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'Blue Ripple' Would Make Regulatory Waves

Joe Biden, the Democratic nominee for president, speaks to supporters on election night in Wilmingon, Del., as votes continued to be counted in his tight race against President Donald Trump.
Joe Biden, the Democratic nominee for president, speaks to supporters on election night in Wilmingon, Del., as votes continued to be counted in his tight race against President Donald Trump. (Image credit: Drew Angerer/Getty Images)

When all the votes are counted, it is looking increasingly likely that the Democrats will have recaptured the White House by a donkey’s whisker. But it was unclear, though a long shot, if that blue ripple would flip the Senate. If so, that would give regulatory-minded congressional Democrats the ability to put an end to the legal wrangling over a neutral internet, impose tougher new privacy laws or pass their version of social media regulation. 

There were razor-thin races still being contested, with more potential twists possible at press time. But on the assumption that the late, urban-centric counties secured a victory for former Vice President Joe Biden that can’t be overturned by President Donald Trump’s lawyers or reversed through recounts — and if the FCC does shift to Democratic leadership — then cable, broadband and broadcast players face the potential return of a number of regulations, including network neutrality rules and an end to the FCC’s push to deregulate broadcast ownership.

See Also: Hooray for Hollywood | Networks All In as Election Day Turned Into Election Days | The New FCC? | Biden Win Would Have Minor Impact on Cable Profits

The National Association of Broadcasters has hit its members up for more money, in part pointing to the possible need to make its deregulatory pitch to a re-regulatory D.C.

With Republicans holding onto the Senate, there would be no legislation reclassifying internet access as a Title I telecommunications service subject to mandatory access and potentially rate regulation. But a Democratic FCC would almost certainly do the reclassifying and restore rules against blocking, throttling and paid prioritization, which would be challenged in court again and continue the years-long careening from regulation to deregulation of internet access.

The FCC under a Democratic chair would likely conclude that broadband is not being deployed to all Americans in a reasonable and timely fashion, a 180-degree turn from the Republican-led FCC’s conclusion that progress toward deployment met that definition. 

If the FCC says deployment is not up to snuff, the law allows it to regulate to make it so. That effort could include rate regulation because, unlike Republicans, the Democrats argue that price is an impediment to reasonable broadband rollout. Democrats could also raise the speed threshold for the definition of broadband availability, which could reduce the number of households credited with broadband availability.

On the broadcast side, the FCC has been defending its broadcast ownership deregulation in the wake of a court remand from the 3rd U.S. Circuit Court of Appeals, which concluded the FCC had not sufficiently taken into account the impact of deregulation on diversity.

President Donald Trump speaks to supporters in the East Room of the White House on election night.

President Donald Trump speaks to supporters in the East Room of the White House on election night. (Image credit: Chip Somodevilla/Getty Images)

Ownership Rules Likely Stay

A Democratic FCC would almost certainly view the broadcast landscape differently. The Democrats have long argued that loosening local ownership rules simply helps mega-groups like Sinclair Broadcast Group get larger, to the detriment of localism and diversity.

But one veteran broadcast executive said that if a chairman Jessica Rosenworcel-led FCC, for example, does try to re-regulate, exhibit A against that move should be the recent report from Senate Commerce Committee Democrats that found online news has “decimated” broadcast TV news revenues in the age of digital, in part due to “unfair and abusive practices by tech platforms.” 

Look for a Democratic FCC majority, which would likely be led by a woman and include at least one minority member, to launch a serious inquiry into broadcast diversity — particularly considering the current reckoning over racial inequalities that are definitely evident in the makeup of broadcast ownership.

As the Rev. Jesse Jackson, NCTA–The Internet & Television Association president and CEO Michael Powell and many others have pointed out, minorities and women were not allowed in line when broadcast licenses were handed out, or in the room when big media deals were struck and the spoils divided.

The current FCC has shown no interest in launching a larger diversity inquiry in connection with the court’s directive to explicitly address the issue in any broadcast deregulation. Chairman Ajit Pai has dismissed the court remand as essentially an impediment to his diversity efforts, which included creating an incubator program that the court threw out and reconstituting the FCC’s diversity advisory committee.

According to the FCC’s latest biennial report on broadcast station ownership, released earlier this year, members of racial minority groups as of 2017 racial minorities collectively owned 26 commercial full-power TV's, or only 1.9% of the total, down from 36 (2.6%) in 2015.

Section 130 Still Looms

One issue that won’t going away no matter which party wins the Senate or White House is the debate over what to do about Section 230, the provision in the Communications Decency Act that has allowed social media to flourish without the threat of civil suits over third party content on their sites.

With an incoming Democratic administration, Pai would be unlikely to follow through with his plans on an order responding to the president’s call for social media regulation. Usually, lame-duck chairmen stand down from controversial items at the behest of congressional leadership from the other party. Pai does not have to comply, but a new FCC could simply reverse an 11th-hour Section 230 order.

The concerns about the size and power of Big Tech run across party lines, though. There will likely be some changes to Section 230, said a former top FCC official speaking not for attribution. But there probably won’t be anything going out the door on a matter as controversial as that before a change in administrations. 

Biden has been a critic of Section 230’s broad immunity, as have congressional Democrats. But while Republicans were using the issue as a cudgel on Silicon Valley giants they say were systematically censoring conservative speech, Democrats say that charge is bogus and was, at least in part, a way to try and pressure Twitter and Facebook not to flag the president’s tweets before the election. Democrats are focused on curtailing hate speech and election meddling via changes to Section 230.

“I definitely see something happening on Section 230, though I think it is constitutionally dicey to find some way to raise and lower the liability issue based on curation,” Robert McDowell, a Republican FCC commissioner during the Bush and Obama administrations and now co-chair of Cooley’s global communications practice group, said. “I am not sure how that survives constitutional muster when it comes to political speech.”

I definitely see something happening on Section 230, though I think it is constitutionally dicey.

Robert McDowell, former FCC commissioner

Privacy Laws Still Hard

Had Democrats won the Senate, privacy legislation might have finally seen the light of day after lots of bipartisan talk and no action. Now, presumably, not so much, though McDowell suggests that, while politically popular, it would still have been hard even in an all-Democratic town, where it becomes essentially an intramural fight. He pointed to the large California delegation that would want something at least as strong as the state’s privacy law, the California Consumer Privacy Act. “It is difficult even with the most apolitical policymakers,” McDowell said. “But there is the popular sentiment that something amiss in the tech world,” McDowell said. 

Industry players were not rooting for a re-regulatory pendulum swing in this election. But even though he was an avowed deregulator-in-chief in some ways, Trump’s inconsistency made it hard to predict where he would come down on issues, and he drew flak from various communications quarters.

NCTA recently took strong issue with Trump’s executive order on diversity training, a directive that no government contractor would get business with his administration if their diversity training included efforts to address systemic racism. The Biden administration would almost certainly reverse that order ASAP. The president’s targeting of cable news networks for scorn, as well as his threats to break up Comcast NBCUniversal and try to block the AT&T-Time Warner merger, have put him at odds with an industry that would have otherwise been in his deregulatory corner.

The NAB pushed back hard on Trump’s attacks on the news media, while the Consumer Technology Association was highly critical of his stands on immigration and tariffs, which respectively threatened a high tech workforce and raised the cost of tech products.

If Biden is the president, look for Trump tariffs to be reviewed/rescinded and for a better working/sparring relationship with the mainstream media.