SENATE MOVES INDECENCY BILL WITH $500,000 FINES

The Committee moved closer to the House’s model for FCC indecency fines by creating a tiered system that can lead to $500,000 fines on the 3rd offense -- doubled if it’s before a large national audience like the Super Bowl’s. The Commerce Committee also added language that would require a license revocation hearing for 3 indecency violations and a provision from Committee ranking Democrat Hollings’ (S.C.) to target violent content, including on cable.

Brownback asked senators to refrain from adding amendments and said the media ownership provision from Sens. Dorgan (D-N.D.) and Lott (R-Miss.) was a “deal killer.” However, by a 13-10 vote, the Committee approved the amendment that would preserve the old broadcast media ownership rules one year, until the General Accounting Office concludes a study whether horizontal and vertical consolidation by media companies is producing more indecent content.

The Commerce Committee also approved Hollings’ proposal for a violence safe harbor. The amendment, based on S-161, would require the FCC to study the effectiveness of the V- chip. If the FCC finds the V-chip to be “insufficiently effective,” the FCC must set rules to prohibit the broadcast of violent content during hours when children are “reasonably likely to comprise a substantial portion of the audience.” The bill would also make it illegal for broadcasters to distribute violent content not specifically rated for violence.

The Committee began the markup by adopting a manager’s amendment to S-2056 that incorporated similarities to HR- 3717, the bill approved by the House Commerce Committee last week that could be approved by the full House as early as today (Wed.). But there are differences. The Senate bill incorporates the House’s criteria for assessing a fine, including: (1) Whether material was live, recorded, scripted or unscripted. (2) Whether violators had an opportunity to review the material. (3) Whether a time delay was implemented. (4) The size of the audience. (5) The size of the market. (6) Whether the violation occurred during a children’s TV program. The FCC would also have to report to Congress each year on the number and progress of complaints.

The senators also approved a measure proposed by Sens. Stevens (R-Alaska) and Lautenberg (D-N.J.) that would require the FCC to initiate a license revocation hearing after 3 indecency violations. But before approving the Stevens amendment, several senators -- including a few who voted for the bill -- said they were unsure what the amendment was supposed to do. Senate Commerce Committee Chmn. McCain (R- Ariz.) said the amendment would weaken the bill since the manager’s amendment version would require the FCC to address license revocation for every complaint. The bill wouldn’t require a license revocation hearing for every complaint, but the FCC would have to state why it was not seeking revocation. A Committee staffer told the senators the provision would help establish a case file to help broadcasters determine what will and won’t be tolerated by the FCC.

The bill also establishes a “shot clock” deadline for FCC action, but it gives the Commission more time. The House bill gives the FCC 180 days from the filing of a complaint to determine if a fine should be levied. The Senate bill gives the FCC 18 months; 9 months to issue a Notice of Apparent Liability (NAL) and another 9 months to close the complaint, which would include collecting the fine or taking enforcement action. The bill also had a “severability clause,” which allows portions of the law to be struck down by the courts without eliminating the rest of the law.

Cable avoided pricing regulation, though several senators offered measures designed to rein in content over the private networks. Sen. Breaux (D-La.) pushed for an amendment that would apply obscenity and decency regulations to cable and DBS until the FCC determined that 85% of households with children were using the V-chip or similar technology or had opted out of using such technology. The amendment was narrowly defeated, 12-11. While Brownback told Breaux he philosophically supported the amendment, he didn’t believe it would survive a Supreme Court review. Hollings also offered an amendment that would create a tiered system for cable subscriptions, but he withdrew the amendment after Brownback said it would likely hurt the bill’s chances for passage. McCain said he didn’t support Hollings because he was pushing for a tiered system, while McCain said he wanted a complete “a la carte” system for cable subscribers.

Stevens proposed several amendments relating to FCC fines as the Committee adopted a tiered system for fines and a mechanism to raise fines even higher under certain circumstances. One amendment established a series of fines: $275,000 for the first violation, $375,000 for the 2nd and $500,000 for the 3rd and any subsequent violations. Also, the Committee approved allowing the FCC to double its fines depending on certain circumstances, including: (1) Whether the material uttered by the violator was scripted or recorded. (2) Whether the violator had a reasonable opportunity to review the material and failed to block the material. (3) Whether the viewing or listening audience is “substantially” larger than usual, such as a sporting event or awards ceremony. (4) Whether the violation occurred during children’s programming.

The FCC will also be able to fine on-air talent who “willfully or intentionally” utter an obscenity, which was proposed by Stevens and Sen. Allen (R-Va.). A similar measure during the House markup caused some concern among members and likely led to Rep. Schakowsky’s (D-Ill.) vote against the bill. She was the only member to vote against the bill in Committee. An amendment from Senate Communications Subcommittee Chmn. Burns (R-Mont.) and Sen. Ensign (R-Nev.) would allow the FCC to take into account the size of the broadcaster before issuing fines that could potentially force stations off the air. Also, an amendment from Stevens would authorize the NAB and other broadcasters to develop a code of conduct for a family viewing policy.

NCTA said it opposed the violence safe harbor advanced by Hollings. “As the U.S. Supreme Court has found, the subscription nature of cable service, and the ability of cable consumers to block unwanted programming through the use of tools offered by local cable systems, strongly differentiate cable from broadcasting, which is distributed free and unfiltered over the air,” said an NCTA spokesman. “From a First Amendment standpoint, we continue to believe that there are less intrusive means to accomplish the objectives sought by this amendment.” But Consumers Union praised the Senate’s action, particularly the media ownership provision, and said it would continue to push for a la carte cable pricing. Several independent cable networks -- including A&E, The Game Show Network, Bloomberg TV, and Oxygen -- sent the Senate a letter urging them to reject a la carte pricing because it would force individual networks to raise their rates, which would be passed onto consumers.

The House could consider HR-3717 as early as today (Wed.), and Rep. Hinchey (D-N.Y.) has said he would propose a similar media ownership amendment to the bill. Hinchey will address the House rules committee today to make the case for the amendment. House Telecom Subcommittee Chmn. Upton (R- Mich.) said he was pleased that the Senate moved on the bill but had concerns about the amendments. “Although the Senate Commerce Committee attached several amendments that are unrelated to indecency, it is my hope that we will come to consensus and send a streamlined bill to the President to be signed into law,” Upton said.