NAB's Smith: TV Station Value Is Tied to Retrans

Preserving fair compensation is key to future of nation's "go-to" medium

By John Eggerton -- Broadcasting & Cable, 7/23/2012 10:35:51 AM

National Association of Broadcasters president Gordon Smith plans to tell his former Senate Commerce Committee colleagues that local TV has "immense value," a value tied to their ability to negotiate "fair value" for their signals via retransmission consent.

That is according to his written testimony for the committee's Cable Act at 20 hearing July 24.

Smith says that broadcasting continues to be the "go to choice for news, emergency service and entertainment."

He points out that while broadcast TV accounts or 35% of all viewership, they only get 6.7% of carriage fees. He said that latter percentage is projected for "slow growth."

He says the fact that the Cable Act is 20 years old does not by itself justify change. "When some focus only on 1992, we should also remember that for many years carriers refused to pay cash to local broadcasters. The simple fact that the nature of the compensation for retransmission consent has changed does not demonstrate a problem."

He says the laws are not ripe for a rewrite.

The hearing is expected to include discussion of S. 2008, a sweeping deregulatory bill introduced by Sen. James  DeMint (R-S.C.) and House companion bill HR 3675 from Rep. Steve Scalise (R-La.), that would scrap both retrans must-carry and media ownership rules.

"In looking at S.2008, there are some provisions that broadcast groups may look favorably upon and others that raise concerns and may require more thoughtful consideration," said Smith in his testimony.

"Language that would eliminate carriage provisions like retransmission consent and must-carry is a chief concern."

Smith suggests that suggestions it should go away provide cable ops more reason not to negotiate retrans deals. "These suggestions only fuel those carriers that would rather seek to change the law than engage in meaningful negotiation."

The bills would also get rid of the compulsory license for cable and satellite. Smith said he recognizes that the goal is to allow broadcasters to negotiate directly for licensing of their programming, but Smith said that programming is separate from the value of the broadcast signal, and that many stations would not be able to undertake the "expensive and cumbersome process of direct licensing."

He also took aim, indirectly, at the current battle between broadcasters and Aereo and other over-the-top providers offering TV station signals. "[B]roadcasters must continue to have the right to control the distribution of their signals and to negotiate with broadband video service providers seeking to retransmit such signals," he says. "If new technologies are allowed to evade retransmission consent and exploit broadcasters' signals without local stations' consent, the viability of those stations -- and their ability to serve their local communities with high quality programming -- will be lost."