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NAB: Broadcasters, Telcos 'Have to Work Together'

Complete Coverage:NAB Show 2013

Despite obvious tensions between broadcasters and telcos
over issues like spectrum and retransmission consent, both NAB president and
CEO Gordon Smith and Verizon Communications chairman and CEO Lowell McAdam
stressed the importance of cooperation between broadcasters and providers of
broadband services during a General Session on April 9 at the NAB Show.

During a candid but cordial discussion, both cited a rapidly
changing technology landscape that is pushing the two industries into many of
the same businesses, with broadcasters delivering more content over mobile devices
and telcos expanding the delivery of video over their networks.

"The media is constantly evolving," Smith said in his
introductory remarks, adding that "we have to consider the role of broadband
and broadcast" in that evolution and look at "how they can work together."

For his part, McAdam pledged to work closely with
broadcasters on upcoming spectrum auctions and sounded conciliatory notes on
issues like retransmission consent.

While McAdam argued that the market has significantly
changed since retransmission consent was adopted and that intense competition
among pay-TV providers made it less necessary to protect broadcasters, he
stressed the importance of good faith negotiations and the fact that taking
channels off the air hurt both operators and broadcasters.

When asked by Smith to name the things he would change in
the Telecommunications Act of 1996, McAdam noted that "retransmission consent
would not be" on his list of the top five things to alter.

Both Smith and McAdam also highlighted their willingness to
work together during the spectrum auctions. McAdam said he would not agree with
any FCC plan to limit the amount that broadcasters could get from the auctions
and that they would work against any effort to keep Verizon and AT&T out of
the auctions, which would reduce the money that broadcasters would receive.

"We have to work together to make the process transparent,"
McAdam said.

The two also discussed several areas of potential future
conflicts. Smith noted that at CES, Verizon had announced plans to broadcast
the Super Bowl over its LTE wireless network hopefully by 2014.

McAdam replied that delivering video to mass audiences over
current cellular networks was impractical but that Verizon was successfully working
on technologies to broadcast events like the Super Bowl over LTE networks.

He dismissed, however, worries that such efforts would put
them in competition with broadcasters for rights.

He said "99% of people" are going to want to watch the Super
Bowl on their big screens at home, adding that working together with
broadcasters on these events would increase the value of them for both parties.

McAdam also stressed that rapidly increasing network speeds
were allowing them to deliver more video. Currently, Verizon is offering 15 Mbps
speeds over its 4G, LTE network and even higher ones over its fiber network to
the home. "We just announced Quantum FiOS at 300 Mbps and are testing one
gigabit into the home," he said.

McAdam noted that half the traffic over their wireless
networks is now video and that the proportion was likely to rise to two-thirds
by 2017.

While McAdam dismissed worries about cord cutting, he noted
that they had to listen carefully to their customers and rethink bundles.

"If a particular channel is a big hit then they
will pay to watch it," he noted, but that only hundreds of people out of their five
million subscribers might be regularly watching some channels. "There is
pressure as to why they have to have 300 channels when they only watch 50," he