>> is become "the communicators" a discussion about issues relating to broadcasters with gordon smith, president ceo of the national association of broadcasters. >> we are pleased to welcome back to "the communicators" gordon smith president and ceo of the national association of broadcasters, former senator from oregon of course. senator smith, the n.a.b. is meeting in town right now in washington this week. what is your message to capitol hill when you meet with the legislators? >> guest: their three big issues we are facing. their many are many issues beyond that at the ones of constant concern in congress are spectrum allocation, retransmission consent, what broadcasters are paid for for their content and of course on the radio side is the whole performance royalty issue and how we reconcile mutual dependence of radio and performers. we need a -- they need us and we need them. people don't buy music anymore and that is unfortunate. but we don't want to break radio and try to resolve this. >> host: has free television been broken by the internet? >> guest: no, because of retransmission consent. just as cable and satellite argued for payment of their produced content, we ask for the same consideration and when they take our content and put it through their pipes or bounce it off their satellites we feel like we are owed something, and i think it is important to remember that if all of all the programming americans watch, in the majority it is broadcast content. people like to watch things life and they like the super bowl. they like his ball. they like 24, the office, the mentalist and all of these things that are very expensive to produce, and we believe we deserve to be paid for for that so we can keep broadcasting in the very best of content. >> host: the republican commissioner of the fcc robert mcdowell and republican chairman of the energy and commerce committee fred up and have both said when it comes to retransmission that the government should not be regulating between broadcasters and cable television. deeply with -- agree with that? >> guest: i do and while there is is the rare interruption the truth of the matter is 99% of these negotiations are settled without interruption and on a market basis, and that works better than the government getting involved in trying to urge a particular outcome for a particular price. government that doesn't usually do that very well, and so we think the proof is in the pudding and it is working. it works for cable when they get paid for their content. it works for broadcasting as well, and so what isn't broken shouldn't be fixed. >> host: is it helpful to your organization that the republicans took the house back in 2010? >> guest: you know our issues are not republican and democrat. our issues are about the american people. news, weather, sports and emergency information that they want to watch and i find friends on both sides of the aisle. the fact of a divided government gives you lots more procedural hurdles that do utilize if you need to and to stop bad things, but you know when i served in the u.s. senate i think i was viewed as a constructive conservative and i count many many friends on the democratic side of the aisle, so now that my ban on lobbying has been removed, i have found regardless of party the reception of me back on the hill has been warm and wonderful, and it doesn't matter whether it is republican or democrat. >> host: also joining us on "the communicators" is jonathan make this is the assistant managing editor for "communications daily." do you get concerned about when you mention the procedural hurdles or procedural tension between the commission on one site which is of course controlled by democrats and the white house and the republican congress and are we seeing in areas other than net neutrality which is the big concern right now among telecommuting and tissues, are we seeing that seep into the broadcast issue spectrum retransmission consent lacks. >> guest: undoubtedly. you know, sure if i want to be a part of -- partisan i would like everything my way but the truth of the matter is our history shows us some of our worst decisions are when you you have one-party domination. those are the ones that end up costing us a great deal of money and usually produce unintended consequences. so divided government gives you an opportunity to fully vet ideas. it does slow down the process, but the founders of the american government with malice of forethought made it hard to make law, and i think that is a good thing. and so as frustrating as it is to watch on c-span sometimes, republicans and democrats don't seem to be able to agree on the time of day. it still produces a better result than when it comes to broadcast issues. it is helpful to us to have an extra check and balance between the chambers, to make sure that our concerns which are very much, are very important, to the american people, that they are fully considered before big decisions are made that may have lasting and damaging consequences. >> guest: the sec and federal mitigation system which is learning on an issue that retransmission consent to your members, they don't have if you will so many hurdles toward enacting regulations and outlaw. do you get concerned there especially with them examining the system which you and your members feel shouldn't be examined to begin with. are you concerned about the threat of over regulation of industry in general and your industry in particular? >> guest: of course we are concerned, and the truth of the matter is, for example net neutrality which we don't have a dog in that fight, but that is something where the d.c. circuit court of appeals has said unanimously without respect to party, they don't have the authority, the statutory authorization to impose that, but they went ahead anyway and they are trying rounds to on that. so when i see that yes i am nervous that there may be a tendency to go beyond what is allowed under statute. but that is why we have a judiciary under article iii of the constitution. but my hope is that the fcc will act in accordance with what they have already said publicly and that they don't have the statutory authority to impose binding arbitration or some new system that was the government's thumb on the negotiations and tries to force a particular outcome. they are rightly concerned, as we are, about making sure there is noticed, that there is good faith, that the parties are earnestly engaged in resolving what the market price ought to be and so i hope that they abide their own comments in the past and stick to the law and produce regulations consistent with the law. >> host: in a recent letter to the chairman of the committees who were in charge of the issues that you face, the energy and commerce committee, and the commerce committee in the senate, he you talked about spectrum quarters, and who are the spectrum quarters in your view and what should be done about that? >> guest: first of all i would say and in answering that, people should remember that i was on the senate commerce committee when we did the analog to digital transition and broadcasters gave up nearly a third of the spectrum that they had in the analog age. we gave it up for wifi purposes. the ink is hardly dry on the bill, and already the demand is we need more. we find him pronounce ers -- pronouncements to shareholders for example time warner recentle admitting to having tremendous amounts of on purpose spectrum and have even used a good economic value. we call it hoarding if you want, but it is spectrum that is there. it is has not been deployed in spectrum that we already gave up. we think it is a reasonable thing before you take more to at least deploy what you have. >> host: are the broadcasters hoarding or sitting on unused spectrum? >> guest: well, the broadcasters were given what we have left and what is being proposed to take an additional 40% of our spectrum. if that is done, in that amount, we are very concerned and what your viewers need to understand is the difference between broadcast spectrum the way we utilize it and the way wireless uses it is that when we use it, our transmission is one to everyone and a demographic area. it is very efficiently use when you look at the way wifi does it. if i sent you a video on my iphone, it is me to you. it is one-to-one. it takes a tremendous amount of bandwidth. the truth is we are in the video business. they want to be in the video business. video is what creates the congestion. no one does it more efficiently than we do and there is probably, if you took all of broadcast spectrum, there probably isn't enough spectrum in the universe to manage one-to-one video on every mobile device and the wifi broadband world. so, we think that our transmission is efficient and is actually essential, because we do it for free and they will charge you a fee. free is better than a fee particularly when you consider that the people who rely on the old-fashioned way of receiving television over the air. some say it is 10%. some say the 17%. let's say it's 14%. that is roughly 42 million americans who rely exclusively on over the air and there is a cord cutting phenomenon. people are rediscovering digital digital tv over the air has tremendous variety and the best quality, and people are saying what else i need i can get over the internet. so, the number of people relying on over the air is going up. it is not going down on the way we do video is more efficient than the way anyone else does it. >> guest: now on spectrum and the interplay between the capitol hill and the federal communications commission, you have had, your members were just in town. these are local tv and radio stations lobbying and members of congress often senators. with some of the feedback you got, did that have anything to do with concern from legislators about what the fcc is lining up to do, which is to do what is called repack? to make the tv channels closer to each other, make the band smaller which is something the commission can do on its own. it does have authority from congress to do that so what was their feedback about those plans? >> guest: well, for your viewers say, what they should know is that the fcc doesn't have the authority to just take our spectrum and put up an option. that requires an act of congress what they do have as you point out is the ability to place you within your allocation, called repacking. our concern is that the repacking, they say that the sale or the auction will be voluntary. but our hope is to keep voluntary voluntary so that if you don't volunteer to go out of business, that you are not placed in an inferior band, that you don't lose multicasting which is your foreign-language stations, or religious stations, you are a minority stations, things was add value in the six metzger -- megahertz each channel has. we don't want to lose the future of mobile television which in the city of washington d.c., you can get if you have a little antenna on your ipad, it will be in stores soon. you can watch live local tv on your ipad or other mobile devices. these are tremendous innovations. these are innovations that broadcasting promise that commerce committee that i sat on that they could do. they spent billions of dollars doing it. and now they are saying well, but we are going to repack but if you are repackaged into an inferior band or crowded with other channels, you lose those innovations. you lose multicasting. you lose mobile. you lose what was promised and broadcaster is detrimentally relying on the word of congress when they gave back a third of their spectrum in order to be able to develop albert their segment. >> guest: what members of congress that you have spoken to feel about this proposition? >> guest: i think without respect of respective republican or democratic registration, they are adjusted in keeping voluntary, voluntary so in exchange for an auction which we support allen terry -- that is freedom. let's be very very careful in any repackaging plan they could take away what brought casters are providing to the american people. >> host: in a recent hearing at the energy and commerce committee longtime energy and commerce chairman, now member representatives john dingell asks fcc chair julius genachowski about the auction process. >> you are going to have -- you are going to have a voluntary spectrum auction. how is it going to be voluntary if there is pressure which is placed on the holders of the spectrum by the commission? >> has the auctions themselves rely on market incentives, allowing the market to set a price for existing owners of licenses to make the choice between continuing what they are doing or transferring the license in exchange for the offer from the auction. >> it sounds kind of like a bank hold-up to me, hold a gun up to the teller's head and say, we know that you are going to voluntarily give me this money and if you don't i'm going to shoot you in the brains. >> only if the free market is a bank holder. >> i want you to know i have some guarded suspicions on this matter. >> host: senator smith. >> guest: i agree with congressman dingell, and again we support voluntary but we are very concerned of the details. the old adage the devil is in the detail it really is in the details of repackaging which really is just forced relocation. perhaps into a lower powered band which would degrade the broadcast signal. we don't want that and i would point out one more thing. we produce the content. we send it out. we don't control the receivers that are made by the consumer electronics people. some of these are of such poor quality that part of what they need to do is to improve the quality of receivers so that there isn't the interruption, so that there is digital efficiency and that will resolve a good deal of the problem. >> host: senator would you agree that they spectrum auction is inevitable and if so, would you give a percentage of how much the broadcasters would be willing to forecast? >> guest: i don't know where they came up with needing another 120 megahertz when we nearly gave that much up two years ago. i don't know why that number comes out of broadcasting. so somewhere between there and see roe. there will be some broadcasters who are underwater economically who will gladly agree to go out of business for a market feed. that said, there are a lot of people in broadcasting who are profitable who employ lots of people and produce the best content and the content that we all rely on locally for news, weather sports and emergency information is no substitute for the broadcasting when it comes to those things. >> host: but no percentage? >> guest: i would want to presume that. the way i describe it though is what you really have when you are talking about this is a regional broadband problem that is primarily los angeles, chicago and new york. and what you have is a national broadband solution. and my feeling is why should people in kentucky have to have their stations potentially degraded so that you can get a faster app download in new york city? i mean, come on, let's be fair. that is really what it is coming down to. >> guest: on the spectrum proceeds wherever the revenue is split between the treasury and the incumbents broadcast holders might be, there is also some tension between the house republicans and especially the freshmen who are very much focused on debt reduction and cutting the budget and obviously broadcasters need to maximize their share of the proceeds. does that concern you at all? >> guest: it does deeply because i mean i hear the fcc saying this is going to be a market and congress will allocate to broadcasters the money to go out of business or to be repackage. but my concern as a former legislator is when you stack up these issues where you are putting -- let's say 27, $33 billion on the table, some say more -- i just remember that in a paygo environments, which is the budget environment across the street, spectrum auctions where every legislator is paid for for everything. so when you put billions on the table there is a lot of claimants and where will broadcasters fair? and so, i have said to those in broadcasting who may want to volunteer, make sure the check clears before you let go of your spectrum. >> guest: is there any reason to think that this time this option might be different than some of the previous options some of which are praised $20 billion? >> guest: we are talking about two different options. one is called the d block which relates to public safety. we support that. >> host: dedicated? >> guest: whether you sell it commercially and use those commercial assets to build up the public safety network, that is one way to do it. another way is to give it to public safety and then go to the option number two which is where we get it and then we become that pay for for building out the public safety networks. either way, we support whatever congress will do to make sure that there is interoperability when it comes to public safety issues. but that said, we are concerned that there is a rush, without even a thorough inventory, of what is out there, who has it, how is the thing used, what kind of audience? leashed see we are able to broadband and broadcast. some see a world where broadcast does away and we think that is a huge mistake, because i'm not sure i know how the internet and wifi would do all for the american people that broadcasting does. it does many wonderful things but it doesn't do broadcast. >> host: is there too much in your view focused, legislative focus, policy focus on wireless in this country today? >> guest: it is the cool thing right now. it is hip, and i love the internet. and i love my mobile devices, but i want to be able to watch live television on blonde on my mobile devices too. when my wife says we have got to meet company at a restaurant, and i'm watching the game she can drive and i can watch on the way. it is a personal example, but i think the world has to include broadcasting in a very healthy manner in order to serve the telecommunications needs of the american people. >> host: a couple of your former colleagues in the senate have introduced a spectrum inventory bill. does n.a.b. supported? >> guest: very supportive and in fact if you proceed with an option without a credible inventory perhaps by the gao, i am just not sure that this will be done in a thoughtful and careful enough way where unintended consequences and damages done that is hard to reverse. again, we just did this two years ago and now they are saying nevermind, let's do it again. we understand there is a problem. we volunteered to be a part of the solution, but we think not taxing it for us, letting us innovate, keeping mobile and multicasting, these are very important and not diminishing our breach in our demographic areas. those four principles -- we volunteer to help. we don't volunteer to be rolled. >> guest: you mentioned the gao in government accountability office and is it your concern that if someone else work to do it, say the ntia which is an agency in the commerce commerce department commerce department that handles spectrum issues that there could be if you will conflict of interest between federal spectrum users and what the administration and the fcc want. why is it that the gao -- should do it? >> guest: well, it is an accounting office that doesn't have any preconceived conclusions, and i think that is an important one. the president -- we support universal wifi at. that is fine but please understand where they talk about it as rural connectivity, i am sorry, there is not a spectrum shortage in rural oregon where i am from. they never will be. the problem is an urban problem. and so we are just simply saying as he fixed the urban problem, don't damage the broadcast signal for rural places, which in some congressional districts, about 40% of the people depend on over the air television and don't have satellite or cable. and remember when you hear people say it is only 10%, who are those 10%? they tend to be the economically disadvantaged, and in one in three spanish households depends exclusively on over the air. so when you start throwing the number, understand it is the elderly, does the rural in the economically disadvantaged. we think that they count too and they shouldn't be rolled just because there are nice to devices out there that urbanites need more access in fact a download for. >> host: we only have a few minutes with our guest gordon smith. let's look at a couple of different issues if we could. indecency. when you were in the senate, if i recall correctly voted for a tenfold increase in the finds a broadcaster should pay. >> guest: i did and i'm so glad that didn't come up when they hired me, but yes. >> host: but now that they have hired you, what is your position? >> guest: well, broadcasters aren't in the indecency business and i tell broadcasters, as frustrating as it isn't as much as we value our first amendment first amendment rights it is actually something that appealed to me in taking this job, that broadcasters had a higher standard. most consumers, most viewers don't know whether they're watching cable content or broadcast content, but notwithstanding the occasional fleeting expletive or the wardrobe malfunction, as a general rule broadcasters are trying to, are trying to comply with the indecency rules. but sometimes we get confused with cable. >> host: the other night, oscar night, there was an expletive that got leaked out by alyssa leo, supporting actress. if that hadn't been delayed, should abc have had to pay a fine? >> guest: they would have would have paid a fine, and frankly when you have a show like the oscars which is broadcast content, and you have watched young people watching it, you know it is the judgment of the american people's elected representatives that we have got to be careful with the public airwaves and that is why i am thankful that and resolving the tension between the freedom of speech and the decency standards that apply differently in every community, but there are technological fixes like time delays and 52nd delay so you complete this stuff out. and it is a tension i have to live with. representing broadcasters that it is also the feeling of the leaders of congress, our lawmakers and we will comply. >> host: a couple other bits of association news this week. the mpa named a new chairman after a year-long search and also the same week the announcement is absorbing mstv which was the long-term spectrum association so i will kind of double barrel that. number one what would your advice before your be for your former colleague chris dodd and he has some of the same corporate parent is your group has and secondly how is putting mstv under your groups umbrella, how's it going to help your spectrum message? >> guest: well, first of all my friend, my former colleague and now my colleague still, chris dodd does not need any advice from me. he is a very able man. he is one of my favorite colleagues in the senate was chris dodd. we didn't vote the same way very often but i think the world of him and he is doing great because he is the natural skills and i will be a pleasure to work with him on many issues that we share in common. as for mstv, we are simply responding to the wishes of our board and their board, many of which are the same individuals who are looking for some economies of scale but also an increase in the focus on technology, and so we thank with a unified voice, with a budget that is sufficient to be visionary and help our members