LAS VEGAS – NAB SHOW – Cozying up to broadcasters as his new best friends, FCC Chairman Tom Wheeler urged US TV and radio station owners to back the Commission's new net neutrality rules, and its plans to sell off more TV spectrum for wireless broadband use.
Speaking before a packed house at the annual National Association of Broadcasters (NAB) here Wednesday, Wheeler called on broadcasters to join his crusade for Title II regulation of Internet service providers. Largely brushing off the flurry of lawsuits lodged against the new net neutrality rules by cable, telecom and wireless industry groups, he argued that the rules will enable broadcasters to use the Internet freely to distribute their content, without any interference from any cable, telco or wireless broadband "gatekeepers" of the web. (See NCTA Appeals Net Neutrality Rules and ACA Appeals FCC’s Net Neutrality Rules.)
"I liken this to the concept of must-carry, just updated for the 21st Century," he said. "When you want to offer something over the Internet, no one should stand in your way."
Effusively praising broadcasters as "first informers" and "an important part of our future," Wheeler also told them that the FCC's Open Internet order "expands opportunities" for "your most important products" -- local news and information. "Our Open Internet goals and yours are the same," he said. "There's no question that the public interest is served by a healthy broadcast industry with robust reach."
Appealing to broadcaster interests again, Wheeler urged station owners to embrace OTT video delivery as a way to take advantage of cable operators' current market vulnerabilities. Noting that the FCC's latest annual video competition report showed that the US pay-TV industry lost subscribers for the first time ever, with cable accounting for nearly all of the losses, he contended that broadcasters should leverage OTT to extend their reach and wreak more competitive damage on cable. "The best way to leapfrog the competition is to leapfrog yourself," he said.
Wheeler also noted that more US consumers are dumping their pricey pay-TV subscriptions in favor of taking broadband and switching back to over-the-air (OTA) TV reception. That growing group includes the FCC chairman's own daughter, who recently relied on her father to install a digital TV antenna in her home. Believing this trend will continue, he said he expects to see more broadcast networks like CBS and HBO incorporated into OTT offerings.
Tackling another sensitive subject in spectrum auctions, Wheeler implored broadcasters to support the FCC's plans to sell off excess broadcast spectrum in the 600MHz band to wireless carriers. With that incentive auction now slated for early next year, the FCC chairman is aiming to round up as much spectrum as possible to meet the burgeoning wireless demand and further fill up the federal coffers. In the Commission's recent Advanced Wireless Services-3 (AWS-3) auction of 65MHz of spectrum in the 1.7GHz and 2.1GHz bands, it raised a record total of nearly $45 billion earlier this year. (See FCC's Monster Auction Ends at $45B in Bids.)
Describing the upcoming auction as "a once-in-a-lifetime opportunity to expand your business model on somebody else's dime," Wheeler said the agency is "repacking" the 600MHz band for the wireless industry in a way that will maximize the spectrum's market value, increasing the value "above that which could be achieved from you going out and selling it yourself." He stressed that the FCC is now working to simplify the rules and procedures for the auction and make them more accommodating and "risk-free" to broadcasters, including allowing them to drop out of the process at any time and still share channels with the new wireless spectrum owners.
Wheeler said the Commission will soon publish its rules and procedures for the incentive auction. He and other agency officials are now conducting a road show for the auction, vising broadcasters in markets across the country.
Finally, Wheeler dismissed critics who have suggested that the record-setting AWS-3 auction has already tapped out the market for spectrum purchases. He noted that AT&T Inc. (NYSE: T), T-Mobile US Inc. and Dish Network LLC (Nasdaq: DISH) have all indicated that they will participate in the bidding again.
— Alan Breznick, Cable/Video Practice Leader, Light Reading