On a roll
NAB's Eddie Fritts expects to keep on winning and prove the critics wrong
By Paige Albiniak -- Broadcasting & Cable, 4/7/2002 8:00:00 PM
After 20 years at the helm of the National Association of Broadcasters, Eddie Fritts can point to a long list of legislative and regulatory victories that have helped keep most TV and radio stations thriving, even in these tough economic times.
And the 61-year-old Fritts seems confident that NAB can ring up some more wins as it tries to ward off competition and ensure broadcasting's place in the mediascape of the future.
Those wins, if they come at all, will not come easy. The forces arrayed against NAB are growing stronger, and NAB has been weakened by the departure of some of its most influential members. And critics say the organization is suffering from tired and inconsistent rhetoric, a we-want-it-all attitude and short-sightedness.
Yet most believe Fritts and company will prevail. NAB members love their president and the team he has put together. No one squawks much about his million-dollar-a-year salary. And other Washington lobbies still consider NAB one of the top shops in town.
"By any standard or measurement, we would have to be very pleased with Eddie's performance," says Steven Newberry, president and CEO of Commonwealth Broadcasting Corp., Glasgow, Ky. "Eddie's a small-market broadcaster that has proved to be unbelievably adept in Washington, D.C."
Says Walt Disney Co.'s top lobbyist, Preston Padden, "You'd be hard-pressed to find any Washington operative with a better track record than Eddie Fritts." Disney-owned ABC is the last major network representative on NAB's board.
"Eddie at heart is a politician himself. He's a master at both managing his troops internally and delivering their message to the outside world," says Carol Melton, head of Viacom's Washington office. Viacom pulled the CBS network, CBS's owned-and-operated stations, and Infinity Broadcasting out of the NAB in April 2000 over a policy dispute.
The association is fresh off a big win in Congress, where it soundly defeated an attempt by Sen. Robert Torricelli (D-N.J.) to force broadcasters to give deep discounts on campaign ads to federal politicians. NAB got what it wanted on low-power FM, getting Congress to pass legislation severely limiting what the FCC could do. With the help of the networks that were then members, NAB got the FCC to loosen TV- and radio-ownership rules. NAB also successfully lobbied Congress for legislation that allowed the consolidation in the radio industry that has brought that industry back to life.
And, perhaps most important, NAB persuaded Congress to give it a huge chunk of spectrum for its transition to digital and to write legislation that essentially gives broadcasters all the time in the world to convert. When more than half the TV stations in the country earlier this month asked the FCC for permission to delay their conversion, the reaction from policymakers has been to press cable harder for cooperation.
Fritts is first to share the credit—with his experienced staff and with the army of station owners and managers that can be called out to lobby virtually any lawmaker in the country. "That's the backbone of what makes NAB effective," he says. "We bring broadcasters to Washington, and they phone, fax and send e-mails to their congressmen. They also have news bureaus in Washington."
It also helps that NAB is financially strong, Fritts says. The NAB has an annual operating budget of $48 million. And, because of the annual convention's highly successful technology exhibition, it has amassed a war chest of $80 million.
But not all is well on N Street, where NAB has long maintained its headquarters in Northwest Washington. The lobby has been weakened by the loss over the past two years of three of its largest and most influential members: Viacom/CBS, NBC and Fox. They split primarily because of a dispute over the national 35% TV-station ownership cap. The three want to eliminate it. But the smaller broadcasters who now control NAB want to preserve it as a check against the networks.
And critics also believe the gimme-gimme attitude will eventually catch up with the industry. NAB insists on must-carry, which guarantees TV stations free carriage on cable systems—without obligations. It demands digital TV channels—without obligations. It wants help with converting from analog to digital service— without obligations.
At the same time, the association complains loudly to Congress and to the FCC any time a potential competitor shows up—low-power FM, for example, or satellite radio.
"I think NAB cries wolf a lot," says one lobbyist. "They are always saying, 'This is the big one, this is the big one,' like Fred Sanford."
Fritts makes no apologies for the DTV demands. "Ultimately, only we have the mandate of a government timeframe. Everyone else is riding on our coattails. And, yes, it is important to have cable carriage. And, yes, it is important to have plug-and-play interoperability between cable set-top boxes and digital television receivers. And, yes, it is important to have built-in tuners in every receiver."
NAB's membership has put Fritts in an awkward position. On one hand, he argues for maintaining the national TV-station– ownership cap on grounds that it would damage localism and diversity. On the other, he argues for relaxing every local ownership restriction as if it would have no negative effect on localism and diversity.
"The fundamental problem Eddie has from an FCC perspective is that NAB's overall message is to get government out of our business," says one Washington analyst, "but their fundamental Washington message is get government into other people's business."
Asked how he squares those positions, Fritts quotes Rep. Ed Markey (D-Mass.): "Consistency was never the mother's milk of the political process."
To justify its demands, NAB claims that TV and radio are special because of their commitment to local programming and community services. With most broadcast stations now owned and sometimes programmed by corporations in other cities, some think NAB's localism argument is wearing a little thin.
"That argument was sort of dead on arrival, but now everyone is at the funeral," says former FCC chairman Reed Hundt, never a fan of broadcasters. "If broadcast TV is not on cable, then it's finished."
Public-interest advocates believe localism is important and is the reason to preserve broadcasting. The problem is that, as broadcasters, "they think they are doing it," but they aren't, says Andrew Schwartzman, president of non-profit Washington law firm Media Access Project.
Fritts maintains, however, that broadcast localism is more than smoke and mirrors. "The radio industry has been able to diversify and be faithful to the government compact. They have been allowed to do it in ways that are consistent with current trends. While they may, in fact, take their back-office billing or their engineering and consolidate those, it seems to me that each of their stations has a separate identity. Part of what that is, it seems to me, is not necessarily the music they play but what the announcers say in between."
NAB's many friends in Congress say they still believe in localism. "Members know that their constituents tune into these stations because of the local content," says Rep. Billy Tauzin (R-La.), chairman of the House Energy and Commerce Committee. "I don't think NAB has to sell that argument to Congress. I think Congress is keenly aware of it and of their own constituents."
Fritts and NAB also take some hits from being too defensive and too short-sighted.
"I think they are a very muscular organization, but they aren't particularly strategic," says the analyst. "On the business- strategy side, the association certainly hasn't led them into the future."
To do that, detractors say, NAB needs to bone up on the high-technology issues that more and more are dominating Washington, like Internet streaming and copy protection for digital content. "Capitol Hill still considers NAB to be a very traditional organization that doesn't deal with cutting-edge issues very well, particularly copyright," says one Washington lobbyist.
NAB members don't seem worried and, in fact, feel that NAB is doing the job it should be when it comes to leading them forward.
"One of the things that NAB does really well is focus on what is on the table today, while thinking about what will be important in five years," says Peter Ferrara, senior vice president of Clear Channel's Southeast regional group, Orlando, Fla.
But some say that, in five years, broadcasting may be an entirely different business: "We're about two to three years away from a unanimous recognition," says Hundt, "that the most valuable things the broadcasters have are must-carry and spectrum."
With the proliferation of voices now provided by cable, satellite and the Internet, Hundt says, must-carry will not survive for long: "It will be a miracle if broadcasters keep winning this, and, eventually, they will lose."
Moreover, he points out, broadcasters' spectrum is "getting more valuable by the minute." That will force the government to put pressure on broadcasters to get off the spectrum so it can be used for other things—wireless data applications, in particular, he says. "You can't stop technology. Government will get rolled if it stands in the way."
If Hundt is right, broadcasters are in real danger of losing their two most valuable assets: spectrum and must-carry.
Fritts downplays the threat. "Congress made a considered decision," he says of its grant of a digital channel to each TV station. "They thought about it, studied it and made an objective decision that broadcasters should transition to digital television."
Congress won't go back on that decision, despite the regular threats from some lawmakers, he says. "Broadcasters already have given up channels in the 80s, 70s, and now we're giving up channels 60-69 and 52-59. At the end of the day, we are the only ones giving up spectrum."
NAB also has put its faith in Congress and the courts on must-carry. So far, the courts have gone against conventional wisdom and upheld the doctrine time and time again. Everyone thought the Supreme Court would throw out the doctrine in 1997, but the high court upheld it 5-4. The Fourth Circuit Court of Appeals in Richmond, Va., recently affirmed the rule again when it was challenged by satellite-TV companies. The Supreme Court could take another crack at must-carry if it chooses to review the Fourth Circuit ruling.
Even though broadcasters have their share of critics, you've got to bet on Fritts. The NAB hasn't shown a lick of vulnerability in recent years. And that means someone at the NAB is doing something right.
To its members, after 20 years, that someone is Eddie Fritts. Says Clear Channel's Ferrara, "NAB and Eddie have sort of become synonymous at this point."
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