NAB 2005: How the Key Issues Shape Up

Apr 18, 2005  •  Post A Comment

Changes in leadership in Congress and at the Federal Communications Commission have dramatically altered the political dynamics for broadcasters in Washington this year, all but guaranteeing that the industry will continue feeling the heat over off-color programming.

Those same leadership changes appear to have taken some of the steam out of a legislative effort to force broadcasters to make the switch to digital no later than Dec. 31, 2006.

In addition, Kevin Martin’s promotion to chairman of the FCC has revived prospects for a broadcast industry proposal that would require cable operators to carry all of the programming streams multicast on digital broadcast channels.

What follows is an analysis of how recent changes in Washington may impact the broadcast industry on these three major issues.

Indecency Enforcement

Mr. Martin’s elevation to the FCC chairmanship in March ensures that indecency will remain a front-burner regulatory issue this year.

Under the chairmanship of Michael Powell, Mr. Martin’s predecessor, the FCC last year issued indecency fines and consent decrees totaling almost $8 million. But watchdog group representatives said Mr. Powell had to be dragged kicking and screaming into his role as government censor, his hand forced by the public and congressional outcry over the exposure of Janet Jackson’s breast during the 2004 Super Bowl halftime show.

Mr. Martin, on the other hand, has long been regarded as one of the agency’s leading behind-the-scenes proponents of an indecency crackdown. His campaign for the FCC chairmanship was supported by the Parents Television Council, the group credited with raising much of the outcry against indecency last year, and Focus on the Family, a conservative religious organization.

One wild card this year will be the impact of new Senate Commerce Committee Chairman Ted Stevens, R-Alaska, on the debate over off-color programming. Sen. Stevens has said he wants cable to retier to provide family-friendly programming options, a proposal that has been endorsed by the FCC’s Mr. Martin and House Energy and Commerce Committee Chairman Joe Barton, R-Texas.

The key political question is whether dragging cable into the debate will take some of the heat off broadcasters, perhaps delivering enough industry opposition to derail any legislative threat.

The House of Representatives voted 389-38 in February to approve legislation that would raise the cap on FCC indecency fines from $32,500 to $500,000. A bill pending in the Senate would raise the cap to $325,000. Another, introduced by Sens. Jay Rockefeller, D-W.Va., and Kay Bailey Hutchison, R-Texas, would raise the cap to $500,000 and extend the government’s oversight of off-color programming to cable and satellite. In addition, the measure would clear the way for the FCC to crack down on violent programming, whether on broadcast, basic cable or satellite.

Sen. Stevens has expressed willingness to consider the Rockefeller-Hutchison legislation if cable rejects his retiering plan.

So whether legislation will appear that includes a crackdown for cable and satellite will depend in part on whether cable agrees to retiering or otherwise addresses the concerns about the edgy quality of some basic-tier fare.

Broadcasters, meanwhile, are developing their own set of “best practices” principles aimed at addressing the concerns about off-color broadcast programming. Whether the principles will go far enough to pre-empt legislation remains to be seen.

Of course, prospects for legislation to raise the cap on broadcast indecency fines are expected to improve dramatically if the industry outrages the public with another high-profile incident.

DTV Transition

Rep. Barton of the Energy and Commerce Committee claims to have the votes needed in the House to pass legislation that would force broadcasters to make the switch to digital television as soon as Dec. 31, 2006.

But even assuming he can deliver, it’s far from clear that Rep. Barton’s initiative would succeed in the Senate. Sen. Stevens has expressed skepticism about the wisdom of a proposal that could alienate millions of voters by causing their analog-only TV sets to go dark.

“We do not want to have over-the-air broadcasters prematurely cut off,” Sen. Stevens said recently. “There is a lot to be answered before that question is decided,” he said on another occasion.

“We cannot be that heavy-handed,” added Senate Minority Leader Harry Reid, D-Nev., at a National Association of Broadcasters seminar in Washington earlier this year. “It won’t work.”

Just last year Sen. John McCain, R-Ariz., Sen. Stevens’ predecessor as chairman of the Senate Commerce Committee, was promoting legislation that would have forced broadcasters to make the switch to digital by Jan. 1, 2009.

Under existing transition rules, broadcasters can keep both their analog and digital channels until 85 percent of the viewers in their areas are able to receive digital-something critics say may not happen for a decade or more.

So broadcast industry critics-led primarily by equipment manufacturers and wireless phone companies-have been promoting legislation that would set a firm date for the transition, and as far as they’re concerned, the sooner the better.

Equipment manufacturers see the transition as an opportunity to sell new equipment on a massive scale. Wireless phone companies want to buy the broadcast industry’s analog channels, which are supposed to be returned to the government for auctions after the DTV transition is complete.

The broadcast industry’s best argument against forcing a transition is that it could render obsolete the 73 million analog-only TV sets currently in consumer homes that aren’t connected to cable or satellite.

Rep. Barton has proposed government subsidies for the digital-to-analog converters for at least some of those sets.

A proposal that would have forced the transition by Jan. 1, 2009, was also being promoted by former FCC Chairman Michael Powell last year. That proposal lost steam after the Senate Commerce Committee voted down Sen. McCain’s bill with its similar transition deadline.

Multicast Carriage

As one of his final acts before leaving the FCC, Mr. Powell delivered a 4-1 vote to kill an NAB proposal that would have required cable systems to carry broadcasting’s multicast digital streams. The good news for broadcasters is that Mr. Martin, the FCC’s new chairman, was the dissenting vote.

“I think the public would benefit more from more free programming,” Mr. Martin said at the time of the vote.

Also giving broadcasters hope on the issue is the fact that Earl Comstock, a former aide to Sen. Stevens, is one of the leading candidates for a Republican seat at the FCC during Mr. Martin’s tenure. Sen. Stevens has endorsed the concept of a digital carriage obligation for cable operators with regard to DTV channels that focus on full-time public-service commitments such as news or weather.

If the broadcasters can’t win the issue at the FCC, they’re expected to press for legislation on the subject. Though Sen. Stevens has been supportive, his counterpart in the House, Rep. Barton, is a strong opponent of must-carry obligations.