News

FCC Chief: We Need to Protect Consumers

5/11/2010 5:34 AM Eastern

Days before the National Cable & Telecommunications Association’s The Cable
Show in Los Angeles, Federal Communications Commission chairman Julius
Genachowski talked with Multichannel News Washington bureau chief John Eggerton
about a broad range of industry topics. He says retransmission consent
may need tweaking. He explains why he remains confi dent he can work with
broadcasters on a viable spectrum reclamation plan. And he believes that
Internet-service providers will preserve a free and open Internet, even in the
current absence of clear rules. Cable operators have pledged to abide by the
FCC’s openness principles, but the chairman warned any bad actors out there
that the commission “will protect consumers.”

MCN: What message do you have for
cable operators gathering in L.A. this
week?

Julius Genachowski: One
of the things that our broadband
plan helped us recognize
was the unique and vital role the cable
plant can play and needs to play in the economic
future in the United States.

It is potentially a real competitive advantage
for the United States that we have a cable
infrastructure. And I think that is a real
opportunity for the country, as well as for
the cable industry. And, obviously, more
and more people in the cable industry recognize
that.

MCN: So, wireless broadband is not going
to make that fixed plant obsolete?

JG: No, we need to lead the
world in wired broadband
and wireless broadband.
It’s not either-or. Both are
essential platforms for innovation.
And we need
to have both world-class,
universally distributed
wired and wireless infrastructure
in the 21st century.

MCN: In the wake of the BitTorrent decision,
NCTA members have pledged to
abide by the FCC’s Internet-openness
principles. But do you have any advice to
any potential bad actors who don’t sign
on to that?

JG: Preserving a free and open Internet,
I am as convinced as ever, is essential to
making sure that we have a platform for
innovation and competition and expression.
And so, the importance of preserving
the openness of the Internet is as important
as it ever was.

The transparency component is also
very important. I think, on all of these issues,
it is in everyone’s interest to develop
high-level rules of the road so that the
freedom and openness that exists on the
Internet, that consumers expect, that
innovators expect, is preserved, so that
businesses throughout the Internet ecosystem
can continue to innovate and invest
and contribute to our broadband
future.

MCN: But if it is months or years until
the FCC’s authority is clarified, what can
the FCC do?

JG: We expect that providers of broadband
service will maintain a free and open Internet, and be honest
and transparent with consumers.

MCN: And if they aren’t?

JG: I assume they will. But if a
problem arises, the FCC will
protect consumers.

MCN: What, if anything, needs to
happen with the retransmission
consent process?

JG: We are taking a look at the
framework. The experiences
over the Christmas/New Year’s
holidays and in April were real
warning signs that there is some
creakiness to the framework
that may not be serving consumers
well.

I think it is important that private
parties be able to negotiate
and strike market deals. But we
do need to make sure that the
overall framework serves consumers
who are directly affected
by what happens during these negotiations
and don’t have a seat at
the table.

MCN: Would you argue that it
is in the interest of the industry,
as well as consumers, not
to have viewers lose access
to TV station signals?

JG: Yes. We need to make sure
there is a framework that allows
market-based deals but
serves consumers as well.
The two issues that have been
identified as ones to look at
as part of the framework are
signals being pulled from the
air, particularly without notice;
and the effects on prices
that consumers pay. Looking
at the overall framework
from those perspectives will
be at the heart of our review.

MCN: Your predecessor, Kevin
Martin, slammed cable rates
with relative frequency. You
talked about them at the National
Association of Broadcasters
convention, too, but in terms
of the rise in retransmissionconsent
fees. Does that suggest
you don’t pin the rise in prices
entirely on the cable industry?

JG: I think there are many factors
involved. I think from a consumer’s
perspective, they are
less interested in all of the complex
reasons than in the bottom
line of getting a fair deal for the
amount they are paying. And so,
consumers have concerns and
we have concerns.

MCN: Now that Rep. Rick Boucher,
chair of the House Communications
Subcommittee, and
others on the Hill have made it
clear that they think a spectrum
inventory should precede
and inform any reclamation of
spectrum from broadcasters or
others, how can you stick to the
specifics of the agenda you outlined
in the national broadband
plan?

JG: We’re going to continue
working with all the stakeholders,
working with the wireless
industry, working with consumer
electronics manufacturers,
working with broadcasters.
We’re going to continue working
as a resource to Congress.
The goal is to make sure we have
the spectrum that we need as a
country to lead the world in mobile
innovation.

We know that there are real
challenges to that. We know that
there is a real risk of a spectrum
crunch, and we know that we
can’t wait until we have the crisis
to solve it because
there is no
solution that can
be implemented
instantaneously.
Running, as
we have been
doing, a strategic
exercise for spectrum
to make sure that the use of
our spectrum serves our overall
national needs is essential.
We will continue to work with
everyone involved and be very
clear about our goals, which are
making sure we lead the world in
mobile, that we have the infrastructure
and spectrum we need
for mobile innovation, that we
continue to have a vibrant broadcasting
business.

As you know, in the broadband
plan there is a proposal for a winwin-
win solution, and we will
continue to work with all the parties
on implementing it.

MCN: You called it a spectrum
‘exercise.’ How much flexibility
is there in terms of the timetable
and who the spectrum
comes from and how much? It
is a flexible document, so can
those things change with new
information?

JG:
We are focused on the very
clear goals that are in the plan:
recovering 500 MHz over the
next 10 years, having sufficient
spectrum available for licensed
and unlicensed use, making sure
we preserve a vibrant broadcasting
industry, adding marketbased
incentives and choices
for broadcasters. It is important
that we work on [these things] as
a country to make sure we have
the mobile infrastructure we
need for the 21st century.

MCN: Why are you so confident
that the spectrum reclamation
plan can remain voluntary?

JG: There is so much value in
the broadcast spectrum that in
order to unlock it, we have to
work on it together. It is one of
those issues that, if we work on
together, we can free up spectrum
for mobile broadband, we
can give more choices, and unlock
value for both broadcasters
and the American taxpayer. I
am convinced that there is an
opportunity and a path to an
outcome that is a win for everyone.

MCN: You have talked to NAB
president Gordon Smith. Did
you get the sense that you can
work with the industry on this?

JG: I don’t see any reason why
we shouldn’t be able to. Providing
additional choices to broadcasters
and giving them the
option of sharing spectrum, for
example, in a market really is a
win-win. I’m optimistic we can
get to an outcome that works for
everyone.

MCN: The FCC has asked for
more information about access
to online video. Is the FCC going
to have to get into online video
access if that is where video
delivery is moving?

JG: I can’t talk about the specifics
of the transaction review,
other than to say the process
is moving and we intend to be
very thorough in our review and
tackle all the significant issues
that are raised.

MCN: You talked at the NAB
convention about protection of
basic must-carry rights. What
do you think about the future
of must-carry as the law of the
land?

JG: It is the law of the land, and it
is an important part of the ecosystem
along with retransmission
consent. As we talked about
before, the retransmission consent
framework is something
that hasn’t been revisited in
a long time. Many players are
coming to the FCC saying there
are issues we need to review,
and we think there are issues to
review.

March