Reporting

House Commerce Committee Ranking Member Frank Pallone (D-NJ)—who has long pushed Congress to hold viewers harmless in the post-incentive auction repack—has introduced a bill to make sure the moving expenses of TV stations (and affected FM stations and pay-TV providers) are covered, given the initial broadcaster estimates of $2.1 billion in expenses and Congress' set-aside of only $1.75 billion.

The Viewer Protection Act would establish a $1 billion "emergency fund" if needed and fund a $90 million viewer outreach effort, given that most of a thousand stations are moving channels—some likely twice—in a 10-phase transition. Any money left over could be used to help low-power stations (including translators), who are not protected in the repack. The bill would also give the FCC's Media Bureau the flexibility to modify the transition periods for the phased transition so stations would not go dark to viewers for reasons outside their control.

A bipartisan bill has been introduced to establish copyright protections for performances of pre-1972 musical works. Reps Darrell Issa (R-CA) and Jerrold Nadler (D-NY) are sponsoring the Compensating Legacy Artists for their Songs, Service, and Important Contributions to Society (CLASSICS) Act (HR 3301).

“This an important and overdue fix to the law that will help settle years of litigation and restore some equity to this inexplicable gap in our copyright system," Issa said. “For years, we have been working to ensure royalty payments for artists who recorded many of our great musical classics before 1972," said Nadler. The new bill is an adjunct to the legislators' Fair Play Fair Pay Act music licensing bill introduced earlier this year and has been introduced in the past.

The US Federal Communications Commission says it has no written analysis of DDoS attacks that hit the commission's net neutrality comment system in May. In its response to a Freedom of Information Act (FoIA) request filed by Gizmodo, the FCC said its analysis of DDoS attacks "stemmed from real time observation and feedback by Commission IT staff and did not result in written documentation." Gizmodo had asked for a copy of any records related to the FCC analysis that concluded DDoS attacks had taken place.

Because there was no "written documentation," the FCC provided no documents in response to this portion of the Gizmodo FoIA request. The FCC also declined to release 209 pages of records, citing several exemptions to the FoIA law. For example, publication of documents related to "staffing decisions made by Commission supervisors, draft talking points, staff summaries of congressional letters, and policy suggestions from staff" could "harm the Commission’s deliberative processes," the FCC said. "Release of this information would chill deliberations within the Commission and impede the candid exchange of ideas."

Big technology companies and their longtime allies on the grassroots left are at odds over how to deal with network neutrality — and the fight is getting nasty.

The companies, especially large ones, while supportive of the net neutrality rules, have been far more open to a legislative compromise to finally end the net neutrality bickering. Many activists, though, are taking a harder line against any movement from the current regulations. That tension has been simmering for months and is boiling over at a crucial point in the lobbying battle. "The public interest community is more skeptical that you can preserve all the protections you want if you move away from the old legal framework," said Gene Kimmelman, who leads Public Knowledge, which doesn't oppose all legislation but doesn't like past proposals. "And then tech companies are probably looking for some version of net neutrality that preserves that principal regardless of whether it's called Title II or something else."

Federal Trade Commission member Terrell McSweeny has doubts that the agency's consumer protection authority is sufficient to discipline the actions of broadband internet access service (BIAS) providers if Title II is rolled back and the FTC regains BIAS oversight.

In comments to the Federal Communications Commission, she said reversing Title II would harm consumers, and that the push to have the FTC regulate both edge providers (as it does now) and ISPs (as it once did) "mistakenly establishes a false equivalence between the static [and largely noncompetitive, she argues] broadband service provider marketplace on the one hand and the dynamic competition offered on the 'edge.' "The FTC is a highly expert consumer protection and competition enforcement agency, but there are limits to the effectiveness of our tools in policing nondiscrimination on networks and protecting competition in markets that are already highly concentrated," Commissioner McSweeny added. She also said antitrust laws may not cover the public-interest issues associated with consumers' ability to access content or express themselves online.

In what is being billed as a bicameral effort, a group of Republican Sens and Reps—including Senate Judiciary Committee Chairman Chuck Grassley (R-IA), have introduced a bill, the Separation of Powers Restoration Act, that takes aim at the Chevron deference accorded federal agency expertise. “For too long, unelected bureaucrats have relied on Chevron to expand their own authority beyond what Congress ever intended. This has weakened our system of checks and balances and created a recipe for regulatory overreach," said Chairman Grassley of the bill. "The Constitution’s separation of powers makes clear that it is the responsibility of Congress, as the People’s representative, to make the law. And it’s the job of the courts—not the bureaucracy—to interpret the law. This bill helps to reassert those clear lines between the branches. By doing so, it makes the government more accountable to the People and takes a strong step toward reining in the regulators.”

The bill would only tweak the language in the US code on judicial review of agency actions, but it makes a big difference. The issue of Chevron has often come up regarding how the Federal Communications Commission exercises its regulatory authority. Chevron is the deference that has been accorded agencies—per Supreme Court precedent—to interpret vague statutes.

The US government has received more than 9 million public comments on rolling back network neutrality regulations, a record response to this hot-button issue that both sides argue plays an essential role in who gets Internet access. The first public comment period ended July 17, and now a one-month rebuttal period is underway. Already, about another million additional comments have been submitted. Those totals were boosted by July 12's online 'Day of Action' conducted by tech companies and liberal privacy rights organizations that support the net neutrality regulations, as well as opposing comments from those in favor of overturning the rules.

At every White House news briefing since June 29 — and many before, too — President Donald Trump's spokesmen have ordered a room full of smartphone-toting journalists not to film the session or even broadcast live audio. On July 19, one reporter defied the White House by streaming live sound of the briefing online. Ksenija Pavlovic, a former political science teaching fellow at Yale who founded a news site called Pavlovic Today, used the Periscope app to stream audio of July 19's briefing. She tweeted a link to the feed. The sound quality was poor, but deputy White House press secretary Sarah Huckabee Sanders could be heard introducing Director of Legislative Affairs Marc Short, who addressed reporters before Sanders took questions. Pavlovic's feed cut out after about 17 minutes, while Short was still talking, but she quickly resumed streaming and tweeted a new link that carried another 31 minutes.

On July 19, 2017, the Senate Commerce Committee held a hearing to examine the nominations of Ajit Pai, Jessica Rosenworcel, and Brendan Carr for seats on the Federal Communications Commission.

On March 7, President Donald Trump nominated Pai, the FCC’s current chairman, for a second five-year term ending June 30, 2021. Rosenworcel is nominated for a term that would end June 30, 2020. Carr, the current general counsel at the FCC, has actually been nominated for two terms, one expiring June 30, 2018 and the second ending June 30, 2023. Carr served as legal adviser to then-FCC Commissioner Pai for three years before Pai was named chairman and appointed Carr as general counsel.

Committee Chairman John Thune (R-SD) characterized the hearing as both an examination of the nominees and a FCC oversight hearing, “fulfilling a commitment I’ve made to hold regular, biannual oversight hearings of the Commission.” His opinions of the nominees: “In my view, the FCC will be in very good hands when all three of these nominees are confirmed.” He noted Chairman Pai’s efforts around transparency and FCC processes, network neutrality, and robocall prevention.

Sen Bill Nelson (D-FL), the committee’s ranking member, raised issues around all three nominations. Concerning Rosenworcel, he noted that she should not have been forced to step down from the FCC at the end of 2016 when the Senate failed to reconfirm her.

Sen. Nelson identified two concerns about Brendon Carr: 1) “two consecutive terms to which the Senate is being asked to confirm you would provide you with the longest single, initial period of service of any nominee to the FCC” and 2) “it is hard to recall a similar situation where someone was nominated to serve at the commission alongside, rather than to follow, their current boss.” He stressed that it is important to have commissioners who have independent voices and “ones who will fight for consumers and the public interest.” He later asked Carr to cite an issue that he and Chairman Pai disagree on – Carr failed to answer on more than one occasion. “Going forward, I’ll make my own decisions; I’ll call it the way I see it,” Carr said. “I think my record shows that I’m not a shrinking violet.” Sen. Nelson called that response “not confidence-building.”

Finally, Sen. Nelson congratulated Chairman Pai on some recent pro-consumer actions, but said, “[M]any view these most recent consumer protection actions as mere icing on what is otherwise an unpalatable cake. A cake constructed out of actions that eliminate competitive protections, that threaten dangerous industry consolidation, that make the Internet less free and less open, and that weaken critical consumer protections for those most vulnerable.”

Net Neutrality

Network neutrality and the FCC’s 2015 decision to classify broadband internet access service providers as telecommunications providers under Title II of the Communications Act were key issues for the hearing. In his opening remarks, Chairman Thune said,

“I am pleased that Chairman Pai has sought to hit the reset button on the 2015 Title II Order, because, as I have previously said, the FCC should do what is necessary to rebalance the agency’s regulatory posture under current law. I continue to believe, however, that the best way to provide long-term protections for the Internet is for Congress to pass bipartisan legislation. Two and a half years ago I put forward legislative principles and a draft bill to begin the conversation, and I stand ready and willing today to work toward finding a lasting legislative solution that will resolve the dispute over net neutrality once and for all.”

Two senators questioned the nominees about the impact of the Title II decision on broadband investment in the US. Sen. Mike Lee (R-UT) cited stats, offered by broadband providers, that investment has gone down. He took issue with a New York Times story that said investment had gone up since the 2015 order. He said that increase included foreign investment, some of which he said was spurred by the Title II disincentive to invest in the US, and that there was evidence that US infrastructure investment had declined precipitously.

On the other side was Sen. Ed Markey (D-MA) who said that almost half of the venture capital funds, or about $25 billion, invested since 2015 was in Internet-related businesses, with broadband providers investing $87 billion, the highest rate in a decade. Sen Markey said investment and job creation are high, so there is no problem that rolling back Title II or reviewing net neutrality rules would fix.

Both senators asked Chairman Pai for his take on their respective views, but the chairman's answer was cautious given that he has an open proceeding before him and comments on his proposal to roll back Title II and review the rules are still coming in. He said that evidence of decreased investment was one of his concerns, but that the FCC was testing that theory, as well as the opposite, as part of its due diligence.

E-Rate

While Rosenworcel, Carr and Chairman Pai all generally agreed on the importance of the FCC's E-rate program -- which makes broadband services more affordable for schools and libraries -- they initially refrained from an outright promise not to cut its funding. Sen. Ed Markey (D-Mass.) had to ask Rosenworcel a second time before she explicitly said she would not reduce the funding for E-rate. Neither Pai nor Carr would make that commitment.

Broadband Deployment

The three nominees were largely unanimous on measures to expedite rural broadband like “dig once” policies, which require installation of conduits for fiber-optic cable when preparing infrastructure such as roads. The policies aim to reduce cost and limit wait times for installing fiber in different municipalities.

“I think it would be helpful for ‘dig once’ policies and similar policies to be the law of the land,” Chairman Pai told Sen. Amy Klobuchar (D-MN).

“The agency, working with local jurisdictions, should try to come up with a model code — one that includes policies like ‘dig once,’” Rosenworcel said. She added that there should be incentives built in for local communities to adopt the model.

Senators also pressed the three on the need for accurate coverage maps so that subsidies issued to companies to build out their infrastructure are actually targeted to the right places.

“I would hope to get your commitment that the commission will work to ensure that mapping data used at the FCC accurately accounts for on-the-ground mobile coverage,” said Sen. Cory Gardner (R-CO). The nominees affirmed they are committed to working toward ensuring accurate data coverage moving forward.

First Amendment

Sen. Tom Udall (D-NM) pressed all of the nominees on their commitment to the First Amendment in light of the many statements President Trump has made disparaging outlets covering his Administration. Sen. Udall pointed to a story that the White House could use AT&T’s proposed acquisition of Time Warner as a way to punish CNN for its stories and suggested the Administration might want to reward Sinclair by approving Sinclair’s purchase of Tribune television stations. Each of the nominees pledged to speak out against violence or intimidation against journalists. Chairman Pai reiterated that the White House had not contacted him about retaliating against negative news stories and said he would not do so if asked. And he promised that the FCC would not be used to punish media companies or reward others and would be troubled by any attempt to pressure it to do so.

"I have not directly had any conversations with anyone in the administration with respect to media regulatory proceedings," Chairman Pai said. "To the best of my knowledge, no one on my staff or in the FCC has indirectly had any such conversations as well."

“I have consistently stated that I believe … that First Amendment freedoms, including the freedom of the press, are critical,” Pai added. “If I were ever asked by anyone in the administration to take retaliatory action, for instance, in a media regulatory proceeding, I would not do so.”

Conclusion

If all of the hearing’s nominees are confirmed by the full Senate, the FCC would have a 3-2 Republican majority. Senators on the committee have until July 21 to submit additional questions for the nominees who will be given time to reply in writing.

Apparently, Univision Communications, the owner of the dominant Spanish-language broadcaster in the US, has been fielding interest from potential bidders after the media company’s initial public offering was delayed. Among the suitors has been cable mogul John Malone, some of the people said. Malone and Greg Maffei, chief executive of Malone’s Liberty Media Corp holding company, held talks with Univision’s owners about the possibility of acquiring a significant stake, apparently.

Malone andMaffei met with Univision backers billionaire Haim Saban and Providence Equity Partners’ Jonathan Nelson at the Sun Valley media conference in July. However, the two sides were far apart on valuation, and it is unclear if a deal—with Malone or anyone else—could be reached. It is also unclear what terms were discussed.