NAB's Smith Defends Broadcast Future

Says mobile architecture fails as real-time video delivery system; stands up for decency regs as product differentiator and lobbying tool

By John Eggerton -- Broadcasting & Cable, 12/14/2012 10:19:40 AM

National Association of Broadcasters president Gordon Smith says that as the original wireless service, broadcasting remains "highly relevant," particularly given what he says is mobile's limitations on video delivery and the indecency regs that keep it a family viewing destination.

That came in an interview for C-SPAN's Communicators series of shows on TV's future. Smith used the word "fail" repeatedly to talk about mobile's inability to deliver the kind of live, real-time video, including high-value sports, which broadcasters supply through their one-to-many architecture. Smith warned that in a world where broadband has replaced, rather than complemented broadcasting, important public values like free, local and decent content will be lost. He stood up strongly for indecency regs, calling them good public policy as well as a good talking point with Congress.

Smith said the challenges for broadcasting are to be on every device, to be "held harmless" in the push to auction spectrum for mobile, and working under a heavier regulatory burden than its competitors, though he suggested some of those regs -- the public interest standard and indecency -- help in making the case for the medium

While Smith said the ownership regs needed loosening, he stood up for indecency regulations.

"When we were kids, when you wanted to bring smut home you had to sneak it past your mother [not that he was advocating the practice]. Today, all you have to do is hit the wrong channel [on cable or satellite or the Internet] and you get all the garbage in the world coming into your house," he said. By contrast, "broadcasters have decency standards that have to be observed and that parents ought to be mindful of when it comes to family TV viewing." Smith called that decency standard "good public policy."

He said he knows some of NAB's members think their First Amendment rights are "somehow impinged" by that, but added that it is a good point to make on Capitol Hill -- he is a former senator himself -- that there should be somewhere for a family to turn that has "respect for community standards."

Another challenge is Congress' and the FCC's move to encourage broadcasters to give up some or all of their spectrum for mobile wireless. "Obviously," he said, "spectrum is a finite resource and others want that resource, and yet there is not enough spectrum in the universe to do all video by broadband."

The FCC's spectrum auctions are uncharted territory, he said. "I think I can say with confidence that none of the big networks are going to be volunteering to go out of business."

Actually, the auctions offer several options, including giving up all spectrum, giving up a portion of spectrum and channel sharing or moving from UHF to VHF spectrum, which will allow the FCC to offer swaths of contiguous spectrum to mobile. Smith did not address those alternatives.

But he did say he did not "have a clue" how many broadcasters "on the edge financially" will say they will take the money and "volunteer to go out of businesses." And there is no guarantee that even those will necessarily be exiting.

Not everyone who wants to give up spectrum for compensation will get it. They may not offer the winning bid, or the FCC may not need the spectrum they are willing to give up. It is mostly looking for spectrum in major markets where the need is greatest, though some broadcasters in smaller markets will need to move to clear the contiguous swaths.

Preston Padden, former top exec at Disney and News Corp., and the former head of the Association of Independent Television Stations, is heading a coalition of the spectrum willing, the Expanding Opportunities for Broadcasters coalition, which he says now includes over 25 major market stations interested in participating in the auction.

Smith said the NAB's focus is on those who stay -- which is the reason Padden's coalition was formed -- and that those who do be held harmless.

"If a broadcaster wants to go out of business and cash in, that's called freedom. We support that," he said. "The FCC chairman has called it 'culling the herd.' Well, we don't want any of our herd culled, necessarily, but if somebody wants to go out of business, they can."

Smith said the problem with the FCC's calculation is that in the urban areas where the FCC most wants the spectrum, broadcasters aren't going out of business.

Smith said broadcasters will be cooperative with the auction, but that if the FCC's repacking of stations after the auction isn't done correctly, this next DTV transition will make the first one look like a Sunday school class compared to the complexity of this move and "millions disenfranchised."

He was asked what kind of business model broadcasters would have 20 years in the future. He said a free, local system would still be around. He said broadcast was the primary deliverer of sports video content, which could not be done by broadband, given its one-to-one architecture.

Asked whether if that would still be the case if the mobile industry got access to government spectrum the Obama administration is also trying to free up through a combination of clearing and sharing, Smith suggested it would tough to pry it out of the military's hands.

The government has over half the spectrum -- 60% was one estimate at a Hill hearing on spectrum this week -- but getting it will be no easy task, Smith suggested. "The problem is when you want to go get it from the government, particularly the United States military, they have guns and they don't want to give it up."

Smith said broadcasters have to be prepared for the wireless industry to push for mandatory spectrum clearing if the FCC does not get enough through voluntary auctions, but added that the future has to be a future with both broadcasting and broadband, and it is just one it would "fail" the American people. "All the other values like decency, localism, free, that goes away."