For the past several months, Republican presidential candidate Donald Trump has heavily criticized U.S. broadcasters, claiming biased coverage that favors Democrats and even threatening to revoke broadcasters' licenses if he is elected next week.

Despite pushback from FCC chair Jessica Rosenworcel—who responded to former President Trump, stating “the FCC does not and will not revoke licenses for broadcast stations simply because a political candidate disagrees with or dislikes content or coverage”—one former FCC chief warns that such determination may not be enough to prevent damage to the commission.

The FCC is considered an “independent” regulatory agency and, as such, is less subject to a president’s individual whims. However, in a blog post on Brookings.edu, Tom Wheeler, who served as agency chairman during the second Obama administration from 2013-2017, said that if Trump follows through on a campaign promise to bring such independent regulatory agencies under presidential authority, he could assume sole power over the commission under the guise of a national emergency.

Section 706 (codified as 47 USC 606), titled “War Emergency—Powers of the President,” in the Communications Act of 1934 that created the FCC, reads:

“(c) Upon proclamation by the President that there exists war or a threat of war, or a state of public peril or disaster or other national emergency … the President, if he deems it necessary in the interest of national security or defense, may suspend or amend, for such time as he may see fit, the rules and regulations applicable to any or all stations or devices capable of emitting electromagnetic radiations within the jurisdiction of the United States as prescribed by the Commission, and may cause the closing of any station for radio communication.”

Wheeler also warned that another part of the section refers to wired networks and could potentially apply to the internet. Since the Communications Act does not define what constitutes a “national emergency,” Wheeler said that based on past history, Trump would cut a wide swath with such privileges, adding that when he was president, Trump claimed total authority, once saying “I have Article II [of the Constitution], where I have the right to do whatever I want as president.”

“The terms ‘war or a threat of war, or a state of public peril or disaster or other national emergency’ are not defined by the Communications Act,” Wheeler wrote. “Such declarations of national emergency were, however, a go-to solution when Donald Trump was in office.”

Wheeler called on Congress to step in.

“The institution that created these broad powers, the Congress, has an important role as overseer of the authority they have delegated to the executive,” he wrote. “Congress constantly holds oversight hearings on the agencies of the executive branch; hearings on the unilateral powers granted to the president are warranted. The threshold question for such hearings should be whether there are sufficient guardrails in place to protect against their abuse, and what such protections should look like.

“Regardless of who wins the election—Congress should review whether the unilateral powers granted to the president in the 20th century need updating for the 21st century,” Wheeler said.

WASHINGTON—The FCC this week adopted new rules that prohibit excessive franchise fees and explains that local governments may not regulate most non-cable services, including broadband internet access service, offered over a cable system. These rules are a response to a remand by the U.S. Court of Appeals for the Sixth Circuit and set forth how local franchising authorities may regulate cable operators pursuant to the Communications Act.

The rule was adopted despite an 11th hour effort from U.S. Senators, who told FCC Chairman Ajit Pai that the new regulations could threaten the future of cable access TV, which relies on such fees.

“If implemented, the Order puts at risk critical funding for public, educational or governmental (PEG) stations, which are vital resources for residents across the country,” the Senators wrote. “These stations connect Americans to their communities, catalyze civic engagement and keep us up to date on the local issues and activities that affect our lives.

“Your proposal would force local government to decide between supporting PEG stations and supporting other important services for critical community institutions like schools and public safety buildings,” the Senators added.

In all, 14 senators signed the letter, including Edward J. Markey (D.-MA) and Sen. Elizabeth Warren (D-MA).

Chairman Pai, Commissioners O’Rielly and Carr approved the adoption while Commissioners Rosenworcel and Starks dissented.

Rosenworcel said the adoption of the new rules could have a detrimental impact on local community coverage.

“This agency should seize opportunities to reinvigorate local newsgathering and community coverage,” she said. “In fact, that has traditionally been a hallmark of Federal Communications Commission media policy.

“But on that score, today’s decision misses the mark,” she added. “That’s because it cuts at public, educational and governmental channels across the country. It goes beyond placing reasonable limits on contributions subject to the statutory franchise fee and jeopardizes the day-to-day costs, like staff and overhead, required to run such stations. I’m not the only one with this concern. Take a look at the record. We’ve heard from thousands of communities across the country worried we are cutting the operations of so many local channels. I am saddened that this agency refuses to listen.”

Under the Communications Act, every local franchising authority and every cable operator that offers cable service must comply with the Act’s cable franchising provisions, and local franchising authorities may charge franchise fees that are capped at 5% of a cable operator’s revenue derived from the provision of cable service. But some local governments, through the practice of requiring “in-kind contributions,” have been imposing franchise fees that exceed the 5% cap. In addition to being unlawful, this practice discourages broadband investment, deployment and innovation by cable operators.

In order to rein in overreach by local franchising authorities, and facilitate the deployment of broadband infrastructure, the commission concluded today that, under the Act, cable-related, non-monetary contributions required by a local franchise are franchise fees subject to the statutory 5% cap with limited exceptions, including an exemption for certain capital costs related to public, educational and governmental access channels.

It has also prohibited, pursuant to the Act, local franchising authorities from regulating the provision of most non-cable services, including broadband internet access service, that cable operators offer over their cable systems.

In addition, the commission decided that any state or local regulation of a cable operator’s non-cable services that imposes obligations on franchised cable operators beyond what the Communications Act allows is preempted.

Finally, the commission concluded that requirements concerning local franchising authority regulation of cable operators should apply to state-level franchising actions and state regulations related to local franchising.

The author is an attorney with Fletcher, Heald & Hildreth, on whose blog this article originally appeared.

On Dec. 12, 2018, the Federal Communications Commission issued a Notice of Proposed Rulemaking commencing the 2018 Quadrennial Review of the commission’s media ownership rules.

The FCC is required under Section 202(h) of the Communications Act to review most of its broadcast ownership rules every four years to determine whether the rules continue to be in the public interest (and to repeal any rules that no longer serve the public interest) because they ensure a competitive broadcast marketplace. (Importantly, the national television ownership cap is excluded from the quadrennial review process).

These proceedings usually involve court challenges and typically take years to complete — as demonstrated by the fact that the commission did not complete the 2010 and 2014 quadrennial reviews until 2017.

In the NPRM, the commission is specifically reviewing its local radio and television ownership rules, as well as the “dual network” rule. The FCC is also considering the adoption of several diversity-related ownership proposals proffered by the Multicultural Media, Telecom and Internet Council.

Each of these items under the commission’s consideration are reviewed below. Despite its name, the NPRM does not in fact propose any specific rules, but rather requests comment broadly on any changes that should be made to these ownership rules. Instead, Chairman Ajit Pai requested an “intellectually honest conversation” about the current state of the media marketplace, and that any changes to the rules would “follow where the facts take us.”

LOCAL RADIO OWNERSHIP RULE

The Local Radio Ownership Rule limits both the total number of radio stations an entity may own within a local market and the number of radio stations an entity may own in that market within the same service (AM or FM). Currently, the FCC divides markets into four tiers based on their size, allowing an entity to own more stations in larger markets. The rule currently permits entities to own up to five commercial radio stations in the smallest of markets (14 stations or less) — no more than three of which may be in the same service — and up to eight commercial radio stations in the largest of markets (45 stations or more) — no more than five of which may be in the same service.

The FCC requested comment on whether the Local Radio Ownership Rule should be eliminated, modified or remain the same in light of any changes to the broadcast marketplace. As in past quadrennial reviews, the commission seeks comment on whether it should modify or eliminate any, all, or none of: the relevant market definitions, market size tiers, numerical limits and AM/FM subcaps.

The commission also requested comment on the National Association of Broadcasters’ proposal that the commission relax its radio ownership limits due to increased competition for listeners and advertisers posed by other services including streaming services, satellite radio, podcasts, Facebook and YouTube.

Specifically, NAB proposes that entities in the top 75 Nielsen Audio Metro markets be permitted to own up to eight commercial FM stations and an unlimited number of AM stations. NAB proposes that all ownership limits on radio stations be eliminated in all other markets.

The FCC is also seeking comment on:

• whether the interim contour-overlap methodology should be made permanent;
• the issue of embedded market transactions;
• the impact that eliminating or modifying the rule would have on minority and female broadcast ownership; and
• whether the relevant markets should be defined as to encompass the increasing competition broadcasters face from satellite radio and online audio sources.

LOCAL TELEVISION OWNERSHIP RULE

The Local Television Ownership Rule limits the number of full-power television stations an entity may own within the same local market. The rule permits entities to own up to two television stations in the same market so long as no more than one of those stations is a “top-four” station within that market. As of last year, however, entities may request waiver of the “top-four” rule under certain circumstances.

The commission in the NPRM requested comment on whether changes in the television marketplace and the video programming distribution industry necessitate elimination, modification or retention of the current rule. Notably, in light of the evolving video marketplace, the FCC requested comment on whether:

• the local television market definition should be expanded to include non-broadcast sources of video programming such as multichannel video programming distributors and online video distributors; as well as social media platforms and Internet websites; and
• if the rule were to be maintained, the numerical limit and the “top-four” rule could be adjusted or eliminated to ensure continued competition in the television marketplace.

DUAL NETWORK RULE

The Dual Network Rule prohibits ownership of multiple television stations affiliated with two or more of the Big Four broadcast networks (ABC, CBS, Fox and NBC). A version of this rule, which effectively prohibits a merger between or among the Big Four Networks, has existed since the 1940s.

The commission requested comment on whether current competition in the television and advertising marketplace mandates the elimination, modification, or retention of this rule. Specific focus was placed on whether increased competition from OVDs necessitated changes to the rule given the commission’s previous findings regarding the promotion of broadcast localism.

MMTC PROPOSALS

The commission requested comment on MMTC’s three diversity-related proposed amendments to the media ownership rules:

1. the extension of cable procurement requirements to broadcasters;
2. the development of a model for market-based “diversity credits” to serve as an alternative to prescribed ownership limits; and
3. the adoption of formulas creating media ownership limits that promote diversity.

Under the cable procurement requirement, cable systems must encourage minority and female entrepreneurs to conduct business with all aspects of a cable system’s operations. Cable systems may accomplish this obligation by recruiting qualified entrepreneurs from a pool of sources likely to representative of female and minority interests. Specifically, the FCC requested comment on whether the Communications Act permitted the adoption of such a rule for broadcasters, and if so, whether the rule would aid in increasing broadcast ownership diversity.

MMTC also proposed that the FCC should adopt a system of “diversity credits” which could be traded between broadcasters and “redeemed” by station buyers to offset increased ownership concentrations resulting from a station acquisition.

The proposal centers on the idea that a transaction deemed to promote diversity — for example the breakup of a local radio ownership cluster or the sale of station to a socially and economically disadvantaged business — could provide the seller with “diversity credits.” These credits could then be used by the seller to have a greater concentration of media ownership than otherwise permitted by the commission’s rules. Comment was sought on whether the Communications Act provided the FCC with authority to implement such a system, and if so, whether such a system would be feasible in increasing diversity in the broadcast industry.

MMTC’s third diversity-related proposal concerned the adoption of either a “Tipping Point Formula” or “Source Diversity Formula” to be used in establishing media ownership limits and promoting broadcast ownership diversity.

The Tipping Point Formula is a methodology for determining whether a transaction would result in the reduction of the amount of available revenue for supporting independent operators in a given radio market to an unsustainable level. If so, the transaction would be barred for having a negative impact on ownership diversity in that market. In contrast, the Source Diversity Formula is not limited to the radio service. The formula, however, relies on a complicated set of variables to assess whether a market manifests strong, moderate, or only slight diversity, which would then be used to assess the permissibility of a given transaction. The FCC requested comment on the feasibility of these proposals, and whether their adoption would aid in encouraging broadcast ownership diversity.

Comment deadlines had not yet been published at press time. File comments in MB Docket No. 18-349 atwww.fcc.gov/ecfs/.