Walden affirms support for voluntary incentive auctions


Greg WaldenHouse Communications Subcommittee Chair Greg Walden (R-OR) addressed the auctions in a speech before the NAB, and also suggested that he’s open to discussing retransmission consent although he does not see a strong reason to make any changes to the current system, among other things.

He also urged NAB attendees to get on board with his subcommittee’s effort to reform process at the FCC, including the imposition of shot clocks on matters under FCC review.

Here are Walden’s full remarks.

Thank you, Gordon, for that introduction.  And thank you for your sound, visionary and strong leadership of the NAB.  You stepped in at an important time in the history of broadcasting where technology and innovation are changing everything at the speed of light. 

And I know you don’t do it alone, you’ve built a strong and effective organization and work with a terrific board, led by Paul Karpowitz and TV board chair Marcie Burdick and radio board chair Don Benson.

Moreover, you get to work with the women and men of the broadcast world who entertain us, inform us, help us and, in times of emergency, save us.  My father started in this industry in 1934…as an engineer…and went on to manage and own stations for nearly 52 years.

I literally grew up in this business, myself—starting as a janitor in my parent’s 1kw AM station as a young teenager, spinning records on air at 15, covering fires and floods with mobile units, wiring studios, fixing cart machines and installing computer audio automation in the early 90s.–and with my wife –owning and operating stations for two decades—I know the ups and downs, the challenges and rewards and the fun, of the broadcast industry.

Two things have happened to me along the way that I never dreamed possible.  One occurred a few years ago when our radio team won a Marconi here at the NAB. 

The second is: after decades of being regulated by the FCC never in my wildest dreams did I imagine that I would chair the subcommittee in Congress that regulates the FCC.

And what a time to hold the gavel.  Enormous change is upon us all, and especially upon industries that produce and distribute content.

I’m sure at times it must feel like trying to jump on one of those grade school merry go rounds when the junior high kids have shown up and begun spinning it as fast as they can.  Sometimes just holding on to what you have is a challenge.

The good news is that this is an industry that was born out of disruptive technology.   David Saranoff translated the dots and dashes of Morse code to tell the world of the sinking of the Titanic.  And he figured out that those electronic bursts could allow music to sing from a box, eventually called a radio.

And if you could get voices out of box, then why not pictures.  And television was born.  As radio added FM, TV added color.  78s gave way to 45s and then CDs and TV went digital and HD.

New entrants arrived…cable, satellite…and with them disruption, innovation and adaptation.   Delivery mechanisms are always changing.  The only constant is the public’s appetite for content. 

I often joke that the DTV transition and each satellite television reauthorization I’ve been through reminds me of the lesser-known clause in the Constitution guaranteeing Americans the right to consume whatever content they want, whenever they want, however they want.

Mobile TV, FM chips, and smartphone apps give that “clause” even more meaning as viewers and listeners engage not just at home, but increasingly on the go. In that vein, I was pleased to see that Sprint and Emmis Communications recently entered into a voluntary agreement to include FM chips and a broadcasting app in smartphones. That’s the marketplace at work, with companies experimenting to offer their customers more choices. I hope wireless providers and broadcasters negotiate more of these mutually beneficial agreements going forward.

The growth in out-of-house consumption of radio and television presents tremendous opportunities for you to reach your audiences. It also may be a good sign for the American waistline, since we no longer need to be couch potatoes to watch that marathon of Big Bang Theory.

As the Chairman of the House Energy and Commerce Subcommittee on Communications and Technology, I have a front-row seat to these changes.  With this in mind, I will focus my remarks on three issues our subcommittee is addressing that bear directly on broadcasters: the incentive auctions, the expiration of the current satellite television authorization, and FCC process reform.

Passage of the spectrum and public safety provisions in the Middle Class Tax Relief and Job Creation Act of 2012 was a landmark in U.S. communications law.  But the work of the Congress starts, not ends, with passage of a law. I intend to continue vigorous oversight of the FCC to ensure that the agency lives up to the language of the statute.

The law contains carefully crafted language we worked on with Gordon and his team, as well as other stakeholders, to clear spectrum for mobile broadband and help fund a nationwide public safety network while treating broadcasters fairly. The decision by a full-power broadcaster to relinquish spectrum is strictly voluntary. And the ability to share spectrum through multicasting may allow stations to generate substantial revenue by shedding only some spectrum while remaining on the air. In the past, broadcast licensees that were inclined to sell had only one option: sell to another broadcaster.  But as the value of spectrum skyrockets, incentive auctions now provide broadcasters that wish to sell additional options.  Broadcasters that sell can then channel that money back into other stations or other projects.

That’s good news for those looking to sell, but what about broadcasters who are not interested?  As I have said before, voluntary means voluntary.  As the FCC moves through the incentive auction process, I intend to ensure that the Commission properly implements the provisions of the Act to preserve a vibrant post-auction broadcast environment. To ensure that broadcasters who wish to remain broadcasters can do so. To ensure that the FCC makes all reasonable efforts to maintain coverage areas. To ensure the FCC coordinates with Mexico and Canada to mitigate interference for border state broadcasters. To ensure that the FCC raises enough money to compensate stations that return spectrum, to reimburse those that relocate, and to help pay for the public safety network.  And to ensure that—after putting broadcasters through all this—the FCC does not just turn around and give away spectrum.

Despite the way some folks back in Washington would like to frame the issue, I don’t see this as a fight between broadcasting and the wireless industry.  In fact, I think you have many reasons to work together to make this auction successful, as can be seen in your recent collaboration regarding potential band plans. An efficient auction that compensates as many broadcasters as choose to sell, that provides a stable environment for broadcasters that choose not to, and that maximizes auction participation and revenue is in everyone’s interests.

This will be one of our main oversight functions this Congress. But as important as oversight is to the business of Congress, we are still a legislative body. One piece of legislation we must address this Congress is the satellite television authorization, which expires Dec. 31, 2014.

We have an opportunity over the next two years to examine whether the law is still serving its purpose in a video market that would be unrecognizable to those who worked on the original legislation in 1988. Some are asking whether the law is needed at all. Others wish to expand it. Last month, we set the table for this discussion with a hearing to examine the current state of satellite television law.  The rules surrounding regulation of broadcasters and satellite television providers are some of the most arcane areas of law we confront in our subcommittee, which is why we will have several more hearings on this topic. 

But as we go forward I am open to an examination of the larger video marketplace and asking some difficult questions. While I’m not yet convinced retransmission consent needs reforming, we must begin a discussion on other issues in light of competition and the rise of Internet video.  The central questions we should be asking are, first, can we better ensure television viewers have access to the broadcast programming they want while respecting the rights of stations that transmit it over the air, the networks that create it, and the cable, satellite and broadband companies that deliver it? And second, does doing so require more or less government intervention?

This will be a challenging conversation, but one that we must undertake if we are to ensure that consumers across the country have access to high-quality, diverse, and local content.  I intend to dedicate a large part of the subcommittee’s time in the 113th Congress to getting it right. 

Finally, I would like to talk about my friend and yours – the FCC- The Friendly Candy Company. The rubber ultimately meets the road at the Commission where the laws we pass are implemented and the regulations applied. Your ability to be heard on incentive auctions, satellite or broader video reform, or the timely transfer of a license and any other issue depends on good process at the FCC. I encourage you to support the FCC process reform legislation which passed the House last Congress and that I will reintroduce again later this Congress.

I have spent a fair amount of time dealing with the FCC as a former licensee, current amateur radio operator, and Chairman of the subcommittee of jurisdiction. In each of these capacities I have reached the same conclusion: that the FCC has been more concerned lately with expanding its authority than working with us to embed better processes. 

Congress has the authority and the responsibility to ensure that the agency conducting the public’s communications business leads the government with transparency and accountability.  It’s not asking too much to have the FCC actually codify a set of best practices and operate by them.

I have spoken at length about the need for the FCC to establish shot clocks so that parties know how quickly they can expect action in certain proceedings.  This happens to be an area in which I have personal experience, to which I am sure many of you can relate.  In 2003 I filed a petition with the Commission to license a couple of translators for our stations in Oregon.  While the licensing of a translator is not a trivial matter, it is one that the FCC’s Media Bureau should be very familiar with and be able to address in short order.  Licensing of radio stations is one of the core functions for which the Commission’s predecessor agency – the Federal Radio Commission – was created in 1927.  I would like to be able to tell you that the petition was addressed before I sold the station in 2007, but that wouldn’t be true.  No, it was last month that the FCC informed me that my petition had been granted.  To make matters worse, after about 10 years of  waiting, the Commission informed me that I was on a shot clock and had 30 days to perfect the petition. If the FCC is able to set shot clocks for licensees, surely it can set shot clocks for itself and report to Congress how well it is meeting them.

Beyond shot clocks, the FCC should be required to find a market failure before intervening. To conduct cost-benefit analyses before imposing regulations. And to adhere to the radical notion that any conditions on a transaction should be limited to transaction-specific harms otherwise within the agency’s jurisdiction, rather than seen as a means for a shakedown.

Some say the only reform we need is to the Sunshine Act. But allowing commissioners to meet in private and doing nothing else does not sound like process reform and transparency improvement to me.

And the old argument that the reforms I propose would bog down the agency just doesn’t cut it.  I’ve never met an agency that didn’t use this argument, yet they always seem to find a way to “fast track” issues that the Chairman truly cares about.  You need to know that I – and a majority of the Energy and Commerce Committee, and indeed a majority of the House – remain deeply committed to the cause of improving transparency and accountability at the FCC.  Too often the public has had to turn to the courts to prove procedural wrongs at the Commission, wasting time and taxpayer resources and leaving the impression with some that the Commission considers itself above due process, which I’m sure is not what they intend.

Now don’t get me wrong, Chairman Genachowski has made some progress by more often publishing the specific text of proposed rules, requiring some details of the substance of ex parte contacts, by releasing more orders sooner after adoption, and by proposing to eliminate more unnecessary and outdated regulations.  While I commend Chairman Genachowski for these actions, there is more to do and no guarantee without legislation that a future chairman won’t roll back the progress he made. My hope is that the next chairman will partner with me on building an agency we all trust and respect to help foster a vibrant an innovative communications marketplace for the benefit of our citizens and our economy.

Our country’s laws–and the FCC rules–must confront the changing face of communications in the same way all of you do; by adapting to the technology and competitive environment, by being responsive to consumers, and by working every day to maintain the trust of the people. 

In the months and years ahead, I look forward to working with you on the issues of spectrum management, content delivery, innovation and FCC process reform.  I know from first hand experience that your commitment to your communities—in good times and in times of emergency—is an essential part of the vibrant quilt of what makes America colorful, dynamic and successful…as a democracy and as a nation. 
Thanks for what you do.