What does President Trump’s executive order giving the White House oversight of the FCC and other independent agencies mean for the world of broadcast? We asked several legal observers.

Their consensus is that the executive order was principally issued to set up a court case challenging the Supreme Court’s Humphrey’s Executor doctrine, which restricts a president’s ability to remove commissioners from independent agencies.

According to the Associated Press, the 1935 Supreme Court ruling established that presidents cannot fire appointed leaders of various federal agencies without cause. But conservative legal experts have argued that all such agencies in the executive branch answer to the president and that he should be able to fire their leaders at will, according to the AP.

“It’s pretty clear that the executive order violates [the Humphrey’s] doctrine,” said Scott Flick, partner with Pillsbury Winthrop Shaw Pittman LLP. “But the administration is trying to get the Supreme Court to overrule that 90-year-old decision, and this executive order creates a test case to accomplish that.

“If the Supreme Court ultimately overrules [the doctrine] and commissioners at independent agencies are effectively made at-will employees, then the White House would be able to wield tremendous power over these agencies by simply threatening to remove any commissioner who doesn’t vote in line with the administration’s policies and priorities.”

“Overreach”?
As we noted in a recent piece published before Trump was inaugurated, FCC watchers have expected a “pro-deregulation” agenda and an end to the commission’s own Diversity, Equity and Inclusion programs (the latter of which came to pass immediately). And some predicted “fast and furious” changes in broader policy.

But the scope of many moves by the new administration has been breathtaking.

The much-discussed “Project 2025” initiative of the conservative Heritage Foundation appears to have turned into the playbook for the new White House, legal experts say. It features a section written by now-Chairman Brendan Carr on the future of the FCC.

“We should not be surprised,” said one person who watches the commission closely.

“This particular FCC chair is much more closely aligned with the current Trump administration policies and objectives than, say, Ajit Pai during the first Trump administration. I would not call (Carr) independent.”

According to a post by the law firm Akin Gump Strauss Hauer & Feld, the executive order, among other things, requires the heads of those agencies to consult more closely with the White House on policy objectives and binds agency employees to the president’s interpretation of the law.

The Akin lawyers wrote that independent agencies historically are insulated from presidential control — delegated authority and considered “creatures of Congress” when it comes to oversight. (The FCC’s own website describes it as “an independent U.S. government agency overseen by Congress.”)

“This EO marks a significant departure from the status quo,” Akin attorneys wrote in their post.

They noted that independent agencies typically are led by a commission or board of members — often with staggered terms and subject to statutory bipartisan membership requirements — who are nominated by the president and subject to Senate confirmation.

In the past, that structure, when paired with the president’s limited authority to remove members of the board or FCC for specific reasons, has insulated independent agencies from executive branch control.

Frank Montero, co-managing partner at Fletcher, Heald & Hildreth, said he is only mildly surprised by the scope of the administration’s undertakings with the executive order.

“But I’m getting used to being surprised, and frankly I think that is the objective,” he told Radio World in an email.

“I think that the M.O. of this administration is to flood the zone, overreach and grab for as much as possible unless told they can’t.”

Montero said he doesn’t expect the White House to be challenged by this Congress over the matter. “Any challenge will have to come from judicial appeals,” he said.

However, he continued, the executive order is not unprecedented. He said President Obama intervened in then-Chairman Tom Wheeler’s net neutrality deliberations.

“The White House has exercised influence over and intervened in FCC proceedings. So this is not entirely unprecedented, although perhaps the scope is. There are a few examples since the agency was first created.”

Montero considers the move a “power grab” since it involves other independent agencies, like the Securities and Exchange Commission and the Federal Trade Commission.

“However, when it comes specifically to the FCC, I think the (White House) focus may be specifically to reel in critical news outlets and perhaps liberal and foreign influence on media. The fact that … early FCC actions have been focused on Audacy-owned stations, public broadcasters and some of the major network news outlets that covered the election is not a coincidence,” Montero said. “I don’t think this president spends a lot of time contemplating net neutrality.”

One broadcast attorney told Radio World he believes the intent of the executive order is clear: “To exercise some control or intimidation over what media reports to the public.”

NAB President/CEO Curtis LeGeyt has been complimentary of Carr’s past comments about the role of local broadcasters and broadcast ownership restrictions and his criticisms of “Big Tech.” But LeGeyt also said last week that broadcasters must be allowed to report the news without the risk of government retribution. He also talked about the value of broadcast journalism in an age of social media misinformation.

What Next?
In the post noted earlier, the Akin attorneys wrote: “While some aspects of the EO may be comparatively uncontroversial — such as the requirement to consult with the White House on agency policies and priorities — others, such as the ability to restrict agency spending on matters the president deems inconsistent with his policies and priorities, will likely be subject to litigation and constitutional challenge.”

However, Seth Williams, a communications attorney with Fletcher, Heald & Hildreth, wonders if there has been an overreaction to the executive order. He said its impact, from a practical level, may not be that great.

“It has always been the case that presidents want someone in line with their policy preferences at the FCC. I think Chairman Carr was going to look to the White House for guidance on how to move forward on policy anyway. That’s how it works,” Williams said.

This article originally appeared on TV Tech sister brand Radio World.

The FCC’s decision this week to dump the main studio rule will likely have broadcasters across the country quickly reviewing their operations for potential cost savings if they haven’t done so already.

Banishment of the main studio rule could present significant savings opportunities for broadcasters. The FCC said so itself in its Report and Order: “Eliminating the main studio rule will produce substantial benefits. Broadcasters will be able to redirect the significant costs associated with complying with the main studio rule to programming, equipment upgrades, newsgathering, and other services to the benefit of consumers.”

Broadcasters appear to believe it, too. Cumulus Media in comments submitted during the FCC proceeding detailed how the elimination of the main studio rule would enable the company to save “significant costs in at least six markets by no longer having to maintain a separate satellite main studio.” Meanwhile, Cox Media told the FCC its radio group “could reallocate $20,000–$50,000 per year in certain markets” if the main studio rule was eliminated. And Crawford Broadcasting, which owns 14 AM and 9 FM commercial broadcast stations, estimated base costs associated with a separate local main studio can “easily run $60,000 or more per year with a small space and minimal staffing, a significant amount by any measure,” according to comments it filed with the commission.

Several broadcast industry observers contacted for this story believe broadcasters will be eager to wring out as much savings as they can through various measures. But they also caution that those who turn away from servicing their local communities could suffer consequences.

Communications attorney Harry Cole at Fletcher, Heald & Hildreth says broadcasters have been keeping a close watch on the FCC proceedings since the latest studio requirement rulemaking was proposed back on May 18, 2017. The rule change takes effect once the decision is published in the Federal Register, which is expected to be by early November.

“Since the elimination of the rule has been in the works for some time now, with the ultimate result largely preordained, I would expect that most broadcasters who perceive the opportunity of cost savings have been planning out their moves in advance. It would not surprise me to see a number of moves in the near-term intended to take advantage of the change. The elimination of the studio requirement will allow consolidation of staff, equipment and operations, and relieve licensees of various costs like rent, insurance, duplicative staffing, equipment, etc. I assume that, at least for some if not many, the savings could be substantial,” Cole said.

Cole tells Radio World he believes there will be job losses as a result of broadcaster’s further consolidating operations. “I’m guessing that one of the anticipated sources of cost savings will be in reduction of staff. If I’m right, then the more stations that abandon their main studios, obviously the more jobs are likely to be eliminated. I don’t know how drastic the effect is likely to be.”

He adds, “However, it does occur to me that wholesale abandonment of any and all local presence in a station’s community could be a short-sighted move. A crucial aspect of broadcasting’s service that has long distinguished the industry from other media sources is its localism, a quality often touted by broadcast representatives. Moving station operations out of town will very possibly undermine broadcasting’s claimed identity as a local service, which could have eventual adverse repercussions in the overall regulatory approach.”

John Crigler, a partner with Garvey Schubert Barer in Washington, told Radio World in an email that the elimination of some of the supplemental requirements, such as staffing requirements, would have an immediate economic effect. “In fact, the elimination of the two-person staffing requirement may have a greater short term effect than elimination of physical location requirements. The purpose of the staffing requirement — artificially applied to the main studio rule by enforcement actions rather than rulemaking — was to insure licensee control and not serve local needs.

“From the beginning, the staffing requirement was designed not to make business sense. It required a licensee to keep two full-time employees on payroll even if they had only symbolic duties to carry out. That loud tapping noise you hear is the sound of LMAs being rewritten this very minute,” Crigler said.

Crigler also warns broadcasters that potential cost savings earned by shutting down main studios are likely to be offset by several countervailing economic forces.

“Even without a main studio requirement, commercial and noncommercial stations will have significant incentives to maintain roots in their local communities. FCC allocation rules, of course, require them to provide signal coverage of their communities of license, but a broadcast station that doesn’t attract an audience isn’t much of a station no matter where its studios are located, and audiences are generally loyal to local talent and their perspective on local concerns, including local weather and emergency information. Without that audience, local advertisers will abandon commercial stations. In addition to a strong philosophical commitment to public service, noncommercial stations are directly dependent on support from listeners for operating revenues. No local support, no station,” Crigler says.

This story first appeared on TVT's sister publication Radio World.