Around the nation and, indeed, in Washington itself, the big story last week, boiled down, was that Republicans now controlled the White House and both the House of Representatives and the Senate. But among media types, the bigger story was likely this: The forces of deregulation are clearly, and rather overwhelmingly, running the show, even counting John McCain's love/hate affair with the media business.
The Arizona iconoclast is slated to regain the helm of the Senate Commerce Committee, and, yes, it's true that gives him a big forum for his pet communications issues: free airtime for political candidates, spectrum fees for broadcasters, decrying the high costs of cable programming.
But McCain has little support among fellow Republicans for those personal initiatives. Although he is likely to hold some high-profile hearings, they are unlikely to translate into high-profile action. On issues with a chance of being enacted into law or regulation, however, McCain and the media companies see pretty much eye to eye.
Most important, McCain favors media deregulation.
Thus, media policy players agree, FCC Chairman Michael Powell can now push ahead with his plans to relax media-ownership rules next year without having to answer to hostile Senate Democrats.
"The levers of power are lined up for deregulation and the GOP agenda," said Precursor Group analyst Scott Cleland. "There is going to be substantial relaxation of media-ownership rules."
With his critics' power substantially diminished, Powell will have great leeway to control the specifics of deregulation, predicts Andrew Levin, telcom aide to Rep. John Dingell, the ranking Democrat on the House Commerce Committee. The Republican wave won't have enough force to legislate on media ownership—primarily because the affiliate/network split divides lawmakers on whether the 35% limit on TV household reach should be raised and Senate rules will give Democrats on that side of the Hill sufficient power to stall deregulation bills they oppose.
Nevertheless, most in the GOP will be content to let Powell do the heavy lifting on ownership. "There's such a split in the industry that the ownership cap is kind of radioactive," Levin says. "That makes it easier for the FCC to come to its own decision."
Cleland agrees: "Media ownership is the single most-partisan issue since the Fairness Doctrine. That strengthens Powell's hand big time."
Not to be overlooked, says Tribune lobbyist Shaun Sheehan, is Alaskan Ted Stevens's control of the Senate Appropriations Committee. Many in the industry fear that Democrats will use the appropriations process to thwart deregulation. In years past, riders to appropriations bills were used to block relaxation of ownership rules, stop elimination of minority-recruiting rules and even keep VHF stations in the hands of public broadcasters.
Outgoing Senate Commerce Committee Chairman Ernest Hollings, in his other role as head of the subcommittee for commerce appropriations, was expected to again seek legislation barring the FCC from spending funds on deregulation.
"Deregulation is no longer under the appropriations cloud," Sheehan says. "Hollings can ask Chairman Powell all the questions he wants, but he can't hammer him the way he was."
Another major factor will be incoming Senate Majority Leader Trent Lott, who is increasingly engaged on media policy. In the past year, Lott has weighed in on broadband deregulation at the NAB's State Leadership conference and joined other lawmakers in letters to Powell with guidance on TV-ownership caps and cable carriage of broadcasters' digital signals. Pressure from Lott to stick to a party line will make it harder for McCain to pursue his own agenda.
"A Senate chairman is always a force to be reckoned with," Cleland says. "But there are limits to how much trouble McCain can make."
On one media initiative, Lott, McCain and Powell are of like minds. McCain has pushed to revive a tax credit that will give media owners more incentive to sell properties to minorities, women and entrepreneurs. He introduced model legislation last month and plans to reintroduce it next session. Powell has repeatedly called for resurrecting the credit, and Lott has voiced sympathy for the idea.
Lott's new influence may be appreciated most on the transition to digital television, especially if White House/Capitol Hill cooperation proves powerful enough to break longstanding inter-industry disputes that have blocked rules on cable carriage and copy protection.
"There are some things the industry and the FCC can't do and need statutory help," says Levin.
Despite a rough reception for some parts of a Commerce Committee DTV model bill floated two months ago, Levin predicts that some form of DTV legislation will pass next year, even if it's a trimmed-down version that tackles only technical details such as standards for "plug-and-play" sets that allow viewers to receive DTV without a set-top converter.
McCain is unlikely to renew complaints about the "$70 billion giveaway" of DTV spectrum to broadcasters, Sheehan predicts. He'd make little headway with that argument, given that recent spectrum auctions indicate that the entire digital allocation amounts to far less—$500 million by a Bear Stearns estimate—than the cash shelled out by stations constructing and operating DTV facilities.
"The question before Congress is how to expedite the conversion," Sheehan says. "[McCain] recognizes there's enough blame to go around for its current problems."
McCain's relatively inexperienced staff also will have their hands full learning to manage the committee's agenda. Since the last election, three veteran aides have departed his office, and current telcom aides Robert Fisher and Bill Bailey will be getting used to keeping the agenda on track.
As for other lawmakers key to media issues, the faces will be familiar.
Rep. James Sensenbrenner of Wisconsin retains leadership of the House Judiciary Committee, although Texan Lamar Smith is in line to oversee copy protection, replacing term-limited North Carolinian Howard Coble atop the panel's Intellectual Property Subcommittee.
A key player on the House Commerce panel will be Fred Upton of Michigan, who will head the telecommunications subcommittee. Playing a much more prominent role as a conduit to leadership will be Missouri's Roy Blunt, who is expected to follow future House Majority Leader Tom Delay as GOP whip. A favorite fundraiser for GOP members, Blunt has played the liaison role before.
On the Senate side, McCain will be backed by Montana's Conrad Burns as Communications Subcommittee chief. The folksy Burns, a former broadcaster, is popular with station owners.
Incumbents defeated were Sen. Max Cleland (D-Ga.), a Commerce Committee member; Rep. George Gekas (R-Pa.), a Judiciary Committee member; and Rep. Bill Luther (D-Minn.), formerly of the House Commerce panel. House Judiciary member Lindsey Graham (R-S.C.) was elected to the Senate.
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