O’Reilly: Eliminate Dynamic Reserve Pricing

FCC Commissioner Mike O’Reilly said Monday that he opposes the FCC’s plan to use dynamic reserve pricing in its bidding for TV spectrum in the incentive auction next year.

“I’m against it,” he said. “I want to see it eliminated in a simplification of the commission rules…. It complicates things unnecessarily and also can short-change broadcasters in the value of their stations.”

But O’Reilly is just one of four votes at the FCC. “I don’t know where we are on winning the day on that.”

DRP, which FCC officials believe is necessary to prevent some broadcasters from getting overly generous payouts due a lack of bidding competition from other broadcasters, particularly during the auction’s opening rounds, would clear the way for the FCC to ask stations to accept a lower price than they had agreed to take in a previous round.

O’Reilly’s comments came during a policy breakfast on the opening day of the NAB Show hosted by communications attorney Erwin Krasnow and his Garvey Schubert Barer law firm. The breakfast is a 30-year NAB tradition.

O’Reilly, one of two Republicans on the commission, also discussed five of his proposals to lighten the regulatory load on broadcasters.

• Follow through on a proposal to allow broadcasters to put details of contests online rather than forcing them to air the rules with “fast talkers and tiny print.” “This is an example of a small victory that will help broadcasters and consumers.”
• Allow broadcasters to fulfill their EEO obligation to announce job openings “far and wide” by posting them on the Internet, which has become “an essential element of job hunting.” Under current rules, last modified in 2001, posting on the Internet is “not sufficient” to comply with the rules.
• Repeal or modify the media ownership rules. Congress has mandated that the FCC review the rules every four years with an eye toward lightening them, yet the agency has done nothing since 2006. “The industry continues to be saddled with many restrictions like the newspaper-broadcast crossownership rule that no longer make any sense.”
• Give broadcasters “a limited right of action” against pirate radio stations. “What do you think would cause more concern or consternation to a pirate station — the busy FCC or a broadcaster looking to protect its rights and revenue.”
• Follow through with allowing broadcast companies to have foreign ownership in excess of the 25% statutory limit. The FCC has the authority to approve investments in excess of 25% and has said it would consider doing so on a case-by-case basis. American broadcasters, especially minority ones, might benefit from foreign investment, and it may open doors for American companies that wish to invest in media companies overseas.

“We can expand foreign investment in the broadcast space without jeopardizing national security in any way, as the commission would retain its ability to closely scrutinize and, if necessary, reject any application.”

Read TVNewscheck’s other NAB Show policy coverage here. Find our full convention coverage here.