Set-top Rider Appropriations Battle Faces Fractured Democratic Caucus

“This may be the way to slow the train down at the FCC,” Rep. Gene Green, D-Texas, said in an interview Thursday. “This may be the pause we’re looking for.”

Green, a Commerce Committee member, led a letter of 53 House Democrats with Rep. Yvette Clarke, D-N.Y., outlining concerns with the NPRM and requesting a pause until further study is conducted. Last week, Clarke called the rider “encouraging,” but Communications Subcommittee ranking member Anna Eshoo, D-Calif., dubbed the provision "pathetic" and doubted its prospects (see 1605240064). Eshoo defended FCC Chairman Tom Wheeler’s NPRM, backed by a smaller group of Democrats. Wheeler told Clarke and other House Democrats he saw no need for a pause for further study and defended the NPRM (see 1606010039). “I would really trust her leadership on that,” Green said of Clarke.

The House Appropriations Financial Services Subcommittee cleared the funding bill last week despite Democratic objections. Ranking member Jose Serrano, D-N.Y., opposes the set-top rider, as does appropriator Mike Honda, D-Calif. (see 1605250059). Chairman Ander Crenshaw, R-Fla., said he expects some Democratic backing. The rider would prevent FCC funding for any proposed rule under Communications Act Section 629 until 180 days after completion of a peer-reviewed cost-benefit analysis from an institution of higher education and compel the agency to seek comment on the study, with no fewer than 90 days for such comments, plus a report addressing those concerns. A full committee markup is expected in June.

The NPRM has stirred a lobbying war between the Future of TV Coalition, representing AT&T, Comcast, Dish Network, MPAA and others, and the Consumer Video Choice Coalition, which includes the Communications & Computer Industry Association (CCIA), Google, Incompas, Public Knowledge and TiVo. Meanwhile, the FCC hasn't been able to get programmers to back its unlock the box initiative (see 1606020072). “To date, more than 160 lawmakers have written to the Chairman voicing concerns with the approach the Commission has embraced in its proposal,” Future of TV said in a news release Tuesday.

Determining the rider’s prospects “all depends on the appropriators and I think that also depends on what the committees of jurisdiction are doing,” Green told us. He said the Commerce Committee doesn't seem inclined to take on the set-top issue, increasing his openness to the rider as the vehicle to pause the proceeding. Communications Subcommittee Chairman Greg Walden, R-Ore., joined with Clarke to request a GAO study of the NPRM’s effects but there's no stand-alone set-top legislation in either chamber. Green stressed his preference that Commerce address the issue first: “I would rather us deal with it instead of doing it as a rider in the appropriations bill,” he said. A GOP Commerce Committee spokesman didn’t comment on possible set-top plans. That Democrats and Republicans would come together in opposition didn’t surprise Green, he told us, citing his time on Commerce since 1997: “On most issues, we really cut across party lines.”

Senate 'Nonstarter'?

The Senate hasn't unveiled its FCC funding bill but Democrats there also are split, including on the Appropriations Committee. Senate Appropriations Financial Services Subcommittee Chairman John Boozman, R-Ark., told us that there is no firm Senate decision whether to include the House’s set-top rider. “We’re still looking at what we want to do,” Boozman said. “We’re still talking. We have to talk to the authorizers and stuff. But I think that’s a reasonable approach, that we’ll have to wait and see.”

Senate Commerce Committee Chairman John Thune, R-S.D., “would support a legislative pause” to the set-top proceeding, a spokesman said Thursday. Thune and Commerce Committee ranking member Bill Nelson, D-Fla., mentioned set-top concerns during a March FCC oversight hearing (see 1603020051).

The set-top rider would be a “poison pill” and “nonstarter” on the Senate side, Sen. Brian Schatz, D-Hawaii, told us. He is a member of the Appropriations Committee and ranking member of the Communications Subcommittee.

Not all Senate Appropriations Democrats favor the NPRM. Financial Services Subcommittee ranking member Chris Coons, D-Del., is “concerned about copyright protections” in the NPRM, he said during an April FCC appropriations hearing. There's some Senate concern that the House rider would compel a time-consuming study of significance, which would amount to a delay tactic rather than a proposal of substance, a Democratic Senate staffer told us. Coons, of course, wants to ensure the NPRM protects copyright, the staffer said.

Democratic Sens. Dianne Feinstein of California, Patrick Leahy of Vermont and Jeanne Shaheen of New Hampshire are appropriators who signed letters to the FCC raising concerns in recent weeks. Feinstein’s letter, sent last week, said she’s “gravely concerned that the Commission has not fully considered the potential negative impact on content providers,” citing concerns about copyright and a need for any NPRM to be tailored to the energy efficient improvements voluntarily brokered between the cable industry and Department of Energy. Shaheen’s letter, sent last week with Sen. Rob Portman, R-Ohio, also highlighted the energy efficiency issue, asking several questions. The senators “are concerned that this rule would require [multichannel video programming distributors] to support third-party apps and devices via an additional converter device,” Shaheen and Portman said. “While the current set-top box model already presents significant energy savings, it would be troubling if the result of the new rule were to double the number of energy-consuming set-top boxes.” Leahy, ranking Democrat on the Judiciary Committee, shares the Obama administration concerns about whether the licensing would protect consumer privacy, he said in his letter.

Other high-profile Democrats questioned the NPRM. Ranking Democrats on the Homeland Security committees -- Sen. Tom Carper of Delaware and Rep. Bennie Thompson of Mississippi -- joined their GOP counterparts in pressing the FCC on the NPRM’s implications for cybersecurity. Nelson has invoked a variety of concerns. In the House, the ranking Democrats on the Intelligence and Judiciary committees expressed reluctance, as has Congressional Black Caucus Chairman G.K. Butterfield of North Carolina. Spokespeople for the concerned Democrats didn’t say whether they would support legislatively mandating a pause to the FCC proceeding, as the rider outlines. Sens. Ed Markey, D-Mass., and Richard Blumenthal, D-Conn., have led the NPRM's Senate defense.

Incompas, CCIA Opposed

Including the rider in both chambers’ FCC funding bills may affect its momentum, Boozman said. “I think any time you have something in both [Senate and House funding] bills, it makes a big difference,” Boozman said of possible bipartisan backing for a set-top rider. “That was true of the broadcast [joint sales agreement] provision that we put in last time. There’s a marker in there now, in the sense of the House bill, so we’ll have to decide if we’d have the votes to be able to retain it or what the authorizers want to do, or if they want it in the first place.”

“We should not delay cost saving, investment-generating competition another second,” Incompas CEO Chip Pickering, a former Republican lawmaker, told us in a statement Thursday about the rider. “Eighty-four percent of Americans want lower cable rates, and 69 percent say competition is the best approach. I believe ultimately this Congress will listen to those American consumers and help them save $231 a year on wasted rent-a-box fees. Unlocking the box is a free market solution and sound innovation policy that will lower prices and create jobs. That is a winning combination in an election year.”

CCIA Vice President-Public Policy Dan O’Connor said Hill Democrats are broadly opposed to such policy riders generally. He argued there’s no need for additional study and comment. “This issue has already received intense scrutiny and several rounds of public comments,” O’Connor said, citing the efforts of the FCC Downloadable Security Technology Advisory Committee and rounds of comments on that DSTAC report. “Now the agency has just finished two rounds of public comments on the proposed rules. Few regulatory proposals have received the public input that this one has. … Calling for another study is a thinly veiled attempt by the cable industry to derail the FCC’s efforts.” O’Connor said it hasn't been determined what happens to the rider ahead of the release of any Senate funding bill.

Green said the issue may have legs due to the number of stakeholders who have weighed in, noting that the NAACP, MPAA and the League of United Latin American Citizens have expressed concern. “To see the FCC not being responsive to authorizers” raises “concern” on both sides of the aisle, Green said. “One of the concerns that I had, this was actually drafted how Google would want it.”