Editorial: Verify, Then Trust

Well, we have to give FCC Chairman Tom Wheeler transparency points. According to various sources, FCC staffers have been briefing a host of stakeholders on the commission’s draft proposal for an incentive auction framework.

One stakeholder called it unprecedented, given that the chairman had yet to circulate the item to the other commissioners (though they were briefed along with the stakeholders).

Broadcasters were not happy with parts of the order, according to sources—both those wanting to sell out at the right price and those wanting to stay in if the FCC doesn’t want to drive them out of business.

So, in the spirit of comity, and in the interest of getting it all on the record, we will take Wheeler at his word when he told a National Association of Broadcasters convention audience last week that “the interests of the American people are served by a vibrant broadcasting industry and include the continuation of broadcasting’s historic role as a principal conveyor of news and entertainment, and especially of its invaluable role as ‘first informer.’”

Broadcasters liked what they heard—and Wheeler wasn’t even finished. “Broadcast licensees have a powerful opportunity to bring the benefits of competition to the new media market,” he said. “When I look at broadcasting, I see the traditional public trust where you received spectrum and in return provided important public benefits—and I don’t see that changing. But I also hope we can see local broadcast licensees as a growing source of competition in the digital market.…For all the wonderful things the Internet has done, one place that it has yet to deliver on its promise is local content. When I was a [venture capitalist], I looked at business plans to plug that gap but did not invest because the cost of developing the content and the cost of promoting it made the plans unsustainable. You don’t suffer from either of these limitations. News is already a high-margin activity, and your unsold avails are the ultimate promotion vehicle.”

He was preaching to the choir, obviously, but we would be happy to put Wheeler on the cover of B&C under the headline, “Friend of Broadcasters Delivers on His Promises.” He can do more than watch for licensees to become increasingly competitive. He can help.

Another one of those promises: JSAs that are in the public interest will be allowed.

The $64,000 question becomes: What defines that public interest? Wheeler says diversity and localism are big parts of it. Well, broadcasters can’t be diverse, or local, if they can’t be competitive. And to be competitive in today’s video marketplace, broadcasters need scale and synergies. That requires not hamstringing them with yesterday’s regs.

Wheeler talked again about sidecar deals doing an end-run around the FCC’s ownership regs. But that’s because the FCC has been unwilling to lift the restrictions even as it pushes wireless broadband and talks about shrinking broadcast audiences.

Just as broadcasters are at an inflection point in their future, so too is chairman Tom Wheeler, and he is far more than an observer.

“We look forward to working with you as broadcast licensees—who have meant so much to this nation—reach for and define new levels of service for Americans,” said Wheeler. We like the words, but as one broadcast audience member added last week, actions speak a whole lot louder.