Policy

Making the FCC ‘Great’ Again

Will progressive or neocon Trump hold sway in D.C.? 1/02/2017 8:00 AM Eastern

WASHINGTON — Donald Trump is shaking up Washington, stirring up his Democratic foes and generally making life even more interesting than usual inside the Beltway.

 

The new president will get to appoint two Federal Communications Commission members and install the folks he wants at the Justice Department, and he plans to make cybersecurity a priority, which could mean giving the government more power over information. He has also promised to spend $1 trillion on infrastructure, almost certainly to include broadband.

 

The FCC has not historically been a big focus of new administrations, sometimes taking months to install a new chairman. But few have made money betting on Donald Trump to follow form or tradition, and the FCC is now all about broadband, which connects everything.

 

With Democratic commissioner Jessica Rosenworcel and FCC chairman Tom Wheeler both exiting, most communications policy watchers polled for this story predict a Republican majority looking to take a weed whacker to the regulatory underbrush, as senior Republican commissioner and likely interim chair Ajit Pai said earlier this month.

 

EXPECT SURPRISES

“Just as the election outcome was unexpected by many, many will not expect how deregulatory the new FCC will turn out to be,” said Scott Cleland, chairman of Net-Competition.

 

Either the FCC or the Republican Congress will likely reverse the Title II reclassification of Internet service providers, though Congress could also reinstate a version of the prior, compromise rules against blocking and discrimination and paid prioritization. Cable and phone ISPs, except Verizon Communications, agreed to abide by those the first time around.

 

Broadcasters will finally get some of the regulatory help on the media ownership front, either from the FCC or Congress or, likely, both, unless the progressive populist aspect of Trump creeps onto the commission.

 

Incoming House Energy & Commerce Committee chairman Rep. Greg Walden (R-Ore.), who is a former broadcaster, has already introduced a bill scrapping the ban on newspaper-broadcast cross-ownership. And a Republican FCC could well roll back the agency’s decision to set TV joint services agreement ownership interests in terms of local limits, meaning owning a TV station and selling more than 15% of ad time in a market is the same as owning both stations in the eyes of the FCC. Cable operators were OK with the restriction because it placed limits on bulk bargaining for retransmission- consent agreements.

 

The National Association of Broadcasters sued the FCC over not scrapping the ban or loosening other rules in the agency’s quadrennial media ownership review released last summer, but has withdrawn that suit and petitioned the FCC to reverse the decision given that the Trump FCC is likely to share NAB’s view that broadcasting is too heavily regulated.

 

A big X factor for broadcasters is how the FCC’s spectrum auction will reshape their business, and how soon the FCC will allow them to reshape it themselves with a new ATSC 3.0 transmission standard.

 

The auction phase will likely be over by the time a new administration takes over, but the repack will take years. Pai has pushed the FCC to makde a decision on ATSC 3.0, so a Pai FCC would likely help speed that process.

 

While Trump threatened to block AT&T’s proposed takeover of Time Warner Inc. and suggested he would unwind the Comcast-NBCUniversal deal, that appeared to be a reaction to their status as owners of the news outlets he loves to hate rather than a signal of antitrust policy direction.

 

Adonis Hoffman, a former top FCC official who now heads Business in the Public Interest, said he thinks the AT&T-TW deal is not in danger.

 

“Big corporations are not seen as inherently bad or suspect, despite candidate Trump’s shoot-from-the-hip reactions to questions on mergers during the campaign,” Hoffman said in an op-ed in The Hill. “In fact, the more measured Trump will rely on big companies to lead the way in rebuilding America’s economy by repatriating jobs and reinvestment.”

 

Nonetheless, Sen. Richard Blumenthal (D-Conn.) said at an oversight hearing on the AT&T deal that he was taking Trump at his word that he would block it.

 

It will take a while for a new FCC to get seated, and even then efforts to roll back network neutrality and the associated new FCC rules on broadband privacy will take a while more.

 

In the interim, the FCC could ramp down through enforcement, or the lack of it.

 

For example, while the FCC’s Wireless Bureau has warned AT&T and Verizon that their zero-rating plans for online video appear to violate the network-neutrality general conduct standard, a new FCC could signal that it feels the standard is too vague, and thus chills innovation, and so it would not enforce it.

 

REPLACE OR REPEAL?

David Goodfriend, president of Goodfriend Government Affairs and a former FCC legal adviser to former commissioner Susan Ness, isn’t so sure consolidation, or even scrapping net-neutrality rules, is a sure thing.

 

“While a Trump FCC will take the neoconservative orthodoxy of the transition team members in many cases, some very strong voices among the populists close to President-elect Trump are not toting the usual line,” Goodfriend said. “For example, Chris Ruddy, CEO of Newsmax [a conservative website and video channel], dined with Donald Trump on Thanksgiving following Election Day and wrote in his column afterwards that Trump should make media diversity, pushing back on consolidated media and distribution companies, a top priority.

 

“When it comes to net neutrality, the dynamic looks a lot like Obamacare: Trump and congressional Republicans, now that they are in charge, can pull the plug,” Goodfriend added. “But some are asking if that’s the smartest political move. As with Obamacare, should ‘replace’ be part of ‘repeal?’ ”

 

A Republican-leaning source speaking on background seconded Goodfriend’s view.

 

Hoffman said he envisions “an extraordinary — and perhaps unprecedented — level of interchange and cooperation between Congress and the FCC, especially at the senior staff level.”

 

“We have not seen this particular alignment of one-party control of all levers in a long, long time, and never in such a divided climate,” Hoffman said. “Senior staffers in the Senate and the House already know more about the inner working of the FCC than they do about any other independent agency, and they have the green light to be a little adventurous.”

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