Media Chiefs Breathe Sighs of Relief as Pai is Promoted to FCC Chair

By Paul S. Maxwell Paul Maxwell Report Archives

When the President elevated Federal Confusion Commissioner Ajit Pai to Chairman, I could hear the clapping (and sighs of relief) in media boardrooms all the way up to my house at 10,000 feet above sea level.  And that’s not to mention the rally in media stocks.

Pai acted as the most consistent nemesis to former Chairman Tom Wheeler and was often the loudest voice against every other word Tom uttered. Wheeler wanted to dictate his competitive agenda.  Pai wanted to listen to the FCC’s constituents and regulate with a light hand.  He also understood the difference among big, bigger, biggest and little companies and was perhaps loudest of all in opposition to Title II, mandated “net neutrality” and the set-top box initiative in favor of the edge players over the ISPs.  His main argument always was against heavy-handed regulation per se.

So, what’s he going to do?  And how quickly can he do it?

The courts backed the FCC’s Title II decision.  All the public comments (emphasis on public) by players in the modern media eco-system have pledged allegiance to the concept of net neutrality. They’ve all made varying levels of pledges to honor it no matter what.  The problem: Title II almost demands rate regulation.  That’s a nice hammer the FCC could use, should it decide to do so.

The best outcome, and the one that Pai (who truly understands communications law) might be able to engineer, is a return to former FCC Chairman Michael Powell’s light hand … less ominous threats to those who might not keep their word about net neutrality.  Also, Pai has launched his chairmanship promising to close the so-called digital divide.  That should play well with everyone.

Meanwhile, the new Congress might find the time to give him a hand.  Senate Commerce Committee Chairman John Thune is trying to craft a bipartisan (no kidding) legislative solution to protecting the open Internet short of relying on Title II.  He “isn’t there yet,” but has made it a priority.

Pai will also soon get to weigh in on proposed media merger activity.

Random Notes

Speaking of media mergers, as I have watched Comcast’s success with its corporate marriage of distribution and content, I’ve suggested that others would begin to mimic its model.  The first move, I thought, would be Verizon acquiring AOL et al and then moving to acquire Yahoo (complete with hacking overhangs).  I wrote a few months ago that, after Charter fully absorbed both Time Warner Cable and Bright House, it should move to acquire Time Warner.

Of course, AT&T beat me to that by actually agreeing to buy Time Warner.  Proved the point, but not as I expected.

So then, I mused, Charter should acquire LionsGate along with Starz (both with a little Liberty).

I should’ve thought about Verizon again … why shouldn’t it grab Charter?  Maybe Verizon should have waited for Charter to get T-Mobile or Sprint before moving?

The long-term new major media model is a (very) few companies with major holdings in every aspect of media: content (production and packaging) plus distribution via any means -- fiber, cable, paired wire, Internet, satellite, cellular, wi-fi, lo-fi and whatever comes next (light waves, anyone?). Can you say media oligarchy?

About the “running war” on media by the new Administration.  Let’s see just what that means. When the President decries the “dishonest media,” he just means, “They reported what I said yesterday, not last week!”

When top advisor Stephen Bannon says the media should “shut up,” he means the media should just “write what we tell you.”

When the Administration says “running war,” it means “we’re going to shoot back … always!”

When the Administration says, “The media here is the opposition party,” it means what it says.

Oh, by the way, the Doomsday Clock moved a little closer to midnight.  Former Soviet leader Mikhail Gorbachev wrote in Time, “Politicians and military leaders sound increasingly belligerent and defense doctrines more dangerous. Commentators and TV personalities are joining the bellicose chorus. It all looks as if the world is preparing for war.”

Here’s when WWIII will start: On February 11, 2018 at the ski jump in PyeongChang, South Korea.

Though I pray not.

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