What Democratic Control May Mean for Marketers

Power Shift on Hill Likely Would Change Internet, Media-regulation Rules

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If political prognosticators are right about a power shift in Congress this November, next year could bring dramatic changes to the internet and media-regulation environment.

Media and advertising organizations, along with interest groups, say a shift in control of the House of Representatives would unseat GOP congressional leadership that has tilted toward easing media-ownership rules, blocking net-neutrality legislation, and that has also largely taken a hands-off approach to the Federal Communications Commission. The Democratic congressional leadership has taken an almost completely opposite stance. At the very least, Democratic control would mean an aggressive approach to FCC oversight.

Changes would be even more dramatic if the Senate changes hands, with Ted Kennedy, Massachusetts., and Tom Harkin, Iowa, taking charge of key committees and Hillary Clinton of New York seeing more power. All three have been openly critical to various types of advertising.

But even without a Senate switch-prognosticators see such a change as less likely-the impacts of a Democratic House could be significant.

"At the moment in the Senate there has been a fair amount of activity," said Dick O'Brien, exec VP of the American Association of Advertising Agencies, noting various attempts to limit DTC advertising and examine the affect of advertising on children. While House Republicans have generally been unwilling to move that kind of legislation, he said, a Democratic House would be more active.

"What will change is the pace, the tempo," he said. "The sort of protection we have had on the House Commerce Committee will disappear. There will be more hearings, more testimony. They are much more likely to investigate our issues."

Democratic seizure of the House would elevate four key Democrats. John Dingell of Michigan would head the House Energy and Commerce Committee and Ed Markey of Massachusetts would head that committee's telecom subcommittee. Henry Waxman of California would head the House Government Reform Committee and John Conyers of Michigan would head the House Judiciary Committee.

All four have been unusually outspoken on media issues, calling for legislation on net neutrality and blasting the FCC for easing media-ownership rules.

"The major change would be oversight," predicted Andy Schwartzman, director of the Media Access Project, a public-interest law firm that works on FCC matters. "Dingell, Markey, Waxman and Conyers have a track record of being aggressive on oversight. I would expect the FCC members to be on the Hill early and often."

Since June alone, Messrs. Dingell and Markey have demanded FCC Chairman Kevin J. Martin explain "the intentional suppression" of several FCC studies questioning media consolidation and demanded Mr. Martin provide more information about digital transition; Mr. Markey has questioned cuts in funding for the Corp. for Public Broadcasting; and Mr. Waxman has questioned the use of video news releases by the Bush administration and TV stations, and raised some questions about whether the Food and Drug Administration has adequately supervised DTC advertising. Mr. Conyers earlier this year joined with Judiciary Committee Chairman F. James Sensenbrenner to introduce net-neutrality legislation that eventually was rejected by House Republicans.

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Dan Jaffe, exec VP of the Association of National Advertisers, noted that Mr. Markey is a longtime activist on privacy issues, while Mr. Dingell has been an activist on a number of media issues.

"Depending on how the election comes out, you have some congressmen who have been outspoken on some very significant issues, and some of these issues may accelerate in the next Congress," he said.

An ANA executive said that in the past Mr. Dingell has called for re-imposing the Fairness Doctrine on TV stations.

Jeannine Kenny, senior policy analyst at Consumers Union, said the biggest question might not be whether the Democrats want to change direction but how much time they will spend investigating the circumstances of past FCC and administration decisions. "At a minimum, there is going to be greater oversight over the FCC proceedings. But I think Democrats will also want to put their stamp on video-franchising legislation [sought by phone companies]."

Leslie Harris, executive director of the Center for Democracy and Technology, said the FCC could also face far more scrutiny from the Judiciary Committee on civil-liberty issues, including unauthorized monitoring of phone conversations.

While a leadership change would affect net-neutrality issues and would increase the likelihood of legislation to prevent phone and cable companies from discriminating among content providers, the ad, media and association execs said most media issues don't divide along party lines and most of the issues would also arise if Republicans are in charge, though they might be handled differently.
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