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FCC chairman Tom Wheeler made his pitch to broadcasters Wednesday morning at the NAB conference as to why they should actively support the controversial net neutrality rules passed in February, which are already being challenged in the courts.
“The Open Internet order,” Wheeler told broadcasters, “safeguards an increasingly important distribution channel for your most important product — local news and information. It assures that your use of the Internet will be free from the risk of discrimination or hold-up by a gatekeeper.
“I hope this means that you, as individual broadcasters, as well as through NAB,” added Wheeler, “can support what we have done and help explain its importance to the principles upon which broadcasting has always been based.
“Your goals,” continued Wheeler, “as an important and innovative public service provider, and our Open Internet goals are the same: When you want to offer something over the Internet, no one should stand in your way. Least of all, no one should stand between you and the consumers who will benefit from your service.”
Wheeler did not make reference to the legal challenges already filed in federal court over the Open Internet rules — or the challenges expected to be filed shortly.
Wheeler went out of his way to praise local broadcasting and to promise that he supports its continued existence even as the media landscape changes.
“Local TV and radio broadcasters are still the most important source of breaking news in our cities and neighborhoods,” said Wheeler. “Broadcasters are the first place we turn in times of emergency.”
The FCC chairman said a recent report shows that for the first time since they began tracking it, the number of pay TV subscribers declined, with almost all losses from cable subscribers, whom he suggested have turned to over-the-top choices like Netflix, Amazon and Hulu.
At the same time, said Wheeler, the number of households that rely exclusively on over-the-air broadcast services went up last year.
Throwing broadcasters a bone, Wheeler hinted that he favors changing the rules to allow foreign ownership of broadcast properties above the current 25 percent cap for the first time. He said he is working on this proposal with his fellow commissioner, Michael O’Rielly.
Opening the market for broadcast properties to foreigners would likely boost value and make it a more competitive market, so this is something broadcasters have long sought.
Wheeler also pitched broadcasters on the reasons to participate in the upcoming auction of spectrum. Broadcasters are being asked to voluntarily turn over spectrum and consider doing things like sharing digital channels. Those who give up spectrum stand to get millions or even billions in return, and the government will also reap a huge financial bonanza.
Wheeler referred to the surprising results of an auction late last year which brought much higher prices than expected, the so-called AWS-3 auction.
“Of all the things that have happened over the past year,” said Wheeler, “perhaps the biggest game-changer for the incentive auction was the historic AWS-3 auction. By generating a record-shattering $41 billion in net bids, the auction confirmed the strong market demand for more spectrum for wireless broadband.”
Wheeler said even Gordon Smith, head of the NAB, the group that represents network broadcasters and stations, supports participation in the auction.
“At the recent Mobile World Congress in Barcelona,” said Wheeler, “Gordon Smith was asked about the AWS-3 auction and what it means for the incentive auction. He replied, ‘If you own a television station and it’s worth $5 million and someone offers you $50 [million], you’d become interested … [M]y members, who are public companies, they have earnings calls to make, boards to report to, return on investment to investors, so they have to look at this now.’ Obviously, I agree.”
“Disruptive technologies,” concluded Wheeler, “demand that broadcasters and the FCC reimagine many policies and practices. If each of us successfully addresses the opportunities inherent in the Open Internet and the incentive auction, the end result will be a vibrant over-the-air broadcasting industry well able to fulfill its historic localism mission and a more competitive multichannel programming marketplace working for the benefit of American consumers.”
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