Wheeler: FCC Should Look Into Consumers Held Hostage Over Corporate Disputes

Chairman Candidate Says Might Be Time for Another Newton Minow Call for Better Programming
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FCC nominee Tom Wheeler said Tuesday that consumers should not be held hostage to business disputes, and that was something the FCC needed to keep tabs on. He also said that the incentive auctions should be expedited, and that maybe the industry was in need of another Newton Minow "Vast Wasteland" moment to use the bully pulpit of the post to call them to the angels of their better programming natures when it came to violence or indecency.

All that and more came out in a marathon--almost three hours with a break for votes--hearing on Wheeler's nomination to be FCC chairman. One potential flash point came when a Republican senator suggested there was an issue that could potentially derail Wheeler's nomination: political speech.

There is currently a petition before the FCC on whether it has the authority to boost political ad disclosures after Congress failed to pass them in the DISCLOSE Act.

Sen. Ted Cruz (R-Tex.) asked Wheeler whether he thought the FCC had the authority " to implement the DISCLOSE Act or otherwise regulate political speech." Some Hill Democrats have pushed the FCC to step into boost on-air disclosures of ads by PACS and other groups.

Wheeler said he needs to learn more about it, but does not need any schooling about how passionately both sides of the aisle feel about the issue. He also pointed out the current openproceeding, which would also limit his ability to weigh in. "I do not miss the expression on both sides as to the strong feelings, and I know this is an issue of tension."

But Cruz was not ready to move on. He pointed out that all the Republican members of the committee, joined by Minority Leader Sen. Mitch McConnell (R-Ky.) sent a letter to then chairman Julius Genachowsi on the issue--essentially advising the FCC not to step in.

Cruz asked Wheeler to submit an answer in writing to the question, and warned that it was an issue that could potentially prevent him from getting the job. A spokesperson was not reachable at press time for comment on what the Senator meant, although a single Senator can block a nomination.

"This is the one issue that, in my opinion, has the potential to derail your nomination." He said he didn't want that to happen.

Sen. Richard Blumenthal (D-Conn.), who supports the FCC boosting disclosures, said he had no potentially derailing issues and advised Wheeler to consider carefully, cautiously and deliberately all of the issues.

Wheeler was asked a couple of times about retrans. The first time he did not say much. But the second time, in response to Sen. Amy Klobuchar (D- Minn.), he provided a little more meat on the bone.

"Today, broadcasters are using retransmission consent as a way of developing new revenue streams where they can get revenue from subscribers through the intermediary of the cable operator," he said, not that there is anything wrong with that. "I believe in that kind of an evolutionary market," he said. But what he doesn't like and says the commission "needs to be attuned to," is "when consumers are held hostage over corporate disputes." He said if he is confirmed, that is an issue he will be looking at.

Wheeler was asked by Blumenthal about the effect of sports-related programming blackouts, which he said upset consumers, and what the FCC could do to prevent blank screens when consumers want to watch sports contests.  Wheeler said that sports blackout rule derives from the days when decisions were made based on what broadcasters had contracted to. "The market has moved since that time. The market has a plethora of new players," the latest example being Verizon Wireless paying a a billion dollars to the NFL to be able to stream NFL games onto mobile devices. "So, clearly this is an issue that is ripe for commission decision."

Sen. Dan Coats (R-Ind.), who lobbied Congress before returning to it, gave Wheeler a chance to respond to critics of his background as the former head of the National Cable & Telecommunications Association and CTIA: The Wireless Association. Coats said he had let his former clients know they were starting with a clean sheet. Wheeler agreed: "I was an advocate for specific points of view. I hope I was a pretty good advocate. If I am fortunate enough to be confirmed, my client will be the American public."

The Parents Television Council, Morality in Media and religious broadcasters have all been pushing the FCC not to change its indecency enforcement policy along the lines of the "egregious" only approach adopted by Genachowski last fall. Sen. Tim Scott (R-S.C.) asked what Wheeler's approach would be to indecency enforcement.

"I have three brand new grandkids," he said. "I am old enough [he is 67] to when I see some things I kind of grit my teeth and say 'is this what I want my grandkids to be seeing. Whether it be violence or obscenity or indecency or whatever. At the same point in time, the courts have been pretty specific and restrictive. I do believe, however, that it is possible to call upon our better angels with some leadership." He did explicitly say he was drawing a distinction between taking regulatory action and using the FCC post to urge restraint, but that was the impression. Although he did reference Newton Minow, whose speech to broadcasters in the 1960's about the industry being a "Vast Wasteland" still smarts--Minow was a her of sorts for FCC Chairman Julius Genachowski.

"I remember Newton Minow talking about television's 'vast wasteland.' He did that without regulatory authority. He caught the public's attention. Maybe it's possible to do the same kind ofthing today, and say: 'Can't we do better.'

Wheeler also said he thought the FCC needed to move more swiftly and give business more regulatory certainty and that the world would transition to IP delivery with or without the FCC, the only question being how it should mitigate the impact.

Wheeler agreed with Blumenthal that not all spectrum was created equal, but was not ready to say how that should translate into policy about spectrum auctions or local market spectrum holdings.