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FCC’s Mike O’Rielly warns ad biz it’s under assault

FCC Commissioner Michael O’Rielly FCC Commissioner Michael O’Rielly at the 2015 ANA Advertising Law & Public Policy Conference

FCC commissioner Mike O’Rielly gave the advertising business a wake up call Wednesday morning on a number of issues that are before the FCC which could adversely affect the advertising business.

O’Rielly, reappointed to the FCC in January, didn’t hold back with his ongoing criticism of an agency he believes is hell-bent on expanding its authority.

“A number of [advertising] issues closely intersect with the FCC. These days that can be a very dangerous thing. Almost every media platform you use to advertise has come under assault by the commission,” O’Rielly told the attendees Wednesday at the Association of National Advertisers annual ad law and government policy confab.

O’Rielly listed the pitfalls that could ensnare the industry, especially from the commission’s recent net neutrality vote, and for the commission’s examination of what constitutes a multi video program distributors (MVPD).

His advice to advertisers: “You should be vigilant. Don’t wait until there is a crisis before you come in.”

Calling the FCC’s net neutrality order “dystopian,” O’Rielly addressed the two biggest pieces of the net neutrality order that could have unintended consequences for advertising: how the FCC interprets privacy under the order, and how it will treat sponsored data plans.

“It should be troubling to any company that uses the Internet to communicate with customers,” O’Rielly said.

The FCC’s recent net neutrality order gives the commission authority over a much broader swath of the communications space. How the commission will deal with privacy is still a big question; the FCC will hold its first workshop on that topic at the end of the month.

While in the past, the FCC has taken a narrow view of telecom privacy and the use of customer proprietary network information (CPNI), FCC Commissioner Michael O’Rielly didn’t rule out that the commission would take it further.

“[Privacy] will become a very important issue at the commission. I suspect you will find a more restrictive perspective about what information can be collected, shared,” said O’Rielly.

“Privacy targeted toward CPNI, time and date, length of phones calls, hasn’t been [applied] to broadband. But under the new definition, we assumed all authority. The edge provider and broadband lines are blurry. We will continue to extend that reach until we are at the edge providers’ door,” O’Rielly opined.

Because of an FCC “catch-all” provision in the net neutrality order, it allows the commission to look at sponsored data plans on a case-by-case basis, another part of the order that O’Rielly has slammed.

“We have given very broad authority to the staff to examine sponsored data plans. I am skeptical that the commission will have a favorable view. I’m worried that’s something that could be set up for the chopping block,” he said.

O’Rielly also said he was troubled by the commission’s attempt to regulate online video services, a media platform that is growing and now makes up two-thirds of Internet traffic. If the FCC redefines some of those services as multi video program distributors (MVPD), a definition currently applied to cable services, O’Rielly said “it’s safe to bet there will be unintended consequences.”

“As lines continue to blur between broadband and edge providers, the FCC’s reach could ultimately extend to other companies that use online information. I foresee FCC rules governing how data is collected, shared and stored,” O’Rielly said.

FCC’s O’Rielly didn’t hold out much hope for a net neutrality bill in Congress.

“Legislation may be difficult in the space because some folks feel they’ve won and some thing they have lost,” O’Rielly said. But those feelings could change “as courts make decisions going forward.”

O’Rielly predicted that litigation could hold up net neutrality policy for “three to four years and be taken all the way to the Supreme Court.”

Traditional media, usually an afterthought before the FCC these days, got some attention in O’Rielly’s remarks.

“Traditional media continue to play a strong role,” O’Rielly said. “But the view down the road is less clear…. The broadcast incentive auction will lead to a reduction of TV stations. For the commission to reach its spectrum clearing goals, about 200 stations must turn in their licenses, either exiting or sharing spectrum with another station, that’s about a 10 percent decrease,” he said.