The White House may be where the direction of a political agenda is set, but it’s at agencies such as the Federal Communications Commission where that vision is transformed into day-to-day policies that broadcasters will live with for the next four or eight years. President Trump began setting that course on Friday when he reportedly named commissioner Ajit Pai chair of the Commission.
The National Association of Broadcasters said it’s had a “great relationship” with both Pai and fellow Republican commissioner Michael O’Rielly. “They are both superb public servants and each has a strong understanding of broadcaster issues,” NAB president Gordon Smith said. The NAB has also worked with Jeffrey Eisenach, who heads Trump’s FCC transition team, and believes he knows the broadcast industry very well. “Regardless of who becomes the next FCC chair, NAB’s goal remains the same—making sure all five commissioners understand the issues facing our industry and how their actions affect broadcasters’ day-to-day operations,” Smith said.
Until then broadcast attorneys say Pai and O’Rielly aren’t likely to sit back. “You have two very strong Republican commissioners who don’t need Senate confirmation and they can get a lot done and this kind of dovetails with Trump’s overall get-down-to-business-quickly approach,” said Kathy Kirby, cochair of the telecom, media and technology practice at the Washington law firm Wiley Rein. She’s expecting the new FCC to focus on a litany of relatively minor regulations that have combined into a big headache for stations. The list ranges from whether they can solely rely on internet recruitment to comply with EEO requirements to what she calls the “ridiculous” requirement they keep paper copies of listener correspondence in their public inspection files, and whether public broadcasters need to disclose sensitive information about their board members. “I think you’re seeing signals out of our two Republicans that they’re looking at bottom-line issues for broadcasters,” Kirby said.
Pillsbury attorney David Burns agrees a lot of the little things that have caused grievances among broadcasters could be targeted in the coming months. And having Pai in charge may also be a shot in the arm for the agency’s attempts to put AM on firmer footing. “He seems to be genuinely interested in AM radio and its revitalization so maybe the translator auction this year may come a little bit faster and with a little bit more energy,” Burns said. “It has been awhile since there has been an FCC chairman who has taken much of an interest in broadcasting.”
The only thing that may slow down the Commission from going further even faster is federal law requiring formal rulemaking procedures. “We’re already seeing these signals of ‘let’s do what we can now,’” Kirby said.
Many in Washington expect Trump’s FCC to come out of the gate devoting energy toward rolling back some of what the agency did during the Obama administration. National Religious Broadcasters VP Aaron Mercer predicts scrapping controversial net neutrality regulations may be just the start. “It will be very interesting to see what [Pai] does. I have a feeling they will be looking at a number of things that were done over the past couple of years,” he said.
Burns doesn’t expect any sweeping media policy shifts until a full five-member Commission is in place. “There aren’t a lot of hot issues in radio that are percolating right now and I don’t think much will happen during this transitional period,” he predicts. But Burns thinks the three-person Commission will act on the pending petitions for reconsidering the quadrennial ownership review. Pai and O’Rielly have been critical of cross-ownership prohibitions and they’d be willing to abolish the 42-year-old regulation. “I don’t know as a practical matter that it’s going to make much difference,” Burns said. “I don’t think you’re going to see a big wave of consolidation between the newspaper and radio industries.”
Even so the NAB signaled it believes its decades-old quest of overturning the cross-ownership ban is within reach when it opted to drop its legal challenge to the quadrennial media ownership proceeding and instead pushed forward with a petition of reconsideration at the Commission. Smith points out both commissioners Pai and O’Rielly voted against the media ownership order when it was released last summer. “We are hopeful that the FCC will [now] adopt media ownership rules that would help broadcasters better compete in the digital marketplace,” Smith said.
The NAB thinks among the other broadcast decisions that could be revisited are the repacking rules for the TV incentive auction if the current FCC plan proves to be unfeasible. Pai and O’Rielly have also signaled they’re chomping at the bit to undo a decision requiring noncommercial stations to collect detailed information from board members similar to what commercial stations submit about their owners.
Longer term, Burns expects the FCC to be open to reworking the subcap limits which dictate how many FMs and AMs an operator can own in a market. “It wouldn’t surprise me to see a rulemaking to change those rules—but it would likely be behind net neutrality and some of the telecom stuff,” he said.
Yet Kirby said there’s also not much “buzz” about updating local radio ownership rules, although as the FCC and Congress take a broader look at media ownership and the public interest they could assess the caps from a deregulatory perspective. “But even if the Republican majority changes course and looks to liberalize those rules for radio and television we still have the overlay of a court review so I don’t think anything will happen very quickly,” she said.
There isn’t any urgent push from the major radio groups to grow larger either. “It depends on where we need to fill in holes,” iHeartMedia chief executive Bob Pittman said. In a Q&A with Inside Radio this month Pittman noted that iHeartMedia is making most of its new investments in digital, live event, and programmatic ad selling capabilities. It’s not alone. SNL Kagan reports radio deal volume last year totaled $522.6 million, which was the lowest tally since 1982.
Beyond ownership, broadcast indecency watchdogs at the Parents Television Council—which has targeted radio and TV stations for violating indecency regulations during the past two decades—is pushing the Trump administration to finally address the estimated 200,000 pending complaints that have been filed against broadcast outlets. “It is time for the Commission to move forward with this congressionally mandated duty,” PTC president Tim Winter said.
But broadcast attorneys doubt the FCC will step up indecency enforcement under Trump. “I don’t think that’s going to be any more of a high priority unless there is something like the Janet Jackson incident during the Super Bowl that sparks a political uprising,” Burns said. He thinks FCC enforcement will be “less aggressive” in general in the coming years given the deregulatory bent of the agency.
There’s a growing expectation that in the coming months the FCC will be reconfigured and streamlined, potentially with some of its competition and consumer-focused functions shifted to the Federal Trade Commission. Conservatives—among them Trump transition team members Jeff Eisenach and Rosyln Layton—have complained the FCC and FTC oversight has been “largely duplicative,” creating additional confusion and expensive regulatory hoops for business to leap through. Congress would have to play some role in the shakeup but the GOP lawmakers have already taken several moves to reform the agency and are likely open to a more sweeping shakeup.
But Beltway veterans doubt a reconfiguration of the agency will have a major impact on the radio industry, beyond a possible shift of Emergency Alert System oversight out of the Public Safety and Homeland Security Bureau to the Department of Homeland Security. They point out the last shakeup merged the Mass Media and Cable Bureaus and that change had little impact on broadcasters.