O'Rielly Not Opposed to FCC Examining Internet Back-End Deals

O'Rielly doesn’t believe “every scenario … should be filed with the commission” so the agency can “look at the details of everything,” but “I'm interested in it as part of understanding all of the different components,” he said. Like most Republicans, O'Rielly is OK with the idea of paid prioritization on the Internet. “Many parts of paid prioritization already occur, and have for decades,” he said.

O'Rielly was asked if part of the negative reaction to the net neutrality NPRM (CD May 16 p1) was the speed with which Chairman Tom Wheeler moved to bring it for a vote. O'Rielly pointed out that other members called for a delay, but that the chairman alone sets the agenda. Wheeler “picked the timing of the item and its course of action,” said O'Rielly.

O'Rielly also touched on the other big-ticket votes at Thursday’s FCC meeting, three items tied to the TV incentive auction. “There has been an argument that [auctions] should all be done at once and there’s an argument you should space them out,” O'Rielly said. “I'm open to figuring out what the right time frame is. I'm not wedded to any particular time.” If changing the timing of the auction would maximize revenue, “I'd be open to considering it,” he said. “I want to do it as quick as possible, but I want to get it right first.”

O'Rielly said, based on discussions he held with broadcasters at NAB’s recent annual meeting, he remains concerned about the extent to which they will sell their licenses in the auction. “I got the general theme, they're not comfortable with where the current commission is,” he said. “There’s a trust factor that broadcasters have to have.” A March order, which made joint sales agreements attributable for ownership calculations (CD April 1 p4) (see separate report below in this issue) wasn’t “helpful for our overall goal” of broadcaster involvement in the auction, O'Rielly said. “Congress charged us with enticing broadcasters to participate.”

O'Rielly said his stance against spectrum aggregation rules at last week’s FCC meeting (CD May 16 p5) wasn’t tied to the concerns over whether any carrier would participate in the auction. “I have problems with limitations as a whole because I think they can be harmful in terms of the job that Congress asked us to do, in terms of raising revenue, having a successful auction,” he said. “It’s not about any particular company.” A failed auction “doesn’t help anyone,” O'Rielly said. “It’s harmful to our future in terms of potentially having incentive … auctions."

On FirstNet, O'Rielly said concerns about how the network could be structured, and its relationship with NTIA, were raised when Congress was working on the 2010 spectrum law, while O'Rielly was a Senate staffer. “I was significantly worried on behalf of members regarding its organization,” he said. “I worry that that may be a problem. That was definitely something we were acutely aware of at the time.”

Cybersecurity, Deal Conditions

The FCC’s role in cybersecurity remains to be seen, O'Rielly said. “How can we be most influential in improving the situation, while also recognizing that we don’t have a ton of jurisdiction in this space?” he asked. “I'd hate for the [FCC] to duplicate other agencies’ roles. That would be harmful. I don’t think it’s something Congress would want."

O'Rielly said he’s cautious of imposing certain conditions on mergers and acquisitions. “I'm leery of conditions that are unrelated to the issue at hand and the potential harm that may come to consumers,” he said. He said it’s important to start by looking at “the four corners of the application itself” when it comes to approaching mergers. When asked if it’s possible for a cable company to be too large in the current video market, O'Rielly was reluctant to determine the right size of a cable company. “I'm not sure that there should be artificial limitations on how big or how small any company should be,” he said. “There are some market efficiencies to be had,” he said, referring to media chatter about some cable companies wanting to expand to negotiate arrangements with content providers and other players. “I'll take every situation as they're presented before me."

O'Rielly said he’s confident the FCC can reform media ownership rules, while expressing frustration at the commission’s failure to meet the 2010 deadline of the quadrennial review of the rules. “I believe in a full record, and we had an obligation to meet the timeline. … We didn’t and now we're pushing it off to June 2016,” he said. “We don’t have any right to miss the deadline that Congress has given to us, so I have deep problems with that.” He bemoaned that there are problems with newspaper/broadcaster cross ownership, he said: “I worry that the rules do not reflect the current marketplace. … I think we can reform our rules but also respect and protect diversity, local ownership, localism all the different public interests."

Unaffected by Threats

Internet threats of violence against him (CD May 19 p7) haven’t affected O'Rielly’s thinking on net neutrality. “I'm sensitive to how passionate people can be on this very important topic,” O'Rielly said. “I've spent a lot of time working on really difficult issues, such as this, and I've been sensitive to all views on this subject matter. But our public policy issues shouldn’t get us into physical scenarios.” Threats of violence “should not be part of the discussion,” he said. O'Rielly said he “very closely” followed arguments on both sides of the net neutrality debate. “I do pay attention to all the comments that were filed, all the letters that I got from members of Congress,” he said. “They did weigh into my equation."

The public doesn’t always grasp the nuances of the net neutrality debate, O'Rielly said. That’s partly due to news reports that “haven’t exactly captured everything,” or “side notes that confuse people,” he said. “I was getting a number of emails who were thanking me for my vote. … I think that they weren’t exactly aware of how I voted, why I voted. … They probably wouldn’t share my views, given what they had said to me."

To O'Rielly, FCC power is determined by the Communications Act, and “I don’t believe that the Congress gave the commission a great deal of authority over the Internet,” he said. “It doesn’t mean that [the FCC] shouldn’t have some say in the matter, but that’s something for Congress to decide, and articulate, and I worked on a number of those bills and I remember some of them dying over the years.” The FCC should keep a “watchful eye on a number of issues,” but regulation should generally be “light touch,” he said.