Guarded Optimism Among TV Executives that Goodwill Between FCC, Broadcasters Is Returning

How the FCC balances priorities between freeing up spectrum for wireless broadband in the incentive auction and promoting broadcasting was a key concern of commercial and noncommercial broadcast respondents to our survey. Some said the extent of that balance will be shown in how the process plays out to repack channels into a diminished part of the TV band in conjunction with the incentive auction. Companies that own affiliates of the Big Four networks and their association said they've stepped up engagement with the FCC, with station executives making more visits in recent years to Washington and also meeting more frequently with members of Congress in districts where they have outlets. They said they hope that engagement pays off with a better understanding of broadcasting at the commission and among members of Congress.

Raycom Media CEO Paul McTear is optimistic because Wheeler seems “to be open and seems to bring a balanced thought process to what’s ahead” with the incentive auction, said the head of the company that owns or serves 53 U.S. TV stations. That’s based on McTear’s “initial take” on what Wheeler has said to others since he became chairman, said the CEO. “For him to step in on this whole auction, repacking issue, it’s an awful lot to assimilate and to try to understand.” The delay disclosed in early December (http://fcc.us/K2R75z) doesn’t surprise McTear, he said. Genachowski, who had no comment for this report, and three other ex-FCC chairmen from both parties also backed Wheeler’s delay (CD Dec 10 p6; Dec 13 p19). The FCC declined to comment for this report, said a spokesman, who referred us to past Wheeler comments on the importance of the incentive auction and his saying it’s been his top issue.

LIN Media CEO Vincent Sadusky is “encouraged” by Wheeler’s comments about the importance of broadcasting and how it’s an efficient distribution mechanism, said the head of the company serving or owning 43 TV stations. Sadusky takes such remarks “at face value” and such comments are “a good sign,” he said. “I definitely applaud his focus on competition.” Wheeler has seemed to be “setting the stage for a good dialogue” on things like international coordination on the repacking of TV stations and how the repacking will work, said Sadusky. “The industry collaborated pretty well” with government during the 2009 full-power TV station digital transition, which was “relatively smooth,” he said. “I just want to ensure that we have the same transparency and the same seat at the table to ensure this goes well” with the auction, said Sadusky.

Wheeler and the other newest FCC member, Commissioner Mike O'Rielly, seem to “really want to work with us” and “share that vision” about broadcasters’ role, unlike what happened with Genachowski, said NAB auction pointman Rick Kaplan. He said he’s optimistic “we have a chairman who seems to be very open minded about that.” It’s the industry’s job to show why broadcasters are innovative and “don’t want to run from” their public-interest obligations and have a “really good story to tell,” said Kaplan, NAB executive vice president. In 2009 when Genachowski became chairman, there was “an abrupt policy shift at the FCC,” which became “singularly focused on broadband,” said NAB President Gordon Smith last month at a Media Institute luncheon (CD Nov 22 p9) (http://bit.ly/1d6xMKT). “Unfortunately, rather than supporting innovation in our industry and working with broadcasters so that we can continue to outpace the rest of the world, the commission has had a different, in fact, a myopic focus."

Broadcasters: Seeking Solutions

An industry both engaged with Congress and the FCC and seeking solutions to spectrum and other issues is a priority to broadcasters, so it won’t be seen as obstructionist, said respondents to our survey. Kaplan cited NAB’s reaching a deal last month with the Defense Department for DOD to largely vacate the 1755-1780 MHz band and move operations to the 2025-2110 MHz band, which carriers supported (CD Nov 26 p1). Survey respondents said they hope the FCC will deregulate ownership rules. Some said they thought the FCC wasn’t sufficiently engaged with industry before draft 2010 quadrennial review ownership rules circulated in 2012 by Genachowski, an order that included making it harder for a company to serve more stations in a market than it’s permitted to own. Wheeler yanked that draft from circulation (CD Dec 16 p1).

That Wheeler joined colleagues to vote at his first meeting to clarify (CD Nov 15 p3) that radio and TV stations could be more than 25 percent foreign-owned, an item circulated by now-Commissioner Mignon Clyburn when she was acting chairwoman, left some respondents optimistic that he may give consideration to other deregulation. “That’s an indication of at least some willingness to really take a look at these age-old rules,” said Sadusky. The agency “is engaged in an extensive process to assure that spectrum is put to its highest and best use,” said Wheeler Nov. 14 in voting for the declaratory ruling, a statement the FCC spokesman referred us to. “We have heard from the broadcast industry” that the agency’s interpretation of Communications Act Section 310(b)(4) on foreign ownership exceeding 25 percent “is widely perceived as an obstacle to new investment opportunities,” said Wheeler.

The “unprecedented times” in media that are “challenging” to the industry make it important to have open lines of communication between the FCC and broadcasters, said Sadusky. LIN executives speak with commissioners and others at the FCC “much more often,” said Sadusky: “Over the last several years, we've consciously stepped up” visits there. “These are challenging issues,” so “to have an ongoing dialogue” helps with the resolution, said Sadusky. “An ongoing dialogue as these ideas come up makes a lot of sense” with the FCC, before a rule is proposed, he said. “We just like to have a good debate about it prior to something really gaining momentum.” What LIN wants from the FCC is “adequate opportunity to have our views expressed,” said Sadusky.

In Smith, who changed the culture of NAB to communicate more with outside parties than occurred under his predecessor David Rehr, “we have the right guy at the right time” to represent the industry, said Raycom’s McTear. “Our television stations, and the radio stations, are better represented.” That’s as NAB hasn’t stood in the way of broadcasters going to “knock on doors at the FCC” and also meet with members of Congress in districts where a company owns stations, said McTear. He said he hopes there will be more “grassroots advocacy” by stations and broadcaster state associations locally to relay the message NAB and some companies pass on in Washington at the FCC and on Capitol Hill.

Kaplan hopes NAB “can build a very good trust relationship” with FCC officials “through our actions and not just our words” as the association works to find solutions to issues and not just raise problems to be solved, he said. “We have to show that we're really engaged.” Smith is trying to change NAB’s “reputation in the past” of opposing change, and “hopefully people will see that we are constructive,” said Kaplan. “We have to make sure, especially at the FCC with the background of it being a very federal and not very local-based body like Congress,” with members from districts or states, that broadcasting is seen as having much import, he said. “We're eager to work with the commission to find ways to ensure that we're a vibrant industry, that we're a world leader, much like our broadband industry should be, and that we're accomplishing things with them, instead of in spite of them."

Public Broadcaser’s Role

Some leaders in the noncommercial broadcasting community said they have had good relationships and dialogue with the FCC. The Association of Public Television Stations has “terrific and constructive” relationships with most of the commissioners, said Patrick Butler, APTS president. The organization is looking forward to getting to know Commissioner Mike O'Rielly, he said. APTS is satisfied with the dialogue that it has had with the commission on the incentive auction, including at the bureau and staff levels, he said. “We're quite happy with the audience we've received from the FCC at every level,” he said. “We've had particularly good conversations with respect that there are no white spaces in the coverage area of public broadcasting."

APTS plans to continue making a case for public broadcasters and their need for a successful repacking process, Butler said. “We're laboring under a $1.75 billion repacking budget that Congress has established for the commission and public broadcasters ought to be at the front of that repacking budget,” he said. “The FCC hasn’t signed off on it yet, but they understand our position.” APTS also will work with the FCC on protecting translators for the public broadcasting community, he said. “We're trying to impress on the commission our need to protect our translators and make sure our translators in remote areas are protected in the auction process."

There’s a new cast of characters in terms of what the future may hold for both traditional broadcasters and those involved in broadband, said Craig Parshall, general counsel for National Religious Broadcasters. He said he’s eying the kind of reform that Wheeler will initiate, and he hopes it will include decreasing “the length of time for which some of these proceedings are allowed to languish.” The FCC has “a huge menu of issues that they're handling during a revolutionary time in communications,” he said. “On the other hand, there needs to be a shot clock ... some constraint on the commission when they tee up an NPRM and broadcasters and broadcasting associations and lawyers weigh in on those proposals."

NRB still awaits a decision on an NPRM that stemmed from the association’s request to allow noncommercial stations to raise funds on-air for other nonprofit organizations (CD Feb4 p8). “A year and a half for something as straightforward as that proposal indicates that it’s a problem that needs to be addressed,” Parshall said. This issue has “existed forever,” and isn’t particular to Genachowski or his predecessors, he said. It would be beneficial for the FCC “to lay out as a whole exactly where the list of priorities are going to be in the coming years under Wheeler,” he said.

Parshall said he'd like to see how the FCC balances the priority between Internet communications and broadband issues and traditional broadcasting. “I would like to see reaffirmation in freedom of speech issues for broadcasters.” However, he repeated NRB’s stance that indecent content for minors is an exception to free speech: “We gave them suggestions on how to tighten up their regs, while honoring the creativity and broadcast freedom of broadcasters” and ensuring “that indecency regulations will continue in some form. In maintaining the rapport it has with the FCC, NRB plans to remind the commission that “faith-based broadcasters have a very different set of priorities and concerns than commercial entities,” Parshall said. “We need some more dialogue from our vantage point as faith-based broadcasters.”

The commission’s interest in broadband was influenced by the National Broadband Plan, Butler of APTS said. “They were naturally focusing on broadband issues and we had an opportunity to participate in that dialogue,” he said. “As we're getting now to the spectrum auction, the commission is naturally turning more to a broadcast focus and how to accomplish auctions that satisfy everybody and makes the auction successful for broadcast and wireless people and for the American people.” ,