Carr Floats FCC Auction for Licenses Without Public Interest Rules

In light of the Kimmel controversy, FCC Chairman Brendan Carr used his monthly press conference following September’s Open Meeting to momentarily float the idea of an auction system that would let broadcasters pay to shed their public interest obligations.

Carr started by stressing his concerns about what he views as the FCC’s long retreat from its statutory duties. “One of the things I’ve been pretty clear about is I think for several years or decades, the FCC has walked away from enforcing the public interest standard when it comes to local broadcasters,” Carr said. “I don’t think the FCC walking away from enforcing the public interest standard has been a good thing.”

At the same time, Carr dismissed criticism of how the FCC defines and enforces those obligations. “If broadcasters don’t like it, they can turn their license in, and they can go to a different type of platform. They can become full-time streamers, can go to cable shows, they can become podcasters,” Carr said.

He then raised the prospect of a fundamental shift in broadcast licensing.

“Maybe there’s a future in which we have some sort of auction and broadcasters can bid to get out from under the public interest obligation and have something that looks much more like a flexible use license,” Carr said. The idea, at first glance, would allow broadcasters to remain under traditional public interest requirements or compete for a new class of licenses with fewer regulatory constraints that look more like spectrum rights held by mobile carriers.

The idea that broadcasters could essentially pay extra to remove themselves to buy their way out of regulatory constraints would be an unprecedented change to a system firmly in place since the landmark Red Lion ruling in 1969.

Growing concerns over the FCC’s monitoring of speech could make such a change appealing to operators wary of being caught in disputes over political coverage, news distortion complaints, or indecency rules – putting traditional radio and TV operators on more even footing with unregulated competitors like SiriusXM, streaming, and podcasts, while the FCC profits.

Granted, since federal law explicitly conditions broadcast licenses on serving the public interest, implementing such an auction would almost certainly require congressional approval. The courts would also be drawn into the debate over whether scarcity still justifies differential treatment of broadcasters in a marketplace dominated by cable, satellite, and streaming.

Broadcasters themselves could end up divided. Those that remain in the traditional framework may feel disadvantaged against auctioned licensees who would face fewer regulatory costs and restrictions.

Carr has framed his proposal as one way to give stations more options in a rapidly shifting media environment. But if pursued, the auction model could ignite a major policy fight over whether broadcasters can, or should, escape the obligations that have defined their role as public servants.