FCC Should Encourage Investment and Innovation in Broadcasting, Says NAB Head

The FCC should spend as much time and effort encouraging investment and innovation in broadcasting as it has in broadband, said NAB President Gordon Smith in a Media Institute speech Thursday. Smith said a list of the FCC’s achievements under former Chairman Julius Genachowski didn’t include any outside the realm of broadband. “Rather than supporting innovation in our industry and working with broadcasters so that we can continue to outpace the rest of the world, the commission has had a different, in fact, a myopic focus,” said Smith. The FCC under Chairman Tom Wheeler should pay more attention to broadcast to allow the industry the regulatory flexibility to “not fight with one or both arms tied behind our backs,” said Smith.

To “foster” broadcasting, Smith said the commission should start a rulemaking similar to one issued by the FCC for broadband in 2009, but focused on the broadcast industry. “Wouldn’t it make sense for the commission to have a parallel examination to identify appropriate and concrete steps the FCC can take to support and encourage further innovation and investment in broadcasting, and better understand the factors that encourage such investment,” asked Smith. He said Wheeler has indicated he would be amenable to issuing such an NPRM. Along with seeking comment on improving broadcasting, the commission should also review media ownership rules to “ensure competition with other industries” and relax other regulations that constrain broadcasters but not other industries, said Smith. One thing the commission shouldn’t change is its “current deregulatory retransmission consent regime,” Smith said. “Tipping the scale in favor of pay-TV providers that seek government intervention to increase their own profits only hurts our local communities."

The commission should also avoid comparing the wireless industry to broadcasting in discussions of spectrum policy, because the two exist in totally different regulatory environments, Smith said. Unlike the wireless “largely deregulated environment,” broadcasters compete every day “with the shackles of heavy regulation in order to serve other congressional and FCC objectives,” said Smith. Broadcasters want the incentive auction to preserve a “very healthy” amount of broadcast spectrum with room for innovation, he said. Broadcasters will be looking for “increased capacity and mobility” in the future, he said. Smith said if the auction went against broadcasters, he wouldn’t “take anything off the table” as a possible response, including court action.

Smith said recent FCC activity to encourage foreign broadcast ownership might indicate a change in the commission’s thinking about broadcasting. He said then-interim Chairwoman Mignon Clyburn’s raising the issue showed the commission was “taking its responsibility seriously to drive innovation and investment in the U.S. broadcast industry.” Foreign investment in broadcasting “is an opportunity to fund investment and innovation and help us continue to lead the world,” he said of last week’s declaratory ruling on investments over 25 percent by foreigners (CD Nov 15 p3).

Cable, DBS and broadband aren’t “enemies” of broadcasting, Smith said. Though he said broadcasting’s role and focus on localism can’t be replaced, Smith said broadband had pushed broadcasting to innovate. “We have much to offer as a complement to broadband, and the same could be said of broadband’s relationship to broadcast,” Smith said.

Smith, a former Republican senator from Oregon, discussed Senate Majority Leader Harry Reid’s, D-Nev., successful effort Thursday to pass the “nuclear option” -- a bare majority required to break a Senate filibuster. “I'm not so sure that’s a good result,” said Smith. He said the change might have a good side in that it will make it easier for the majority to make appointments. “Elections need to have consequences,” he said. However, he said the move will lead to increased politicization of the judiciary, “and that is lamentable.” Democrats would come to regret the decision, said Smith. “What comes around goes around, and paybacks are hell.” -- Monty Tayloe (mtayloe@warren-news.com)