FCC Chair Tells Broadcasters to Go From ‘Disrupted to the Disruptors’
Federal Communications Commission head Tom Wheeler urged broadcasters to take advantage of the Internet and transition from being “the disrupted to the disruptors” in a speech at the National Association of Broadcasters show last week, according to The Hollywood Reporter. Wheeler is trying to encourage traditional television broadcasters to move forward with technology while encouraging them to support the FCC’s now-invalid net neutrality rules.
The FCC’s net neutrality rules were designed to keep the Internet a fair and open space for all types of content by barring Internet service providers from charging content providers based on how much bandwidth a company’s content takes up. In January, Verizon Communications (NYSE:VZ) won a battle against the FCC over net neutrality when an appeals court in Washington, D.C., ruled that the FCC was overstepping its bounds by trying to bar Internet providers from blocking certain kinds of online content or charge the companies that take up the most bandwidth a higher fee.
The FCC has vowed to rewrite the rules; Wheeler still believes that such rules are necessary to keep the Internet a place of open information for all, and not a place where service providers can throttle content if they feel like it. If traditional broadcasters step up their online efforts and support net neutrality, Wheeler will have more people in his corner when he presents a revised version of the rules and tries to put net neutrality laws back in place.
Wheeler said in his speech at the NAB show that Internet content and service providers are ramping up their efforts to compete with traditional television as consumers increasingly turn to the Internet to get their TV fix. He pointed to Yahoo’s (NASDAQ:YHOO) work toward creating national and local Internet news shows, as well as Verizon’s $1 billion purchase of the National Football League’s rights as reasons that broadcasters should act quickly about getting online.
“I hope you won’t see an open Internet as something for ‘those folks.’ An open Internet represents an open sesame for broadcasters to move from the TV business to the information business,” Wheeler said during his speech, per The Hollywood Reporter. “You possess compelling content, local content, and the ability to promote it — and you can leverage those advantages at incremental costs. You have the opportunity to become the source for local news. [With an open Internet] a network provider cannot block your content.”
Wheeler and the FCC have been criticized by broadcasters recently, as traditional television feels ignored due to the increased focus on broadband Internet. According to The Hollywood Reporter, National Association of Broadcasters CEO Gordon Smith has called out the FCC for its “increasingly singular focus” on broadband Internet. Thus far, the NAB hasn’t taken a stand on net neutrality.
Wheeler also addressed an upcoming spectrum auction from the FCC in 2015 and encouraged broadcasters to take part. “I continue to believe that the auction is a fantastic financial opportunity for broadcasters. The pilot project has provided information about channel sharing capabilities; it works. Spectrum sharing will allow you to maintain your business and take home a check,” Wheeler said, according to The Hollywood Reporter, which also pointed out that the NAB has said spectrum sharing would limit some of the services it offers, like Ultra HDTV.
Internet television provider Netflix (NASDAQ:NFLX) could also benefit from more companies pushing for net neutrality. While broadcasters putting TV online would represent competition for Netflix, the popular online streaming company has already had to pay fees to Comcast (NASDAQ:CMCSA) in order to keep its streaming up to acceptable speeds. More online TV providers could pool their power in an attempt to stop service providers from forcing them to pay fees.
More From Wall St. Cheat Sheet:
- Netflix Coughs Up Cash to Comcast for Fast Streaming
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