This commentary originally appeared in the newsletter of law firm Hardy, Carey, Chautin & Balkin.
Nothing is certain of course, but we thought it worth some space in our newsletter to at least muse on what the election of Donald Trump means for the FCC, and more specifically, for broadcasters who are regulated by the FCC.
First, and most obvious, is that the FCC chairman and two other commissioners will be Republican appointees, resulting in a 3–2 majority that was last held eight years ago. Current Chairman Tom Wheeler will likely resign effective upon Donald Trump’s inauguration in January. By the end of 2016, Democrat FCC Commissioner Jessica Rosenworcel’s current term will expire (her pending re-appointment as a commissioner had been blocked by Republican senators). With Wheeler and Rosenworcel out, that leaves Ajit Pai (likely the interim chairman) and Michael O’Rielly, both Republican appointees, along with Mignon Clyburn, a Democrat appointee. Those three are likely to be serving together until the Senate approves a new chairman and other appointees, which probably won’t be completed until summer of 2017.
Their duties and potential actions during this interim period won’t be insignificant. Commissioner Clyburn herself served as interim chair several years ago, and she moved along several items during a few short months. We expect Interim Chairman Ajit Pai to do the same thing — he will control the docket for meetings and can bring items up for a vote that have been languishing or decide to delay votes on various items.
Mr. Pai will also be overseeing what will likely be the end of the incentive auction for broadcasters, and scrutinizing or having significant input over the post-auction repack plan, an ongoing proceeding that has been delegated to the staff for adoption. An FM translator auction for AM stations that did not participate in the 2016 250-mile waiver modification windows is also something he could press for quickly. The FCC staff has supposedly been working on transitioning all noncommercial broadcasters to the same Dec. 1biennial ownership report and migrating the report into the License Management System (LMS), some of which likely requires OMB approval because of information gathering. Depending on the progress of that effort, ownership reporting for NCE stations on the current schedule could be suspended, with new reports due by Dec. 1, 2017. The migration of all radio stations to online public files hosted at the FCC is also still percolating, with deadlines for that in early 2018.
All of that could become even more interesting if Mr. Pai is nominated for and appointed to the chairmanship, which is a distinct possibility. Let’s just say that Mr. Pai will need plenty of coffee in the next several months.
A Republican-controlled FCC is generally seen as being driven less by government regulation, and more accepting of market-based solutions. For that reason, the existing multiple ownership rules — which were recently left virtually unchanged by the Democratically-controlled commission and were legally challenged — are likely to be relaxed in the next few years.
Congress is wary of any last-minute regulations adopted by the current FCC, and warned/asked Chairman Wheeler to cancel votes on any controversial items. Commissioners Pai and O’Rielly issued statements in support of that letter. Although Chairman Wheeler did remove certain more controversial proceedings from the commission’s December agenda, there are others — such as EAS — that remain ripe for a vote. For any regulation or order adopted that is considered an overreach, House Bill 5982, appropriately named the Midnight Rules Relief Act, has been introduced to override the enactment of last-minute votes by agencies controlled by the Obama administration. That would include our beloved FCC.
Well, those are our musings for now. But we would be remiss without issuing a closing statement (being lawyers, and all). So, here goes. Just in case any Trump administration folks or friends might be readers of this newsletter, Commissioner Pai has been a staunch advocate for broadcasters, and while there are others qualified to hold the chairmanship, we put our support behind Mr. Pai for FCC chairman.
Joseph C. Chautin III represents radio and television broadcasters in regulatory and compliance matters as well as transactions and sophisticated private placement and bank financing.