CEA Head Blasts Broadcasters for Seeking Delays to FCC Incentive Auctions, Innovation

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By Paul Barbagallo  

 

Television broadcasters are trying to stifle innovation by seeking delays to the Federal Communications Commission's voluntary incentive spectrum auctions and litigating against innovative new products and services, such as Aereo Inc., Gary Shapiro, president and chief executive officer of the Consumer Electronics Association, said in an April 22 speech to the Media Institute.

In wide-ranging remarks, Shapiro first attacked the broadcasters for “employing every possible strategy to slow walk” the FCC auctions, under which the agency will try to reclaim airwaves now used for free over-the-air TV and auction them off to wireless carriers, with a portion of the proceeds paid to the broadcasters.

The TVStudy Controversy

Shapiro criticized broadcasters in particular for protesting the FCC plan to use new software, TVStudy, to implement Office of Engineering and Technology Bulletin No. 69, the Longley-Rice Methodology for Evaluating TV Coverage and Interference.

The Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. No. 112-96), which authorized the FCC to conduct incentive auctions, directed the agency to use Office of Engineering and Technology Bulletin No. 69 to “make all reasonable efforts to preserve, as of the date of the enactment of this Act [Feb. 22, 2012], the coverage area and population served of each broadcast television licensee.” The FCC believes the current software is out of date, but the broadcasters claim TVStudy fundamentally alters the methodology of OET-69, noting that Congress had written the law with “key features” of the software in mind.

“The prior software relies on U.S. Census data from 1990. So, why is the National Association of Broadcasters pushing to use software that relies on 20-year old population data and 20th century technology?” Shapiro said. “I don't know, but this effort to shift the FCC's focus to 'defense' rather than keeping its attention on moving the auctions forward is the latest broadcaster stalling tactic.”

The Response to Aereo

Shapiro next chided the broadcasters for their response to Aereo, a new service in New York City that uses tiny antennas to capture over-the-air broadcast signals that can then be streamed on the internet and viewed on a device of the customer's choice--a smartphone, tablet computer, or internet-connected TV--all without compensating TV stations.

He noted recent comments made by Chase Carey, the president of News Corp., which owns Fox Broadcasting, that Fox may become a subscription channel if Aereo remains legal.

Aereo won a big victory on April 1 in its legal fight with the broadcasters, as the U.S. Court of Appeals for the Second Circuit upheld a lower court decision not to issue a temporary injunction to halt the company's service in New York City. The broadcasters are now asking for a full appeals court review.

“Of course, this is America; anyone has the right to challenge the legality of anything,” Shapiro said. “But to also threaten shifting from free over-the-air to subscription? The Aereo service actually expands the viewing base of commercials. With this threat, the ruse is revealed. Over-the-air just isn't that important. What broadcasters value is not the audience for free over-the-air commercials, it is the government mandate that cable and satellite must carry or pay for their service. This is fine. It may be better for everyone if many broadcasters relinquish their spectrum so it can have bigger and wider uses than the tiny percent now getting their signal over the air.”

When questioned by Patrick Maines, president of the Media Institute, about why he would support Aereo considering the service's implications to broadcast copyright holders, Shapiro said: “It turns out that 'must carry' is the valuable right here, not the copyright.”

“You can't have it both ways,” Shapiro added. “You can't say that free over-the-air broadcasting is the most essential, valuable thing about being a broadcaster and then throw it all away because one product is extending free over-the-air broadcasting to residents of that city.”

In a dissent in the Second Circuit case, Judge Denny Chin called Aereo a “Rube Goldberg-like contrivance, over-engineered in an attempt to avoid the reach of the Copyright Act…”

NAB Reaction

A spokesman for the National Association of Broadcasters (NAB) refuted Shapiro's remarks April 22, saying in a statement that the group's aim is to help the commission have a “successful auction as expeditiously as possible” and that it is confident the courts will declare Aereo to be a “copyright infringer.”