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The Word From Wheeler - Broadcasting & Cable

The Word From Wheeler

In an exclusive, wide-ranging interview, the FCC chairman weighs in on net neutrality, sports telecast blackout rules and the upcoming spectrum incentive auction
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FCC chairman Tom Wheeler has been making some news— as usual—the past few weeks, outlining an FCC agenda for insuring competitive broadband, promising broadband speeds keep up with what he says are the table stakes in the 21st century, trying to get L.A. Dodgers games to fans and attempting to sack sports blackout rules.

He has been facing pushback on his network neutrality proposal from Web activists, though he says that this pushback represents the “beauty” of the Internet. And he bristles at suggestions that the FCC’s increased scrutiny of sharing arrangements has been part of an attempt to push broadcasters toward the incentive auction.

The chairman also strongly defends the need to preempt state laws that limit broadband, and provides some insight on his management philosophy.

It was a full agenda for Wheeler, who spoke with B&C Washington bureau chief John Eggerton after trading the Beltway for another location where sticking to your guns can be a gamble—specifically, from in the basement of the Sands Expo Center in Las Vegas, following his keynote speech to the CTIA convention. An edited transcript follows.

Were you surprised by the blowback online to your Sec. 706 proposal for recrafting net neutrality rules?

We have put ideas out there and we are looking at all the feedback on that now and we are obviously looking forward to the roundtables that are going to take place in the next couple of weeks. We’ll be seeing where things go after that.

But were you surprised that there was so much opposition to it, particularly since the court signaled that was a way for you to go?

Well, this is the nature of the Internet. This is why we want the Internet to be open and free, because it allows for this kind of discourse and dialog. I think this just proves the value of an open Internet.

Are you still targeting the end of the year for a new Open Internet order?

I don’t want to be held to a specific date. We want to make a decision based upon the record and based upon the work that has been done in the interim. And we’ll let the decision set its own timing. I don’t want to [say] “it’s got to be done by Christmas” or that sort of thing,

Some online advocacy groups have called for field hearings on net neutrality. Will you hold some outside of D.C.?

We are going to have these roundtables, and they are going to be open to people to participate in via the Internet. We’re going to have a whole and complete record. I don’t think it’s necessary to have to do a road show for that because the Internet itself is connecting us all. If somebody in Minneapolis wants to see an ongoing discussion and debate and be able to ask questions, we are going to facilitate that using the technology itself.

Do you have any plans to act on the open retrans docket or are you going to leave that to Congress?

I’m going to be really interested in seeing what Congress does. Obviously we have a great interest in the whole retrans issue, but I think Congress is in the process of considering some game-changing concepts.

You clearly rubbed broadcasters the wrong way when you suggested their lawsuit against the auction was throwing up roadblocks to freeing wireless spectrum. A top NAB official told B&C that you appeared to be using the NAB as a bogeyman, something to shoot at if the auction fails, and that if the auction does fail, you have yourself to blame.

OK, but the facts speak for themselves. I didn’t file suit.

Can you understand why some broadcasters feel the FCC is pushing them toward the auction with its crackdown and scrutiny of sharing arrangements?

That is an entirely specious argument. That the sharing arrangements have anything to do with the auction is a concocted fiction.

Sharing had to do with the fact that there was a cottage industry in Washington, D.C., of Washington lawyers who were cooking up fancy ways to cook ownership to get around the rules. I mean, hey, people can characterize it any way they want, but it is a totally specious argument to say there is any connection between the two.

You came out strongly against the NFL blackout rules last week and scheduled a vote for the end of this month.

This was put into the rules 40 years ago when we had an entirely different reality. The [FCC rule] has been an excuse people pointed to to defend why consumers couldn’t watch TV. That’s wrong. We deal with communications policy. And using communications policy for something that gets in the way of consumers’ ability to see the home team is an idea whose time has come and gone, if it ever existed.

Speaking of the ability of the fans to watch the home team, what is the status of your vetting of documents in the Time Warner Cable RSN carriage impasse and what role does the FCC have?

We looked at all the documents. We are going to send out a request for additional information. But we have three weeks to go in the [baseball] season. The Dodgers are in a pennant race. I mean, come on folks, for three weeks let’s put down the gloves and let consumers see the games.

We are going to continue our process, but that is not going to be done in the next three weeks because no kind of an enforcement process like this is ever done in that short a period. But, my goodness, you would think Time Warner Cable and the [multichannel video programming distributors] could say, ‘Hey, we will forget about it. Let’s just carry it. Let’s just get it done so that people can see the games.’

On your management style, we have talked to a bunch of folks and their read is that your style is primarily top-down, almost like a cabinet secretary, and that when you are convinced of the rightness of something, it is hard to move you off that position.

I have two management philosophies. One is that I think you ought to delegate responsibility and authority and so I have been trying to push responsibility and authority down in the agency to the bureau chiefs and asking the bureau chiefs to delegate it out further. And the whole issue of delegated authority is a huge political issue at the commission, so that gets challenging.

The other is that what I learned in the first few months in the job is that people would bring in homogenized presentations that said ‘here’s what we think the answer is,’ and it would be a homogenization of multiple positions. And I kept saying, ‘no, what I want to see is knock-down, drag-out arguments right here in my office and I want to participate in them.’ And that is, I think, the way you make good policy. You don’t just say, ‘OK, we are going to agree amongst ourselves and I’ll give you this’ or whatever the case may be. And you come up with a homogenized policy; these are important, multi-faceted issues. So, I have been encouraging folks to come in and argue it out. Let’s hear all sides of the issues; let’s not just hear what the conclusions are.

Does it help to have been a lobbyist because you know how people are going to be making those arguments?

No. I think that is management. I don’t think it has anything to do with being a lobbyist. The nature of an institution is to arrive at commonality, and what I am trying to say is that by the time it gets to the [FCC’s] eighth floor [office], I hope that there is still an ability for people to debate. Obviously, we will make decisions when it is necessary to make decisions, but let’s hear all sides out. Let’s not kick ideas out just because we gotta get something up to the eighth floor.

The Republican commissioners have complained about not being sufficiently included in the process. Are there grounds for that complaint?

Oh, golly. We have had far more unanimous votes than we have had 3-2 votes. The Republican commissioners get the information on white copy day—the agenda for the next meeting—the same as the Democratic commissioners do. They may have differences of opinion, but the process is operating as the process has always operated.

Former FCC chair Reed Hundt, who is leading an effort to get Redskins owner Dan Snyder to change the name of the team, has asked FCC commissioners to speak out. Will you?

Yes. I don’t use the term personally and I think it is an offensive and derogatory term. I am a Civil War buff, and there were a lot of terms that were appropriate at that time that aren’t appropriate anymore.

I think it would be great if the Washington football team would recognize those kinds of changes itself.

Does the FCC have any role in that beyond the bully pulpit?

I hope that this is something that if enough people express themselves, that Dan Snyder can see which way things are going.

Why should the FCC be pre-empting broadband-related laws passed by duly elected state legislatures?

Section 706 gives us a responsibility to encourage the growth of broadband and I am for faster, cheaper, better broadband. And I am for competitive broadband. We are going to look at the petitions that have come in with serious analysis because the question is, how do we get faster, better, cheaper broadband?

At least what I have seen in the Wilson, N.C., and Chattanooga [Tenn.] situation, and again I am not making up my mind here, but what we have seen in some of the submissions, is that outside of the area they’re getting un-faster, they’re getting un-better, they’re getting un-cheaper kind of a service, and when people want to extend them faster, cheaper, better service, if the local representatives of the people, and elected by the people to resolve the local issues, say they want to do that, I think we should be for faster, better, cheaper broadband.

Will the FCC weigh in with a definition of an MVPD, which would seem to be an important answer in the over-the-top world we are moving toward?

I think it is a question we’ve got to look at. I am not ready today to plant a flag in the ground one way or the other. But I don’t disagree with your point that it is worthy of looking at, particularly as we go to an all-IP environment and as cable systems evolved from QUAM to Docsis 3 [a next-generation telecommunications standard allowing for higher-speed data transfer]—does that have any policy implications? I don’t have an answer to that, but I think it is an interesting question.

The National Cable & Telecommunications Association said in its comments on the Sec. 706 report that the commission should not change the baseline broadband speed threshold from 4 Mbps downstream and 1 Mbps upstream because that’s sufficient to do high quality voice, video and data.

That’s funny because I’ve been on the floor at the show here and I have been looking at new applications with cell phones and heads-up devices and things like this, all of which have 4, 5, 6 or 7 Mbps at least. And then when they go to 4K, that increases even more in the need for throughput.

So, I disagree. As I said the other day, I think we are looking at table stakes for the 21st century being 25 megabits. And I hope that they are actually talking about at least 100 meg and going to a gig as much as possible. I had people talking to me this morning about how they needed two gigs of throughput to do some of the things they are talking about doing with technology.

Would that mean changing the 706 report definition of advanced telecommunications services to 10 Mbps and maybe 25?

That is what the whole notice of inquiry is about. I have said we should be increasing it at least to 10 for Universal Service Fund activities because shame on us if our subsidy program for hard-to-serve areas creates a second-class area of service because we didn’t set our sights high enough. That would be a failure on our part.

At CTIA, you said, “If mobile operators don’t put their money where their mouth is, then the future of spectrum policy will look a lot different.” What did you mean?

What I was saying was that there are two things that are the promise of the future of spectrum. One is sharing—and not just broadcast sharing, but all kinds of sharing, like the mobile operators are now having to do with [the Defense Department] and other federal users—and the fact that digital allows for sharing. And the other is that the auction creates a way in which both parties’ economic realities can be dealt with. And we can say: ‘OK, is it possible to find an economic model that works for both [broadcasters and mobile operators] in an incentive auction?’

Do you ever worry that the substance of your position is getting lost on people who are being pitched slick ads saying essentially: ‘Free the Net’ as though somehow you are imprisoning them?

(Laughs) I’m for ‘free beer.’ Look, there is nothing more important than protecting free speech and innovation online. This is a complicated issue, so it’s not surprising that it can be misconstrued. Right now there are no rules in place to protect the open Internet, and I am focused on finding the right approach that will pass legal muster.

You have said that you don’t think fast and slow lanes would meet the commercially reasonable standard proposed in the new anti-unreasonable discrimination network neutrality rule. But your critics say that the next chairman might not make the same judgment call.

So, I have been real clear in saying that the court said we have authority over anything that interferes with the virtuous cycle. And I think that fast lanes do that. I think prioritization does that. I think blocking does that. I think that degrading and slowing down service does that. And that is what the court said. That’s not what Tom said. That’s the authority of the commission. Period.

But critics ask what if the next chairman disagrees, and has the flexibility of a ‘commercially reasonable’ standard.

That’s what the courts are for.

Reed Hastings in Wired magazine said that, “If net neutrality rules don’t apply to peering, it would be better to have no rules.”

I assume you disagree.

I know Reed’s position.

What is your position?

So, we are in the process of working through everything that we have gotten in the process and we’re going to come out with our thoughts and we will share that with you at that point in time.

FCC chairman Tom Wheeler has been making some news— as usual—the past few weeks, outlining an FCC agenda for insuring competitive broadband, promising broadband speeds keep up with what he says are the table stakes in the 21st century, trying to get L.A. Dodgers games to fans and attempting to sack sports blackout rules.

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