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NAB: FCC Chair Defends Commission; Warns Broadcasters of Competition From Yahoo

Tom Wheeler addressed the issue of an "open Internet" at the Las Vegas show on Tuesday.

Tom Wheeler - P 2013
Getty Images

LAS VEGAS -- FCC chairman Tom Wheeler told broadcasters that they have an opportunity to go from being the "disrupted to the disruptors" -- but to keep an eye on competition from Yahoo, AT&T and Verizon. Speaking Tuesday at the NAB Show, he also emphasizing that he is not the "enemy," one day after National Association of Broadcasters president and CEO Gordon Smith criticized the FCC for its "increasingly singular focus" on broadband while urging it to close a "trust gap" with broadcasters.

"I hope you won't see the open Internet as something for 'those folks,'" Wheeler said, commenting net neutrality -- an issue on which the NAB has not taken a position. "An open Internet represents an open sesame for broadcasters to move from the TV business to the information business.

"You possess compelling content, local content and the ability to promote it -- and you can leverage those advantages at incremental costs. You have the opportunity to become the source for local news. [With an open internet] a network provider cannot block your content.

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"But the window of opportunity won't stay open," he warned. "Yahoo is reportedly relying on the open Internet to expand into local TV news. The Wall Street Journal reports they plan to spend $300 million to acquire a company that syndicates news clips from 200 local stations. Yahoo's strategy is to offer personalized local news content and to sell higher CPM video ads around it.

"The telecom companies aren't hesitating in their pivot either," he added. "Both Verizon and AT&T are reportedly exploring new lines of business based on broadcast LTE. Verizon has bought Intel's media platform, and recently paid $1 billion for NFL rights.

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"They all are embracing something new that looks startlingly like your model," warned Wheeler. "Because we are pro-competition, we hope that broadcast licensees will see this challenge as a call to action."

Addressing the plan for the 2015 spectrum auction, Wheeler emphasized that this would be voluntary. "There is no conspiracy," he said. "Those who want to participate can; for those who don't want to, that's fine.

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"I continue to believe the auction is a terrific financial opportunity for broadcasters," he added. "The pilot project has provided information about channel sharing capabilities; it works. Spectrum sharing will allow you to maintain your business and take home a check."

The NAB has argued that channel sharing would mean that those broadcasters would be unable to offers services such as Ultra HDTV.

On Monday, Smith called for the FCC to create a National Broadcast Plan, along the lines of the National Broadband Plan. In response, Wheeler effectively said Congressional support is needed. "I take your suggestion very seriously," he said, pointing out that the National Broadband Plan was mandated by Congress. "If Congress will do the same thing on a nation broadcast plan in terms of the authority, scope and funding, I guarantee we will deliver a similar kind of product."

E-mail: Carolyn.Giardina@THR.com

Twitter: @CGinLA