Washington

The Art of the Possible

In her first wide-ranging interview since becoming the newest Democratic commissioner of the FCC, Jessica Rosenworcel talks spectrum auctions, retrans, consumer protection and the road to the digital revolution 12/17/2012 12:01:00 AM Eastern

Feeling at Home

For the FCC’s Rosenworcel, family matters matter most

Growing up: “I am from Hartford, Conn. As a child, I also lived in Boston, northern New Jersey and southern Illinois.”

Drumming up support: “My father, now retired, was a nephrologist. My mother has spent the last two decades helping run a soup kitchen in Hartford. I have one sibling—a brother, who is the famous one in the family. He’s the drummer for the band Guster. So my parents have a rocker and a regulator for children. What were the odds of that?”

Keeping her humble:
“I now live in the District of Columbia with my husband, Mark, and our two children—Caroline, age 6, and Emmett, age 3. Like parents the world ‘round, our children are our pride and joy. Plus, nothing in life keeps you humble like having kids. That’s a good thing!”

The pictures on the
wall of Jessica Rosenworcel's FCC office include shots of the first Apple
computer, the first radio and telephone operators in Times Square. The last is
there, she says, "because that is what ‘women in communications' used to mean."

Today, it means
helping to decide the fate of all those media as one of five FCC commissioners
trying to keep up with, and at the same time shape, a communications
revolution.

Dick Wiley,
communications "super lawyer" and former FCC chairman, says of Rosenworcel:
"She has the intellectual capacity and experience to be a very effective
commissioner. She is generally well-respected on both sides of the aisle." That
experience includes helping Sen. Jay Rockefeller (D-W.Va.) craft the Senate
side of the incentive auction legislation that will ultimately reshape the future
of broadcasting.

Rosenworcel joined
the commission in May from her previous post as senior communications counsel
to the Senate Commerce Committee (Rockefeller is currently chair). But it is
also a homecoming. She served as legal adviser to former FCC commissioner
Michael Copps, whose seat she took over. "Michael Copps is a terrific person,"
Rosenworcel says. "He has grace and smarts in spades, and it was a great
privilege to work with him."

And though she has a
Copps-like passion when it comes to issues such as retrans impasses and their
impact on consumers, Rosenworcel is definitely her own person-and commissioner.
She believes the commission should move faster on license renewals and simplify
rules when necessary, but also stay in the business of reviewing mergers.

In her first
wide-ranging interview since becoming the newest Democrat on the commission,
Rosenworcel says of the incentive auctions-arguably the FCC's most imposing
issue over the next several years-that the FCC has a duty to minimize
broadcaster disruption, but that broadcasters have a responsibility to fairly
assess the opportunities the auctions afford them to create new business models
and revenue streams.

Before answering
questions from legislators last week about spectrum, Rosenworcel weighed in
with B&C Washington bureau chief John Eggerton on that topic and
much more. An edited transcript follows.

What is your regulatory philosophy?

I've had the
privilege of looking at communications issues from several different seats. I've
sat in the private sector, in the trenches at the commission and up on Capitol
Hill. That's a range of perspectives in law, business, policy and politics. I
think that helps when I assess the issues before my office and the agency. I've
got a deep practical streak and a healthy respect for the art of the possible.
Communications markets are changing at a rapid clip. In an instant, innovation
can upend what we think we know. But with so much change, I think there are
some values in the law that are constants. Public safety is always a priority.
Competition promotes innovation. Universal service means providing first-rate
communications opportunities across the country. And of course, consumer
protection is essential. At the same time, I think you can pare this down to a
question of confidence. How do we make sure that companies have the confidence
they need to invest in communications infrastructure and services? And how do
we make sure that consumers have the confidence and information they need to
secure, and make full use of, the expanding array of services that are remaking
the way we connect in the 21st century? I think those two questions are
essential for the agency and vitally important for growing our digital economy.

There is constant chatter that chairman Julius
Genachowski may exit next year. Do you have any interest in the big chair?

That is above my pay
grade and not for me to decide. But I can say that it's an absolute privilege
to be here and I am grateful to the president and the United States Senate for
this opportunity.

What is the future of broadcasting?

Broadcasting has
long had a special place in our media landscape and our local communities.
After all, broadcasters can deliver local news and entertainment into our homes
in a way that no other medium can. No one can deny that media markets are
changing and that these are transitional times. But there are new opportunities
for broadcasting on the horizon. Incentive auctions are, above all, voluntary.
But for those who wish to participate, there will be new ways to develop
channel-sharing agreements and new abilities for revenue to help strengthen and
grow station services and content. We also need to keep an eye on what other
countries are doing with digital television. I'm especially intrigued by the
effort to develop a single, global broadcast standard, and the opportunity this
provides to bridge the gap between different signal formats and transmission
systems.

You have said that the keys to incentive auctions are
simplicity, fairness, balance and public safety. Talk about what fairness means
in terms of broadcasting.

I think fairness has
two components. First, fairness means that, for broadcasters that want to
remain on the air, the commission should minimize unnecessary disruption and
maximize the ability of the public to continue to receive free, over-the-air
television. We have a duty to remain faithful to the statute. Congress
developed a number of built-in safeguards for broadcasters choosing to stay on
the air. For instance, the Middle Class Tax Relief and Job Creation Act
protects UHF stations from being involuntarily relocated to VHF channels. In
addition, the commission is required to make all reasonable efforts to preserve
station geographic and population coverage areas. The commission also must
coordinate with our international counterparts along the border. I know the
agency already has engaged with our colleagues in Canada and Mexico and will
need to continue to do so during this process. Second, I think fairness also
requires broadcasters to assess the opportunities available to them in the
incentive auction process. Broadcasters will have new opportunities for channel
sharing that preserve must-carry rights. There are also voluntary incentives
available for relocating from UHF to VHF. These options can lead to new
ownership models and new revenue streams that broadcasters can use to support
new content.

Does there need to be a spectrum inventory?

There's no question
that a spectrum inventory can be helpful, to the extent that it's technically
and practically feasible. I believe that this agency and our counterparts at
the National Telecommunications and Information Administration, with
responsibility for federal spectrum, should regularly assess how this resource is
being used. And, absent security concerns, this information should be available
to the public. But we need to be honest. The demand for our airwaves is going
up while the supply of unencumbered airwaves is going down. We need to approach
this spectrum challenge with an "all of the above" strategy. This will take
studying spectrum use, considering changes in topology and spurring new
technologies-all at the same time.

What should happen with the open retrans docket?

I know that the vast
majority of retransmission consent negotiations occur quietly and without
incident. However, it's also true that we've had some high-profile disputes
when local broadcast stations and cable and satellite companies fail to reach
agreement over the terms of carriage. This is not a simple issue. But it is not
fair when these disputes leave viewers with dark screens on their television
sets when they reach to turn on the game, their favorite show or the local
news. The parties to these negotiations have an obligation under the law to
negotiate in good faith, and they should be held to this standard. Above all, I
do not want to see consumers caught in the crossfire and the collateral damage
in these disputes.

Does the FCC need to do anything to clarify that
standard, or is it OK as it is?

The majority of
these negotiations occur without incident, and that's a good thing. But I think
that if the number of disputes continues to increase, and the number of
consumers who get saddled with dark screens for extended periods grows, we are
going to have a problem on our hands and we are going to have to do something
about it. If that happens, I think the agency is going to have to scour its
statute and a way to use that good faith authority to prevent further consumer
disruption.

What should the FCC's next move be if the court throws
out the Open Internet order?

I have no legal
crystal ball. I recognize that the court could rule a number of ways. For my
part, the essential thing is ensuring that we balance incentives for network
deployment with the incentives for the development of Internet-based services
and applications.

You have advocated regulatory humility when it comes
to technological change. What should the FCC's role be in an over-the-top video
delivery future?

I think that the way
we watch is changing. We are increasingly going to look for the content we
want, when we want it-on any screen handy. All of this competition and
innovation is good for consumers. It should mean more options and lower prices.
The commission should not favor one technology or business plan over another.
It should be up to consumers to decide which services they want! And if our
rules are barriers to entry or distorting the evolution of video markets, we need
to take steps to address that.

Former FCC chairman Michael Powell says the FCC should
get out of the merger review business and leave that to the Department of
Justice and the Federal Trade Commission.

I respect former
chairman Powell's perspective. But I disagree. Consider that spectrum is a
scarce resource. The commission has been directed by Congress to make sure this
public resource is used in the public interest. As a result, in the
Communications Act, Congress directed the commission to review applications to
transfer ownership of wireless licenses to ensure that the transfer is
consistent with the public interest, convenience and necessity. This is a
different review standard than the antitrust assessment that guides the
Department of Justice and [the] Federal Trade Commission. The purpose is
different, and the issues are different. There are broader issues in spectrum
licensing, for instance, that merit consideration and are outside of antitrust
purview. However, I do believe that the commission needs to move faster and
reach decisions on license transfers at a swifter clip. This is the Internet
era, and it is time for the agency to move at the pace of digital-age demand.

Speaking of digital, what's on your iPod?

First, Guster,
because I have filial duty [see "Feeling at Home," above];
Adele-I have a lot of music. When you have a musician in the family, you listen
to a lot of music-Tom Waits, Rufus Wainright, Lucinda Williams, Shakira, the
Pogues, Stevie Wonder, Blondie, Ray LaMontagne-he used to open for my brother-
Otis Redding, Pat Benatar, Patsy Cline and Joan Jett.

What should happen
with the still-open Title II docket?

Title II regulations designed for the era of basic telephony
are not uniformly appropriate for the technologies and services of the digital
age. 

I think the Commission's Open Internet rules are an attempt
to wrestle with this, and apply basic values in the Communications Act-like
nondiscrimination and service on just and fair terms-to the services of the
digital age. 

For nearly a decade now, the Commission has classified
broadband as an information service rather than a telecommunications service. On
the one hand, there has been substantial reliance on this regime. It has been
upheld by the Supreme Court. On the other hand, it has on occasion required
some legal contortions. It can throw into question some important values in
Title II of the Communications Act.

In the end, I do not believe the semantics should guide us.
The questions are more fundamental. How do we protect consumers? How do we
encourage network investment? How do we foster competition? How do we ensure
universal service? And how do we provide public safety with the resources they
need? We can close the Title II proceeding, but these fundamental questions
need to be answered. 

Should the FCC open
a separate docket on over-the-top video, or deal with it in the Sky Angel complaint?

I believe the Sky Angel complaint [related to Discovery's plan to terminate its agreement with the
distributor more than four years earlier than originally agreed upon, which Sky
Angel calls discrimination] is a restricted proceeding, so I can't talk
about it. But I can say what is obvious, which is the way we watch is changing
and this agency is going to continue to struggle to apply the laws of the
present to the way we are going to watch in the future.

We have asked questions, I believe in a public notice about
certain definitions in the statute, but I think that this is a big issue and we
would benefit from having a broader proceeding and getting more industry input.

E-mail comments to jeggerton@nbmedia.com
and follow him on Twitter: @eggerton

Feeling at Home

For the FCC’s Rosenworcel, family matters matter most

Growing up: “I am from Hartford, Conn. As a child, I also lived in Boston, northern New Jersey and southern Illinois.”

Drumming up support: “My father, now retired, was a nephrologist. My mother has spent the last two decades helping run a soup kitchen in Hartford. I have one sibling—a brother, who is the famous one in the family. He’s the drummer for the band Guster. So my parents have a rocker and a regulator for children. What were the odds of that?”

Keeping her humble:
“I now live in the District of Columbia with my husband, Mark, and our two children—Caroline, age 6, and Emmett, age 3. Like parents the world ‘round, our children are our pride and joy. Plus, nothing in life keeps you humble like having kids. That’s a good thing!”

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