Trump Win Leaves Fate of Set-Top Plan Uncertain

The future of the FCC draft set-top plan is seen as bound up in the questions of how long Chairman Tom Wheeler and Commissioner Jessica Rosenworcel will remain in their seats, industry officials on both sides of the set-top issue told us. In the wake of Republican Donald Trump's win of the White House Tuesday, no one is sure what the answers to those questions are, many stakeholders agree. Rosenworcel has been seen as the swing vote on Wheeler's set-top plan (see 1611030055) since it was pulled from the September commissioner meeting (see 1609290076). The question of her reconfirmation during the lame-duck Congress and the amount of time Wheeler has left to convince her to vote for his plan are seen important factors in the fate of the item.

There are too many variables for those in the industry to be sure of the outcome, a cable attorney following the set-top matter told us. The draft rules' fate is “at least as unclear as it was before the election, and may be more so" now, the attorney said. Without reconfirmation, Rosenworcel would soon need to leave the FCC.

Spokespeople and an FCC official told us recently that work has been continuing on the order. Ex parte filings connected with it have continued. But the item is widely seen as stalled because Rosenworcel hasn't voted on it, and that's seen as connected with her confirmation. After the results of the 2016 election, it's not known if serving as a minority commissioner on a Republican FCC would be as attractive a proposition for her, one cable attorney pointed out. The commission’s policies are likely to undergo “a fundamental change” under the new administration, the cable attorney said.

The length of Wheeler's remaining time at the commission is similarly unclear, officials on both sides of the set-top issue told us. He could leave the FCC under the new president, or stay on as a minority commissioner, an industry official told us. Wheeler's term runs until the middle of 2018. It's also not clear if he would spend his remaining time in office trying to push through rules now that would be unlikely to get past a Republican FCC, one cable attorney said, calling the practice “midnight regulation.” Since the set-top plan has gone through years of development and comment periods, it's inaccurate to characterize it as midnight regulation, an official who supports the FCC plan told us. “It's overtime regulation,” he said. Wheeler should "stay the course," Public Knowledge senior staff attorney John Bergmayer said.

Reconfirmation

Senate Republicans likely will have little appetite for confirming Rosenworcel in the lame duck, a Republican Senate staffer told us. Rosenworcel's renomination has faced GOP holds for much of the past year, which Senate Commerce Committee Chairman John Thune, R-S.D., has attributed in part to Wheeler’s refusal to commit to step down at the end of the Obama administration. The Republican Senate staffer questioned what Wheeler would gain from such a commitment now or whether that would even help -- even if Wheeler secured Rosenworcel’s aid in successfully advancing his set-top order in the remaining months, that order could easily be undone by now-Commissioner Ajit Pai as the new or interim chairman or another GOP FCC chief next year, the staffer said.

Appropriators also could revive an appropriations rider that would stall the set-top proceeding in putting together the FY 2017 measure to fund the government past Dec. 9. A content company official told us that stakeholders are keeping an eye on that rider, though he said it's unlikely to make it into any funding measure on the budget.

One factor connected to the stalled renomination is bipartisan Senate Commerce Committee telecom legislation that is idled. Senate Minority Leader Harry Reid, D-Nev., blocked the Mobile Now (S-2555) and FCC Reauthorization Act (S-2644) bills on the floor (see 1609270053). He said reconfirming Rosenworcel was part of a deal he made with Senate Majority Leader Mitch McConnell, R-Ky. But the blocked legislation is of less concern now, the staffer argued. These measures were weakened to clear them from committee this year, and if Republicans wait until next year and revive them, they could be stronger, the staffer said. A Republican Senate Commerce Committee aide previously had said that if the two telecom bills remained stalled, they would be priorities early in 2017 (see 1608080022).

McConnell’s office has no scheduling updates on Rosenworcel’s renomination, a McConnell spokesman told us when asked about lame-duck plans. Thune and Commerce Committee ranking member Bill Nelson, D-Fla., previously said they believe Rosenworcel will be reconfirmed this year.

Change Coming

Industry officials know change is coming at the FCC, they just can't at this point be sure what form that change will take, several industry officials pointed out.

Trump has made statements against media deals that are seemingly counter to the expressed views of Pai and fellow Republican Mike O'Rielly, and it's not clear what the FCC under Trump would be like, industry officials told us. Incompas, a proponent of the FCC set-top plan, released a statement applauding Trump's pro-competition stance as possibly being allied with the company's own views. “President-elect Trump said more competition is a solution to rising health care costs, and he is a vocal opponent of consolidation and market power in the communications and media industry,” Incompas CEO Chip Pickering said. “These are encouraging signals, and we look forward to working with the Trump Administration and Congressional leadership to make competition principles the catalyst for creating new businesses and new jobs across America.”

It's still an open question whether Trump's telecom policy will be influenced more by his stances against "cronyism" or by the pro-industry stance of the current FCC Republicans, an industry official who supports the FCC's set-top plan told us. If statements coming out of his camp show him leaning one way or the other, it could be a clue to what would happen to set-tops under Trump's FCC, the official said. "We just had a populist election, and nothing is more popular than saving people money on their cable set-top box," a Consumer Video Choice Coalition spokesperson told us. Despite that uncertainty, Wheeler's set-top plan is seen as unlikely to have much of a chance if it isn't approved before Trump's inauguration, an industry official told us. With little information on the item released since it was pulled from the September commissioner meeting agenda, it's not clear what exactly the draft item currently proposes, the official said.

Trump would perhaps see the set-top proceeding as a “highly regulated pivot” and resist any FCC action, said Nicol Turner-Lee, a Brookings Institution fellow who recently left the Multicultural Media, Telecom and Internet Council. She expects Trump may be receptive to some of Wheeler’s actions and not to others. “He shouldn’t push back on 5G and spectrum deployment because we know we need it,” she said. “BDS [business data services regulation] may not work for him.” For now, BDS remains on the agenda for Thursday's commissioner meeting (see 1611100041).