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What a Democratic Midterm Victory Would Mean for Hollywood

If Democrats take one or both houses of Congress, many entertainment industry figures will be joyous over the new check on President Trump and the prospects for taking back the White House in 2020.

For the business side of entertainment, Democratic control may be a mixed blessing. What can be expected are gridlock, investigations and more oversight — including over federal departments and agencies.

Major Silicon Valley players would still be subject to great scrutiny. Lawmakers in both parties have been hammering Facebook, Twitter and other internet giants over issues including hacking, privacy and fake news.

That’s music to the ears of studio lobbyists, who for years have been pressing Congress to require Google and other platforms to bear more responsibility for fighting piracy.

MPAA chairman Charles Rivkin already has been pushing lawmakers on the idea of “platform accountability,” while the content group CreativeFuture recently sent out a letter and petition to all midterm candidates, with the implicit message that the next Congress needs to put more pressure on Google.

Hollywood is positioned to have content-friendly lawmakers in charge of key committees if Democrats gain control of the House.

But Democrats want to go even further when it comes to regulating tech — in ways that aren’t necessarily in the interests of major media companies.

House Minority Leader Nancy Pelosi, likely to run for speaker if the Democrats win, has suggested a new agency to deal with tech and its impact and proposed an Internet Bill of Rights to protect consumers, with provisions on privacy, data collection and net neutrality.

One provision would require opt-in consent to the collection of personal data and to the sharing of personal data with a third party — at a time when studios and networks are waking up to the need to have that information from their consumers on ad platforms and when making programming decisions.

The grumbling over tech giants has spilled over into antitrust policy.

“It’s the witching hour for antitrust,” says Larry Downes, senior industry and innovation fellow at Georgetown University. “It’s possible that a new Congress with Democratic majorities in either or both houses may find it easier to build a coalition with the White House to put tech companies under more pressure.”
Democrats, though, are just as likely to be skeptical of media consolidation.

Last year, Senate Minority Leader Chuck Schumer, D-N.Y., unveiled a party platform that included much stricter antitrust enforcement, including reviews of mergers after they have been completed, and retaining a “consumer competition advocate” to take complaints and recommend investigations. He singled out media companies, including the AT&T-Time Warner merger.

Any legislation would be a long shot to pass in a gridlocked government, but if Democrats are in charge, they would be able to call hearings of proposed mergers. That’s something Republicans declined to do with the Walt Disney Co.-21st Century Fox deal as well as Sinclair’s proposed acquisition of Tribune Media. (The former was approved by the Justice Dept.; the latter was sidelined at the FCC).

The power to greenlight mergers would still be in the hands not of Congress but of the Justice Dept., the FTC and the FCC. But hearings still put companies on the spot and force them to answer critics.

“That’s the most realistic and powerful thing Congress can do — hold hearings and shed light on them,” says Gigi Sohn, a former FCC official and longtime public interest advocate.

A Democratic-led Congress also could require FCC chairman Ajit Pai and other commissioners to answer for their actions.

Former FCC chairman Tom Wheeler, an appointee of President Barack Obama, said that Republicans “have been flying air cover” for the Republican controlled FCC and that it will be a “different experience” if they have to answer to Democrats in Congress.

The speculation is that Pai, having completed a big chunk of his deregulatory agenda, may take the midterms as a cue to leave. Asked about that at a recent FCC meeting, his reply, tellingly, was noncommittal.

“I can’t speculate about hypothetical, future election results that haven’t come in yet,” he said, chuckling a bit. “I’m staying the course.”

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