There’s more than just a potential performance royalty keeping radio’s lobbyists busy on Capitol Hill. Washington insiders say that although conventional wisdom says not much gets done in an election year, if there’s an issue where there is political consensus it could quickly become a busy year for broadcasters. That includes most notably addressing the Federal Communication Commission’s looming repack of television spectrum. It’s a process that will have a collateral impact as an analysis identified 678 FMs at risk for disruption as 997 television stations change channel positions. TV broadcasters have filed requests seeking more than $2.1 billion in funding. That’s well above the $1 billion earmarked by Congress for the TV Broadcaster Relocation Fund. Legislation introduced last summer proposed not only making another $1 billion available to the fund to help cover broadcasters’ costs but also to allow FMs impacted by the repack to tap into the fund to cover their losses. It would also lengthen the 39-month timeline to complete the repack process. But Congress has so far failed to approve the bill.
To lawmakers considering whether to support the bills that would boost the fund size, one radio lobbyist said the industry’s message is that, unlike wireless services or TV stations, radio stations will receive “zero benefit” from the multibillion dollar spectrum auction. At the same displaced or temporarily silenced FMs stand to lose “significant sums” to accommodate the repack. “It’s important our stations and our listeners are not sacrificed as part of this process,” the lobbyist said.
National Association of Broadcasters president Gordon Smith doubts Congress will achieve much this year, but he believes passing a bill to address the repack will be an exception explaining his NAB team is confident there’s enough support in the halls of Congress to overcome the financial hurdle. “Lawmakers earnestly want to address the shortfall in the repack fund and ensure both TV and radio broadcasters are fairly reimbursed for expenses incurred from the repack,” he said. “We will work with them to pass legislation addressing the repack fund shortfall and I’m optimistic we will have a solution this Congress.”
Less certain is whether the FCC’s proposed 39-month timeframe remains realistic. Smith said broadcasters have no reason to drag their feet but the reality of too few tower workers and weather delays means that timetable may prove too ambitious. “Not being able to sufficiently reimburse broadcasters, especially non-commercial stations, for needed new equipment could make sticking to that timeline almost impossible,” Smith said.
SANDy Bill Still In Limbo
The Securing Access to Networks in Disasters Act—otherwise known as the SANDy Act—cleared both the House and Senate last year, thanks in part to a succession of Category 5 hurricanes putting a spotlight on the issue. The bill would designate radio and TV as “first responders” during emergencies. But because the bill passed a year ago by the House is different than the version the Senate approved last Sept.—for issues having nothing to do with radio or TV—the two bills need to reconciled and both chambers will need to take a second vote on the combined legislation before it lands on President Trump’s desk.
The challenge for broadcasters will be to keep the proposal from falling by the wayside as the impact of the hurricane season is now off the congressional radar. “The odds of SANDy being enacted in 2018 are high if broadcasters continue to reach out to members of the House and encourage them to support the bill’s passage,” one lobbyist said.
FCC Reauthorization A Possible Path Forward
One possible path forward in Congress for not only the SANDy legislation but also the proposal to boost the size of the repack relocation fund is to roll both bills into an effort by House Communications Subcommittee chair Marsha Blackburn (R-TN) to reauthorize the FCC for the first time since 1990. Blackburn’s draft legislation is the product of several months of work by House staffers and now at 78 pages it includes several proposals and ideas that have been kicked around on Capitol Hill for the past several years. Some insiders say it could be a catch-all for broadcast-related issues as well. What comes out of that effort remains uncertain but broadcast lobbyists say the winds are at least blowing in a favorable direction. Blackburn named Rep. Billy Long (R-MO) to lead the work on media ownership issues. Long has been a critic of current media ownership regulations and a champion of local broadcasting. Not only has he sided with the radio industry to fight a performance royalty, but he’s also served as an outspoken proponent of radio and TV during emergency situations.
Ad Tax Fight Done In D.C.—For Now
Before the Christmas holiday, President Trump signed the Republicans’ sweeping tax overhaul legislation approved last week. The President called it a “Christmas gift” for the American people and for broadcasters the “gift” was arguably it didn’t include the threatened change to how companies could write-off their advertising expenses.
Even though federal budget standoffs now routinely threaten to shut down the government—including as soon as Jan. 20—most Washington insiders think the ad tax fight has now passed. “Congress just passed a monumental tax bill that did not include the ad tax—I cannot underscore what a huge victory that is,” one lobbyist said in an email, adding, “While there is likely to be a tax technical corrections bill next year I don’t see the ad deduction being an issue.”
Smith expects the issue to continue bubbling up in statehouses however as lawmakers look for short-term revenue fixes to their budget shortfalls. “Thankfully, we have a strong network of state associations that we will work with to ensure lawmakers understand the job-killing effects this would have on the economy,” he said.
DOJ Crackdown On Pot Ads Still Possible
Twenty-nine states and the District of Columbia now have laws broadly legalizing marijuana in some form. But in Washington it’s unlikely the Dept. of Justice or the FCC will give explicit clearance to radio and TV stations to air pot commercials in 2018. Erwin Krasnow, a partner with the law firm of Garvey Schubert Barer, thinks the FCC will continue to duck the question similar to how it avoided ruling on whether Las Vegas and Atlantic City casino ads were permitted. And Krasnow says it’s entirely possible Attorney General Jeff Sessions could even turn up the heat on stations that have tested the pot ad waters. “There is a better than even chance that the Justice Department will reverse the policy under Obama of not enforcing the federal drug laws that characterize marijuana as a banned narcotic drug,” Krasnow said.
Rep. Jared Polis (D-CO) introduced the Regulate Marijuana Like Alcohol Act (H.R. 1841) last year which would help clear the way for stations to air pot-related commercials without threat of losing their license. But his bill has attracted only 17 cosponsors and GOP leadership has so far refused to hold any hearings on his proposal.
Midterm Elections Loom
The calendar may say it’s the start of a new year, but on Capitol Hill the calendar isn’t quite the same. There, it is unlikely 2018 will have 12 months like in the rest of American workplaces. That’s because the midterm election will mean 33 Senators and all 435 House members will be up for reelection and that’s sure to curtail some of what will get done.
“Election years tend to suck all the oxygen out of the room. We also have a Congress that has been slow to enact legislation for the past few years,” Smith said. “I don’t expect there to be much done in 2018 that will have an impact on radio.”
“It is a midterm election year and that always affects things here in Washington,” National Religious Broadcasters VP of government relations Aaron Mercer agreed. Traditionally it’s meant the summer recess was the cutoff point for legislative action, with a few weeks in the lame duck session after Election Day for Congress to get much done.
The election is still a long way off and despite recent wins in Virginia and Alabama, insiders say the political map isn’t friendly to the Democrats since 25 of the 33 senators up for reelection are Democrats and many of them are in states President Trump won. And in the House, the Democrats need to pick up 24 seats to gain control. While Democrats have voter enthusiasm now, insiders say they still have to deal with how current district lines are drawn—which tend to favor Republicans. One wildcard is what impact the wave of retirements will have on who holds the gavel next January.
“No matter what happens, whoever has the majority will effect what the priorities are going into the next Congress into 2019 and beyond,” Mercer said.