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Flip-flop, Fritz

Senate shift returns Hollings to the center seat on Commerce 5/27/2001 08:00:00 PM Eastern

The deregulatory express could become a local. The return of Sen. Fritz Hollings (D-S.C.) to chairman of the Senate Commerce Committee will likely shine a new and different light on some key communications issues, plus reintroduce ones the industry would rather not see. But the practical effect of that change is more likely to be a slowing of the deregulatory timetable than a derailing of key initiatives.

With many issues to be settled at the FCC and in the courts, and with a Republican president, House and FCC chairman, most industry observers say they don't expect last week's power shift in the Senate to represent a shift in the treatment of their industry.

Still, they say, the difference in political tone will be huge. "It's very significant who controls the gavel," said one industry lobbyist. Hollings, who chaired the committee from 1987 to 1994, will set the agenda, and that could well include restricting violent television to late hours, keeping the broadcast industry under government's watchful eye and making sure incumbent phone companies aren't deregulated before they open their local markets to competition.

Although Hollings and outgoing Chairman John McCain (R-Ariz.) have gotten on well—the two were the first chairman and ranking member to craft a power-sharing agreement after the 2000 election—observers say Hollings would have liked the committee to handle many items that McCain ignored.

One issue McCain did allow the committee to debate is a Hollings bill that would ban violent TV programming from all but late hours. It never passed the full Senate, but, as chairman, Hollings can focus more attention on the measure. The place that attention might start is at a hearing on TV violence that Hollings asked McCain to hold.

Once Vermont Republican Sen. James Jeffords announced last week that he was becoming an independent, all scheduled hearings were off. That swept three media-related hearings from the Commerce Committee's agenda—one on media concentration for June 12, another on TV violence for June 13 and a third on the migration of sports programming from free-TV to pay-TV for June 14. Hollings' TV violence hearing is the one likely to remain on the schedule, giving Hollings a good place to begin.

Hollings also has long taken the side of the local TV affiliates in their disputes with the broadcast networks.

Chairman Hollings can impede the networks' efforts to get rid of ownership regulations. But lobbyists say that's not such a big change: Ranking Member Hollings was practically as powerful as Chairman Hollings will be. In both iterations, Hollings is apt to delay anything with which he disagrees. And now Hollings can spend the committee's time focusing on his issues, while politely ignoring those that interest John McCain.

More to their advantage, network lobbyists say, is that the fate of the 35% national TV audience cap lies in the hands of the D.C. Court of Appeals, which is expected to remand its decision to the FCC. Chairman Michael Powell says he's no fan of caps, and network lobbyists this year expect to rid themselves of an ownership limit they abhor.

Deregulation-minded Powell may find himself in an interesting position vis-à-vis the new chairman. Hollings now is chairman of two committees—one that authorizes the FCC's existence and one that decides how much money the agency gets.

While all observers say Hollings has a good relationship with Powell, they also say the two have very different views. Powell is a champion of allowing market forces to operate; Hollings believes the big hand of government occasionally should be put to work.

"We'll see how savvy a politician Michael is," says one industry lobbyist. "The last thing you ever want to do is get cross-eyed with your appropriator."

It could get challenging, but all bets are on Powell to make the relationship work. "From Fritz' standpoint, having Michael Powell in there is a dream. Michael Powell is not some crazy idealogue. He would do everything he could to be responsive to Chairman Hollings—just because he's a good pol," says one industry executive.

The other relationship to watch will be between Hollings and House Energy and Commerce Committee Chairman Billy Tauzin (R-La.). Both being maverick Republicans with a flair for press, McCain and Tauzin circled each other somewhat uneasily but managed to come out on the same page. Hollings and Tauzin clash directly on many issues.

"Billy's not going to get anything done without Hollings," says one lobbyist. Tauzin spokesman Ken Johnson says the two will get along fine. "Billy has great affection for Fritz Hollings. They've worked together on a number of issues."

Of course, the Commerce Committee isn't the only one changing hands. With regard to communications-related committees, Sen. Daniel Inouye (D-Hawaii) takes over the Senate Communications Subcommittee; Sen. Patrick Leahy (D-Vt.) becomes chair of the Senate Judiciary Committee, and Sen. Herb Kohl (D-Wis.) will head the Senate Antitrust Subcommittee.

Observers point out that not only have both the Senate Commerce and Judicary Committees, and their subcommittees, operated in a bipartisan fashion for years, but the issues these committees cover tend to cross party lines, as well, making the Senate power-shift more important from a political point of view than a policy one.

What a difference a day makes Sen. John McCain vs. Sen. Fritz Hollings on key issues
The issues McCain Hollings
35% TV ownership cap Raise it Leave it
Newspaper/broadcast crossownership Fine with it Dead set against it
TV violence Thinks it's bad; wants industry to clean up its act Thinks it's bad; wants to channel violent programs to late nights
Telco broadband deregulation For it, sort of Dead set against it
Digital TV Broadcasters ran away with $70 billion in free spectrum, should be held to a tight transition schedule Broadcasters should have gotten spectrum but should act in the public interest; sources say that could include more HDTV content.
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