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The Life of O’Rielly

WHY THIS MATTERS: As a member of the Republican majority, Michael O’Rielly is a key part of the FCC’s deregulatory push.

FCC commissioner Michael O’Rielly is not ready to start regulating edge providers, such as Google and Facebook. For one thing, he says, the commission lacks that authority. For another, he is leery of adding “new burdens” on edge providers that don’t make sense anymore.

The commissioner is more interested in removing regulations to let all flowers bloom. That includes broadcasters, which he said are already doing a great job but would still benefit from getting out from under some legacy regulations.

But while he is all for blooming, the commissioner is also for whacking away at deregulatory weeds, including children’s television mandates he has suggested have been outstripped by market events.

O’Rielly said he is ready for Congress to settle the network neutrality debate, even if he doesn’t like the result, but he ultimately expects the courts will have to be the ultimate arbiter of some of the FCC’s decisions. He talked about these issues and others with B&C.

Did the broadcast ownership deregulation item go far enough or should the commission have done more?

There is a lot more that we will hopefully look at as part of the quadrennial [the FCC’s congressionally-mandated regulatory review] at some point. [FCC chairman Ajit Pai] is committed to starting that process this year.

One of those issues that the chairman has opened an inquiry into is the 39% national audience reach cap. Broadcasters have been arguing for leaving the cap alone but extending the 50% discount to both VHF and UHF, essentially doubling the cap. But you have issues with the FCC’s authority. Are its hands tied on the issue?

My argument has been that Congress did not give the FCC authority to change the cap, but I have been supportive on moving forward on an item that tees that up.

Some people disagree with me and say that I am crazy and misreading the statute or misremembering my experiences [as a former top congressional staffer who worked on communications issues]. They make some colorable arguments on why the cap can be changed. So, I have been arguing that it should be litigated out. So, let’s do an item and let the court decide on whether we do or don’t have the authority.

Whenever the chairman indicates he wants to move forward, I’m going to look at the record to determine what the number should be.

I have been reading stories on the filings and different ideas. You highlighted the National Association of Broadcasters’ idea [of extending the discount to VHF stations], which may be one. Others have said you shouldn’t have a cap at all. Others have said you kind of split it based on whether you are an O&O or an affiliate.

I will digest all of those at the right time. I’m sure there are probably some more different flavors of that going forward.

Is it an item where you will vote and let the courts decide, though?

I have been supportive of moving forward on the cap. I don’t actually think that 39% makes any sense, but I do think our hands are tied. Others think our hands aren’t tied. I just want to get to the point where it is litigated out and we’ll see who’s right.

Talk about kids TV for a minute. The chairman has put you in charge or reviewing the children’s-TV rules — a mandatory three hours per week of educational and informational programming in at least half-hour increments. What is wrong with quantifiable mandates?

That is one part of it. There are many parts that go into our kid-vid rules that have been modified over the years.

But, first and foremost, I think we have to ask the question: How has the market changed significantly since our implementation of the rules to get to the three hours and the different components that go into kid vid?

I would argue that the market has changed significantly and there are a lot of other players getting media attention, and rightfully so. A number of those market directly and intentionally to children, that focus on bringing good programming to children because they see the benefit. So, we are trying to figure out how do our rules still make any sense, and if they do, what should they look like.

But you appear to already have some pretty definite ideas?

I came forward with a fairly strong proposal and suggestions to get some focus on the issue, and the chairman came back and said, you know what, let’s look at this methodically, but I would like you to lead it. So, now I am talking to every entity that may be out there that have issues or are interested, and try to figure out what to recommend.

Any news on the timing of that?

I would like to, hopefully, get something concluded by the end of the year. That would be a goal.

The Restoring Internet Freedom Order pre-empts state net neutrality laws. It doesn’t seem as clear how that applies to net-neutrality language in state contracts, which is another tack some states are taking? Is it clear to you?

We are still getting our arms around exactly what those look like and each state looks a little different.

We’re going to see how much authority we have in terms of the purchasing power issue. The real question is some of the most egregious efforts where it is not about that, it’s about setting our own rules for everybody to operate under. We have to work through those issues and see what the exact statutes are that are enacted by states and localities to see what actions would be pre-emptible.

So, ultimately the courts are going to have to decide that one, too?

I suspect that’s a fair assessment. Every decision on net neutrality has been litigated out and I expect this one will be, too.

What is the best way to resolve the net neutrality debate once and for all?

I have supported Congress addressing this through legislation. Even if the outcome is something I may not ultimately like, when they speak on an issue it’s very helpful for my purposes.

I think there are many members who are interested in legislating on this topic. They will figure out the best timing to do things. In the meantime we will take our actions and wait accordingly.

Should new net neutrality regulations, if there are any, include the edge?

We don’t have that authority. If the Congress were to give it to us that is one thing. I am leery about adding new burdens on to the edge providers just as I am with adding burdens onto ISPs. I think that the rules themselves against throttling or blocking are less objectionable, but I still wonder about their value. To extend them to edge providers is not the direction I would seek to go.

But we will just have to see if that is something Congress gave us the authority to do.

You were at the NAB Show, correct?

Yes.

What was the heart of your message to broadcasters?

Our obligation is to enforce statutes, but also to remove those burdens that no longer make any sense. That is the heart of the quadrennial and it has been part of the effort of the chairman in what he has called “media modernization” to reduce these burdens that no longer make any sense, that are not beneficial and have costs in compliance times and burdens on broadcasters.

So, we are trying to lighten the load, rightfully, without undermining the service to consumers.

I think broadcasters do a great job with that and we can remove burdens and make their job a little easier.

They should know that the FCC is cognizant of the benefits they bring over all to serve Americans. It may not have been that way in the last commission, but we have a different commission and a different approach. They should know that their views are thought of highly here.