Waxman’s New Role Could Be Good News/Bad News for TV Industry

Agenda Unknown for New House Commerce Committee Chairman

By Ira Teinowitz

California Congressman Henry Waxman’s ascension to chairman of the House committee that oversees media and advertising issues may confront the television industry with a double-edged sword.

Rep. Henry Waxman

Rep. Waxman hails from a district that represents the heart of Los Angeles’ creative community: Beverly Hills, West Hollywood and Santa Monica. That could signal that the House Energy and Commerce Committee will be less apt to push indecency regulation and more receptive to copyright protection.

Networks and media companies, however, may encounter challenges under a Waxman regime. The Democrat in the past has tried to curb drug and tobacco advertising. Marketers also could find their plans to develop targeted advertising in Rep. Waxman’s sights, as consumer groups suggest he supports privacy restrictions that could affect media companies’ use of customer information.

Rep. Waxman wrested control of the Energy and Commerce Committee from Michigan Congressman John Dingell in a fight that was more about energy and health-care issues than media.

For the television industry, though, the changing of the guard that brought President-elect Barack Obama to power introduces many new variables, including a Federal Communications Commission that may look askance at media mergers.

Mr. Waxman didn’t unveil an agenda last week upon taking power. He also declined to announce whether he’d retain any of the current chairs of the committee’s panels. Rep. Ed Markey, D-Mass., currently heads the panel that considers media legislation.

The observers suggested the leadership change would be felt both in the way the committee runs and the issues it takes up.

“This is going to be a huge change in style,” said one media industry official, who didn’t want to be identified because he has to work with the new chairman.

For years Mr. Waxman has been the House’s most aggressive advocate of limiting tobacco advertising. Two years ago he and Mr. Markey proposed imposing a three-year moratorium on direct–to-consumer advertising of new prescription drugs. So-called DTC ads had generated as much as $5 billion a year in advertising, but lately that has been declining.

The tobacco and DTC issues created the biggest immediate concerns last week among media and ad groups.

“It’s not like they are replacing somebody who sat on the sidelines,” said Dan Jaffe, executive VP of the Association of National Advertisers. “You have to consider that Dingell was considered one of the more activist chairmen. But in the advertising sector, there is no one who has been more activist than now-chairman Waxman.”

He predicted the committee would become “super-activated.”

“Mr. Waxman is not a shrinking violet,” said Mr. Jaffe.

Mr. Jaffe and Dick O’Brien, exec VP of the American Association of Advertising Agencies, said the Obama administration’s push for health-care legislation would almost certainly lead the panel to examine ad curbs.

While girding for a fight, their question was whether any drug advertising curbs could provide a precedent to attempt limiting other kinds of advertising.

One study last week suggested that elimination of ads for fast food would reduce childhood obesity.

A second media industry lobbyist said what’s not clear is whether Rep. Waxman’s past focus on health issues would make him open to also examining limits on food ads or even ads for high-mileage cars.

The selection of Rep. Waxman comes as the arrival of the Obama administration is also giving the congressman some big bonuses. Phil Schiliro, a former Waxman chief of staff, recently was tapped as the new assistant to the president for legislative affairs. In addition, former Waxman committee aide, Joshua Scharfman, is being mentioned as a candidate to head the Food and Drug Administration.