Newspapers And Capitol Hill p. 26

By: Debra Gersh Hernandez The biggest issues in Congress during the year involved
telecommunications and postal rates; telco bills are pending sp.

AMONG THE BIGGEST issues on Capitol Hill of interest to newspapers were those involving two diverse methods of delivering information: tele-communications regulation and postal rates.
During the coming year, however, the status of independent contractors, as defined under the Clinton administration's health care reform proposals, could well become a leading concern.
1993 may have seen the start of the last lap in this round of telco legislative wars, with one Senate bill and two pieces of legislation in the House pending as Congress adjourned for the holidays.
In addition, as the year drew to a close, Vice President Al Gore announced the administration's intent to introduce legislation lifting restrictions on telecommunications providers (see p. 40).
The issue has gone as far as it can in the courts. In November, the Supreme Court refused to hear an appeal of a lower court's ruling that allowed the regional Bell operating companies to expand into information and other services.
As Congress adjourned, two bills were introduced in the House. One, sponsored by Reps. Edward Markey (D-Mass.) and Jack Fields (R-Texas), focuses on the long-term picture of RBOC access in local markets, such as in cable. The other, sponsored by Reps. Jack Brooks (D-Texas) and John Dingell (D-Mich.), addresses information services directly.
The House bills join an all-encompassing Senate bill, the Telecommunications Infrastructure Act of 1993, introduced earlier in the year by Sens. Daniel Inouye (D-Hawaii) and John Danforth (R-Mo.).
Both the Newspaper Association of America and National Newspaper Association support the House bills. The NNA has withheld its endorsement of the Senate legislation until it includes stricter safeguards, especially for smaller papers, against potential RBOC abuses. The NAA supports the Senate bill.
Because the Senate bill was introduced earlier, a series of hearings already has been held. Hearings on the House legislation are expected early in the session because health care is likely to dominate lawmakers' time as the term progresses.
Timing could be a problem "because everybody wants everything to happen in the first few months of the next session. Then they're going to get bogged down with health care," explained NAA senior vice president/public policy and senior counsel John Sturm.
"If a bill is not moving well by Memorial Day, chances are it's probably not going to happen. From roughly then, if not sooner, most committees will spend most of their time with health care, except for emergencies," Sturm said.
"It's going to be a very interesting January to May," he added. "It's nice to have a few weeks before they come back. We've already started the legwork for January 25th and beyond."
Telco has "increasingly been a problem for us," noted NNA president and CEO Tonda Rush.
A new problem concerning at least two NNA member papers is the issue of N11 numbers, she said. Community papers in Tennessee and Georgia asked for and were assigned N11 numbers for their local exchange areas but then found the tariffs so expensive, $2,000 to $5,000 a month, that they were shut out.
Pointing out that if positioned correctly, N11 numbers can "turn a weekly into a daily," Rush said, "Now, some audiotex vendors are supplying technology our members can afford. The pieces are in place for community papers to get involved, but they're being shut out."
A local emphasis, such as local assignation of N11 numbers rather than giving them out on a statewide basis, is important to NNA in any telco legislation.
In fact, after Gore's speech at the National Press Club announcing the administration's plans for telco legislation, the NNA sent him a letter asking the administration to "please be extremely careful to respect localism . . . ."
"We have worked with two key members of Congress, Representative Jim Cooper of Tennessee and Senator Conrad Burns of Montana, to include specific language in legislation that will guarantee rates, access and competition for community newspapers," the letter explained.
On the telco front, the first session of Congress largely was spent getting ready for the second, Sturm said.
"People stewed around on the Hill and watched the business move forward. Fortunately, we used the time to try to work out an arrangement with the RBOCs. The lesson of last fall, with the Brooks-Dingell jurisdictional fight, was that we're not going to get any relief without both chairmen agreeing to it," he said.
The Brooks-Dingell and Markey-Fields bills "put together make a pretty nice package," Sturm noted. "The planets really are lining up the right way."
Action, however, "will pivot around whether the two committees in the House can move those bills up and out by springtime. Otherwise, they will get bogged down. That will give the Senate time to act also," he said.
But Sturm does not believe that the Supreme Court's final action on the RBOC issue had anything to do with getting the legislation moving.
"It had absolutely no effect," he said, referring to the "not unexpected" decision. "It was a circumstance of timing. The more significant decision came last May in the Court of Appeals. Congress discounted the courts from then on."
Also on the horizon in 1994 is a postal rate case.
Sturm believes that the postmaster may try to implement a "quickie rate case, with an across-the-board increase," keeping all assignments and allocations the same and raising all rates a certain percentage during two years. That figure, once estimated at 6%, could be up to 10%, he said.
If all parties do not agree, however, there could be a full-blown rate case as well as some reclassification during the year, but it all remains speculative, he added.
One postal issue that died in 1993 was Saturday certain delivery.
"Looking back, every year that goes by without something like that is good; '93 was a good year for Saturday certain delivery, but it can always come back," he warned.
Second-class issues were settled, at least for a while, with a six-year set-rate agreement.
Congress had been determined not to appropriate funds to cover Postal Service losses on second-class rates, including nonprofit and in-county.
The NNA and lawmakers were able to hammer out an agreement calling for a set six-year schedule of increases. Further, future in-county rates will be set by the Postal Rate Commission rather than by Congress.
Although arguments before the PRC require big investments of money to pay lawyers and economists, Rush said, the outcome is more predictable, giving "people a chance to work increases into their budgets."
Settling the in-county rate issue also helped stave off potentially bigger increases when the full-blown rate case is concluded, she added, anticipating a 20% rate hike.
Telco and postal issues are important, but looming is one that may be even more pressing: health care reform and independent contractors.
"This is a tough, difficult issue and one that is part of the fundamental operations of virtually every newspaper," Sturm said. "Because of the activities of the last couple of years, telecommunications is often given center stage, but the truth of the matter is, at least since I've been here, there are issues just as important or more important."
The health care issue "is a serious problem. As it's currently written, it would rewrite the law beyond health care into employment tax law," he explained. "Theoretically, it could have serious repercussions for newspapers and any industry using independent contractors."
What the plan does, he said, is try to stem abuses by employers who move regular employees to independent contractor status to sidestep the cost of providing health care. Legitimate independent contractors, however, have been included in this.
The proposal, Sturm said, "gives the IRS [Internal Revenue Service] carte blanche to rewrite the rules and regulations they dislike and allows the IRS to reclassify legitimate independent contractors as employees. This puts the fox squarely in charge of the hen house."
The good news, he believes, is that "the breadth of this proposal is starting to dawn on some in the administration, and hopefully, they can rewrite this to achieve their objective without going beyond it."
"If they don't, we're going to have an interesting time in the House Ways and Means and Senate Finance committees this spring."
Another issue that could be addressed early was carried over from the end of the last session. It is an amendment to the crime bill sponsored by Sen. Barbara Boxer (D-Calif.), calling for restricting access to Department of Motor Vehicle records by people who request information based on a license plate. News groups are opposed to the action, which would cut off access to important public information.
"Everything's coming up at once: privacy versus open records and open information. Right now, privacy's winning," Sturm said.
There may be hearings as early as mid-January, but the outcome doesn't look promising, he added.
"I think it's a very difficult thing to stop," he said.
"It's one of these things being driven by a couple of horror stories. It's difficult to combat. I can give a whole list of good stories based on this information, and the other side says, 'Yeah, but I can show you how people have died.' Another part of this, the common citizen, ask them if they want their rec-ords public to everybody," he said. "We ought to be, but we're not, on the high ground."
Sturm said he wouldn't be surprised if the media lost on this issue.
"For good reasons, it's difficult to find a compromise position. We're either up or down," he said. "Right now, it's starting to look down."
Striker replacement legislation, prohibiting companies from hiring permanent replacements for striking workers, was approved by the House in 1993 but stalled in the Senate.
The issue is of concern more than ever, however, because of two things, Sturm said.
One is the recent American Air-lines situation, in which the company threatened to hire permanent replacements for striking flight attendants. The other is the North American Free Trade Agreement, "which greatly disappointed the labor community," he said.
"I worry that the administration will bend over backwards to appease labor," he said, adding that however, if the issue does not come up again in 1994, it "could be behind us."
Some observers believe that striker replacement legislation will not garner enough support in the Senate.
One issue that never quite goes away is advertising deductibility.
In 1993, there again were hearings about whether to allow only an 80% deduction for advertising, with the remaining 20% amortized during the next four years. The idea never really gained momentum.
With the massive health care proposals, however, Sturm cautioned that the government is going to need to find money so "it's not impossible it could pop up to fund this. This whole movement toward reducing the deductibility of least favored products portends badly for any business deduction."
In fact, advertising of one least-favored product, tobacco, was targeted by Sen. Tom Harkin (D-Iowa), who introduced a bill to reduce the deductibility of tobacco ads and promotion to 80%.
Harkin said, "These campaigns are outrageous . . . and you and I are helping to foot the bill because it's all tax-deductible."
But when the bill was introduced, American Advertising Federation
president Wally Snyder countered by pointing out, "Tobacco companies, or the makers of any other unpopular product, have the same right to truthfully advertise a legal product."
Another least-favored product, alcoholic beverages, again faced potential legislation that would have required rotating health warning labels in all print, broadcast and cable ads.
Early in the next session, there may be an attempt to mark up the Senate's Sensible Advertising and Family Education Act, which would require such labels.
Although they did not testify at hearings, NAA and NNA representatives presented written comments to the committee, noting that they believe that "a very troubling precedent is set whenever the government dictates the content of speech by private entities. Regulation of commercial speech should be a last resort action of government."
Because of the death last year of a daughter of Sen. Strom Thurmond (R-S.C.) in an automobile accident caused by a drunken driver, observers believe that this bill has a better chance of moving than similar bills have before.
Various bills addressing regulation of political advertising content, access and requirements for presidential debates, and the privacy of telephone records also were introduced in the House during 1993.
A bill addressing electronic FoI and accessibility was introduced at the end of the session by Sens. Patrick Leahy (D-Vt.) and Hank Brown (R-Colo.). It likely will be addressed in 1994.
" '94 is going to be an interesting year," Sturm commented.
?( Tonda Rush) [Photo]


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