ACA Summit: Wheeler Defends Joint Service Ruling

Washington, D.C. — Calling broadcasters' joint service agreements for signal retransmission a "charade" and insisting that "the negotiating table has to be level," FCC chairman Tom Wheeler defended Monday's commission ruling that places strict limits on such TV ad sale arrangements. Wheeler said the original intent of the policy was "being undone by legal legerdemain" and that "things had developed that were perverting the rules that Congress has laid out" for such ad sales deals.

Refraining his self-imposed mantra of "Competition, Competition, Competition," Wheeler called the joint sales activities "harmful to competition." He also cited ways in which some deals were structured so that outside companies owned large portions of some broadcast stations and reported to the Securities and Exchange Commission that they were station owners, even though under FCC rules, those companies were not the licensed owners.

Monday's controversial 3-2 FCC decision has drawn opposition from Congressional Republicans as well as the commission's two Republican members, who contend the sales restriction will hurt small companies.

Wheeler's strong defense of the ad sales ruling came amidst a wide-ranging conversation at the American Cable Association policy summit in Washington. In an on-stage chat with ACA president Matt Polka, Wheeler stood by his open Internet stance, offered some clues about the commission's look into program distribution and encouraged small and rural cable operators to take part in upcoming Internet Protocol transition field trials so that the FCC can understand how the IP transition will affect all segments of the wireline sector.

He also insisted that the recent Circuit Court ruling that ordered the FCC to revise its network neutrality policy provides "a roadmap for examining that jurisdiction."  Wheeler vowed that the FCC is "not going to revolutionize the approach to open Internet," but rather that the court directions enable the agency to establish rules that meet his three principles for such a policy: transparency, non-blocking and non-discrimination. Wheeler said that a new rulemaking plan will be ready "by Spring."

In response to Polka's question about "content neutrality," Wheeler insisted that the FCC must come to "data-driven conclusions," not ones based on "what-could-happen anecdotes."

Referring frequently to his past incarnations as chief lobbyist for the cable industry and mobile phone industry, Wheeler acknowledged that he tries not to succumb now with a prototypical response to questions about specific policies. With a wry laugh, he said that usually commissioners skirt tough questions by saying that the appropriate FCC bureau staffs are examining the issue.

But he said, in response to Polka's question about the cost of cable programming, that the staff is exploring whether the National Cable Television Cooperative should be able to file a complaint about the process it is using to handle program deals on behalf of its members.

As for the development of next-generation telecom technology, especially the IP transition, Wheeler indicated that the Commission may adopt initial proposals "by late summer or early fall."

"By mid-year, we will identify trials taking place, and we'll watch them like a hawk," he said. "I'd love for you guys to do trials," he added, looking at the audience.  "We need to be able to deal with issues that come as a result of moving forward: competitive issues, access issues."

He said that he would like field trials to include "atypical situations"—not just big-city telecom situations—"so that we can answer questions" about how to apply technology elsewhere.

"The goal of universal broadband is to reduce the cost," he said. "That's a no-brainer."

Wheeler lingered on a discussion of E-rate for educational institutions, citing "today's broadband goal of at least 100 meg, scalable to a gig" and asking, "How do we get there?" 

"We need to readjust the program so that twenty-first century monies are being put to twenty-first century solutions," he said. Wheeler also promised a spring timetable for an FCC E-rate examination.

Polka's final question focused on Wheeler's recent book, "Net Effects." Polka asked the chairman which is his favorite chapter title in the free e-book, and Wheeler (as usual) said the first one: "Dare to Fail."

"You can always correct a mistake, but an opportunity lost is squandered forever," Wheeler concluded.

Gary Arlen

Contributor Gary Arlen is known for his insights into the convergence of media, telecom, content and technology. Gary was founder/editor/publisher of Interactivity Report, TeleServices Report and other influential newsletters; he was the longtime “curmudgeon” columnist for Multichannel News as well as a regular contributor to AdMap, Washington Technology and Telecommunications Reports. He writes regularly about trends and media/marketing for the Consumer Technology Association's i3 magazine plus several blogs. Gary has taught media-focused courses on the adjunct faculties at George Mason University and American University and has guest-lectured at MIT, Harvard, UCLA, University of Southern California and Northwestern University and at countless media, marketing and technology industry events. As President of Arlen Communications LLC, he has provided analyses about the development of applications and services for entertainment, marketing and e-commerce.