NAB: ‘Appropriate’ JSAs Will Stand, Says Wheeler

Wants broadcasters to move toward their future, not build defenses to protect their past
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NAB Show 2014

A cool and confident Tom Wheeler addressed a jammed room of skeptical broadcasters in Las Vegas to assure them he’s thinking of their future—and wants to help them get there. Wheeler said the incentive auction is truly voluntary—and a great business opportunity, he added. He said the FCC will let stand those joint sales agreements (JSAs) which genuinely benefit localism, competition and diversity, and iterated that he wants to help broadcasters move beyond being television stations to become digital content providers.

Wheeler trumpeted “optimism, not opposition” in his 30-minute address, and said the FCC believes “competition is better than regulation.”

Broadcasters entered the room deeply cynical of Wheeler’s intentions, but some left with perhaps a little less skepticism. “His comments suggest he’s a friend of broadcasters,” said Michael Fiorile, Dispatch Printing Company CEO. “We need to watch and see if that’s the case. I learned a long time ago that actions are more important than words."

Wheeler heaped praise on broadcasters for their dedication to public service, calling them vital “first informers,” and noted how the NAB had given him life’s greatest gift—he met his wife when she worked for the trade association, he said with a smile.

Wheeler downplayed his heel status in the broadcast world, and referenced a B&C cover story touting Gordon Smith, NAB president and CEO, alongside the headline “No More Mr. Nice Guy.” “Smith against Wheeler would be a great UFC pay-per-view event,” he quipped. “But if Gordon and I do it, it would be broadcast over the air.”

TV stations are very well positioned to be crucial sources of local news well into the future, said Wheeler, because they are engineered to both create compelling local content, and to market it. He spoke frequently of stations changing with the times. “I hope you won’t see the open Internet initiative as something for those folks over there,” he said, referring to cable and wireless competitors. “The open Internet is open sesame…as you move from the television business to the information business.”

On the topic of the controversial incentive auction, Wheeler said it was coming in about 14 months, it is a mandate from Congress that he had nothing to do with, and it is truly voluntary. “Those who want to participate, can,” he said. “Those who don’t want to—that’s fine.”

He said the one-time event “represents a terrific financial opportunity for broadcasters,” noting that it is a “virtually risk-free opportunity to expand your business on someone else’s dime.”

On a new ATSC broadcast standard, Wheeler said it would be a “long and heavy lift” that the commission is happy to pitch in with.

The topic of joint sales agreements, which the FCC ruled to crack down on recently, was likely the largest topic of interest in the meeting. Notably, Wheeler said that “appropriate” sidecar arrangements that serve the public interest will be upheld, while “end-runs around local television rules” will get the veto. “So long as they do not impair competition, diversity and localism, they’ll have no problem clearing the FCC,” he added.

Wheeler then sat for a Q&A with Smith, who presented the Ohio State fan with a buckeye necklace that Smith described as a “peace offering.” Wheeler reiterated his take on JSAs, saying that “broadcast lawyers took a really good concept and manipulated it to their ends as a way to get around [the rules]. We’re gonna take a good look at those.”

Sidecar arrangements jack up the value of the lesser station, he added, which keeps minority owners on the sidelines.

Despite the cage match imagery, Smith and Wheeler engaged in a cordial conversation. On the concept of a National Broadcast Plan that Smith raised the day before, Wheeler said he takes the notion “very seriously.”

Wheeler mentioned installing an antenna at his daughter’s house to help her cut the cord with costly cable bills, which elicited healthy applause. "I’m a believer in broadcast television,” he said.

Many in the room said Wheeler acquitted himself well in addressing a crowd that does not see eye to eye with him on key issues. While he has reservations regarding the auction, Bill Hoffman, Cox Media Group president, found the talk of broadcast’s bright digital future interesting. “It inspires us to look at new digital opportunities that are forward thinking,” he said.

He and Fiorile both found Wheeler’s talk on JSAs compelling. “What I heard is that he’s open to those who serve the public interest,” said Fiorile. “It’s the first time I’ve heard that.”

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