Federal Communications Commission Chairman Tom Wheeler told broadcasters Tuesday that they need to stop thinking like TV station owners and imagine a more Netflix-like future for themselves online.
In a speech at the National Association of Broadcasters annual convention in Las Vegas, Wheeler, a former venture capitalist and lobbyist, suggested station owners need to look toward the future online or they may find themselves trampled like other failed industries before them. (He drew a comparison to canals and barges that were overtaken by railroads.)
“Your content represents far more than the potential for retransmission fees,” Wheeler said, describing the money stations get from pay-TV providers to rebroadcast channels. “It can be the basis for a fixed and mobile-delivered cable-like service.”
Instead of letting Netflix, Amazon and other over-the-top video providers gain more viewers, local TV station owners should start offering competitive services, he said. “Broadcast licensees are in the pole position to leverage off that trend to deliver broader OTT services anchored in local news and information.”
It wasn’t necessarily the speech that broadcasters were expecting from the FCC chairman, who has focused more time recently on trying to encourage broadcasters to participate in an upcoming auction of TV airwaves. Wheeler took a conciliatory tone throughout the speech in an effort to calm broadcasters who have increasingly expressed concerns that he’s out to get them.
Wheeler’s appearance was met with polite applause even though some station owners are still fuming about other recent actions taken by the FCC, such as barring TV stations from jointly negotiating fees with cable operators.
NAB chief Gordon Smith struck a congenial tone Tuesday and offered gracious comments for Wheeler, but it was a different scene on Monday, when Smith accused the FCC chairman of being out of touch.
Smith, a former Republican senator, accused Wheeler’s FCC of treating TV stations like “dinosaurs” and doing what it could “to encourage TV stations to go out of business.” Later in the day, Univision Chairman Haim Saban joked (sort of) that FCC now stands for “Friendly Cable Commission.” (Wheeler is a former cable lobbyist.)
TV station owners are peeved the FCC recently shut down their ability to form joint-sales agreements with other local stations and share advertising staffs. The agency was concerned stations had been using the agreements to get around media ownership rules, which limit the number of stations a company can own in a local market.
They’re also worried what will happen to their signals when the FCC starts the process of cramming stations closer together to free up airwaves to sell to wireless carriers.
The FCC is trying to convince some TV station owners in the top 30 markets in the U.S. to give up some or all of their airwaves in an upcoming auction. Stations aren’t required to give up their airwaves, but it’s not clear yet how many will voluntarily agree to go along with the FCC’s plan.
“In light of the FCC’s recent action, it’s not surprising that broadcasters are finding it hard to trust that the FCC will follow through on its commitments during the incentive auction,” Smith said Monday.
The FCC is planning on holding the auction next year and is expected to release closely watched technical rules for how the auction will be conducted (and who can bid for the airwaves), next month.