March 29 Auction Date Priority for Wheeler

Kicking off the TV incentive auction on its appointed March 29 start date is among FCC Chairman Tom Wheeler's top-most priorities, said Gigi Sohn, his counselor, at a Practising Law Institute event Thursday. The idea that the current FCC is more divisive than previous ones is “a bunch of nonsense,” Sohn said, referring to a recent story (see 1510280062). “In the past, there were interparty battles,” Sohn said, saying past FCCs have been similarly contentious. For that Oct. 29 story, the agency was provided a chance to comment and declined.

Wheeler also is focused on modernizing the Lifeline program to allow more people to connect to broadband, and making a decision on the next step for the report spawned by the Downloadable Security Technology Advisory Committee, Sohn said. His office will make a decision “soon” whether the FCC will act based on that report, Sohn said. The FCC also will start a rulemaking on privacy rules that will apply concepts that previously had affected only phone companies to the broadband carriers that the FCC recently brought into the Communications Act Title II fold, Sohn said. That process is “difficult” and the commission will likely take its time arriving at final rules, Sohn said.

The incentive auction is a complex process because it has multiple, conflicting goals, Sohn said. “We're trying to do the best we can” despite challenges, she said. It doesn't serve anyone's interests to have the incentive auction not go well, said Sinclair Senior Vice President-Strategy and Policy Rebecca Hanson. “It behooves us to make it work in a way that benefits broadcasters,” said Sherrese Smith, a former aide to then-Chairman Julius Genachowski and now an attorney with Paul Hastings.

The auction still includes a lot of unknowns for broadcasters, Hanson said. Broadcasters still don't know “the fate of wireless mics,” she said. She also listed the loss of low-power TV stations, the vacant bands for unlicensed use, the repacking time limit, and interaction with ATSC 3.0 as chief broadcaster concerns about the incentive auction.

Retrans costs are increasing at a rate that's “unsustainable,” said Time Warner Cable Vice President-Regulatory Affairs Cristina Pauze. Since pay-TV companies can't import distant signals, broadcasters get increased leverage against them, she said. If TWC could import distant signals, it wouldn't completely undercut the broadcaster's position during a blackout because audiences would still miss the local content of the missing station, she said. Allowing distant signals would “take out the legs” of broadcasters during negotiations, Smith said. Her clients have included broadcasters.

Wheeler will “look skeptically” at rules that prevent broadcasters from facing competition, though he believes the public interest is served by having a healthy broadcast industry, Sohn said. The FCC has allowed other industries besides broadcasting to consolidate, putting broadcasters in a bad position, Hanson said. Broadcasters responded to the changing market with joint sales agreements, but FCC rule changes made those less viable, Hanson said.

If online video companies are designated MVPDs, they should bear all the burdens of other MVPDs, Pauze said. Broadcasters want to ensure online MVPDs compensate them as they are by current MVPDs, Hanson and Smith said.