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How the US midterm election could shape future of tech, media policy

The outcome of U.S. midterm elections could have implications for the tone of congressional oversight of the Federal Communications Commission, even though technology, media and telecommunications issues are not expected to drive most voters' candidate preferences.

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Democrats have criticized recent FCC actions that have allowed more consolidation in the broadcast space, and any shift in the majority power could impact future decisions on media ownership rules. The FCC's deregulatory approach to internet traffic remains a contentious issue for many, and it is drawing calls from federal legislators on both sides of the aisle to try and reach a legislative solution. Other issues such as rural broadband deployment and data privacy have drawn bipartisan support, though it remains to be seen which side will take the lead on crafting legislation.

Media ownership rules

Media ownership rules, which place limits on consolidation among broadcast station owners, proved to be a hot topic in 2018, amid the failed megamerger of Sinclair Broadcast Group Inc. and Tribune Media Co. The deal, which involved more than 200 full-power TV stations nationwide, pushed against the limits of the rules, even after the FCC voted in November 2017 to loosen them. The transaction ultimately fell apart after certain divestitures Sinclair proposed to appease regulators drew further scrutiny.

The FCC is expected to continue its deregulatory push in the broadcast space in 2019, triggering further consolidation. An open FCC proceeding seeks comment on whether to modify or eliminate a rule that prohibits a single broadcast station group from owning TV stations that together reach more than 39% of U.S. TV households. The agency is required by Congress to review its media ownership rules every four years, but its efforts have repeatedly been rejected by the courts, thus extending the four-year timeline for earlier reviews. It is unclear when the next quadrennial review proceeding will begin.

"It's safe to say there will be more heightened scrutiny of media ownership rule relaxation under a Democratic-controlled House or Senate, should that be the case after November," said Dennis Wharton, executive vice president for media relations at the National Association of Broadcasters.

Net Neutrality

Net neutrality, or rules regarding the treatment of internet traffic by service providers, has long been a contentious issue across the country, and the FCC's policy on the issue has flipped during each of the last two administrations. The most recent action took a more deregulatory approach under the Republican-majority FCC.

The tug-of-war extends far beyond Washington. California recently became the fourth state to adopt its own net neutrality policy, and it is the most aggressive to date. The California law drew the ire of the Department of Justice, which recently filed a lawsuit saying the state law is pre-empted by federal law.

The U.S. Senate in May passed a resolution that would restore net neutrality rules that the FCC overturned with a 2017 order, but the resolution failed to gain support in the House. A change to the majority party in the House could influence interest in the measure in 2019. Changes to the Senate's makeup could also affect support in that chamber: Just three Republicans joined Democrats to pass the Senate's resolution.

Sen. John Thune, R-S.D., chairman of the Senate Commerce Committee — which has FCC oversight authority and shared jurisdiction over a variety of tech policy issues, including consumer privacy — has asked net neutrality supporters from both political parties to work with him on a legislative solution. "If Republicans and Democrats have the political support to work together on such a compromise, we can enact a regulatory framework that will stand the test of time," Thune said in a December 2017 speech.

Rural broadband deployment

Congressional Democrats and Republicans do agree that there is a need to expand broadband access in rural areas. According to the FCC's 2018 broadband deployment report, of the 24 million Americans who do not have access to high-speed broadband at home, 19 million live in rural areas.

Chris Lewis, vice president of Public Knowledge, says that the issue of expanding rural broadband is "ripe to be worked on" next year, no matter which party holds the majority.

Despite wide support for the issue, there are some points of contention. Lawmakers have pushed for new and improved broadband maps from the FCC to better understand which areas are truly unserved, warning against the risk of overbuilding. There is also the question of how many federal dollars should be spent on expansion efforts.

On Oct. 4, Thune blasted the FCC over budget cuts to a program that subsidizes rural broadband deployment called the Universal Service Fund and called recent funding swings "unacceptable."

A strict budget control mechanism over a portion of fund, imposed in 2016, reduced support to certain carriers by about $180 million, a 13% reduction, and further cuts are expected. While the FCC allocated $180 million to carriers as a one-time stop-gap measure, Thune noted, "There's been no economic analysis of what these cuts are doing to rural America, what they're doing to rural jobs, rural economic development."

In March of this year, the commission initiated an investigation of the budget control mechanism to examine possible changes it could make to the USF.

Privacy

Data privacy is a popular topic this year for Congress, which has held a slate of hearings with top tech executives and policy experts to examine data privacy and security issues in the wake of a series of high-profile data breaches at technology companies like Facebook Inc.

Senators from both sides of the aisle have debated a range of policy solutions. Thune is reportedly planning to introduce a privacy bill in 2019. Some elements of the European Union's strict new privacy policy, the General Data Protection Regulation, have drawn bipartisan support among U.S. legislators interested in crafting data privacy regulations. For example, a bill proposed by Sen. Amy Klobuchar, D-Minn., and Sen. John Kennedy, R-La., would incorporate opt-out provisions for data collection and require that consumers are notified of a privacy breach within 72 hours of discovery.

"Privacy is an issue that is going to be front and center regardless of which party controls Congress," said NAB's Wharton, echoing similar sentiments of USTelecom, a trade group representing telecommunications businesses and Public Knowledge. "That's an issue that's not going to go away, probably for the next five Congresses."

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