FCC Deregulation Broadly Expected; O'Rielly Pushes for '2-for-1' Rules Cuts
The FCC should adopt an “eliminate-two-regulations-for-each-one-adopted” model as President Donald Trump is requiring for executive agencies, Commissioner Mike O’Rielly said Wednesday at an American Cable Association event. The agency has other routes for reviewing rules, but O'Rielly said it has "plenty of rules we can strike without undermining ... consumer protection."
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Numerous speakers said there's a broad expectation the agency under Chairman Ajit Pai will focus largely on deregulation. O'Rielly said there are "absolutely" some video deregulatory steps for the agency to take. He told multichannel video programming distributors to suggest rules that are no longer relevant to the industry and wouldn't face big opposition in rescinding -- one example being the Charter Communications network overbuild condition the agency may revamp (see 1702240029). O'Rielly called it "likely" the FCC would this year reopen its reclassification of broadband as a Title II service.
ACA outside counsel Tom Cohen of Kelley Drye said the agency under former Chairman Tom Wheeler was so uninterested in buy-in from Republicans that it's leading to a backlash and rush to undo many of the actions taken then. ACA outside counsel Barbara Esbin of Cinnamon Mueller said the FCC likely will loosen its broadcast ownership rules, giving stations more leverage in negotiations with MVPDs, but any balancing out of the retransmission consent regime "would be an uphill battle."
This year will likely be "tough" on video issues, with many Republicans seeing the current retrans regime as market negotiations with which they don't want to interfere, said ACA President Matt Polka. He said the group's big video priorities for the year include again pushing for program access rule changes that would give the National Cable Television Cooperative more leverage (see 1604250036), with ACA also hoping to see a broader telecom review by the Senate Commerce Committee. Esbin said the program access rules proceeding could be easily revived since O'Rielly and Pai seemed relatively receptive. Pai is scheduled to address the ACA meeting Thursday.
Senate Commerce Committee member Shelley Moore Capito, R-W.V., said the committee’s immediate priority will be an infrastructure bill, particularly since it “has good promise” for bipartisan support. She and several other speakers indicated that bill almost surely would have a large broadband component. Capito said the committee also will be busy with Federal Aviation Administration reauthorization, which could be contentious. Further down the road could be hearings on agencies’ regulatory framework, she said.
The Senate overall is focused on the Supreme Court confirmation of Neil Gorsuch, now that healthcare reform “is in a time-out," Capito said. After returning from April recess, the Senate will focus on spending bills and infrastructure, she said. The Senate also will likely work on tax reform and perhaps take up healthcare again, Capito said.
House Commerce Committee member Kurt Schrader, D-Ore., said a review of a Communications Act update could net bipartisan support since it lacks an obvious partisan bent and “Congress is hungry to work together.” FCC and NTIA reauthorizations have been seen as a higher priority for the committee (see 1702080076). Schrader also said an infrastructure bill could contain not just spending but also deregulatory action to facilitate private network investment by cable ISPs.
Executive Chairman Tom Might said Cable One’s de-emphasis of video subscribers will become inevitable for other MVPDs given the ongoing industry declines in video and landline voice subscribers. He said the move let Cable One -- which has seen earnings grow even as it has half the subscriber numbers of five years ago -- change its negotiation strategy with programmers and to treat customers based on their value instead of treating all customers the same.
Advertising loads -- including frequency and length of time -- are hurting the MVPD industry as it competes with over-the-top services, NBC News Group Senior Vice President-Global Strategy and Business Development Elisabeth Sami said. "We need to reinvent what a relevant advertisement looks like in the future,” she said, saying NBC is looking at changes including branded advertising.
NCTC CEO-President Rich Fickle said the co-op expects to have signed deals with some virtual MVPDs "fairly soon" as part of an emerging strategy in the video space for MVPDs to branch beyond their traditional video package offerings. "It's the right time to open the door" to other types of providers, Fickle said.