for television licensees.

However, even before the Obama FCC is in place, the Supreme Court could render a ruling on the appeal of the Second Circuit Court action that strictly limits the FCC’s power to fine stations for fleeting words, i.e., the “f” word and the “s” word. In addition to the Second Circuit Court ruling now before the Supreme Court, it is noteworthy that the Bush Justice Department recently petitioned the Supreme Court to review the FCC reversal rendered by the Third Circuit Court in regard to the FCC’s vicarious liability ruling in the Janet Jackson fiasco. Either of these cases could severely alter or expand the FCC’s content regulation authority in 2009.

The Senate oversight of the Obama FCC should be gentler in 2009 when Sen. Rockefeller assumes the chairmanship of the Senate Commerce Committee. However broadcasters and cable operators will be well-advised to look at Sen. Rockefeller’s web page; it will confirm that in the past, the senator from West Virginia has persisted in introducing legislation that would restrict sex and violence on the airwaves. He has even suggested in the past that paid services such as cable and satellite transmission of video programming should be subject to new content regulations even though they are not using the public airwaves.

As far as the House of Representatives’ oversight of the Obama FCC, the fearsome reign of House Energy and Commerce Committee Chairman John Dingell is now a thing of the past, with California’s Congressman Henry Waxman becoming chairman of that important committee. Waxman is known for his strict oversight, regardless of whether he is dealing with Republicans or Democrats.

With President Obama’s nomination of New Mexico Governor Bill Richardson to lead the Commerce Department, it’s probable that that department will be a much more proactive commenter in activities related to the FCC agenda. Richardson is an adept Washington player who knows the telecom, ICT and broadcast industries quite well; so you can expect a Richardson Commerce Department to put its stamp on much of the FCC’s agenda in 2009.

So broadcasters and programmers beware: change is definitely coming and it could be good or bad. But one thing is clear: there will be a lot of regulatory activity in 2009 impacting this country’s important communications sector.

Washington Insight, October '08

Wed, 08 Oct 2008 17:49:34 +0100

Musical Chairs at the FCC?

In the next few months there will be some heavy-duty “musical chairs” being played amongst the five FCC commissioners. NATPE’s Washington Counsel Mickey Gardner looks at the various scenarios resulting from November’s presidential election outcome.

When the 110th Congress officially adjourns, either before election day or after a post-election lame duck session, Republican Commissioner Debbie Tate’s term will end. That’s because the very able Commissioner Tate, who has become the most effective children’s advocate in the commission’s history, is not likely to be reconfirmed by the Senate in the remaining weeks of the 110th Congress. Miracles can happen, but at this point it is very unlikely that the Democratic-controlled Senate will reconfirm Commissioner Tate.

With the conclusion of Tate’s term, the Martin FCC would be deadlocked with two Republicans (Martin and McDowell) versus two Democrats (Copps and Adelstein). But that deadlock could be ruptured were Chairman Martin to resign if Senator Obama is elected on November 4. That would leave a Democratic-controlled commission where Democratic Commissioners Copps and Adelstein outnumber the only remaining GOP Commissioner Rob McDowell 2 to 1.

The prospect of Chairman Martin resigning if Senator Obama is elected is not farfetched. Typically, FCC chairmen have resigned during the period following the election of the candidate from the opposing party. In fact, no FCC chairman in recent history has stayed on beyond Inauguration Day, January 20. That’s because the prospect of being demoted from chairman to commissioner has proven to be “unacceptable” for prior FCC chairmen who would lose control of the commission’s agenda, budget and key staff appointments once they are relegated to the status of mere commissioner.

If Senator Obama is elected president, he would be able to designate one of the two Democratic commissioners (Copps or Adelstein) as interim FCC chairman immediately after being sworn in. This is because the president doesn’t need Senate confirmation when designating an incumbent commissioner to serve as chairman. Moreover, if President Obama is calling the shots after January 20, 2009, he would be able to nominate a Democrat to fill the vacancy left by Commissioner Tate’s departure from the commission this fall. In view of the fact that the Democrats control the Senate – a reality that is likely to be augmented after the election – President Obama’s nominee to the FCC should gain speedy confirmation.

If Senator McCain becomes president, it’s anyone’s guess whether President McCain would ask Kevin Martin to continue to serve as FCC chairman. While McCain and Martin agree on the need for a la carte programming on cable, it’s questionable whether Chairman Martin, as a Bush-appointed chairman, would be asked to remain at the helm of a McCain administration’s FCC. Regardless of whether Kevin Martin stays as chairman or commissioner, President McCain would be able to nominate a Republican to fill the seat vacated this fall by Commissioner Tate.

Bottom line: it’s a very fluid situation on the eighth floor of the FCC.

Washington Insight, September '08

Wed, 01 Oct 2008 20:46:27 +0100

When a bitterly divided FCC voted on August 1 to condemn Comcast’s management of its broadband Internet network, most reporters characterized the commission’s decision as a huge victory for network neutrality – and another predictable rebuke for Comcast by its chief federal critic, FCC Chairman Kevin Martin. NATPE’s Washington Counsel Mickey Gardner speculates if the decision signals a new era for independent programmers…

Indeed, the commission’s 3-2 vote was adroitly engineered by the FCC’s current Republican chairman, who prevailed only after enlisting the support of his two Democratic colleagues, Commissioners Michael Copps and Jonathan Adelstein.

Following the contentious FCC vote, the chairman and the Democratic commissioners lauded themselves for their “landmark action” protecting consumers’ rights to an open Internet in the 21st century. But in fact, it was much more: the FCC’s Comcast decision was an important benchmark victory for independent programmers who want to successfully compete as Internet content producers in the explosive broadband marketplace.

Essentially, the FCC’s 3-2 decision tells broadband Internet providers – whether they are large cable companies or telecommunications conglomerates – that they can no longer arbitrarily interfere with Internet applications under the umbrella of “necessary network management.” In addition, any form of content discrimination by Internet service providers is prohibited by the FCC.

While Internet carriers will still be allowed to “reasonably manage” their networks, they cannot use their unique management role to engage in anti-competitive behavior that could impede the distribution of independently produced content on the Internet.

For the independent producer, the FCC’s explicit policy pronouncement articulated in the Comcast decision means that the Internet will remain a wide-open vehicle for the creative community. And as the broadband Internet market matures and universal broadband access becomes a reality for all Americans, a whole new cottage industry of independent Internet programmers could spring up where the once vibrant community of independent television programmers thrived during the FinSyn era.

Washington Insight, August '08

Wed, 01 Oct 2008 20:44:59 +0100

NATPE’s Washington Counsel Mickey Gardner asks: “What is indecent television programming?”…

The FCC’s ability to regulate indecency on television suffered another near-fatal blow on July 21, when the 3rd Circuit Court of Appeals in Philadelphia unanimously concluded that the FCC’s $550,000 fine against CBS for the Janet Jackson wardrobe fiasco was “arbitrary and capricious.” Importantly, the 3rd Circuit Court relied in part on the June 4, 2007 decision by the 2nd Circuit Court in New York that concluded that the FCC’s “fleeting explicative policy” against Bono and Cher’s impromptu use of the F-word was also “arbitrary and capricious.”

Now the big question for broadcasters and programmers is: how will the U.S. Supreme Court rule on the FCC’s challenge to the 2nd Circuit Court of Appeals ruling? Briefs in the Supreme Court case – the first case in 30 years questioning the FCC’s indecency authority – are due August 1 with possible oral arguments by November. The schedule for the November oral arguments could slip into next year if the FCC seeks to appeal the 3rd Circuit Court decision, creating the possibility of a consolidated appeal of the 2nd and 3rd Circuit Court cases before the Supremes.

For the Martin FCC, the latest rebuke by another federal appellate court is horrible news. The 3rd Circuit Court not only dismissed out of hand the FCC’s new “vicarious liability” policy for broadcasters, it also ruled that performers like Janet Jackson and Justin Timberlake were not network employees but rather independent contractors. The fact that the 3rd Circuit Court in Philadelphia relied, in part, on the decision by the 2nd Circuit Court in New York is even more problematic. In a nutshell, these two powerful federal appellate courts are whacking the FCC on its knuckles – not because the FCC can’t regulate against indecency, but because the FCC changed its enforcement policy without adequate advance notice. Ultimately, what’s at stake before the Supreme Court is future “creative flexibility” for programmers of broadcast television in the United States.

Even before the Supreme Court rules, the collective impact of the 2nd and 3rd Circuit Court rulings is immediate and profound. While the FCC has congressional authority to levy fines amounting to $325,000 per each indecency violation, the commission must now adhere to existing enforcement precedent rather than unilaterally expanding its enforcement policy with new untested approaches like its discredited policy of “vicariously liability.” For the time being – and surely until the Supreme Court rules on the 2nd Circuit Court appeal – the FCC is in a regulatory straitjacket.

While Supreme Court “watchers” are debating the likely outcome of Fox Television Stations’ case against the FCC, there is another variable that could ultimately impact the FCC regulation of indecency on television in the 21st century: that’s the U.S. Congress.

When the new 111th Congress is sworn in next January, Senator John Rockefeller (D-W. Va.) may become the new chairman of the Senate Commerce Committee. Whether he becomes chairman or merely remains a senior Democratic member of the powerful committee, Sen. Rockefeller can be expected to continue to be a fierce and relentless opponent of indecency on the airwaves. In this regard, earlier this year Sen. Rockefeller sponsored Senate Bill 1780 – the Protecting Children from Indecent Programming Act –legislation that generated strong support within the Senate Commerce Committee. Rockefeller’s proposed legislation was intended to clarify that the FCC could determine that there was an indecency violation on television even when the violation was based on a single word or image. While this legislation automatically dies if not enacted before the conclusion of the 110th Congress, it’s likely that Sen. Rockefeller will reintroduce his bill when the new Congress is seated.

In the meantime, the whole issue of indecent broadcasting is up in the air – and broadcasters and programmers will not know the new rules of the game until the Supremes and the 111th Congress play out their hands.