Clarke, Cardenas Want Brakes on Set-Top Order, Text Released; Wheeler Office Called Programmers

The FCC better not approve Chairman Tom Wheeler's set-top box order now on circulation in a 3-2 vote, said Rep. Yvette Clarke, D-N.Y., Wednesday. She and Rep. Tony Cardenas, D-Calif., members of the Commerce Committee, spoke on a news-media call organized by the National Urban League. They and others, including tax activist Grover Norquist, urged the agency to lift comment restrictions on the item that have been garnering criticism (see 1610030044) and demanded the release of the proposal’s text. An FCC spokeswoman declined to comment.

Clarke called a possible 3-2 approval in the near future, still with the sunshine prohibitions against lobbying in place, “extremely disappointing” and a scenario she would “absolutely” object to. Wheeler removed the order from the Sept. 29 commissioner meeting agenda, with consensus still lacking (see 1609290076). “A public regulatory body has an obligation to go above and beyond, to demonstrate transparency,” said Clarke, who led an effort questioning the proposal and requesting a GAO study on the NPRM’s programming diversity impact. The FCC wouldn't be “acting in good faith” to advance the order now since it’s seemingly so different from the NPRM released in February, she said.

Industry officials have said they expect Wheeler and Commissioner Jessica Rosenworcel to continue negotiating over the item, and a filing at the FCC in docket 16-42 indicates that could be occurring. Aides to Wheeler contacted representatives of Disney, Time Warner, Scripps, CBS, 21st Century Fox and Viacom Monday to discuss the set-top item, said an ex parte filing. Wheeler aide Jessica Almond arranged the call to ask for clarification about the concerns expressed by the programmer representatives, it said. Rosenworcel's principal differences with Wheeler's set-top plan echo the programmers' concerns about FCC oversight of licensing terms. The programmers said FCC oversight of contract terms would be outside commission authority, and pushed again for a two-year waiting period after the set-top launch, after which the FCC could reevaluate the marketplace for anti-competitive behavior. That proposal is seen closely resembling the current draft, industry officials said.

“We have only two and a half pages to go on,” said Cardenas of a fact sheet, noting the many pages from the NPRM that suggest “a lot more to it than we’re being notified about.” The NPRM said nothing about a licensing board, Cardenas said. “That’s a big issue because we need to know what exactly does that entails.” The NPRM did briefly touch on a "standardized license and certification regime" as a possible piece of a set-top rule (see 1609090064). Industry officials have said this doesn't constitute sufficient notice, but FCC officials said it does.

Cardenas recently led a letter of 63 House Democrats including Clarke demanding release of the order text and a Further NPRM process, a point he also lobbied Rosenworcel about Sept. 28. That call for further release and comment was echoed by Senate Commerce Committee Chairman John Thune, R-S.D., House Commerce Committee Chairman Fred Upton, R-Mich., and House Communications Subcommittee Chairman Greg Walden, R-Ore. A small contingent of Democrats defending the order include House Communications Subcommittee ranking member Anna Eshoo, D-Calif., who accused the Democrats of backing Cardenas’ letter of not knowing what they were talking about (see 1609270048).

“GAO has already assembled a staff to proceed,” Clarke noted of the request she made with Walden. But the GAO hasn't begun its analysis due to the “fluid nature” of the FCC proposal, and there’s no written assurances from Wheeler that the agency would wait on that review, she said. The challenge is “a new proposal emerging that would make the accuracy of the work they do a moot issue because we’re essentially working with a new dynamic that would not go into the impact study,” Clarke said. “There should be a delay until the study is done.”

"The work remains underway and is not contingent upon any particular proposal," a GAO spokesman told us. "We’re looking at the broader impact questions such as the economics around set top boxes and diversity of programming impacted by any changes in the market. But we don’t have an anticipated release date as of yet."

National Urban League President Marc Morial also complained of the “evolution of changing proposals, none of which have seen the light of day” and said the proceeding “should not be taking place in the waning months of this commission’s tenure.” The FCC never responded to their calls for an independent analysis, Morial said, denying they want delay for the sake of delay. He also said the individuals on the news-media call “represent the broader voice of the community,” in contrast to Black Entertainment Television founder Robert Johnson, an FCC backer who Morial said was speaking in an individual capacity in his advocacy. Morial said the FCC diversity record is “not good” and questioned the agency’s credibility, noting its resistance to doing a disparity study as requested years ago. Brent Wilkes, national executive director of the League of United Latin American Citizens, said he wants to “see what those changes are” in the order compared with the NPRM. “We have a right to see the plan.”

“None of us are against set-top box competition,” Clarke said. “We have to recognize and acknowledge that the current set-top box arrangement is part of an ecosystem.” She said a proposal done in the wrong way could “squander the progress” made in programming diversity, saying it could affect an entire generation: “We will not relent on this issue.” Cardenas said the issue is ultimately about consumers: “This is not a Beltway issue. … I appreciate the fact that the item was pulled from the agenda.”

Americans for Tax Reform President Grover Norquist joined the calls to lift the sunshine restrictions and allow comment on the item, he said in a letter. “With requests to see the new rules from Democrat and Republican Senators and Representatives, private industry, civil liberties groups, and other advocacy groups representing a broad swath of the political and socioeconomic spectrum, it is hard to understand how Chairman Wheeler can say the public has already had enough opportunity to comment on this proposal,” Norquist said. “It is clear the public does not agree.” The U.S. Chamber of Commerce also challenged Wheeler on a lack of transparency. “Three unelected FCC commissioners cannot meaningfully deliberate over a proposal which has undergone such significant changes and impacts a wide range of stakeholders without the public having an opportunity to see the new rule or provide input," the Chamber said in a blog post.

The set-top proposal “has been one of the most controversial rulemakings in recent agency history,” said a blog post by Free State Foundation President Randolph May, who opposes the FCC plan. Putting it out for comment may lead to “a less harmful regulation” and will “increase the public’s confidence in the integrity of the agency’s process,” May said.

Mark Tseng Putterman, a media justice campaigner with 18MillionRising.org, countered the attacks on the order. “For decades, cable's top-down programming has left Asian Americans fighting for scraps in terms of television representation,” he said in a statement. “Unlocking the box and giving consumers universal search will help level the playing field for countless creatives of color that want to tell their stories on their own terms, but have been boxed out by cable industry gatekeepers. We're tired of waiting -- which is why young Asian Americans are consuming more streaming video that any other group.”