NAB: Genachowski to Broadcasters: Hear Us Out on Spectrum Auction

Commish also says to get moving on the public political files matter

By Michael Malone and John Eggerton -- Broadcasting & Cable, 4/16/2012 7:04:10 PM

Complete Coverage: 2012 NAB Show

FCC Chairman Julius Genachowski once again attempted to sell the FCC's spectrum incentive auction plan to broadcasters, many of them skeptical, at the NAB show in Las Vegas April 16. Genachowski mentioned that it was his third NAB presentation as chairman, along with many visits as a broadcaster and trade association staffer, and took pains to paint a rosy economic picture for local broadcasters.

He said the incentive auction for broadcasters' spectrum might well be a favorable opportunity for the 40% of TV stations not getting retransmission consent cash, and for those who do not air local news.

But Genachowski stressed that broadcasters in all markets, and of all sizes, should at least hear the details of the plan. "It's an unprecedented opportunity [for broadcasters] to improve their financial position," he said. "Don't be afraid to be interested. Others already are."

He gave broadcasters some quotable verbiage on retransmission consent. "New retransmission consent fees are giving many broadcasters a meaningful second revenue stream," he said, a source that cable operators argue come from the FCC's thumb on the scale.

But the chairman suggested the FCC would continue to resist calls for agency intervention. "The basic view is that it is both economically sensible and consistent with the statutory scheme for broadcasters that have invested in desirable programming to seek and receive retransmission fees," he said. That did not translate to an endorsement of broadcasters as fair negotiators or of individual deals, but it did send the message that he thought broadcasters deserved to be paid for their high-value programming.

As the careful lawyers, the chairman outlined the arguments on the other side. "The cable industry points to historical benefits that broadcasters have received from government, and argues strongly that these give broadcasters an unfair advantage in a marketplace that has changed significantly since the retransmission consent law was adopted. Consumer groups and others are concerned about effects on consumers and on independent cable programmers."

He left open the possibility of action, but it looked more like a flashing yellow light than a signal of any FCC intervention. "We opened an FCC proceeding because these are important issues, and we continue to watch the marketplace carefully to determine whether further Commission action is warranted."

Genachowski announced that media and telecommunications attorney Gary Epstein has been added to the auction task force.

He stressed that the FCC is "committed to fair treatment" of broadcasters as the spectrum issue persists.

The chairman was less chummy when he discussed the issue of stations putting their public files on political buys online, as opposed to stored in file cabinets. "It's the 21st century," he said. "I call it common sense."

He said the cost for stations to do so is "nominal," and would end up paying for itself in the long term.

Introduced by Gordon Smith, NAB president and CEO (Smith called Genachowski a "certified smart guy"), the commissioner spoke for about 30 minutes, and left without taking questions. Some in the room wished they'd had a chance to address Genachowski directly.

Many in the room declined to speak on the record, but said privately that they felt the FCC's spectrum plan continues to lack enough details to pacify them. They also expressed frustration at what they felt was Genachowski making light of the effort to put the public files online, saying the process would be more onerous than the commissioner suggests -- a complicated array of candidates and programs and ad rates that would end up confusing the public more than illuminating them.

"The chairman is extremely bright and understands the industry," said Alan Frank, president and CEO of Post-Newsweek. "It's good he recognizes the intention of broadcasters to work with the FCC. I was pleased with many things I heard, and disappointed with others."

The public file issue was a source of disappointment for Frank, who said broadcasters' efforts to strike a compromise have not been warmly received in Washington.