Attempting to reduce uncertainty: lobbying in a competitive communications environment

Abstract

In an effort to reduce regulatory uncertainty, this study examines if the broadcast and wireless industries have changed, or are changing, lobbying practices. Using resource dependence theory, the topic is examined through in-person interviews with lobbyists employed by broadcast and wireless organisations and trade associations. The study argues that the industries are attempting to reduce uncertainty through specific lobbying behaviours, specifically policy selection, intra-industry cooperation and trade association involvement.

Keywords:

• lobbying
• broadcast industry
• wireless industry
• spectrum
• resource dependence theory

Notes

1. The broadcast industry’s largest trade association, the National Association of Broadcasters, increased lobbying expenditures 27% from 2008 to 2012, while the wireless industry’s largest trade association, CTIA-The Wireless Association^®, increasing lobbying expenditures 77% during the 2008–2012 time frame. Lobbying data from The Center for Responsive Politics.

2. The 1996 Telecommunications Act reclassified telecommunications services as Title I, broadcast services as Title II and cable services as Title III.

3. In the United States, spectrum space was first allocated through merit-based hearings to the broadcast industry. However, as the wireless industry grew, so did the need for spectrum space associated with mobile devices. The 1970s to early 1980s marked a rise in the application for spectrum licences at the FCC, from both broadcast and wireless organisations, resulting in backlog at the FCC (Shelanski & Huber, 1998). This backlog, combined with the deregulatory focus, led to the system of spectrum allocation being changed to a lottery system for non-broadcast licence applicants in 1981 (Hazlett, 1998). While an improvement from the hearings system, the lottery system failed to always provide spectrum space to the most interested bidder, and resulted in rent seeking practices. After a prolonged fight from the broadcast industry, spectrum auction allocation legislation passed in 1994. Most recently, incentive auction legislation was passed by Congress in February 2012 as part of a Payroll Package, with an expected $25 billion in auction revenue being allotted to extend a payroll tax holiday and jobless benefits (Wyatt & Steinhauer, 2012). The incentive auction legislation allows for the broadcasters to voluntarily return 120 MHz of spectrum, which will then be auctioned to wireless organisations. The 120 MHz represents an approximate 22% increase in the amount of spectrum space available to wireless providers. Although the broadcasters will be compensated for the reallocated spectrum through the incentive auctions, many broadcasters are not willing to give up spectrum space and worry that the transfer of spectrum space will reinforce the perception that broadband has become the dominant communications platform (Eggerton, 2010; Stelter & Wortham, 2010). The success and outcome of the incentive auctions, slated to start in 2015, is still uncertain, and while the wireless industry is a fairly unequivocal supporter of the upcoming auctions, feelings among broadcasters are mixed, with many broadcasters hesitant to give up spectrum space and concerned about the results of the auction, including changes to channel lineups in markets, as the result of stations that participate in the auctions going out of business or having to share spectrum with other broadcast stations (Johnson, 2014).

4. A list of lobbying expenditures is compiled by The Center for Responsible Politics, and posted on opensecrets.org.

5. In the United States, lobbying disclosure laws require lobbyists to register with the Clerk of the House of Representatives and the Secretary of the Senate, and submit quarterly reports of their lobbying expenditures. The primary piece of legislation guiding lobbying activities is the Lobbying Disclosure Act (LDA) of 1995, with the Honesty in Leadership and Open Government Act (HLOGA) of 2007 amending the LDA. The LDA requires lobbyists whose income from lobbying government contacts exceeds $2500 in a quarter, and corporations with in-house lobbyists whose lobbying expenses are more than $10,000 per quarter, to register with the House and Senate. Under the LDA, trade associations generally have to register because their principle purpose is often to influence legislation. Some people are excluded from having to register as lobbyists, including public officials acting in an official capacity, newspapers and other mass media, and individuals who testify before Congressional committees on legislative issues. Also excluded are individuals who spend less than 20% of their time at work over a six month period lobbying. Numerous communications with federal agencies are also exempt from the LDA transparency requirements, including filing of comments in agency proceedings, petitions for agency action, and communication in compliance with agency procedures of adjudication.

6. The top 10 broadcast organisations spent 95% of all lobbing expenditures, while the top 20 wireless organisations spent 81% of all lobbying expenditures. Lobbying data from The Center for Responsive Politics.

Additional information

Notes on contributors

Amy Sindik

Amy Sindik is an Assistant Professor at Central Michigan University, where she teaches Media Management, Media Entrepreneurship and Media Law courses. Her primary research areas include the political activities of communication industries, with a specific focus on spectrum allocation.