O’Rielly Seeks to Knock Down Barriers

Commissioner speaks up for economic freedom, licensed incumbents and the rule of law
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Michael O’Rielly keeps on his wall a framed picture of Ronald Reagan and on his desk a memento with the word “Freedom” — both suggestive of his regulatory philosophy. A picture of his two-year-old daughter and a Father’s Day card signed “Daddy’s Grilling Partner” attest to the role of family.

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With more than four years at the Federal Communications Commission including one in the political majority, O’Rielly is no longer the new guy. Radio World Managing Director of Content Paul McLane and Content Manager Emily Reigart sat down with him in February ahead of his appearance at the spring NAB Show. Text is edited for length and clarity.

Radio World: On the idea of a 5G nationalization proposal, you said, “I’ve seen lead balloons tried in D.C., but this is like a lead balloon made out of a Ford Pinto.” Regarding the possibility that then-Chairman Wheeler would circulate a draft item, you said, “Forgive me being pessimistic after having the rug pulled out from beneath the feet of rationality so many times.” And more recently, you told an audience that Chairman Pai couldn’t make a scheduled appearance so instead they were going to get “a shorter, less attractive version of an FCC Republican.” Do you write your own material?
O’Rielly: I have a good staff. But they tend to let me write the colorful stuff. I try to make things lighthearted but also make a point.

RW: Would you say that you have a tart tongue and a quick wit?
O’Rielly: That seems too complimentary. I do like to joke around. I think wit is part of the job.

RW: Since you’ve come into the majority, what’s your big-picture assessment of the FCC’s performance? Is there a signature accomplishment to date?
O’Rielly: Chairman Pai has done a wonderful job, and I hope I’ve been a good partner to him. He and I have a great relationship, I’ve been very impressed with his leadership and excited to see where we go in the next couple of years.

The chairman would say his top priority is the digital divide, closing that. It’s something I’ve spent a ton of time on myself. There are many items that go into that; we just did one on terms of the Connect America Fund Phase Two auction rules. There are pieces people can’t see on a day-to-day basis that set the stage to bring broadband to those who don’t have it.

[Read: Chairman Pai: The Radio World Interview]

RW: How would you grade yourself in regard to radio issues so far?
O’Rielly: I don’t look upon it as one particular segment or another. But in terms of radio, I’ve spent a great deal of time getting to know the industry, understanding what the concerns are, what’s happening in the marketplace and addressing them from our vantage point. From my perspective it’s been about removing barriers that no longer make any sense and addressing the issues the chairman has led — AM revitalization, the main studio rule. A number of burdens have been there so long and not a lot of people have paid attention to them.

RW: What did we learn from the Hawaii false missile alert situation?
O’Rielly: We’re still in the investigative stage, so we’ve got more work to do on our end to get a complete picture. The preliminary report and presentation were made at our [January] meeting. We learned a couple of things that I can’t extrapolate anywhere else yet; in Hawaii there are some management issues and serious staffing capability issues that are really troubling.

Our role at the FCC is the back end — after the notice and the warning have been prepared, making sure providers get it out. That side of the equation worked very well. The wireless companies getting out the message worked very well. The broadcasting industry did an exceptional job getting out the message — and getting the correction out.

The front end — people don’t like to hear it — is not necessarily the FCC’s responsibility. It doesn’t mean I don’t think it’s important. Congress decides our lines of who should do certain things; and that is a FEMA job. … People talk about best practices and corrective measures. That’s on the FEMA side, given the industry side worked very well.

Michael O’Rielly, center, with Paul Rotella of the New Jersey Broadcasters Association and Francisco Montero of Fletcher Heald & Hildreth at an NJBA event in 2016.

Michael O’Rielly, center, with Paul Rotella of the New Jersey Broadcasters Association and Francisco Montero of Fletcher Heald & Hildreth at an NJBA event in 2016.

RW: You mentioned the broadcasters’ response in distributing —
O’Rielly: Thank goodness for the broadcasters! It’s not just Hawaii, it’s everywhere. A massive snowstorm happened in Buffalo a couple of years ago and you have like seven feet in a weekend. How amazing it was that they were able to get the information out. Thank goodness we have broadcasters that educate consumers, especially during time of trouble.

RW: Do you think broadcasters have an additional role to play in some sort of mechanism for calling alerts off?
O’Rielly: I think that’s one thing that’s being worked on in Hawaii. I don’t know if it needs to be done elsewhere. That’s something FEMA is going to have to look at closely.

Broadcasters did a wonderful job. I’m not interested in posing new burdens on them. I want to congratulate the work that they did.

RW: Our industry’s tech leaders feel the decision to close FCC field offices led to the retirement of some very talented people. And there was the promise of Tiger teams. Do you see an opportunity to restore field offices?
O’Rielly: I think it might be a heavy lift to reopen field offices, given the budgetary situation that we face.

The decision on the field offices was made by former Chairman Wheeler. I didn’t necessarily agree with the decision. He had said, “This a path we need to go along,” and it had the Tiger teams. Since then, I’ve been asking the Enforcement Bureau, “Where are the Tiger teams? What’s the status of them?” They seem to be quite lacking. They aren’t able to do what was envisioned. People have called them basically a roving field office; that’s not was anticipated when it was sold to us. It was supposed to be this “strike team” that would hit a particular area because something happened. I’m a little disturbed on where that is, and just getting operational. Last I knew, they were still looking to fill slots. They have personnel openings to try and find the right personnel.

I visited a number of our field offices in my time here, and I really appreciate the work that they do. … I didn’t sign up for Chairman Wheeler’s plan; I think undoing it is probably pretty problematic.

RW: How did illegal broadcasts come to be one of your major issues?
O’Rielly: To me, it’s a rule of law issue. It impacts listeners and it impacts the companies.

Companies themselves have had financial issues; the radio industry is going through some turmoil; AM radio has had some issues. On the financial side, the impact of pirate radio is problematic.

On the listeners’ side I think it’s equally problematic in terms of what they may miss out on by having these pirate stations — whether they’re stealing advertisers and making the other stations less vibrant, or missing requirements like EAS, the warning systems, the good work that broadcasters do.

With Chairman Pai focused on it too, it’s been great. He’s been such a good leader on it. I don’t agree with someone just determining that they can set up their own station at any time. There are rules and obligations that come with getting a license. Our obligation is to shut them down. If for some reason the market is able to handle a licensed station, then we should look at that closely.

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RW: Where are you on your push to get more statutory power to act against landlords, seizure of gear, increased penalties.
O’Rielly: I continue to have my conversations with friends on Capitol Hill. I don’t want to get ahead of myself. It’s not my job. They get to determine when they may or may not act on something. But I get the impression from talking with folks that they’re getting closer to looking at the issues that are important to me, increasing the fines, addressing those who are aiding and abetting.

RW: Many who watch the pirate radio debate scoff at the FCC fines. They perceive that unless the Justice Department picks the matter up, nothing’s going to happen, so who cares. So what do you do about that? Even if you increase the fines?
O’Rielly: Increasing the fines actually does trigger the thresholds at the Department of Justice and their ability to enforce them. If they’re at paltry levels, they tend to focus on bigger cases; increasing the fines does have an impact on that side.

Two, we can have a telephone scammer or someone sending a fax — hundreds of million dollars may be the proposed fine against them, and then you see $14,000 against a pirate radio station; that’s never going to be collected. You can throw multiple fines on somebody and it has no impact. It’s demoralizing to the field staff to know that their work is not being as fruitful as it should be. We’re working through that and hopefully we’re going to see some stuff done in the very near future.

RW: Okay. …
O’Rielly: I don’t want to get ahead of myself.

RW: Okay. I see you smiling about that. There’s something going on there. Let me ask you about AM revitalization. That has included modification of FM translators and expansion of cross-service translators. These are popular with a lot of AM owners; but some folks say this is only a short-term solution, or actually detrimental because we’re actually moving people over to the FM band more than we are focusing on AM. How do you view the success of AM revitalization so far?
O’Rielly: To me it’s about giving AM stations an opportunity to reach the marketplace.

To the second part of your question, it was very important for me to have conversations with those stations that are not on AM. I talked to a number of [FM stations] and said, “Does this cause you problems if we were to do this?” And they said, “No. We actually work in cooperation. We don’t have difficulty with their becoming an FM broadcaster.” That was helpful for me. I had a number of conversations to make sure that wasn’t going to be problematic.

In terms of the first part of your question, it really does give an AM broadcaster an opportunity. But the marketplace is what’s going to decide whether they succeed. Does AM have a long-term future? That’s what consumers are going to decide. The technology is only one component of it. Do they serve the local consumers? Does it attract enough listeners? Is it a long-term medium? That’s for the marketplace to decide, in my opinion.

RW: One then might say, “Why have an AM revitalization procedure at all?”
O’Rielly: There are technical limitations that could be addressed with the [translators] that full-power FM stations don’t have a difficulty with. To give them that opportunity to me is just like removing a number of barriers on rules. Remove those things, give them the opportunity and see where the market takes it.

RW: Do you think we’ll see the FCC change protected contours and give less protection to those big Class A stations that they’ve always enjoyed?
O’Rielly: Those are harder cases to say. I can’t tell you right now where we’re going to come out on that issue. It’s been something debated for quite a while. There’s [also] a proposal to create a new class on the FM side.

To see where the path is, you’ve got to see what’s the opposition. Many of these have opposition, and it makes it’s harder and probably more unlikely. But we’ll just have to see.

RW: The historic structure of the AM band, with big signals that covered so much of the country — the historical justification for that, one might argue, is long since gone.
O’Rielly: Don’t disagree with that, but I’d also say people bought those stations with the understanding of the rules that were in place. They’ve put finances based on those. If they had known, you would have different purchasing prices. There are expectations that we can’t just mightily wipe off without serious consideration.

RW: Broadband. You wrote an op-ed with Sen. Ted Cruz about net neutrality and made a comment that it was “imperative to establish a strong deregulatory federal framework.” You’ve also been quoted as saying, “People do a disservice to overstating the internet’s relevance.” Given its critical role in society, shouldn’t the internet be a utility?
O’Rielly: The internet is very important. It can be incredibly beneficial to consumers.

I disagree that it’s a necessity. There are individuals who do not have the internet today and are quite successful in the marketplace. I don’t think it’s an absolute necessity. Necessity is a term that gets denigrated when we go down this path. A necessity, if you look at circumstances, you need food, shelter, water, power. If you look at what the needs are in areas such as Puerto Rico, it’s power, it’s clean water.

Communication is very important. It doesn’t rise to that exact level, in my opinion.

RW: Isn’t it getting there?
O’Rielly: I think it’s increasingly important; but even at the time of [peak] telephone penetration we only had 95 percent of reach of telephone. No matter what we did, we couldn’t get the last 5 percent; and people still were able to function.

If it’s a necessity, then you have a right to it. Therefore, you can’t be denied it. So you don’t pay your bill, you can’t be — there are consequences to declaring it certain things.

We have utilities for water and sewer; that’s not where broadband is today. These are private sector companies that offer service. We haven’t nationalized them; localities are not declaring them the local property in the community. That’s the wrong direction to even contemplate. It is a private-sector service being offered to consumers. They are incredibly increasing investment to try and meet consumer demands. It’s exciting for consumers. It’s a race to provide service and meet all the different technologies and what you can do on the net. It’s incredibly valuable to individuals.

I’m a full-bore supporter of the internet and what it can be. I just don’t declare it a necessity.

RW: How serious is the FCC about sharing the C Band with wireless carriers for broadband? We hear there’s a proposal for a market-based approach that would split up the spectrum and share it with satellite and wireless broadband. There’s also disagreement about just how many stations broadcasters are using. How serious is that proposal?
O’Rielly: It’s a very serious proposal. I think it’s very likely to move forward. Radio broadcasters and broadcasters in general should not be concerned. As someone who’s leading the effort on the 3.7 to 4.2 band, and the 6 gigahertz bands, which are the C Band up and down links, we’re going to take care of incumbents. I’m not interested in disrupting incumbents.

A market-based mechanism may be the best way to go. Intelsat and Intel have a proposal. I really appreciate the work that they’ve done on that; but I haven’t endorsed that mechanism yet.

I’m looking at how we would best go about the 3.7 to 4.2, how would we make that happen without disrupting service to local broadcasters.

You also raised the point: We don’t know exactly who’s operating today. You get interference protection if you’re registered; you don’t if you aren’t. We’re trying to figure out how we protect those we don’t know about. “Tell us if you exist.” It’s hard to protect people we don’t know about.

C Band, itself, may not be the way to offer service. Maybe it could be done through fiber. It can be other bands, satellite. I’m open to looking at different ways to make sure that broadcasters — or whomever is operating in the band, there are multiple players — aren’t disrupted and are not harmed in the process.

RW: Related to that is general concern about noise and interference across the dial. Can’t the FCC do something to protect over-the-air incumbents more aggressively?
O’Rielly: The noise floor is a huge problem. It’s not just the radio band. It’s a lot of different bands.

Consumers want more technology, more wireless technology. It does have an impact. Our job is to protect from harmful interference those licensees that have them, and we will continue to do so.

The noise floor, in general, we are trying to figure out how you would deal with and what does it mean. Each band is a little different. It’s not an easy answer though.

RW: The FCC’s Technology Advisory Council has taken this on and asked for comment on spectrum management proposals. It seems, in general, there’s a need for better understanding of that environment — quantifying it. There was a proposal to conduct such a study; I don’t believe that’s been happening.
O’Rielly: I can’t speak to it off the top. There had been a proposal to establish a noise floor, and we weren’t ready to do that at the time. We were trying to figure out, how do you quantify it? What does it look like? What does it mean for this band, how does it differ from over there? It wasn’t ready at the time. It doesn’t mean that the TAC recommendations don’t lead to something along those lines. We just weren’t ready at the time. I think it was premature.

RW: What priority do you see next that will affect radio licensees and people in the industry?
O’Rielly: I don’t want to point to any specific item; the chairman gets to dictate the schedule. But what you have seen so far will continue, and I’m excited about that. We have a media modernization effort; every month we’re taking something up along these lines. If there are burdens on the industry that no longer make any sense or are unnecessary given the marketplace competition, for multiple reasons we want to get rid of those.

You’re going to see more of the same, in a good way.

RW: It was a big change to see the main studio rule go away. How can stations really be local without a studio?
O’Rielly: I don’t believe the elimination of the requirement is going to have a tremendous impact. In radio, like the television side, stations are committed to the community. They have to be. They know that’s how you make money. That’s how you stay profitable.

I don’t believe their ties to the community are driven by the fact that they had a particular site, on this street, in this community. I don’t see a tremendous change in how radio operates. We’re not going to see tremendous closure of studios in the near future. There may be some efficiencies to be had. It shouldn’t be something though where people make decisions based on FCC rules. We want to make sure that radio is allowed to have efficiencies to address what’s happening in the marketplace. I don’t think for a minute that they’re going to change their behavior in staying incredibly local. It’s the only way to succeed, in my opinion.

[Related: "Sources: Starks Proposed for Democratic FCC Seat"]

RW: Should the FCC raise radio’s ownership caps — local station numbers?
O’Rielly: I’m open to exploring that. We will look at that as part of our quadrennial [review].

I have suggested that we need to eliminate the AM/FM sub-caps. I don’t think the downsides that people have suggested actually will occur. I got a promise from the chairman that we’re going to look at that as part of the quadrennial. We’re going to start the quadrennial sometime this year, I’m hoping this summer.

Whatever is decided here is going to go into court. We’re still stuck with so many rules because the court hasn’t approved anything — on either side of the ledger, either from Republicans or Democrats or conservatives or liberals. We’ve been basically stuck for so long with no changes, it’s been incredibly problematic.

RW: You’re not a lawyer, working in a town and an organization of lawyers. How does that play out in your job?
O’Rielly: I spent 20 years on Capitol Hill as a staffer. I’ve written, probably, more provisions than a lot of lawyers have. My fingerprints are all over the statute. I don’t pretend in any situation to be a lawyer. I have a wonderful staff who are all layers and they do incredible work. I rely on their expertise on those points. But I don’t think you have to have a law degree to serve in my role; you want varied backgrounds and personalities for commissioners.

RW: Do you think there should be a requirement that at least one commissioner be an engineer, as has been posited over the years?
O’Rielly: No. I don’t think an artificial requirement is the way to go. If that were a requirement, I might not have made the commission. Hopefully I’ve brought some benefit to my time here so far.

RW: You’ve worked for and around Republican lawmakers for two decades. What did you learn from people like Senators Sununu, Cornyn and Kyl?
O’Rielly: I did nine years in the House, 11 in the Senate; it wasn’t intentional necessarily but I found that those I was interested in working for were strong family people. They would rather spend time with their family than trying to get the most publicity for whatever item they’re working on.

That has been something I’ve tried to do in my job here. I try to make it home. I try to go home for dinner, whether I’m cooking dinner or my wife is cooking dinner.

I’ve also learned that there are incredibly dedicated people with different backgrounds. You may not agree with them on every instance. I worked a ton with Democrats and I have a lot of Democratic friends on the Hill. You may not agree with everything that they do; but you have to respect that they’re dedicated to the job. We kind of lost that some in the last couple of years; hopefully, we’ll get back to that. You can have a disagreement of positions, disagree at one moment and then try to find something else.

That’s what I strive to do here at the commission. I might argue with my Democratic colleagues, or even Republicans in the past, not that often; but if there are instances, disagree; and the next day try to work on something different.

I disagreed with Commissioner Clyburn on something in a recent meeting, and this week we did a blog together on an issue. You try to find those partnerships when they can happen.

[Read: Clyburn Adjusts to New Role at FCC]

Telecommunications policy was not partisan for the longest part of my career. A couple issues would spike up. Public broadcasting was one that would spike up and cause some partisanship; more recently net neutrality has gone along those lines and made it seem like Republicans and Democrats can’t agree on communications policy. That’s something the Congress needs to address. If they do, we can go back to doing our job and getting along again.

Commissioner O’Rielly is shown at the Free State Foundation 5G Seminar last year.

Commissioner O’Rielly is shown at the Free State Foundation 5G Seminar last year.

RW: I do wonder what it’s like working on and around the Hill in an environment like it’s been for the last year or two. You clearly are a fan of Ronald Reagan; and I can’t think of a less Reaganesque president than we have right now.
O’Rielly: I haven’t been there for four years but I do keep up. In my time period, 20 years, I lived through some very extraordinary times. There were government shutdowns. We had an impeachment process of the president of the United States. My old office building, kind of nondescript, is where they kept the information regarding impeachment, the Starr report. I’ve seen a lot of things.

This doesn’t surprise me too much or jar me too much. You go with the flow. We’ve dealt with wars. We’ve dealt with domestic attacks. You grow used to the dynamics of things shifting very quickly.

I’m excited to see what the next couple of years have for the new administration. They have a track record so far in a year. They’ve got a lot of problems for the United States to work on, and a lot of success so far. So we’ll just see where it goes.

RW: Spectrum, at least on the FM band, remains very much in demand. To some people, the band is full. Is there anything the FCC should be doing differently about FM band management?
O’Rielly: Just like I’m not a lawyer, I’m not an engineer. That’s why we have some really good folks in the Audio Division in the Media Bureau and in OET [Office of Engineering and Technology] to give some inclination of what the story is.

But I don’t think your estimate is too far off. We have thrown a lot of stuff at the FM band. That’s why the noise floor is of deep concern to a lot of individuals. We have to have a better analysis of that. I think that’s a fair role for the commission.

RW: Does the FCC have a role to play in getting Apple to activate the FM chip in phones?
O’Rielly: We don’t have a statutory role over Apple. The chairman has done a wonderful job in trying to convince them of the benefits. I’m of the same mind — that you can’t do it through a mandate. We don’t have the statutory requirement. I also don’t think that’s the best way to go. But that seems to be the biggest sticking point: how to convince the one company, given that the providers themselves are willing to do so, as they have on other platforms.

RW: I’m curious to your perspectives on whether we might see a time soon when the FCC would allow broadcasters to turn off their analog and go all-digital — whether it’s AM or FM.
O’Rielly: It still seems like the story is mixed in terms of where the industry is on digital radio. It goes back to that point: Is there a general agreement that it should go one way or the other? Right now it doesn’t seem to be the case. I certainly don’t want to mandate we go that direction. …

Whatever side of broadcasting, we want to make sure whatever we do doesn’t cause harm to the listeners or viewers who enjoy their product today.

RW: There have been broadcasters who’ve said, “We’ll never in our lifetime turn off our analog.” Given the television experience, it seems it could be more of a possibility.
O’Rielly: I think that’s a fair analysis. It’s more likely today than in the past. But that doesn’t mean it will happen.

RW: The commission seems to have more of a collegial environment than over the last 10 years.
O’Rielly: It is this year. Under Chairman Pai it’s more collegial than it was. Tom Wheeler is a friend, a former colleague; but everyone walked around holding their breath; it was almost like dancing on the head of a pin. He was a very dominating personality. I think Chairman Pai is a little bit more open. It’s a breath of fresh air.

RW: What role does the FCC play in the dashboard and the broader world of the autonomous vehicle?
O’Rielly: Very interesting question. We are still limited by our statute. Our role in terms of autonomous vehicle is not extensive. We have some spectrum issues; one that’s been important to me is the 5.9 DSRC. [5.9 GHz Dedicated Short-Range Communications is a range of spectrum set aside by the FCC in 1999 for use in intelligent transportation systems]. The system proposed would have interaction with other cars and infrastructure and everything else in their path; I’ve had some concerns about that. But that’s one of our roles, the spectrum around autonomous vehicles. Other safety agencies deal with how the autonomous vehicles work.

The dashboard itself, we don’t have a great role in. I’m just of the mind that radio is so important to consumers, their interests and meeting what they do on a daily basis, that no matter what the car looks like — or maybe we won’t even call it a car, whatever the vehicle is going forward — radio is going to be a part of that equation.

RW: You have a desk ornament with the word “Freedom” front and center on your desk. Why?
O’Rielly: A gift from a former staff person. It complements my overall message. I stated in my first speech that I was going to look upon issues of the commission through what I call an economic freedom lens. There’s a number of criteria that I still abide by — like cost-benefit analysis; does the solution actually bring about what it is supposed to, [solving] the problem that we’re trying to solve; does it have negative consequences?

It also was a mantra that I had on Capitol Hill: Stay strong for freedom. … I think freedom is incredibly important. It’s what makes our country unique — we provide a beacon of light to the rest of the world, what they want to be.

RW: Final thoughts?
O’Rielly: I want to get the FCC to remove the barriers to allowing broadcasters, particularly radio, to serve their local communities. And I thank them for the benefits that they bring. There’s no better participant or active aid during emergency circumstances; there’s no better fundraiser than the broadcaster when the chips are down in the community; there’s no one who cares about their community more than a broadcaster.

 

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A CAREER ON THE HILL

Michael O’Rielly was nominated by President Barack Obama and confirmed unanimously by the Senate in 2013. In 2015, he was sworn in for a new term.

O’Rielly received his B.A. from the University of Rochester and began his career as a legislative assistant to Rep. Tom Bliley in the mid-1990s. He also served as telecommunications policy analyst and then a professional staff member on the Committee on Energy and Commerce in the House of Representatives.

Moving to the Senate, he worked in the office of Sen. John Sununu as senior legislative assistant and later legislative director, and for the Republican Policy Committee as a policy analyst for banking, technology, transportation, trade and commerce issues. He later served as a policy advisor in the Office of the Senate Republican Whip, led by U.S. Sen. John Cornyn. He worked in the Whip’s Office since 2010, as an advisor from 2010 to 2012 and deputy chief of staff and policy director from 2012 to 2013 for Sen. Jon Kyl.

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