NAB's Smith: We'll Engage Constructively With FCC

Says the FCC's first order of business is to come up with auction rules so broadcasters know where they stand

By John Eggerton -- Broadcasting & Cable, 2/27/2012 12:01:00 AM

RELATED: Spectrum Auctions: What Now?

NAB President Gordon Smith says the FCC's first order of business is to come up with auction rules so broadcasters know where they stand. He talked to B&C Washington, D.C., bureau chief John Eggerton after Congress approved incentive auction authority for the FCC, paving the way for auctions of broadcast spectrum. An edited transcript of the interview follows.

So, incentive auction legislation has finally been approved?

We're delighted with the way the legislation came out. We're feeling like the government and the FCC are getting what they need, and the Congress has given us what we need to preserve an indispensable service for the American people.

We contend there are still a lot of questions that need to be answered. What questions do you think need to be resolved?

They have to put together their auction proposal and induce broadcasters to put up a price, but I am not hearing the hooves of any stampede. I know there has been a lot of speculation in the marketplace, but I am not hearing that coming from broadcasters, except in one instance that I know of. [Editor's Note: Bert Ellis, President of Titan Broadcasting, testified before Congress last year that he might be interested in selling some spectrum.]

How long do you expect this process to take?

If history is any guide, it will be at least several years but no longer than 10. But your guess is as good as mine on the timeline.

We have heard that broadcasters who stay in the business could try to hold up the reclamation process in court if they conclude the FCC has not provided "all reasonable efforts" to preserve their coverage areas.

We are going to engage constructively and do our very best to get the FCC to observe the black and white terms of the statue.

Any concern that if the FCC does not get what it wants that it will assert imminent domain power to foreclose on broadcasters for the info highway to come through?

The FCC would have a real steep Hill to climb under that kind of scenario when the statute is very explicit as to what they have to do.

Do you plan to hold a strategy session at NAB when you have everyone together?

Yes, of course. But, I want to emphasize that we are going to engage constructively with the FCC to get a good result, but obviously my job is to protect the non-volunteers in the broadcast industry to make sure there are no involuntary consequences forced upon them. The Congress is very clear that that should not happen.

Are broadcasters better off if the FCC gets the spectrum it needs so you won't face a potential knock at the door, this time with club in  hand?

Under the terms spelled out in this bill, we're enthusiastically for this process to move forward and we will do everything we can to help it be successful, but we are determined to make sure that broadcasters are not damaged.

How big a challenge is this second DTV transition going to be?

It's huge, and a daunting task. It's a much larger job than the transition from analog to digital. There is no way to mask that. This has the potential for significant disruption.  But the Congress has made very clear with the dollars and the common sense that they want to preserve the broadcast industry and all of the benefits it confers upon its constituents.

Is the $1.75 billion transition fund enough?

I think so.

A communications lawyer said he thought NAB had gotten about as much as it could out of the bill.

My sense is we got 99.9%.

Any sense of when the NTIA will come out with its report on spectrum it will give back.

I don't know.  I have been focusing on broadcasters that want to stay in business.

Some broadcasters could both give up spectrum, but remain in business by leasing digital spectrum from another station in the market.  Do you see that as a way for broadcasters to eat their cake and have it too?

It is a possibility, and that has not been fully flushed out.