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Marathon Men: Wheeler, Pai Face Hill - Broadcasting & Cable

Marathon Men: Wheeler, Pai Face Hill

Testify at lengthy House Communications Subcommittee hearing
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In its third FCC oversight hearing in the past four months, the House Communications Subcommittee spent several hours Tuesday gently grilling FCC chairman Tom Wheeler and senior Republican commissioner Ajit Pai on a host of topics.

Among the top takeaways from the legislator's questioning were Wheeler's commitment to launch a rulemaking reviewing the FCC's enforcement of good faith retrans bargaining by the Sept. 4 deadline set by Congress. Others were Wheeler's adherence to the FCC's incentive auction framework, including not adjusting the reserve auction trigger per requests by T-Mobile, Public Knowledge and others. But he did say that the FCC had almost tripled the buffer between medical telemetry and unlicensed devices that will be sharing ch. 37 after the incentive auction.

But he did not say the FCC would hold off on an Aug. 6 vote on that ch. 37 plan for stakeholders to provide any more input or alternatives.

Generally, the Republicans at the hearing talked about their concerns with FCC policies, while Democrats generally defended the commission under FCC chairman Tom Wheeler as furthering competition and protecting consumers.

Of Commissioner Pai's concerns about both process and policy, Democratic Rep. Mike Doyle (Pa.) said "welcome to the minority."

The broadcast incentive auction got a lot of attention. The chairman defended putting stations in the downlink, rather than uplink, portion of the wireless band in the TV station repack. He said that putting them in the uplink portion would have a greater impact on wireless by knocking out entire base stations.

Chairman Wheeler sent a signal that the FCC's "totality of circumstances" judgment calls now baked into its new designated entity rules would allow it to prevent gaming of those rules given that they allow DEs to lease 100% of their spectrum to larger carriers.

Commissioner Pai suggested that and other changes in the new rules would allow for new arbitrage. He said that under the new rules, Donald Trump could get DE status in a spectrum auction, and the DE discount, then lease the spectrum to AT&T or Verizon.

Among the other key takeaways:

Rep. Bill Long (R-Mo.) pointed out that the Justice Department had found no material competition issues with the AT&T/DirecTV deal, but the FCC had required a number of conditions. Why the difference in views, Long asked.

Wheeler said that the FCC had worked with DOJ, that there was actually not a "slivver of light" between them, and explained that while Justice's was an antitrust review, the FCC looked at public interest issues.

Given that, he said, since in about a quarter of AT&T's service areas, it had been competing with DirecTV video service, did eliminating that competition create an incentive to eliminate broadband competition as well. What the FCC concluded, he said, was that AT&T needed to expand broadband coverage, which it will have to do in a significant amount to prevent the merger from being a "choke point."

The chairman said an order has been circulated on handling confidential program contradict information in response to a court decision remanding FCC's decision to make information available to hundreds of third parties.

Wheeler said that he had reached out to the big four major carriers to get them to resolve an issue with phone number portability disclosed by the subcommittee, but that if they did not do it voluntarily, the FCC would step in.

“Number portability has been a great success for wireless consumers and competition," said Tom Power, SVP and general counsel of CTIA. "However, as a working group of the FCC’s numbering experts recently found, nationwide number portability faces a number of technical, policy and jurisdictional challenges. CTIA will work with our member companies and interested stakeholders to consider the challenges and potential solutions in response to the Chairman’s inquiry.”

The chairman pledged to work with the National Association of Broadcasters and Congress on a comprehensive plan to inform TV viewers about the incentive auction and TV station repack.

Commissioner Pai said that he believed the FCC had doubled its Enforcement Bureau staffers while cutting back field offices. Wheeler said that was not the case, and that Enforcement Bureau staffing was 20% less than under the most recent Republican chairman, Kevin Martin.

The chairman said that the FCC's new robocall rule clarification means that legislators' would need to get permission for their telephone town halls, which drew some concerned responses by Subcommittee chairman Greg Walden (R-Ore.).

Commissioner Pai said that it could cost over $3 billion to repack TV stations while the FCC had only budgeted $1.75, meaning broadcasters could be on the hook for the other $1.25 billion. Wheeler said Congress had set that $1.75 billion budget and the FCC had to work within that.

The chairman put in a plug for the FCC's recent agreement to coordinate U.S. and Mexico border spectrum issues, saying "a major hurdle had been vaulted."

Rep. Walden encouraged the FCC downloadable security working group to focus on that issue rather than on disaggregating content, a reference to a computer company push to extend that STELAR Act mandate to the all-vid issue of having set-tops access video from various sources.

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