[opendtv] FCC chairman offers plan to save broadcasters - CNET
- From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Wed, 9 Apr 2014 18:22:17 -0400
http://www.cnet.com/news/fcc-chairman-offers-plan-to-save-broadcasters/
FCC chairman offers plan to save broadcasters
Tom Wheeler says he has a plan to make sure TV broadcasters survive and
flourish in the new broadband future. But broadcasters are skeptical about its
implementation.
LAS VEGAS -- Federal Communications Chairman Tom Wheeler has a plan to save the
broadcasting industry, he said during a speech Wednesday at the National
Association of Broadcasters meeting here. But it may not be the solution
broadcasters were hoping for.
Wheeler -- whose appearance at the convention was highly anticipated because of
ongoing tensions over newly imposed FCC rules and the upcoming spectrum auction
-- outlined a plan for broadcasters that he said would save their industry from
extinction. The main message was that broadcasters need to change with the
times. And if they don't, they'll likely go the way of the dinosaur.
"We are at an inflection point in history, where broadcast licensees can go
from being the disrupted to becoming the disruptor," he said.
He sympathized with the industry over the hard challenges it faces, but he
emphasized that broadcasters need to change to stay alive.
"Nobody likes technological change and the way it restructures business," he
said. "But those who win are those who say, 'OK, how do I take advantage of
this?'"
The cornerstone of his vision for TV broadcasters is for them to take their
highly valuable local TV content and deliver it not necessarily over their own
airwaves but over the Internet to consumers who want to view it when and where
they want. In essence, he said that TV broadcasters could become Netflix-like
distributors of local news over both wired and wireless broadband connections.
He cited a recent Pew Research report that showed that a third of Americans now
watch news online.
"I hope that we can see local broadcast licensees as a growing source of
competition in the digital content market," he said. "Your content represents
far more potential than retransmission fees. It can be the basis for fixed and
mobile cablelike services.
He added that the upcoming incentive spectrum auction, which will let
broadcasters sell all or some of their spectrum licenses back to the government
so that they can then be resold to the wireless industry, will help pay for
this transition in business strategy. He called the auction a
once-in-a-lifetime opportunity for broadcasters to invest in their own
businesses "on someone else's dime."
Wheeler's talk comes as broadcasters are increasingly leery of the FCC's
intentions and commitment to preserving the broadcast business. A week ago, the
FCC issued new rules that make it more difficult for local TV stations to form
advertising sales partnerships. The agency also ended the practice of allowing
multiple TV stations to negotiate distribution deals with cable and satellite
operators.
Wheeler explained that these moves were not attacks on the industry but efforts
to ensure the playing field is kept level and that certain players aren't
abusing the FCC's rules regarding the protection of competition, diversity, and
localism. He said the waiver process put in place is designed to ensure that
small and minority stations are not inadvertently harmed by the new rules.
Some in the broadcast industry fear the FCC is using these new rules as a way
to strong-arm broadcasters into giving up their spectrum in the upcoming
incentive spectrum auction. Broadcasters are being asked to voluntarily sell
their spectrum back to the government, which will then sell the spectrum to
wireless broadband providers. The FCC is still working out the rules for the
auction, which is scheduled to take place by mid 2015.
Wheeler defended the agency against allegations that it is coercing
broadcasters to give up spectrum.
"There is no conspiracy," he said. "Those who want to participate in the
auction can. And those who don't, that's fine."
But he cautioned broadcasters that there is unlikely to be another opportunity
for them to sell their spectrum to the government in this fashion in the
future. And he said that if the industry doesn't transform its business to
reflect the new business realities, others will step in to fill the need.
Namely, he pointed to Internet giant Yahoo, which is planning a $300 million
investment in providing news clips on its site. He said that wireless companies
AT&T and Verizon are also looking at using broadcast LTE technology to deliver
video. Verizon has already struck a $1 billion deal for NFL content and it
recently bought a video distribution platform from Intel.
"Clearly Yahoo, AT&T, and Verizon are aware that history is full of businesses
that clung to old models and didn't survive," he said. "They're embracing
something new that looks startlingly like your business. We hope that broadcast
licensees will see this as a call to action."
During a question-and-answer period with NAB President and CEO Gordon Smith,
Smith pressed Wheeler on the FCC's willingness to preserve the heart of the
broadcasting industry's business, which is delivering free over-the-air video
content to people who otherwise couldn't afford the cost of expensive services
like cable TV and broadband.
"We represent the people who can't afford to pay for every bit that goes over a
broadband network, or who can't afford their phones and TV service," Smith said.
Though Wheeler praised broadcasters for their public service and even said he
helped his daughter install an antenna at home so she could receive free TV
instead of paying a hefty cable TV bill, he stopped short of talking about how
broadcasters can use their existing spectrum and broadcast distribution
technology to continue to distribute TV to mobile devices.
Instead, he focused on the possibility of broadcasters sharing spectrum with
each other in order to free up channels that could be sold to the wireless
industry. And he encouraged broadcasters to get involved in the issue of Net
neutrality, because ultimately, he said, keeping the Internet open would
benefit broadcasters looking to distribute their content via fixed and wireless
broadband networks.
But he made no mention of existing broadcast mobile TV efforts. And he lightly
touched on the FCC's willingness to work with the broadcast industry when new
standards for distributing broadcast video over the air to mobile devices are
established.
Following Wheeler's talk, NAB Executive Vice President for Strategic Planning
Rick Kaplan said that even though broadcasters appreciate the chairman's
efforts to offer up a plan for the future, he was disappointed that Wheeler
didn't see the existing broadcast network as a worthy competitor to the current
wireless broadband model, especially for video distribution.
Kaplan, former chief of FCC's wireless bureau under Chairman Julius
Genachowski, said there's not enough spectrum available for the wireless
industry to effectively deliver the demands of live TV events to mobile
devices. He said broadcast by nature is the only distribution model that is
equipped to handle the load.
"Chairman Wheeler laid out a plan that has broadcasters relying on cable and
phone companies to deliver our content," he said. "But he ignored the benefits
of our one-to-many architecture, which is the only way that mass video can be
distributed."
To that end, Wheeler said the FCC wants to work with broadcasters. And when
asked by NAB's Smith about his suggestion of developing a National Broadcast
Plan that provides a roadmap for how to preserve the broadcast industry and
ready it for the future, Wheeler said he was open to it, so long as Congress
approves it and foots the bill.
"I take the suggestion of a National Broadcast Plan seriously," he said. "If
Congress will do the same kind of thing that it did for the National Broadband
Plan in terms of granting authority and funding it, I will guarantee, we will
deliver a plan."
He reiterated that the FCC is not working at odds with the broadcast industry.
"I'm not here to rehash old issues," he said. "We want to work with you to
focus on the future. You have an opportunity to think new and act anew. It's
our job to facilitate such innovation."
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