The FCC’s regulatory treatment of broadcast joint sales agreements (JSAs) involved in merger transactions, and the issue of broadband rate regulation emerged as top subjects of debate during an FCC budget hearing conducted by members of the Senate Financial Services and General Government Subcommittee on Tuesday.  Tuesday’s hearing touched on many of the same topics discussed last month at a similar event before the House Appropriations Committee. 

As with last month’s hearing, FCC Chairman Tom Wheeler and FCC Commissioner Ajit Pai were again featured as key witnesses.  On the subject of JSAs, Wheeler reiterated his previous House testimony, explaining a rider attached to the Consolidated Appropriations Act of 2016 (CCA), which grandfathered JSAs in existence prior to the FCC’s March 2014 decision to classify JSAs as attributable ownership interests, could not be applied to assignments and transfers of broadcast television licenses because the FCC has historically deemed such transactions to be the end of the existing license and the start of a new license.  Wheeler’s arguments, however, failed to satisfy subcommittee chairman John Boozman (R-AR), who charged the FCC with ignoring Congressional intent in exempting assignments and transfers of stations involved in JSAs from the CCA rider.  Stressing, “your agency knew of the significant bipartisan support of this language . . . yet the FCC consciously found a way to write its way out of it,” Boozman asked Wheeler: “does Congress need to again work in a bipartisan fashion to close every conceivable JSA loophole?”  Pai concurred with Boozman that the language of the JSA rider “is exceedingly clear” and that the FCC “should simply follow the law.” 

Boozman also questioned Wheeler on his apparent opposition to pending House legislation that would bar FCC regulation of broadband Internet access rates.  Adopted last month by the House Energy and Commerce Committee, the No Rate Regulation of Broadband Internet Access Act (H.R. 2666) would effectively codify commitments made by the FCC as part of last year’s Open Internet order to forbear from applying Title II rate-setting and other common carrier regulations to providers of broadband network services.  Notwithstanding the FCC’s pledge of forbearance, Boozman complained that the FCC and the Obama Administration “worked hard to kill” H.R. 2666 and a similarly-worded rider to a previous appropriations bill that never came up for a vote.  In reply, Wheeler pointed out that he had previously voiced support for legislation that codifies FCC forbearance of specific Title II provisions that authorize “before the fact” regulation of broadband service rates.  Wheeler stipulated, however, that he had concerns with the broad language of H.R. 2666 which could also ban other rate regulation by the FCC and could impact the FCC’s ability to enforce Open Internet rules against paid prioritization, throttling, and the blockage of lawful web content.