Cover Story: Can Gordon Smith Save Broadcasting?
New NAB president covers spectrum, legislation, ownership and politics in exclusive interview
By John Eggerton -- Broadcasting & Cable, 11/9/2009 2:00:00 AM
RELATED: Editorial: Owning Up
New National Association of Broadcasters President Gordon Smith sits in his elegant outer office at NAB headquarters in Washington, looking like a man comfortable in his own skin. He speaks softly but carries a big responsibility-making the case for broadcasters facing a sea change in technology, formidable economic hurdles, and a government that is hungry for spectrum and eyeing broadcasters' beachfront real estate.
In addition, Smith must keep his members on the same page, a challenge he likens to herding cats, though he expects his relationship with the NAB board to be one of both leading and following.
The former Oregon senator says he will live and die a Republican. That said, his tenure at NAB will rise or fall on his ability to operate in a town where Democrats currently set the legislative and regulatory agendas.
While one of the criteria for the man replacing the legislative-contact-challenged David Rehr was to be able to get calls answered on Capitol Hill, Smith can't even make those calls for more than a year thanks to new lobbying restrictions. But Smith says that won't stop him from answering the calls he still gets from friends in high Hill places, or testifying when he is asked. And he has already begun making the rounds at the FCC. He is also a former basketball player in a town where the Hoopster-in-Chief has raised the profile of pickup games.
Smith talks about balancing localism with the need to attract investment capital, and protecting the First Amendment while making the point that most broadcasters "are not in the business of being indecent." He speaks philosophically about politics but takes a businesslike approach to the job ahead. Whether it's selling peas (he owns a frozen-food company) or promoting free over-the-air TV, Smith says the business principles are "quite similar." He also says that respecting your opponent is a key to finding common ground in the sausage factory of politics.
Smith, just three days and change into his tenure atop the association, talked with B&C Washington Bureau Chief John Eggerton about those topics and many others, including hate-crimes legislation, the Fairness Doctrine and reshaping Nielsen markets, in this exclusive interview.
What are broadcasters' biggest challenges in Washington?
I think the biggest challenge we have is continually reminding policymakers of the enduring values of the public airwaves. How free radio and television provided by broadcasters is an important piece of the quality of life of the American people, and those values are valuable still-the values of localism, emergency preparedness, entertainment, news and sports, all provided for free.
But you can't be selling your father's Oldsmobile. You have to be selling it on the future as well as on the legacy. How do you do that?
The challenge, in a business sense, that broadcasters have is that instead of responding defensively to new technologies, embrace them and help develop them so that the future is one that we shape instead of one to which we are simply responding.
The FCC wants spectrum. Are broadcasters going to be willing and able to give up more?
We've already given up a lot, and we've already spent a lot on the digital transition. Many of the American people have invested in reliance on the government that this is a direction they are going to go.
The spectrum doesn't have to be wireless. There is a lot of dark wire out there. There is certainly a national interest in getting America wired up to the Internet. There is certainly a public value in that. But that needn't come at the expense of broadcasting's opportunity to develop that spectrum as well with mobile TV, high-definition signals and all of the potential business opportunity that is there for broadcasters.
A number of broadcasters are owned by private equity firms. If they are offered a better return on their spectrum by the FCC now that they see in the future...
I don't know that that is the FCC proposal. I know what you are saying and what I read in the press. But that is not what I find at the FCC. It is a work in progress, so it is hard to respond to news accounts of what might be when I don't find that necessarily at the FCC.
What would be your argument if the FCC did come to you and say, "We need it back"?
We want to use that space. Every company will have its interests to pursue. But there is a patchwork out there of spectrum, and the technology of how to accomplish what [the FCC wants]-while still preserving free broadcast TV and high-definition signals and business opportunities and mobile TV-is not clear to me.
How important is mobile to TV's future?
My sense is, very important. Chrysler just announced that it is putting mobile TV in its new cars. So that kind of market pressure is going to mean that automobile manufacturers on a very regular basis are going to be putting mobile TVs in automobiles.
You talked at the NAB radio convention in Philadelphia about getting NAB members on the same page. There have been some historic divisions in the association. What is your plan to do that?
I have to keep all the cats herded in the same direction. I understand the different business interests there. But there is an enduring community of interest between affiliates and networks. They need each other, and my job is to keep harmony in the family.
What is the balance between you and the NAB board? Who calls the shots?
My job is to advise the board and to lead the board, to offer my perspective of 16 years as a lawmaker on what is possible and what is not; to help them prioritize their various issues between the possible and the probable and the impractical; and to be their advocate in all legislative and regulatory matters. And so, there is a balance, a tension, if you will, between being a statesman and being a delegate. I don't want to get ahead of my board, but if I am going to earn my keep, I have to lead my board, too.
You had your first meeting with FCC Chairman Julius Genachowski two weeks ago. What did you talk about?
It was mostly introductory, a personal outreach to him to let him know that the NAB was very interested in being constructively engaged with [the FCC], that if there are problems we want to help solve them, but we have a keen interest in preserving a business model that allows our members to stay in business.
What specifically would help you do that? What, for instance, would you be looking for out of the FCC's media ownership review?
We did specifically talk about duopoly. I hear all of this talk in the press about how we preserve journalism and the ownership rules. I would argue that with the proper guidelines-whatever [the FCC] wants to develop-we ought to permit economies of scale between radio, TV and newspapers, so you have one reporter pool that can benefit all three outlets. That is one example; some relaxation there so we can preserve the Fifth Estate.
How receptive do you see this commission being to that argument?
The White House and the administration must acknowledge that journalism as we have known it, which is a very important part of the First Amendment and an informed citizenry, is in jeopardy right now. And I think, given their interest in that, there is going to be some new thinking as to how we can preserve journalism, whether it is print or over the airwaves, [in a manner] that has integrity and sufficient resources to be investigative and [informative to] the American people. I think that is seen as a pretty important ingredient of a free society.
How concerned are you about the localism proposals, including shortening licensing periods and establishing community advisory boards?
One of the very important features of broadcast is localism. We need to preserve that. It is certainly one of the things we [use to] sell broadcasting to the American people, having an interest in localism. But one of the problems you have in an industry is, periodically, attracting capital for future investment. So I think the value of localism [versus] the need for capital for investment in the future is a balance you have to continually [monitor].
Is that a byproduct of the economic decline, that everything has to be balanced against jobs and people's futures?
I think jobs are a very important issue all the time, but the issue gains greater currency in an economic downturn. Every member of Congress is interested in jobs, and broadcasting provides a lot of fine jobs in every community.
What is your view on indecency and whether the FCC should be in the business of regulating broadcast content?
Again, you are talking about a balance. Broadcasters are not trying to promote indecency. They also value keenly their First Amendment rights. The broadcasters I have spoken with generally understand that with public airwaves comes public responsibility. And when it is over the airwaves, there is technology to empower parents and empower viewers or listeners. They will turn it off and block it out. And the more information we can give to consumers, the better off we are going to be.
There are more than a million indecency complaints backed up at the FCC. Is it better for broadcasters if the FCC works through them and gives the industry a better sense of what it can or can't do, or should the FCC not be in the business of telling broadcasters what to air any more than the government should be telling newspapers what to print?
I think, clearly, the FCC is having trouble dealing with more than a million complaints. But I think, equally clearly, that the vast numbers of broadcasters are not in the business of being indecent. If they were, after 10 p.m. you would see a lot of indecency. You don't. Whether it is Leno or Letterman or whatever, they are trying to entertain. They are not trying to be indecent.
Having been in the Senate, I'm sure you had a legislative philosophy. Do you have an association philosophy?
Absolutely. If there is a problem and the solution offered is worse than the problem, offer a better solution. My experience on the Commerce Committee was that the issues did not register partisan, they registered practical. These issues tend to be where competitors come to get a competitive advantage. Those don't line up based on Republican or Democrat.
Do you have any concerns about the Fairness Doctrine returning, either through the front or back door?
I have concerns about the Fairness Doctrine. I am heartened by the fact that the Obama administration opposes it. I don't believe there are the votes for it in Congress, and I don't believe the Supreme Court would uphold it if it were ever reinstituted.
Some Fairness Doctrine foes continue to suggest that localism proposals could represent a form of government-enforced fairness.
You have to watch the front door and the back door. My own view is that the marketplace of ideas will sort these things out. If you look at the whole array of media, seems to me most views are pretty well covered and that the American people have the freedom to choose what they want.
What concerns do you have about the satellite reauthorization bill?
I think that it is coming out in a way that is generally acceptable to broadcasting. There are some concerns about local-into-local broadcasts; we want to make sure [the bill] doesn't compromise a station's ability to sell ads. On the other hand, I can tell you in my former role as a U.S. senator that I understand how keenly rural people feel about getting the news, the weather and the sports from their state. And so this is something we have to work on with the ratings institutions and try to get a shape that allows business to flourish and people to get the information they need for their hometown and their state.
So, should the Nielsen DMAs be un-gerrymandered?
My own sense is that it would be a good thing, but it can't be done in a sudden way because, certainly, advertising dollars follow the current markets. It has to be done, I think, gradually.
That would appear to be staking out some new ground for NAB. Is this a case of leading your board?
I understand that I represent the interests of broadcasters now, and I appreciate the damage that could be done to localism if the law were to be changed too quickly. Perhaps there will be a technology solution that emerges somewhere down the road. In the meantime, I would urge caution on the part of lawmakers.
Knowing as you do the speed at which things happen on the Hill, and given the deadline for reauthorization by year-end, will the Senate be able to reauthorize this bill, or are there entangling amendments that will force it to have to do a one-year extension?
My experience is that on a must-pass piece of legislation, if there is an amendment that is important to one member but has the net effect of killing the bill, it will ultimately not make it through the process. They'll keep working it. It doesn't go away, but it doesn't mean it is going to hold back the advancement of must-pass legislation....We'll have a study, we'll get a commission, we'll do a survey. That is how things are resolved in sausage-making.
One of your charters from the board is to be more proactive, rather than reactive, on technology. How do you interpret that?
A lot of things are happening that portend a brighter future for radio and television, whether it is mobile TV or chips in your cellphone. It gives us new platforms on which to continue to deliver great content to the American people for free.
And does that mean doing more talking to the Googles and computer companies of the world?
Yes. Perhaps there was a resistance to new technology. My approach to technology is somewhat like my approach to legislation: What's the problem? What's your solution? Well, here's mine: I think it is a better solution. So as we look at technology development, what endures are the values of free broadcast radio and TV. How do we fit those into those new platforms? The future says to me that, the Internet notwithstanding, there is still a place for what we do.
You can't lobby Congress for a while, right?
I can't for another 13 months. But as I have said, I can lobby the FCC directly, which I have already started doing.
How much does it cramp your style not to be able to do the Hill side of it?
I still have very regular contacts with my colleagues who are my friends, but I observe the letter and the spirit of the law that I voted for. They can ask me to come up and testify and I can answer their hearings. The limitation is on me, not on them. [For example, Smith last week had to ask for an ethics waiver to comply with a request to meet with legislators on the issue of music royalties on radio.]
Religious broadcasters were opposed to recently passed hate-crimes legislation, saying it could target their preaching on abortion or homosexuality.
It was my bill, and I am a very religious person. Hate-crimes laws have existed in this country for 30 years and have been upheld by the U.S. Supreme Court, William Rehnquist being the drafter of the majority opinion. Religious freedom is still alive and well. I respect their concern and it is something that has to be watched, that the right of the free exercise of religion is not compromised by hate-crimes laws. But in 30 years of litigation specifically on issues related to gays and lesbians, it never has been.
At the radio convention, you talked about your favorite Washington radio station. What TV station did you watch most when you lived in Washington?
I think I watched channel 9 [WUSA, formerly WDVM and before that WTOP] most because I loved Warner Wolf. I was an All-Met honorable-mention basketball player, and Warner Wolf occasionally would mention my name. That was in the 1960s, and that was the big channel in my youth.
When you were first announced as the new NAB president (to replace former beer-industry lobbyist David Rehr), one wag suggested that frozen foods was only "one aisle over" from beer, the point being that he didn't see much difference. The same person last week said he had heard you did a fabulous job at the recent NAB board meeting in Dallas and thought you were the right person for the job.
I know business and I know balance sheets. I know my responsibility is to help broadcasters have a place in the future in American commerce. I fell in love with broadcasters as a member of the Senate Commerce Committee. They are fascinating, they are challenging, they are intriguing, they are endlessly interesting.
I also found in 16 years as a lawmaker that if you can remember the humanity of everybody there and respect their motives-that their motives aren't choices between good and evil-it gives you the ability to work with a Ted Kennedy or a Jesse Helms on a range of issues. The contest of politics is a contest over ideas that lead to social justice.
I have a father who worked for Eisenhower and a mother whose last name is Udall. I am the eighth of 10 children. In that mix, I learned that the contest in public policy isn't a choice between good people and bad people, it's a choice of how you are going to approach solving public problems. And when you do it from that perspective, respecting the motives and the integrity of your opponent, you can find solutions because it will lead you across the aisle.
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mark roger - 11/13/2009 11:22:06 AM EST -
What does "spectrum" mean? It's a new term for me. Google definition doesn't help much. Can anyone help me with this term as it was used in John Eggerton article? Thanks
John M Roth - 11/9/2009 4:52:29 PM EST
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