Tax reform, media ownership and net neutrality highlight NAA’s public policy efforts
By Paul Boyle, NAA senior vice president of public policy
Members of Congress returned this week to Washington after a two week spring recess. Much of the work on the floor of the House and Senate over the next six months will be message-related to differentiate the two parties from one another before the November 4 congressional election. A lot is at stake: the House Republicans want to increase their majority position and the Senate Democrats want to retain control of the upper chamber.
Since we are well into the political season in Washington, we are not going to see too many pieces of legislation become law before November. This doesn’t mean, however, that NAA is not going to be active. There is much to be done to pave the way for legislative debates next Congress as well as work to be done in regulatory proceedings before Federal agencies.
Here is an update on issues that we will be working over in spring and summer.
Given the upcoming elections, comprehensive tax reform will not go anywhere this year. But legislation could move in the next Congress. The new Chairman of the Finance Committee, Ron Wyden (D-OR) and the expected Chairman of the Ways and Means Committee, Paul Ryan (R-WI) have a history of working together and have expressed interest in tax reform. The prospects for comprehensive tax reform would see a boost if President Obama makes it a priority in the remaining two years of his second term.
NAA is working hard to educate policymakers on current tax reform proposals that would negatively impact newspapers. The most damaging proposal is one that would limit the business deduction for advertising costs. For more than 100 years, advertising expenses has been treated as an “ordinary and necessary” business expense that is fully deductible just like salaries, rent, office supplies and any other cost of doing business.
Advertising is a major economic engine driving growth in the U.S. economy and plays an essential role in the creation of jobs in every congressional district and state. NAA will be working with its member newspapers in the coming months to educate policymakers that the current tax treatment of advertising expenses should be maintained.
In mid-April, the Federal Communications Commission issued a Further Notice of Proposed Rulemaking in its quadrennial review of its media ownership regulations. The Commission recommended a modest relaxation of the newspaper-broadcast cross-ownership rule, which since 1975 has prohibited ownership of a daily newspaper and television or radio station in the same market.
The Commission stated that it is inclined to maintain the ban on newspaper / TV cross-ownership, but suggests a revised waiver-based system to allow for some combinations. The Commission also stated that it is open to the elimination of the ban on cross-ownership of a radio station and daily newspaper.
NAA will submit comments in this proceeding to encourage the Commission to eliminate this nearly 40-year old ban that restricted the flow of investment in local news.
FCC Commissioner Ajit Pai said it best in his comments when the Commission voted on the order, “Cross-owned -owned television stations on average provide their viewers with more news than do other stations,” he said. “It doesn’t make sense to single out broadcasters and prevent them from operating newspapers. If you are willing to invest in a newspaper in this day and age, we should be thanking you, not standing in your way.”
The FCC has circulated a proposed “Open Internet" Notice of Proposed Rulemaking that attempts to “reinstate” the principles from the Open Internet rule adopted by the Commission in 2010 which was remanded by the DC Circuit Court.
In a blog post, FCC Chairman Tom Wheeler said that the Notice will not change the underlying principles of the 2010 rule, specifically that Internet Services Providers should not block lawful content and cause “unreasonable discrimination among users.”
As with most things in Washington, the devil is in the details. The Chairman’s proposal has just gone to the other Commissioners, and it may change before it is issued on May 15. Consumer groups and members of Congress have come out strongly against the Notice even before its full text has been released, on the basis of leaks about what the notice might contain. This opposition, based on the notice’s claimed feature of allowing ISPs to create “fast lanes” for content providers who pay ISPs for that privilege, has been made more concrete by the disclosure that Netflix has agreed to pay Comcast a fee for “fast lane” carriage to reach Comcast homes.
While this “Open Internet” policy has more to do with premium service for the streaming of video content, which will impact the studios, networks, satellite TV, NAA is watching this issue closely to make sure that the proposed rule does not slow down or limit newspaper media’s ability to reach digital customers.
Last Updated: April 30, 2014
First Published: April 30, 2014
About the Author
Paul J. Boyle is Senior Vice President/Public Policy at NAA and manages the legislative and regulatory affairs operation of the association, covering issues such as: tax policy, copyright, postal affairs, media ownership rules, advertising regulations, and the First Amendment.
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