Dizzying Pace in D.C. - Broadcasting & Cable

Dizzying Pace in D.C.

New Year shapes up as barn (and perhaps silo) burner
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Related: B&C's 2015 Preview

The early part of 2015 in Washington promises to be as busy as a stump speech tour, with action on lots of fronts—namely, Congress, the courts and the FCC. House Republican leaders are promising to wade into a rewrite of telecom laws and to level the regulatory silos that they, and others, suggest are so last century.

That effort began on the House side this year with a series of white papers, and Washington watchers predict the House and Senate will soon start getting down to details.

Given that a comprehensive effort will likely take years, the Republican-controlled Congress may want to start off with a standalone FCC reform bill.

Instead of trying for the “home run,” says one cable lobbyist, the Republicans may want to take a section—perhaps process reform—that has been hanging out there and may be doable. That is, unless the Republicans try to overreach by, among other steps, trying to limit FCC merger conditions, as they did in a previous attempt at reform. “Nobody is going to throw themselves on the track for FCC process reform,” the lobbyist suggests.

“I think it is possible to begin a process that leads to a telecom rewrite, probably sometime in 2016,” says Ev Ehrlich, a senior fellow at the Progressive Policy Institute and former undersecretary of commerce under President Bill Clinton.

With Republicans taking over Senate committee and subcommittee chairmanships, most expect increased FCC oversight, including more hearings and perhaps General Accounting Office reports on relevant issues. There could even be a Congressional resolution opposing network neutrality rules, depending on how that issue shakes out.

Ehrlich thinks the first sign of where the new Congress is going in terms of network neutrality is how it reacts to the president’s Title II “dictum.” “I think the reaction to the president’s desire to pick a fight on [network neutrality] will be the first hint we have.”

Former Republican FCC commissioner Robert McDowell( now a partner at Wiley Rein) agrees that it’s easier to “tear down some silos in pieces rather than all at once,” though he thinks a comprehensive bill will eventually be hammered out. “It remains to be seen exactly how the stars align, but I haven’t seen this level of seriousness to get something done in a long time,” McDowell says.

The FCC’s new net neutrality rules, either based in Sec. 706 authority, Title II or some combination, will likely not surface until at least February, but activists will continue to hammer the commission on the issue.

The Sony hack could put new pressure on Congress to pass cybersecurity legislation allowing ISPs and others to more easily share cyber threat information. One bill passed in the last Congress on voluntary cybersecurity standards, but other legislation on sharing did not. Certainly the President has signaled that Congress needs to move given that the next attack might not be on a movie studio over a Seth Rogen comedy.

A Sign of Things to Come

February could prove to be only the start. Unless the chairman produces a compromise Open Internet order, as Julius Genachowski did four years ago, whatever the commission votes on will likely wind up back in court.

One safety valve for the FCC is the Comcast/ TWC merger. If the FCC allows the deal, the chairman could make his new rules a condition of it, as Genachowski did with Comcast/NBCU.

A Comcast spokesperson declined to comment on whether a condition involving Title II would put the kibosh on the agreement.

This deal, and AT&T/DirecTV have already wound up in federal court and the FCC has made no call on either the deals or network neutrality. Programmers obtained a stay of the FCC’s decision to make copies of program contracts and their work product available to hundreds of third parties.

That suit could delay the completion of both mergers, but unless something major happens, the FCC will almost certainly make the call one way or the other in the first half of 2015.

Network neutrality is the poster issue for the FCC, but the commission will also be busy tying up loose ends on its most-productive-ever spectrum auction—the AWS-3, which generated over $41 billion. Then there is the upcoming broadcast incentive auction. The FCC has a timetable for action, but the auction framework drew lawsuits and challenges from myriad broadcasters so that timetable has been pushed back as well.

Also on the FCC docket is the classification of linear over-the-top providers as multichannel video programming distributors. The FCC has voted to propose making linear OTTs MVPDs, at least when it comes to access to programming.

That could be a game-changer for video competition. But the FCC’s proposal is filled with lots of questions, so don’t expect a final-order vote anytime soon. There will, however, likely be plenty of debate and comment.

Republican Ajit Pai, who along with fellow Republican Michael O’Rielly voted to concur on the item, rather than give their full-throated support, have some issues with the item.

Pai has signaled he thinks that the FCC’s presumption that some over-the-top providers are MVPDs, rather than simply asking the question of whether they are or not is premature. He is also concerned about regulating online content.

Now that the Satellite Television Extension and Localism Act Reauthorization has passed, the FCC plans to start working on a successor software-based set-top box security/surfing regime, as well as a congressionally mandated review of what constitutes good faith negotiations.

The FCC will have to create a set-top working group, where issues will include two-way compatibility, competitive access, licensing terms, security, privacy and data collection—tracking what people are watching.

The proceeding will likely be an opportunity for those pushing a single set-top to unite online and traditional video. That so-called AllVid effort has been opposed by cable operators who argue the FCC should mandate a one-size-fits-all video navigation solution when there is a growing choice of devices to deliver programming to the home.

The STELAR follow-up could also be a focus for attention on set-tops as an opportunity to collect data, track viewers and target advertising. The working group will likely not come to consensus answers, but the questions should generate some heat.

Related: B&C's 2015 Preview

The early part of 2015 in Washington promises to be as busy as a stump speech tour, with action on lots of fronts—namely, Congress, the courts and the FCC. House Republican leaders are promising to wade into a rewrite of telecom laws and to level the regulatory silos that they, and others, suggest are so last century.

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