Passing the Torch to the New FCC

Forty-eight years ago, John F. Kennedy signaled the passing of the torch to a new generation of Americans. Three days ago, Barack Obama did the same, setting the stage for a sweeping overhaul of the country’s domestic and foreign policies.

The laws and regulations governing TV will not be immune. In fact, change is already underway at the FCC and in Congress, the two main regulators of television and related industries, in the form of new leadership. The change in policy will play out over the next four or more years, issue by issue. Some will be new Obama initiatives. Others are unfinished business from the Kevin Martin (and earlier) FCCs. 

Here, I highlight nine of many unfinished issues likely to be in the torch that’s passed to the new FCC. Some, such as whether Congress postpones the DTV transition, are unusually urgent.

But first let’s talk about that new leadership.

At the FCC the effects are already dramatic. Republicans Chairman Martin and Commissioner Deborah Taylor Tate — 40 percent of the five commissioners — are gone, their positions vacant. By law, at most three of the five commissioners can be from the same political party as the president, and each commissioner has one vote. All are nominated by the president for U.S. Senate confirmation. So the FCC majority will change from Republican to Democratic. 

The president names one commissioner from his own party as chairman, who controls the FCC agenda. Yesterday, President Obama appointed an acting chairman, current Democratic Commissioner Michael Copps, to serve until a permanent chairman is nominated and approved. Press reports indicate that Obama’s Harvard Law school colleague and former FCC General Counsel Julius Genachowski is the likely choice for permanent chairman.

In Congress, House and Senate Democratic majorities are larger than before, and leadership of key FCC-related committees, where much of the work of Congress gets done, has changed. Sen. Jay Rockefeller (D-W.Va.) is now running the Senate Commerce Committee in place of Dan Inouye (D-Hawaii) and Rep. Henry Waxman (D-Calif.) beat out incumbent John Dingell (D-Mich.) for chairmanship of the House Energy and Commerce Committee. Also in the House, Ed Markey (D-Mass.) and Rick Boucher (D-Va.) have traded their traditional chairmanships; Markey now heads the Energy and Environment Subcommittee and Boucher the Communications, Technology and Internet Subcommittee.

And now for those nine unfinished issues.

1. Postponing the Feb. 17, 2009 DTV transition date. Bills are pending and could pass in the Senate and House at any moment to move the long-established analog cut-off date of Feb. 17 — just 25 days away — to June 12. The legislation would also give over-the-air-only viewers until July 31 to acquire and use the $40 NTIA coupons to buy converter boxes to continue receiving TV off air. 

Proponents include Obama and his transition team, the Consumers Union and others. They are concerned that the NTIA has run out of money to issue coupons, many consumers are confused about what to do (one estimate is more than 8 million households won’t accomplish the transition), old antennas may be inadequate to receive the new signals and call centers can’t handle all the questions and complaints.

Opponents include the Consumer Electronics Association, former FCC Chairman Martin (who cites consumer confusion from changing the date) and some congressional Republicans who cite the Jan. 15 successful conversion in Hawaii and the readiness of most broadcasters. Cost of continuing an analog signal is another factor.

If the deadline is extended, stations will likely still be able to convert early, but will need to continue consumer education efforts. Until the results of the legislative efforts are known, all stations must prepare to switch to digital-only by Feb. 17.

2. Digital translator and “nightlight” extended analog service FCC rulemakings/initiatives. Over the past month or so, the FCC has proposed, collected comments on and partially implemented a new window for stations to file applications for new digital TV translator stations to fill expected coverage gaps in stations’ DTV-only signals. On Dec. 24, 2008, the FCC released coverage maps of all stations’ digital signals to help identify gaps. Expedited application processing is up to the new FCC.

Simultaneously, the FCC considered and on Jan. 15 approved, on a rush basis, new rules implementing a congressional measure authorizing designated stations in each market to air, on a sponsored basis, transition-related and emergency material on their analog signals beyond the transition date. The idea is that often the best way to reach TV watchers is via TV.

These measures have wide support and should contribute to public readiness for the transition.

3. Must carry for TV digital multicast video signals. In 2005, the FCC ruled that TV stations’ digital subchannels do not have must-carry rights and cable systems do not have to carry them. Broadcasters had argued that the potential of digital subchannels could not be realized if cable/satellite/telcoTV operators could refuse to retransmit them.

At the start of 2009, stations increasingly use multicast signals to offer quality video programming free to viewers, precisely the type of programming intended to be protected by must carry. Some of this programming expands the reach of stations serving minority and foreign-language audiences, which traditionally have been underserved. Whether and when Congress and/or the FCC will revisit the question is still an open question.

4. LPTV transition to DTV. This has long been deferred until after the full-power switch, but with relatively few specifics. LPTV representatives have sought specifics, and there has been preliminary FCC activity, but many significant points need definition.

5. Reform of the retransmission consent complaint process/enforcement. Like many retransmission consent agreements that expired Dec. 31, 2008, were extended and are still being renegotiated, policy issues about that process also are spilling over to the new FCC.

An example is FCC rule Section 76.65. It establishes a “duty to negotiate in good faith” by the parties in retransmission consent negotiations and provides for enforcement via complaints. Recently, however, both broadcasters and cable/satellite operators have voiced dissatisfaction with the timing and substance of FCC enforcement, which in some cases has focused mainly on requiring the parties to resolve their differences. December even featured a public dispute between an FCC administrative law judge and the Media Bureau over jurisdiction to resolve a retransmission complaint.

What’s more, by its own terms, the good faith rule expires on Dec. 31. This warrants serious, concerted attention in a timely way by the new FCC.

6. Indecency regulation. Under the last chairman, the FCC adopted, for the first time in 40 years, a policy of “vigorous enforcement” of federal law prohibiting “indecent” television and radio broadcasts. Even live use of isolated “fleeting expletives” was subjected to maximum multimillion-dollar fines. The FCC and Justice Department devoted substantial scarce resources to appealing court rulings as far as the U.S. Supreme Court, which heard oral argument in one of the cases on Election Day.

Will the new FCC itself overturn this radical departure from decades of precedent and defer more to the First Amendment and child-proofing technology? Stay tuned.

7. Regulatory status of AT&T U-Verse and Verizon FiOS. These IPTV (Internet protocol TV) or telcoTV competitors to satellite and cable TV have yet to be defined by the FCC as “information” or “cable” services. As a result, each has claimed to be subject to aspects of each regulatory regime, and it is unclear whether must carry and franchising requirements apply to them. Some states and courts have tried to fill the void, not necessarily consistently, without guidance from the FCC, the “expert agency.” Congressional enactments have not addressed the issue squarely. 

8. Product placements. Among the issues here is whether stations must make sponsorship identification announcements when someone connected to a product pays a station to use it other than in a commercial. Example: In a station- or network-produced program, a character removes her shoes and the label shows clearly. This is highly controversial.

9. Media ownership issues. Aspects of these remain unresolved, while minority and female ownership levels have slipped or not improved significantly. Some on both sides of the ownership issue at a macro level — whether media ownership is now too concentrated or not — advocate or oppose what they foresee as a wholesale revisiting of this contentious area after the new FCC is up and running.

On a more micro ownership level, new offshoot questions are raised by the recent Ion/Urban applications and FCC solicitation of comments on a request that share-time multicast channel programmers (which are independent of the station programming the primary digital channel) be treated as distinct stations for must carry and other purposes.

In addition, there are pending judicial challenges to the “old” commission’s modified newspaper/broadcast cross-ownership rule. On Dec. 24, 2008, the Media Bureau granted an extension to Feb. 9 to Cox, Bonneville and others to file requests for permanent waivers of the rule. 

In his acceptance speech last Tuesday, President Obama said: “For everywhere we look, there is work to be done.” May the torch being passed to the new FCC light the way.