Elections to Change the FCC and Policy

As we go to press, there are a number of legal challenges in Pennsylvania, Georgia, Nevada and Arizona.  Nonetheless, most now recognize former Vice President Joe Biden as the President Elect.  He is already putting his transition team together.  Legal challenges aside, it is worth looking at what the FCC will look like under a Biden administration.   Experience has taught us that you never know who will be appointed to the FCC, especially in the first term of a new president.  So the following should be considered “educated” speculation.

FCC Chairperson

FCC Chairman Agit Pai will be stepping down.  Frankly he was planning to move on anyway, but now we can expect him to move on in the next month or so.  This will be a loss for broadcasters.  Improving radio, especially AM radio, has been a top priority for Chairman Pai. We hope it will continue in the next administration.

We expect current FCC Commissioner Jessica Rosenworcel to become Acting FCC Chairman.  She has a lot of support in the Senate.  Now for the speculation.   If she wants the job, we expect former Commissioner Mignon Clyburn to have the inside track for the FCC Chair.  Her father, House Majority Whip Rep. Jim Clyburn (D. SC), was instrumental in the securing the Democratic nomination for President Elect Biden.  If Ms. Clyburn does not want the job (she may try for a cabinet post), then Commissioner Rosenworcel may be leading the pack.  Others in the running include former NTIA Chief and key Biden Advisor Larry Strickling, several Senate Staffers, as well as current FCC Commissioner Geoffrey Stark.

Commissioners

In a democratic administration, there will be three democrats and two republicans.  This could get interesting.  The term of current FCC Commissioner Mike O’Rielly ends at the end of the year.  We will miss him.  Commissioner O’Rielly has been a strong supporter of broadcasters and a leader on increasing enforcement against illegal pirate radio operators.  About and month ago, President Trump withdrew his nomination and replaced him with current NTIA lawyer Nathan A. Simington.

It is not clear what will happen with this nomination.  There is only one republican slot to fill. (The Chairman’s spot will go to a democrat.)  Republican Commissioner Brendan Carr will remain. It’s possible that the Senate, which is Republican controlled, would move to confirm Simington during the lame duck session.  Waiting until January would give President Biden an additional choice (albeit a Republican) and a possible democratically controlled Senate.  Frankly this is too tough to call right now.

The democratic side is equally confusing. If Ms. Clyburn declines, and Commissioner Rosenworcel becomes Chairperson, that will leave one democratic seat open.  There are scores of potential nominees. Of course Larry Strickling would be in the running.  Another possibility is Travis Leblanc, former FCC enforcement chief.  Mr. Leblanc has close ties to Senator, and Vice President Elect, Kamala Harris.

Policy Changes

Topping the agenda will be the re-imposition of the FCC’s net neutrality rules.  This will be done at the FCC, or perhaps in Congress.  You will also see a significant push to improve broadband penetration, especially in rural areas.

We do not anticipate there will be additional relaxation of the broadcast ownership rules.  As a policy matter, democrats have generally opposed relaxation of the broadcast ownership rules. Currently the FCC’s quadrennial review, which largely focuses on the broadcast/newspaper and radio/TV cross-ownership rules will be heard by the Supreme Court.  Even if the Court supports relaxation, it is unlikely that the court would foreclose the ability of the FCC to reinstate the rules.  In addition other rules, such as the local ownership caps for TV and radio as well as the national TV ownership caps, are not directly part of that litigation.  At this point further ownership deregulation may be unlikely. We shall see.

The FCC will also focus a lot of attention towards improving minority ownership and participation in broadcasting.  Minority ownership in broadcasting remains incredibly low.  We believe the FCC and Congress will reinstate the minority tax certificate program as well as its incubator program.  You may also see an increase in EEO reporting and EEO enforcement.

Of course there are a number of other issues that we have not discussed including ATSC 3.0, spectrum sharing, FM translators, FM boosters and children’s TV.  We will keep a close tab on all these issues.

Again, making predictions at this point in time is speculative.  The only thing we can say for certain is there will be a shift in some key policies under a Biden FCC.

Change in Administration Could Impact Tax Policy in New York

For the past several months NYSBA has been keeping a close eye on the New York State budget negotiations.  As you know New York State is facing a $59 billion revenue shortfall because of COVID 19.  The state is running an estimated $14.5 billion deficit for this year and perhaps a $16 billion for the next fiscal year.

The Governor and the New York State legislature have been looking at a number of revenue options, including digital advertising taxes and a digital data tax.  We have been concerned about the imposition of these taxes and also a possible advertising tax.  Frankly with these deficits all options are being discussed.  At this point, New York has not put revenue raising options on the table.  New York policy makers do not want to affect the amount of revenue they may get from the federal government.

With the results of last week’s election, there is a feeling that New York State will receive its share of federal aid in any new COVID-19 legislative package in DC.  This will take a lot of pressure off implementing new taxes in New York State.  We will continue to remain focused on this issue.

 

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