Mr. Smith Goes to Vegas

National Association of Broadcasters President Gordon Smith weighed in with B&C on the key issues facing his industry as it gathers in Las Vegas this week.

Among other things, Smith believes the much touted "spectrum crisis" is instead a capacity crunch that broadcasters can help alleviate. He tells B&C that broadcasters want to hear more details from FCC Chairman Julius Genachowski on his spectrum auction plan when he addresses their convention this week in Las Vegas.

Smith provides NAB's definition of "voluntary" when it comes to said plan, and says that before the FCC tries to take away another 40% of broadcaster's spectrum oxygen, a move he describes as "Draconian," the commission needs to get a handle on who in the wireless industry may be warehousing their spectrum.

The FCC has said it already completed a baseline spectrum inventory. Smith says that doesn't cut it.

What follows is an edited transcript.

Sinclair CEO David Smith says that the spectrum crisis is "manufactured." Do you agree, and if not, why not?

Certainly there is increasing demand for wireless services, but it's debatable whether that constitutes an actual crisis. We see it as a capacity crunch, which may emerge primarily in a few metropolitan areas-New York, Los Angeles, and Chicago among them. There is no spectrum crisis in Montana or Kansas or rural America, and there never will be.

Moreover, if a capacity shortage emerges, it will involve the demand for delivery of video. And the reality is that no one does video delivery better than broadcasters.

Because of our ‘one-to-everyone' transmission architecture, broadcasters can deliver video far more efficiently than the ‘one-to-one' transmission scheme used by cell phone carriers. We send full HDTV video 24/7, 365 days a year to millions of people, and rarely if ever is there a service disruption.

So we want to be helpful to the FCC and to Congress in resolving these capacity issues. If there's a problem, we volunteer to be part of the solution. But let's not jeopardize an essential and enduring American institution-which is free and local broadcasting-during the process. And let's not punish TV viewers in Bend, Ore., just so someone can get a faster download app in Manhattan.

What do you want to hear from Chairman Julius Genachowski this week in Las Vegas?

We've got great respect for Chairman Genachowski and we're pleased that he will be joining us in Las Vegas this week. This will not only be a great chance to hear his views on telecommunications policy first-hand, but also an opportunity for him to see and experience broadcasting's bright future. We strongly believe that broadcasting and broadband can co-exist and complement each other; it's not an either/or proposition. We hope that Chairman Genachowski agrees.

Proposed spectrum auctions remain a major concern for many of our broadcast stations. We appreciate Chairman Genachowki's assurances that these will remain truly voluntary, and that broadcasters that choose not to volunteer won't be forcibly relocated into a swath of spectrum that does not allow a TV station to deliver on the digital promises we made to our viewers. We hope Chairman Genachowski offers more details on any FCC plan to conduct auctions, especially in the wake of the proposed AT&T and T-Mobile merger.

What isNAB's definition of "voluntary?"

For us, voluntary means broadcasters who choose not to turn in their spectrum aren't subject to new spectrum fees, which would hurt their ability to make payroll and create jobs. It means broadcasters that stay in business aren't forced into an inferior band and prevented from providing the new services promised to viewers during the digital transition.

I think what we are looking at in terms of repacking is analogous to a row of townhouses. Let's say you own a townhouse and your neighbor, if he decides he needs the money, sets his house on fire for the insurance money. Are you held harmless? No, your house will be damaged as well as his. As it applies to spectrum, if your neighbor channel decides to sell its spectrum, you don't mind as long as you're capable of providing your viewers with the services they want. But if it means you have to be repacked into an inferior band or your signal has a smaller reach, you are harmed, and more importantly, tens of thousands of viewers could be denied access to free multicast channels, niche foreign language programming, live and local mobile DTV, and even HDTV. That to me does not constitute a voluntary process.

How should the FCC go about freeing up spectrum for broadband?

First, it's important to remember that less than two years ago, broadcasters gave back to the government more than a quarter of the TV spectrum we used. That spectrum was auctioned off to wireless carriers, and it has not yet been fully deployed. Now we are being asked to give back up to 40 percent more. Before we adopt something that Draconian, doesn't it make sense to conduct a thorough inventory of who's using spectrum and who is warehousing it? Some press reports indicate there is as much as $15 billion worth of spectrum yet to be deployed.

So we would respectfully suggest that the first step should be a comprehensive spectrum inventory. Not a baseline inventory such as the one the FCC announced last month but rather an in-depth understanding of who has spectrum and what they're using it for. We should do it right the first time so we don't have to do it again. We need to find solutions from all industry holders if we want to achieve the most efficient telecommunications system and that begins with taking an inventory and finding what spectrum is underutilized.

Let's also look at making receiving devices more spectrum efficient. Both current and former FCC engineering experts suggest minimum federal standards are needed; that's something that should be explored.

How should the FCC adjust its ownership rules, and what are the other key TV issues on your radar screen?

NAB supports modest reforms to out-of-date ownership rules, including elimination of the broadcast/newspaper cross-ownership rules and reform of the television duopoly rule. We need rules that reflect the modern-day media environment and allow broadcasters to compete on a fair footing with competitors so we can best serve consumers. Why shouldn't a broadcaster be allowed to buy a newspaper, if that helps preserve journalism jobs? In addition, allowing television station partnerships in markets of all sizes would strengthen local programming, allow more news and public affairs, and offer more over-the-air options for viewers.

The last thing I'll mention is retransmission consent. We're pleased that the FCC and Congress have recognized the retransmission consent regime is working and provides a fair marketplace for both broadcasters and pay-TV operators. Broadcasters would oppose any government inference in this process that skews negotiations in favor of one party. The FCC is also seeking comment on network non-dupe and syndex rules. NAB will work to ensure these rules aren't changed to harm broadcasters' ability to serve their communities. Those two rules are a linchpin for localism, and should not be changed.

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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.