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NAB Chief’s Message: Get Spectrum Done Right

National Association of Broadcasters President Gordon Smith says he thinks Congress is getting the message that their constituents have a stake in free over-the-air TV. Smith’s goal is to make sure that any incentive auction bill protects broadcasters from any material harm from repacking spectrum. And while he is still waiting for an answer from the FCC on border stations issues, that has not kept the NAB from meeting with legislators daily about the issue.

Smith last week briefed John Eggerton, B&C Washington bureau chief, on the status of broadcasters’ campaign to secure a future in the digital age. An edited transcript follows.

You told the Deficit Reduction Supercommittee in a recent letter that the looming spectrum crisis claims have been manufactured by wireless and electronics companies and advanced by the FCC. So, is there no looming crisis?

We were trying to highlight that the wireless industry has 538 MHz of spectrum and only 92 MHz are in use today. There is more than half still to be deployed.

Why would they manufacture a crisis?

We don’t suggest that there won’t at some point need to be a look at this, but it does seem to me that the [Citigroup] study raised anew the necessity of an inventory that determines not just quantity but the quality of its usage and the likelihood of its deployment.

Could you summarize the Citigroup study?

It just said there is no spectrum shortage. That there is a lot of spectrum that has been auctioned to the wireless community, but it is in the hands of some who appear to be speculating and who have no plans for deploying it. So, if you are in a broadcaster’s shoes and you look at a report like that, it is reasonable to ask why there’s a rush to damage an essential American industry when [the wireless] industry already has an inventory that has yet to be deployed and no plans for its deployment.

Did you assume a more combative or assertive tone on the spectrum issue in your letter to the Deficit Committee concerning the study's findings on the presumed urgency for incentive auctions?

Having been on that side of the legislative dais in the past, it was certainly my judgment that sometimes the very premise that is being presented to you may not actually be as true and as urgent as advertised. This study came out at a time when it seemed really important for lawmakers to have all the facts. Mom always told me that the best way to ruin a good story is to hear the other side. We are trying to point out the other side of this rush to auction.

Are you assuming that there is going to be some form of incentive auction legislation?

Yes, and we do not oppose an auction bill. Frankly, all we are asking for is that the damage to non-volunteers be de minimis. Having already surrendered a third of our spectrum, we think that before another 40% is required of us, every question should be answered and every other available source of spectrum ought to be considered.

You were a Senator; what specific language would you put in a spectrum bill to make it acceptable?

We have certainly been offering to the two committees of jurisdiction language that would permit the FCC to have what they want, which is auction authority, but would protect broadcasters with de minimus terminology and which also protects broadcasters and states on our northern border, who at present appear to be disproportionately damaged by repacking modeling.

Have you gotten any answer from the FCC yet on how they are going to resolve the border issues?

No, and they're not even sharing it with [Michigan] Congressman [John] Dingell, who raised the question.

You said broadcasters have to be held harmless, and the FCC says it has to repack.Can both those things happen?

That is the 64-dollar question, and until we see their modeling, all we can go on is the modeling of the physics of other scientists who are formerly FCC employees.

CTIA: The Wireless Industry survey says theNABis getting desperate. How would you respond?

I would simply respond to the specifics of the Citigroup study. It seems to me that we have been consistent in saying we support auction authority for the FCC. We merely ask, having given a third of our spectrum back already, to have de minimis impact on remaining broadcasters.

So, you recognize that there needs to be repacking, you just want that to happen without any material reduction in signal quality or coverage?

That is correct.

Is the association at all divided over your message between those who are going to stay and those who may be considering selling?

Not really. It might behoove you to talk to the Sinclair people, who want no auction authority [for the FCC]. My own sense of that is the auction authority isn't what we fear.

It is the repack modeling that could be the involuntary damage to non-volunteers. The FCC already has the authority to repack. If by granting them auction authority we can get protections in repacking, which we think is important to the American people and members of Congress, we have said we are good with it.

What is the status of broadcast spectrum fees in any of the auction bills?

Apparently, what was off the table with the Senate vote [defeating] was the President's Jobs plan. In that bill, there were spectrum fees for radio, but not television. I don't know why they made this discrimination between radio and television. Maybe the calculation was made that they are already proposing to do enough damage to TV.

Is theNABdoing any advance planning on how broadcasters will give up spectrum or how to put a value on it, or is that like agreeing to beat the drum for your own death march?

We are all in the dark, just as the Congress is, on the modeling proposals the FCC would offer. That is a real concern to us.

If we knew what they wanted to do we would be less concerned with a blanket right to proceed that would come with the auction authority. We think members of Congress and their constituents have a real stake in those modeling proposals. In other words, if you get 120 MHZ, how are people repacked? If you get 84 Mhz, what does that mean, 60 or 30?

These have very different consequences when you apply the hard science to the physics of spectrum. If you do 120 for a city like Detroit, they will lose all 14 of their channels.

What is the most likely vehicle for the bill?

As I read the tea leaves, the most likely vehicle is the Supercommittee. I am watching every potential avenue and trying to make sure that our reasonable requests are included in any granting of auction authority.

Do you think it can pass by the end of the year, which House Communications Subcommittee Chairman Greg Walden (R-Ore.) has said is his goal?

I am speculating, but it is going to be very difficult for the Supercommittee, given its partisan makeup in a presidential election year and the much larger issues in play, like the Defense Department and entitlements and taxes, to come to an agreement that could entirely deal with their charge from the vote in August.

You sent the letter to the committee, and took out ads about the Citigroup study. What is your next move?

We are up there every day talking to members and congressional leadership, trying to make sure we are backstopped in the repackaging language. That is my duty and that is NAB's responsibility.

Any prediction on whether that is going to happen?

No, I would just be speculating. But I feel like we are being listened to and I think more and more members are understanding that their constituents have a stake in the outcome of free and local television.

What is the fate of broadcasting if the FCC gets the spectrum auctions wrong?

You will lose a lot of viewers and damage the business model of television stations.

When you do that, you damage the ability to provide good journalism locally and you potentially damage the economics to produce the content people have come to enjoy and count on. Most folks like to watch football live, not streamed tomorrow.

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