The O’Rielly Factor

The newest FCC commissioner’s voice could help shape issues from regs to retrans to auction legislation

Why This Matters

WHY THIS MATTERS
The interests of a new FCC commissioner offer a view of how communications policy will be molded in a vital time for the industry.

Michael O'Rielly seems younger than a 20-year veteran of the congressional lists, with an earnest manner, a firm handshake and a tendency to look directly at you when he speaks.

And the recently minted FCC commissioner— sworn in last Nov. 4—appears still to be getting his sea legs, boning up on the myriad tough issues before the commission, including the IP transition and spectrum. But he promises to use his bully pulpit to make a difference once he has settled in.

Though he is new to the FCC, O’ Rielly is hardly a stranger to telecom policy. He was a House and Senate Republican staffer for most of those two decades and was in the room when the 1996 Telecommunications Act was being hammered out.

He calls it “disgraceful” that the FCC has not concluded its 2010 quadrennial media ownership review and reported back to Congress. And having been there when legislators drafted key provisions of the 1996 law, he also believes the FCC and the courts have gotten it wrong.

In his first Q&A since joining the commission, O’Rielly spoke with B&C Washington bureau chief John Eggerton about retrans, cross-ownership and more. An edited transcript follows.

Talk about the quadrennial media ownership review and the joint sales agreement item teed up for a vote at the commission on March 31.

I have deep reservations about the efforts underway to limit JSAs [joint sales agreements]. I have spent a lot of time reading the record, which shows that JSAs have been extremely beneficial to communities. Some broadcasters wouldn’t be able to produce local news and diverse programming without these agreements. And we are going to find a way to harm diversity and local news? It seems like a backward step, and I don’t see why we would spend our time doing this.

What about the other parts of the item, including the retrans proposal and not loosening any ownership regs?

I have to look closer at the retrans proposal [and other elements] and the underlying authority provided to the commission. My first obligation is the statute.

And on not loosening any of the crossownership regs?

I have a deep problem with that because, similar to [Section 706, requiring the FCC to report annually on whether broadband is being deployed to all Americans in a reasonable and timely fashion], I was there for 202(h) negotiations, and 202(h) [which created the biennial—then quadrennial—media ownership rule review] was meant to go one way. We wanted to put some things in statute to make the commission review its media ownership rules to reflect the current media marketplace. And 202(h) was intended to deregulate. But if it plays out this way, there will be new burdens and no relief.

I think the marketplace has changed. I want to be thoughtful about this. I think there is room to modernize our rules to reflect the current marketplace, but do it in a way that doesn’t harm localism, competition, diversity or the public interest. I think the commission can do this. It does require work. The commission here seems not to be doing the part it should be doing, and that is really harmful in my opinion.

You were involved in crafting incentive auction legislation. What would be your definition of a successful auction?

First and foremost, my obligation is to implement the statute correctly, which is trying to entice existing broadcasters to either channel share or give up their license or move from VHF to UHF, so we will free up spectrum for new wireless services. That is success. Can we entice broadcasters to even close an auction? What kind of spectrum are we actually making available so they can increase service?

But it is also to protect broadcasters that decide not to participate, that they are continuing to serve their market and are protected, and their service replicated as the statute requires. And unlike other auctions, this actually has a tie-in to revenue. Under the statute we are obligated to meet certain goals, trying to provide for FirstNet [the interoperable broadband network the Obama administration has budgeted at $7 billion]; we have deficit reduction numbers that are in the statute, NG911 and other things that are part of the equation for a successful auction. That is important to me. You have a number of members [of Congress] who think FirstNet will be very successful. I hope that’s the case.

We don’t have a great role in that here, but I did spend some time as the statute was being drafted. And so I am really interested in making sure we can try and meet our revenue targets.

OH, REALLY?

So, when O’Rielly is not regulating—or more likely, trying to deregulate— TV, what does he watch?

“I watch a wide variety of programming. I was joking with public broadcasters that I don’t watch a lot of public broadcasting, but my fiancée has me watching Rick Steves and his traveling of Europe. I happen to like a lot of programs on FX. I think Justified is one of the greatest shows on TV, and Archer. But I am also fond of How I Met Your Mother—we’re into the last three episodes.”

No House of Cards, the cynics’-eye-view of the Hill?

“I am behind on House of Cards, but I am about three-quarters through the first season. As someone who has spent a great deal of time in the Capitol and in politics, [I know] they do use their creative license well. There are a lot of things that are really interesting, but we never, ever would have considered [them] in my old job.”

The chairman has just announced his new take on network neutrality rules using 706 authority. What is your take on that approach and, if you could, give us a sense of what you think Congress meant when it gave Congress that authority?

First and foremost, I disagree with the court’s decision on the authority they believe 706 provides the commission.