United States: Washington Hot Topics: What To Expect In 2013

Last Updated: February 12 2013
Article by Mark B. Denbo

With the re-Inauguration of President Obama now in our rearview mirror, this is a good time for a brief outline of the goings-on in Washington that will be of particular concern to broadcasters in 2013.

New FCC Chair. It is widely expected that Chairman Julius Genachowski will announce soon that he is leaving the FCC. According to multiple reports, the next Chairman will not be either of the two sitting Democratic commissioners (Mignon Clyburn and Jessica Rosenworcel). Instead, recent speculation has centered on four current FCC "outsiders," all of whom have substantial communications experience: Karen Kornbluh, U.S. ambassador to the Organization for Economic Cooperation and Development, who headed the FCC's Legislative Affairs office in the late 1990s; Blair Levin, the primary author of the FCC's National Broadband Plan, who currently is a fellow at the Aspen Institute; Susan Ness, a former FCC Commissioner who now is a Senior Fellow at the Center for Transatlantic Relations at Johns Hopkins School of Advanced International Studies; and Lawrence Strickling, the Assistant Secretary of the National Telecommunications and Information Administration. Because Kornbluh was then-Senator Obama's Policy Director and has retained close ties, she has emerged as a frontrunner. Moreover, there may be pressure to nominate her because there has never been a female FCC chair and because most other nominees for top posts in President Obama's second administration are men.

Major Policy Initiatives at the FCC. The most pressing issues at the FCC primarily affect television broadcasters.

  • First and foremost is completing the proceeding that will provide rules of the road for the voluntary incentive auction and the involuntary "repacking" of television broadcast spectrum. Comments in the proceeding were due last month and reply comments are due by March 12. The FCC hopes to issue a Report and Order sometime in 2013 and hold an auction in 2014. It is possible that the first Report and Order will address only auction- related matters and save the more complex repacking items for a later date.
  • Also before the FCC are the intertwined issues of retransmission consent reform and review of the Commission's multiple ownership rules. It is expected that the FCC will not change either its rules governing retransmission consent or its rules governing the number of radio and TV stations one party may own, either locally or nationwide. However, the FCC may decide to "attribute" TV joint sales agreements. (JSAs already are attributable in radio.) That would mean, in applying the multiple ownership rules, a party providing such services would be treated by the FCC as if such party owned the affected station. We understand that a draft Report and Order on the multiple ownership rules is nearly complete, and that it would not allow full "grandfathering" of TV JSAs, but instead would require all existing arrangements to come into compliance within two years. If the new rules are not issued before Chairman Genachowski departs the FCC, a new Chair could substantially revise the current draft. It also is possible that Congress could intervene if it disagrees with the approach the FCC ultimately adopts.
  • Following the Supreme Court's June 2012 decision, which provided some level of clarity regarding the FCC's policies governing "indecent" programming, the FCC staff may begin granting the hundreds of radio and television station license renewal applications that have been pending for many years.

Major Policy Initiatives on Capitol Hill. In contrast, the major initiatives under consideration on the Hill primarily affect radio broadcasters.

  • Although the issue of a mandatory "performance royalty" has recently taken a step back (likely due in large part to the deals cut by certain broadcasters and smaller record labels), it could re-emerge in 2013 if broadcasters and the major record labels are unable to reach agreements on their own.
  • Radio broadcasters also have been pushing the wireless industry to include "FM chips" in mobile devices. Congress may take up the issue if both sides fail to reach an accord.
  • On the TV side, in the wake of the Sandy Hook massacre, Congress may enact legislation to study the effects of violence in television and video games on children. Congress also may seek to impose restrictions on violent programming if it does not feel as if television broadcasters are adequately addressing the issue.
  • Finally, it appears as if the leadership of the House Commerce Committee (and Telecommunications Subcommittee) will remain the same, with Fred Upton (R-MI) continuing as the Chairman of the full committee, Henry Waxman (D-CA) as ranking member and Greg Walden (R-OR) as chair of the subcommittee. In the Senate, there is some flux. The Chairman (for now) remains Jay Rockefeller (D-WV), but he is retiring at the end of 2014. The ranking member is expected to be John Thune (R-SD), who is replacing Kay Bailey Hutchison (R-TX). The head of the subcommittee currently is John Kerry (D-MA), but that will change once he is confirmed as Secretary of State. Next in line is Barbara Boxer (D-CA), but it is not known whether she will take over that position.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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