COVER STORY: David Rehr: Broadcast’s Man for All Seasons

National Association of Broadcasters President Reflects on His Two-and-a-Half Years at the Helm

David Rehr is ready (for the digital-TV transition), willing (to fight the Federal Communications Commission’s localism proposals) and able (to work for broadcasters in a partisan town).

He came to his job as head of the National Association of Broadcasters with great expectations.

He had the credentials. He was already a top lobbyist and a Republican in what was, when he started the job two-and-a-half years ago, a Republican town.

But he’ll be the first to admit that the job has been tougher than anticipated. He’s got to get the industry through the DTV transition. He’s fighting FCC localism proposals that he calls “ridiculous.” He vowed that an FCC proposal to require stations to provide more and detailed information online will never happen.

But he also senses that change is in the air. For one thing, whether Republicans or Democrats dominate Washington after November, he’s sure that the wide-open Reagan era of broadcast deregulation is coming to a close. And if that means an even more combative relationship with Washington’s powers that be, he is ready to fight for the industry.

In a freewheeling interview with Washington bureau chief John Eggerton, the feisty Rehr pointed to victories in beating back threats to limit pharmaceutical advertising and stopping efforts to resurrect the Fairness Doctrine. He admitted to no lobbying defeats, although he conceded that he could almost taste victory on multicast must-carry before it slipped away.

Q: You were tapped for the NAB job in part because of your Republican connections, correct?

A: Well, I thought I got the job because I was a good administrator, a strategic visionary and I ran a trade association, and I happen to be a Republican.

Q: OK, but if there is a Democratic president and FCC chairman and Congress, how can you effectively get your message across?

A: The NAB is a strong bipartisan organization. We’ve got me. We have [executive vice president of government relations] Laurie Knight, who is a very prominent Democrat on Capitol Hill. We have a whole host of political personalities here. We try to use everyone to their advantage. We have done pretty well with a Democratic Congress with me being at the head. I think in Washington, people want to know that you are being straight with them, and that you are passionate and forceful. And we are, and we will do well. And I hope this doesn’t happen, but if we move into a more antagonistic position, we want to be prepared to fight on behalf of our members.

Q: Is that a warning shot across the bow?

A: I think we have come to the end of the Reagan deregulatory era and are moving now into a cycle of more regulation. As an economist, I have always believed that, as a regulated industry, we want to have the optimum level of regulation, and if people want to impose burdensome or unnecessary or counterproductive regulation, we fight them, leaving no stone unturned. But if it is regulation that makes sense, that does well for communities and our members, we have no problem. That’s because when you get the license, you agree to live under a certain set of regulations.

Q: So is that part of the explanation for your approach to indecency rules -- that it is regulation you have to live with so you do the best you can?

A: I think that is part of it. You know, we have some members who say, ‘Let us just be unlicensed. Let’s just do whatever we want.’ We don’t actually want that. We want to have a licensed regime in which people who live by rules can be compensated for their businesses and perform great services for America. It is sometimes really hard to be the president of the NAB. One thing I learned is that the job is probably a lot harder than I thought it was when I got it. But the inspiration is thinking about all of these great people I represent every day and all the great things that they do.

Q: On the indecency front,
the networks challenged the FCC on indecency, but a couple of years ago, you said: ‘We have no objection playing by the indecency rules, but we have to know what they are.’ Why should broadcasters have to play by the government’s indecency rules?

A: We are a nation of communities and we serve communities, so we have to be responsive to the communities. And while I don’t take a back seat to anyone on defending the First Amendment, I don’t think America wants, nor does our business model allow us, to be obscene or indecent. This is a personal feeling of mine. I think that in the long run, our business models are not well served by being indecent, even though we might have a constitutional right to be indecent. What about the golf game where the woman suddenly drops her clothes and runs across the camera because she wants her moment of fame? Is that our fault? No. Should we be penalized for that? No. But on the flip side, there are people in the arts community who will use broadcast distribution as a way to create edginess or to reinvent their careers. The problem is that we are the ones who get penalized, and that just doesn’t seem right.

Q: The cable industry sometimes feels like FCC chairman Kevin Martin has a vendetta against them. How has he treated broadcasters?

A: I think FCC chairman Kevin Martin has always worked very hard to understand the broadcaster perspective on issues affecting the FCC. On multicasting, you could not have found anyone who was more committed than chairman Martin. On localism, we have to go in and make sure he understands the full consequences of the localism proposed rulemaking. I think he wants over-the-air TV and radio to do well in America because he understands the unique role it plays.

Q: Nielsen put out a study last week talking about the number of TV homes that were still ‘unready’ for the DTV transition, meaning that they were not hooked up to cable or satellite or a converter box and didn’t have a DTV set.

A: Every time I see this, it’s like, ‘OK, tell me again that this is not a really hard thing to do. Tell me again that this is not a Herculean effort.’ I know that. What I need are people who help us to educate those hard-to-reach people. I like Nielsen, but they should have spent all of those resources on helping us to get those people rather than telling us that it’s going to be difficult to get those people. I know that. My nine-year-old son knows that.

Q: There appear to be some legitimate concerns about viewers still being able to receive analog signals from low-power TV stations after the transition to digital for full-powers. Are you worried and, if not, why not?

A: We have sent a communication to every low-power television station in the country. We understand that there are some legitimate concerns they have about people continuing to receive their signal. If we want to go back in history, we can say, ‘Well, the community broadcasters should have been louder, the NTIA [National Telecommunications and Information Administration] should have included it as a minimum requirement.’ The point is that we are where we are.

Q: But where do you go from here?

A: Here is what the NAB is doing. We have an LPTV task force. We have already had meetings in person and by conference call, talking about what we need to do to make sure people are sensitized to the low-power television issue. No. 2, we are also cutting commercials, which we are going to give to low-power television stations at no cost to them, helping to educate people on their particular concerns and what converter boxes they get. No. 3, if people buy new digital televisions, they won’t have a low-power issue because they have both a digital and an analog tuner. No. 4, we have set up a Web site where people can go to learn about specific issues related to viewing low-power television. I want to underscore that the NAB has a number of low-power television stations as members, and it is our job to drive value for them. So we are doing everything we can to work through this issue with them so that their viewers can continue to watch their stations.

Q: The Nielsen report found that more than one-quarter of Spanish-language network viewing was in the so-called digital-unready households. Does that argue for making sure that there are enough analog pass-through boxes given that many of those network’s affiliates are low-powers?

A: Actually, one-third of low power television stations are going digital by February 2009. It is mostly the larger low-power televisions, which then would lead one to believe that they are those with the greater viewing audience.

Q: So it is not as dire a situation as it is sometimes presented?

A: Right. The challenge with low-power television is that we don’t really know how big the universe is. Whatever that universe is, one-third of those stations are going to go digital, but we don’t know whether that one-third represents 10% of low-power television or 80% of low-power television.

Q: The FCC is testing the analog cutoff in September. What needs to come out of that test to make it a success?

A: I think you want to have a minimum number of people calling elected officials saying that they can’t get their signals from over-the-air TV. Then we need to make sure that the cable companies have all of the equipment they need to get the signal to viewers, that all of the feeds are correct and that they have tested it ahead of time, so that there is no problem at the cable end. We are reaching out to cable. We have worked together on a reference book for both satellite and cable on how to prepare for the digital transition.

Q: Are you working on any new DTV initiatives?

A: We have two church initiatives going on. One is the National Black Church Initiative, which is going to 13,000 African-American churches across the country to ensure that DTV material is put in every church bulletin, as well as the great preponderance of ministers who will talk about the DTV transition. And we are doing a separate project with about the same number of Hispanic churches.

Q: You have been in this job two-and-a-half years now. What have been your biggest priorities on the TV side?

A: The DTV transition, probably followed by the important private retransmission-consent process between cable and broadcasters, then probably the white spaces, or what we call “interference zones,” and then the ability of folks to advertise on TV. We were in a fight earlier in the year on pharmaceutical advertising.

Q: You took the FCC to court over the newspaper-broadcast cross-ownership rule change. Why?

A: We don’t think it went as far as it needed to go to provide the flexibility necessary in today’s media environment.

Q: But doesn’t that put the rules into suspended animation again and further delay the regulatory certainty broadcasters have been looking for?

A: We have actually been in suspended animation since the court threw out the FCC’s broadcast-ownership rules. Our position is that the FCC should have gotten rid of the ban entirely.

Q: Martin has suggested that loosening the ban was all that was in the public interest and cited consolidation complaints he had heard at field hearings on the issue. Was he hearing wrong?

A: I don’t want to presuppose what the chairman was thinking or not thinking. I think it is just clear that the media environment has changed and that for the government to say that you can’t buy a radio or TV station and a weekly newspaper or, perhaps, two weekly newspapers in a town is patently absurd. In most of these cases, the combinations are helping businesses to stay in business and do better where the government now is forcing one to fail, which is the unfortunate part.

Q: Why are broadcasters fighting so hard against the FCC’s localism proposals and the enhanced disclosure requirement that requires them to put more information online?

A: Most of these proposed localism changes were discarded by the FCC in the early 1980s because they did not work. If you take any part of our business today and ask whether or not it is more or less competitive than in 1982, I think the great preponderance of broadcasters will say it is more competitive.

Q: One of those localism proposals could be to require a TV station’s main studio to be physically located in its community of license. What’s wrong with that?

A: To have your main-studio rule brought back after it was discarded in the early 1980s and after billions of dollars have been invested in making media better that you will now have to burn up to physically move your location is, frankly, just ridiculous.

Q: How well are you making that case?

A: I think we are making it very, very well. We have had a tremendous number of filings at the FCC explaining why these proposed rules do not make sense and are counterproductive and frankly don’t overcome the high hurdle that is imposed on FCC rules when they are discarded and then brought back.

Q: So, do you think the localism proposals will be DOA?

A: I have met with some of the legal advisors and some of the commissioners and one of the things I emphasize is that it is a tough environment out there right now and you are trying to overlay all of these really unnecessary and extremely burdensome and counterproductive regulations. If there was ever a time to have these regs -- and I don’t agree that we should have these regs -- this is precisely the wrong time.

Q: On the so-called white-spaces issue. Google cofounder Larry Page said broadcasters are being obstructionist. Could you briefly explain the issue and respond to Page’s characterization?

A: Yes, this is an attempt by some technology companies to create devices that would operate in the so-called white spaces in the digital-television band. For one, there is not all of this white space out there. There are all of these wireless devices and microphones, which is why we have strong support from the theater community in New York and Las Vegas and virtually every professional-sports league is with us. There is not like this empty vast wasteland between channel five and channel six. Plus, no one can make devices that work. We have had two Microsoft devices, both of which failed. We have a couple of devices sitting over there in the labs [at the FCC] that don’t seem to work. What happens when you put these things in production and people are dropping them on the ground, and what’s the consequence to all this? The consequence is that it will freeze people’s televisions, except that we won’t know who is causing the interference. Only in Washington would you try to reward companies that fail at something by endangering others. And the companies pitching the FCC on the regulations aren’t actually going to be the ones making the devices. They are going to sell the technology to other people who will make the devices.

Q: Didn’t Google propose a compromise on the unlicensed devices using a different technology?

A: I was hoping Larry would roll up some tinfoil and put it on his head and suggest that as an alternative. We would hope that there would be integrity in the scientific procedure to have a fully transparent, fully scientific process by which the FCC, the guardian of TV for America, ensures that no devices would be manufactured and no regulations promulgated until people actually showed you a device that worked without a problem.

Q: So there is something these computer companies could do that would convince you to allow them into the DTV band?

A: I think our position would be very different if people could demonstrate that these devices worked and didn’t interfere with digital television.

Q; What have your biggest TV victories been at the NAB?

A: Preventing Congress from imposing limitations on pharmaceutical advertising, for one. No. 2 would be getting the FCC to adopt the NAB DTV-education plan, which I believe all but 122 TV stations are using as their DTV-education plan. It was more flexible than the government plan. It was better for the individual stations’ messaging, and I thought it was a better marketing effort. No disrespect to the FCC, but we had real marketers put together the plan. On white spaces, everybody expected the FCC to have already acted on that and they have not. Larry and the gang are on the defense. Their devices don’t work. On the localism initiative, we have 160 members on our side. And on enhanced disclosure, the government is going to make a mistake. Is it a law yet? No. Are we going to prevent it from becoming a law? Yes. Last year, there was an effort by Rep. Mike Pence of Indiana to ensure that the Congress didn’t bring back the Fairness Doctrine. That passed. We are waiting for someone to bring up telecommunications legislation in the Senate. If they do, they will probably put a Fairness Doctrine [blocking] amendment on that, as well. That probably will win. The reporter shield law passed the House and the Senate Judiciary Committee. We are now trying to bust it through the rest of the Senate and get it sent to the president. [Sen. John] McCain [R-Ariz.], [Sen. Barack] Obama [D-Ill.] and [Sen. Hillary] Clinton [D-N.Y.] have all said they would sign it. So that is likely to be a victory in the next Congress. The one thing about this business is that there are relatively short-term wins and losses.

Q: What has the NAB lost on in the last two-and-a-half years?

A: I don’t think we have lost on anything. We might not have gained as much as I wanted. We might not have knocked it out of the park. But at the FCC, we are certainly in a much better position relative to where the cable people are. On Capitol Hill, we are in a much better position relative to the recording industry. We have a lot of challenges but, as I tell my children almost every night, slow and steady wins the race.

Q: What about multicast must-carry, which appeared to be on a fast track and then was stopped?

A: We peaked in June 2006 and, unfortunately, commissioner [Robert] McDowell did not think he had the statutory authority to grant it. That was one where you could almost taste it. But that taught me and many of us the complexities of this FCC.

Q: Is that issue dead?

A: I think that in the short term, it is less of a priority given all of our other more important priorities. What I tell the board is that if we have a shot to try and go get something, we’ll take it.

Q: So at the moment, you don’t think you have a shot?

A: We are repositioning that. Plus, [National Cable & Telecommunications Association president] Kyle [McSlarrow] told me that there are a ton of cable companies that are already handling multicast channels as part of retrans negotiations.

Q: Let’s say we’ve just won the lottery. Why should I invest in a TV station over, say, a cable system or Web site?

A: If I was a prudent investor, I would invest in broadcast television because it remains the leader for eyeballs and because it is a niche business. Broadcasters are really good at being broadcasters. Cable guys aren’t good at being broadcasters. Internet people have not found the solution on how to make money at doing video. But broadcasters are really good at providing news, weather and entertainment. Even though, in terms of revenue, we are kind of in a funk right now, I still think that if people could line up, everybody else would rather be us, and we would certainly rather be us than them. It’s a great cash-flow business. Broadcasters can continue to get advertising revenues, can now look at retrans money for subscribers and 86% of our people are on the Internet and they do pretty well at it. You’ve got to work really hard at it -- you’ve got to be entrepreneurial -- but I still think it is a lot better than some of the alternatives.