Pai's FCC Expected to Be Largely Laissez-Faire on Media Issues
The FCC under Chairman Ajit Pai almost surely will look to deregulate, or at least loosen, media ownership rules, but is unlikely to touch retransmission consent or other negotiation rules or to seek to extend agency authority over over-the-top provision, experts told us. Video regulation isn't a top priority for Pai, who seems much more focused on broadband deployment and on internal processes, TechFreedom policy counsel Tom Struble emailed us. Proof of that is Pai's removal of the set-top box order from circulation and that he hasn't taken up any video regulation matters since taking over, Struble said.
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With then-Chairman Tom Wheeler having been reluctant to make any changes to retrans rules (see 1607140047), a Republican-controlled FCC is even less likely to do so due to deference to Congress and to the existing market that seems to be working, said Tom Davidson of Akin Gump, who has programmer and multichannel video programming distributor clients. The Pai administration also won't likely advance the independent programming NPRM, especially since the FCC in the past didn't act when elements of that were before the commissioners, or try to put retail or wholesale a la carte programming requirements on programmers, Davidson said. But Commissioner Mignon Clyburn could get some bipartisan support for her efforts to advance minority ownership interests and incentives, Davidson said. Clyburn's office didn't comment. She, Pai and Commissioner Mike O'Rielly have given at least general support to incubators to foster minority ownership (see 1702070072).
Cable ISPs' primary focus is on broadband, so if the FCC is going to do anything in the MVPD space, "we’re going to say, ‘Hey, do something about broadband,’” said MCTV President Robert Gessner. He said he hopes the indie programming NPRM "might still have life" given the relief it would provide both independent programmers and MVPDs. He said he hopes the Pai administration will tackle utility pole access to make network buildouts easier and cheaper.
The FCC declined to comment on Pai's stance on retrans, except to say it encourages resolution of retrans disputes so as to avoid blackouts, and it can officially get involved in negotiations only if a bad-faith complaint is filed. It said Pai hasn't indicated what direction he might take on media ownership but he has been clear the rules should reflect the current media market. It pointed to Pai's dissent on the media ownership order issued in August in which he criticized the FCC for inaction on updating or rewriting its media ownership rules despite massive changes in the media industry since they were enacted.
Pai's stance on media issues contrasts with that of his predecessor Tom Wheeler, who aggressively pushed such uncompleted items as MVPD reclassification and set-tops, and whose FCC changed its default presumption to one of local video markets being competitive, Struble said. Pai almost surely won't move to reclassify any types of online video distributors as MVPDs, Struble said. "The FCC might be tempted by mission creep to step in and start regulating Netflix or other online video distributors, but the legacy video regulations in Title VI of the Communications Act are a very poor fit for the current video marketplace, so I can't really see Chairman Pai going down that route," he said.
Given the declared deregulatory bent of a Republican FCC, the agency might be expected to shy away from content negotiation issues like retrans. However, the American Cable Association plans to try to make the case to the agency and Congress that while deregulation is needed in some program access areas, government intervention is required in others, ACA President Matt Polka said. The proceeding regarding possible changes to the totality of circumstances test in good-faith retransmission negotiations remains open and ACA "still think[s] it's very ripe" for action, Polka said. ACA also hopes to see Pai take up its charge of changing program access rules to let the National Cable Television Cooperative file complaints (see 1507020018).
Polka hopes the FCC doesn't try to extend its regulatory oversight over the growing virtual MVPD market but instead toward regulatory parity for traditional MVPDs: "It doesn't stand to reason why one transmission is essentially encouraged and left hands off while the other still suffers under enormous control.”