Wheeler Elusive On Retrans, Ownership

Tom Wheeler, President Obama’s nominee to be the next FCC chairman, may be more willing than his predecessor to consider revamping  the retransmission consent rules — or maybe not.

At the nomination hearing before the Senate Commerce Committee this afternoon, Sen. Roy Blunt (R-Mo.) asked the former cable and wireless lobbyist whether he agreed with Julius Genachowski that the FCC’s power to rewrite retransmission consent rules was “very limited” and changes in the policy would have to come from Congress.

Wheeler wanted no part of the question. “I look forward to looking into that issue and trying to get my arms around it, particularly in light of some recent court action and a pending Second Circuit action that has been brought on a related kind of issue,” he said without identifying the Second Circuit case. “I am not trying to dodge the questions, but I think this … is a situation that is in flux at the moment.”

Asked by Blunt if the court ruling might give the FCC more authority over retrans, Wheeler said, “I would hate to second guess a court in advance.”

When Sen. Amy Klobuchar (D-Minn.) later asked what he thought about retransmission consent, Wheeler endorsed it, saying it was a way for broadcasters “to get revenue from subscribers through the intermdiary of the cable operator. I believe in that kind of evolutionary market.”

But Wheeler also expressed concern about the breakdown of retrans negotiations between broadcasters and cable and satellite operators that sometimes results in the loss of broadcast signals to subscribers. “What does bother me…is when consumers are held hostage over corporate disputes. And if I am fortunate enough to be confirmed, that is something I will be looking at.”

It was deep into the hearing before broadcast consolidation came up. That was by Maria Cantwell (D-Wash.), who said that she was concerned about Gannett’s acquisition of the 23 Belo stations, particularly two in her home state — KING Seattle and KREM Spokane — and one in neighoring Oregon, KGW Portland.

Asked whether he shared her concerns, Wheeler said,”When the commission looks at these issues, competition, localism and diversity are the issues that should be the touchstones, not business plans.”

Not completely satisfied, Cantwell asked whether some broadcasters “could abuse” sharing arrangements to get around the ownership rules. “I am not informed enough to be explicit on that, but I’m going to be….”

Cantwell then asked if consolidation was needed to save newspapers. Wheeler suggested that is was not. “It has been my experience that the way to grow businesses when they are challenged by new technologies is to embrace those new technologies. That’s best way for working your way out of this situation.”

Of broadcast issues, Wheeler was most direct in promising, at Committee Chairman Jay Rockefeller’s (D-W.Va.) request, to conduct the incentive auction of TV spectrum as quickly as possible.

“I think it is absolutely critical that the incentive auction move on a expedited schedule, senator,” Wheeler said. He said he hope to stick to the original 2014 timetable for the auction.

Wheeler compared the complexity of the incentive auction to that of a Rubik’s cube. “On the one side of the cube, you have got to provide an incentive for broadcasters to want to auction their spectrum,” he said, holding an imaginary cube before him and twisting its right side.

“On the other side of the cube, you have got to provide a product that is structured in such a way that it incentivizes…the wireless carriers …to want to bid for the spectrum,” he said, twisting with his left hand. “And then in the middle of this, on an almost real-time basis, you have a band plan that is constantly changing to reflect the variables that are going on [on the sides].

“That’s why this has never been tried before. This is a monumental undertaking.”