Gordon Smith: Wheeler Open To Studying Promoting Broadcast Innovation, Investment

FCC Chairman Tom Wheeler may be open to studying ways to promote broadcast innovation and investment, just as it has been doing for the wireless industry.

That is according to National Association of Broadcasters President Gordon Smith, who, along with other trade association chiefs, met with Wheeler two days ago on a day when the chairman also talked with public interest group execs.

Smith outlined his vision of a vibrant and relevant broadcasting business at a Media Institute lunch in Washington Nov. 21, saying he saw broadcasters partnering with broadband rather than being supplanted by it.

Smith said the FCC had become singularly broadband focused and suggested it had lost sight of the enduring value of broadcasting.

He talked of broadcast critics invoking the highest and best use of spectrum (something the new FCC chairman also invoked in suggesting that is among the factors the FCC needs to keep in mind as it approaches its decision making on issues).

"Let me freely admit that if highest and best use is determined only by the calculation of dollars and cents, or by how many gadgets and gizmos quickly mount up on the ash-heap of our landfills, broadcasters will lose out in that calculation every time," he said. "But, if 'highest and best use' includes, not only the advantages of our one-to-many architecture, but also the durable public values it serves — reliability, decency standards, children's programming, news, weather, sports, localism and lifesaving information during times of crisis — broadcasters win every time."

Earlier in the week, at a webinar on the incentive auctions, NAB spectrum point person Rick Kaplan suggested one of the reasons the FCC might want to keep broadcasters around is that the FCC has regulatory powers over TV stations that it lacks over the wireless carriers who will be buying up the spectrum (and delivering video). "We're heavily regulated," he said, "including a public interest standard, mandates on diversity and localism, and ownership limits."

Smith was not so much chafing at that regulatory bit, but pointing to it as the reason why broadcasting developed as it did.

"As we discuss spectrum policy," he said, "it is also essential to keep in mind that comparing broadcast to wireless is comparing apples and oranges. The wireless industry has grown up quickly in a largely deregulated environment, with little government intrusion. The broadcast industry, on the other hand, has grown up for decades under heavy government regulation, which has led us to be smaller and localized. Though broadcasters wholeheartedly embrace serving local audiences, the industry doesn't — and can't — have an AT&T or Verizon that spans the country and can make any one innovation appear instantaneously. We have to coordinate as an industry — a diverse industry by design. So, we compete every day, but with the shackles of heavy regulation in order to serve other congressional and FCC objectives."

He said broadcasters needed "a nimble FCC that works with our industry with the same gusto and verve it has for the broadband industry."

To that point, he said, in August 2009, the Commission issued a Notice of Inquiry titled, "Fostering Innovation and Investment in the Wireless Communications Market." Smith said it was time for the FCC to conduct a parallel inquiry into promoting broadcasting and that Wheeler seemed amenable. "I was heartened in a meeting with our new chairman that he seemed to apply that he would undertake such a study and was open to such information."

Smith had suggestions for how the FCC might promote and enhance broadcasting:

1. "[M]eaningfully and efficiently review ownership rules to ensure competition with other industries..."

2. "Allow flexibility so broadcast networks can evolve with others."

3.  preserve the retransmission consent regime, which he said is essential to broadcasters "serve the public in ways no other media is expected to."

Smith said broadcasters were willing to be partners in a successful incentive auction as well. "We want to work with the FCC to get it right," he said, though he joked that FCC Media Bureau Chief Bill Lake — who was in the audience — had told him the auction required software and a new Web site. "He assures me they used the same firm as the Obamacare Web site," he added. Smith said getting it done right meant not in a rush or to meet some artificial date, "but as soon as they can do it [right] the better."

But if the FCC doesn't get it right? When asked whether NAB would sue the FCC if the auction was set up in a way to discourage or as a disincentive for broadcasters to remain in business, "I'm not taking anything off the table," he said. "I'm going to do what I have to do in order to win for broadcasting, because if I do that I win for the American people."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.