Democrats In Charge, but Not Threatening

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Washington— If anything bad happens to the cable industry as a result of the Democratic takeover of Congress, it shouldn’t happen very fast.

Angry about war in Iraq and corruption on Capitol Hill, voters booted House and Senate Republicans from power last Tuesday. The watershed election put Democrats in charge of both chambers for the first time in 12 years.

END OF AN ERA

The election ended an era of cable-industry oversight by Republicans with a free-market orientation. But because House and Senate Democrats have made the issues that drove voters to the polls their legislative agenda to start 2007, it’s highly unlikely that incoming House Speaker Nancy Pelosi (D-Calif.) has plans to move telecommunications policy to the forefront of the new Congress.

“I would just note that this election was not about telecom,” Stifel Nicolaus telecom analyst Blair Levin said.

For the time being, Levin expects a benign environment for cable on such matters as franchise reform, network neutrality, and any mandate, to sell cable channels one at a time to viewers, known as a la carte pricing.

“I don’t believe that Congress is likely to pass a big, comprehensive bill,” Levin said.

Jessica Zufolo, who tracks telecom policy at Medley Global Advisors, said telecom legislation won’t be foremost on Democrats’ minds.

“Telecom is not going to be a big focus in the next two years,” Zufolo said.

Institutional forces would assist cable if the industry wound up needing to block bad legislation. House leaders can ram a bill through the chamber, but the same is not true in the Senate, where a 60-vote supermajority is needed to quell filibustering by minority opponents. Democrats will have a 51-49 margin in the 110th Congress.

Meanwhile, President Bush is expected to make greater use of his veto power to check the Democrats — something he did only once since 2001, so as not to offend congressional Republicans.

The National Cable & Telecommunications Association declined to comment on the election’s results.

The Democratic lawmakers who will exercise dominion over cable, phone and broadcast companies are familiar faces, with decades of experience in the recondite world of telecommunications policy.

In the Senate, the Commerce Committee will likely be headed by Sen. Daniel Inouye (D-Hawaii), taking the gavel from Ted Stevens (R-Alaska). Inouye, who has not staked out an agenda, isn’t likely to move a telecom bill early next year, an aide to the senator said last week. Inouye, 82, was elected in the Senate in 1962.

VETERAN LEADERSHIP

In the House, cable lobbyists will need to answer to Reps. John Dingell (D-Mich.) and Edward Markey (D-Mass.). Dingell is expected to take the chairmanship of the Energy and Commerce Committee and Markey the chairmanship of the Telecommunications and the Internet Subcommittee.

Their combined House tenure is 82 years.

Both held the same positions when Democrats lost power in 2004. In 1992, Dingell and Markey were instrumental in securing passage of the Cable Television Consumer Protection and Competition Act, subjecting cable operators to comprehensive regulation at the Federal Communications Commission. In 1996, Dingell and Markey backed the first major overhaul of telecommunications statutes in 60 years, a law that eliminated some cable rate controls in early 1999.

Dingell would take the gavel from Rep. Joe Barton (R-Texas), a deregulator who often sided with the NCTA on such hot topics as net neutrality and multicast must-carry.

“I think Mr. Dingell, frankly, is an improvement for us over Mr. Barton,” said National Association of Broadcasters president David Rehr. “[Barton] was just a cable guy.”

In an interview, Dingell indicated interest in passing a telecommunications bill, though he wouldn’t commit to a timetable.

“Clearly, we’ve got to do something about the telecom bill,” Dingell said. “We passed a bill which I regrettably was not able to support, but the Senate has taken no action on it. I think we’re going to try and do that again in a responsible way.”

The House passed a telecommunications bill in June, but the effort collapsed in the Senate, largely over the contentious issue of net neutrality. Both bills sought to expedite the entry of AT&T and Verizon Communications into cable markets by reducing the oversight role of local governments.

“I think we’ll take a look at it. I can’t tell you how far we will go,” Dingell said, referring to cable franchising.

Rep. Rick Boucher (D-Va.) — who would likely become chairman of the telecommunications subcommittee if Markey took the chairmanship of the House Resources Committee — said last week that franchise reform might be off the agenda.

“[The phone companies] may not come back and ask for video franchise-relief. I wouldn’t be surprised if they just trust their fate to states on that. They are doing pretty well in the state capitals,” Boucher said.

Dingell also is watching to see whether Federal Communications Commission chairman Kevin Martin goes too far in relaxing ownership of radio and TV stations in local markets.

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