Wheeler: Merger Reviews Should Be Fact-Specific

In early questioning by Senate Commerce Committee leaders,
FCC nominee Tom Wheeler pledged to conduct merger reviews according to the
specific facts and legal precedents of those mergers and said that the
broadcast incentive auctions should be expedited.

Broadcasters have argued that the FCC should not rush them,
and rather get them done right instead of just getting them done.

Wheeler's view came in response to questions from senators
in early questioning in his nomination hearing. Ranking member John Thune
(R-S.D.) and Sen. Roy Blunt (R-Mo.) were both concerned about Wheeler's
opinions, expressed in a 2011 blog posting while he was working as a venture
capitalist, that the FCC could have put conditions on the AT&T/T-Mobile
merger that could then be more generally applied.

Wheeler said that had been "hypothetical
speculation," and that a regulator's charge for reviewing mergers, a job
he said was one of the FCC's most important, is to look at statutory directives
from Congress, the facts in a specific merger and legal precedent.

Asked by Blunt whether the FCC would "continue" to
apply merger conditions "that don't directly deal with competitive
issues," Wheeler echoed an earlier response to Thune. "I believe that
the merger review process deals with a specific case, the facts in that
situation and is guided by the law and precedent. And that ought to be the
defining four corners of any consideration."

Sen. Jay Rockefeller (D-W. Va.) asked Wheeler whether he
felt the incentive auctions should be held ASAP -- Rockefeller is concerned
about them raising enough money to pay for FirstNet, a first responder public
safety network he has been championing since 9/11.

"I think it is absolutely crucial that the incentive
auction move on an expedited schedule," Wheeler said emphatically. He also
said that he understood the need for incentive auction rules that provide
enough funding for FirstNet.

Depending on who you ask, ensuring that return includes not
putting conditions on the auction, or new limits on local market spectrum
holdings, that discourage participation by AT&T and Verizon.

While Wheeler said the auctions should be expedited, he
suggested that could be an unprecedented challenge. "The incentive auction
is something that has never been tried before. I liken it to a Rubik's cube. On
one side of the cube you have to provide incentive for broadcasters to want to
auction their spectrum. On another side of the cube you have to provide a
product in a way that incentivizes the wireless carriers or however the bidders
may be to want bid for that spectrum. And then in the middle, on an almost
real-time basis you have to have a band plan that is constantly changing to
reflect the variables. That is why this has never been tried before. This is a
monumental undertaking."

Wheeler took a pass on a question on the FCC's authority in
retransmission disputes. Sen. Blunt pointed out that both FCC chairman Julius
Genachowski and his predecessor interpreted FCC authority narrowly when it came
to retrans disputes and said that new changes in policy would have to come from

Wheeler said he was not dodging the question, but
sidestepped it saying he needed more time to study and for courts to weigh in.
"I look forward to looking into that issue and trying to get my arms
around it," he said, "particularly in light of some court decisions
and a pending Second Circuit action that has been brought on a related kind of
issue... I think this is a situation that is in flux."

As expected, Rockefeller got Wheeler's pledge that he would work
to support and expand the E-rate program, which subsidized cutting-edge
technology -- more recently high-speed broadband in particular -- to schools
and libraries.

Rockefeller also urged Wheeler to use the FCC's
"vast, vast" authority to "advocate for the public
interest." He said the FCC in recent years had become too polarized and
politicized," and suggested it should be refocused on protecting
innovation and consumers.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.