Transcripts For CSPAN2 The Communicators 20160222

Is i have ever observed and i say that having observed many on the same committee. Is the fcc structured, in your vie, in a way that fits the 21st century . Guest i think so, but i do think House Commerce Committee and others have come up with reform ideas that are probably long overdue. But, you know, again, i dont im not anxious to venture into telling them how to do their job, because my job is to get along with them and to work with them and try to make the broadcasting case as well as i can on the basis of good Public Policy. Host well, joining us today to talk about some of those issues that the broadcasters face is monthty today low of communications today low monty tayloe of Communications Daily. Does the election time make a difference . Guest you know, the Election Year all the time consumes a lot of oxygen on the hill, and so the focus of the hill tends to be more focused on the ballot box than necessarily government agencies, at least that was my experience. I would say that chairman upton, chairman walden and chairman thune and Ranking Member nelson in the senate and Ranking Member pallone in the house as well as the judiciary committees bipartisanly have written things to the fcc that in my day would have gotten a different response. At least that was my experience, that it got different responses. But i think congress has been doing its job doing its oversight. How responsive the fcc has been to that pressure, sometimes yes with, sometimes no. We can at least sort of glimpse the end of chairman wheelers term, you know . Its not over yet, but its coming. How do you think hes going to be remembered as a chairman . What do you think can his lasting legacys going to be . Guest well, i think hes a very able and very smart man, and i think he has very clearly in mind what he wants his legacy to be, and he is sort of no respecter of industry. Hes going after that. And sometimes in the face of real congressional criticism. Thats not necessarily a bad thing. Its what he, its what his agenda is that hes pursuing. My own sense is that his legacy will largely be defined probably by the Net Neutrality vote but especially by the broadcast spectrum auction. Hes put a lot of his chips on that, on that part of the table, and, you know, were anxious for it to be successful, were anxious for it to be over, were anxious for to do our part. And im really kind of riding two horses in the circus on this, because i have many broadcasters who are very anxious for very good and logical business reasons wanting to participate. I have a lot of broadcasters who just want to be in business and be left alone and support localism and grow their businesses and look for new ways of, new platforms to get broadcasting content out there. So i, on the one hand, i have to support the auction which we do and i do, on the other i have to protect the remainder in the process, and were doing our best to ride those two horses at the same time. The fcc hasnt released any statistics on the number of broadcasters who have signed up for the auction but, you know, being with nab, do you have any sense of the level of participation . Is it enough on the broadcast side . Guest no one knows, and the chairman has said hes not going to release that. I have reason to believe that many broadcasters will look at it, again, for good reasons. How many remain in it is the open question. Of course, that depends on the buyers side. How Many Companies will come to the table. When you look at what we hear on the street, sprint is already out, verizon and at t seem to be kind of vague about their intentions, and tmobile is going to be a big player, but how big their wallet is, thats an open question. And what new entrants will come in . We dont know. And thats all all those cards are being held by chairman wheeler. Host why do you think its secret . Guest i dont know. I suppose he should answer that question. Could you talk about the vacant channel proposal . I know nabs fought really hard against that. Why do you think the fcc is pursuing it so hard in the face of all that opposition, and do you think its going to end up in court . Guest well, remember, part of the motive of the auction is to raise money for the federal government. A vacant channel, lets be honest, who gets the vacant channel . Google gets it. Google is a marketization company with 570 billion. Its the Biggest Company in the world. Its bigger than in than many countries. So if youre going to set aside a google channel for nothing, you have to ask yourself how is that in the interest, the intention of the auction legislation . Broadcasters and broadcasting Industry Companies like antenna companies have said the repacking plan associated with the auction isnt taking into account the level of tower crews and the amount of infrastructure there is to support the auction and the repacking. Is that still the case . Has anything been done about that . Guest well, several things. First of all, if i were to come in with if you were an auto mechanic and i came in and said how long is it going to take you to fix my car and you havent looked at it, could you tell me . Of course not. Its selfanswering, and thats whats happening here. We dont know how long its going to take to do. If you tell me how many megahertz theyre going to get and how many stations are going to be affected. If its a thousand, i can promise you that just on the physical labor required that 39 months is not enough. If its 200, yeah, maybe too much time. We dont know. Unfortunately, the fcc has put 39 months in the regulation. But in their defense, every fcc commissioner to a in a house hearing was asked the question will you force the broadcasters off, if you get 120 megahertz and its not done, will you force those who are not completed in the repacking to go dark, and every one of them, even chairman wheeler, said no. And i dont think they could sustain it politically if you said to a state you guys are off the air. I cant imagine, i can imagine because i used to sit in one of those chairs what my reaction would be if they told me all my broadcasters in oregon were off the tv set. That was a lawmakers megaphone to their people. Thats how you communicate with your constituency. And so theyre not going to do that. But or nor do they know how long it will take until they know how many stations have to be repacked. Host just to go back a step, senator smith, are broadcasters excited about this auction . I know you gave a mixed view of that, some are, some arent. But are they excited about the chance to, you know, benefit financially . Guest i think it just depends on every broadcaster and their Balance Sheet and how what kind of monetization they look to. How can they monetize their six megahertz of spectrum. How are they doing, and do they have any excess. Have they got, you know, a couple of channels . Maybe they can get rid of one. Maybe they can channel share, and maybe they can use the infusion of capital. I think every one of them has to speak for themselves. And so i see my membership as really rather divided on whos going to participate and who wont. But many will. And many, particularly if theyre public companies, theyve got to answer to boards of directors and investors, and they have to look at this and look at it seriously. And i believe they are. But whether they you see, they have in the auction the ability to withdraw anytime. And they dont have to accept an offer thats made. So how many will be at the end, i cant say any more than tom wheeler can say. If it goes the way wheeler wantings it to wants it to with so many megahertz being cleared, are you concerned any position will be weakened because of less broadcasters . Guest what a fashion majoritying question, monty. We will be smaller. Does that mean youre less important or more important . If something is in short supply and the public still truly values localism, one of the most popular telecommunication brands are your local tv stations. Will they be less important or more important . I think the answer is well have a smaller band, but well actually be more important. See, many of the people who are going to bid on the auction, they want what we have. They want our airwaves. They dont want the responsibilities a broadcaster has like localism, like weather, news, sports. They dont want to do that. They dont want to set up a newsroom. They want the spectrum so that they can bill you more on your phone bill or any other bill that they might be able to direct to you through those airwaves. So my own view is this is a grand experiment, never been tried before. Im happy for my broadcasters who want to somehow utilize it. But i have a duty also to protect those who want to stay in the business. And broadcasters tend to be real devotes to their industry and their cause of Public Service through providing local content and Great Network content. Host is there an impact to the viewer of a smaller spectrum . Guest well, if youre not crowded out, i mean, theres some channels im told may just go away. But what that will do is, i guess, make the programming scheduling a little more interesting on what remains. But i think its possible there may be be some communities that have none, but thatll be very few because i think the Public Policy that underlies and overarches the broadcast license is, there are values that are still very valuable to the american people. You know, what broadcasters do, what newspapers do, the two of them together, they give people the civic information they need to live informed lives and to know whats going on in their community. And that brings up the ownership role loop. The newspaper broadcast crossownership rule, if anything, ought to be changed. Because were both in the journalism business, and were both important to the people who live in every community in this country. Host it should be changed n your view, but will it . Guest well, i never really understood the quadrennial review. I never focused on it on the senate Commerce Committee. But ive been at nab now for six years, and theyve missed it twice. Havent even done it. But theres a real crying need for that to be accomplished and changed so that for the sake of the First Amendment and investigative journalism, it ought to be changed. Speaking of the ownership rules, Congress Took a swipe at the fccs rules on joint sales agreements and sort of forced a grandfathering provision in there. Do you think the fcc has a responsibility to scale that rule back now that they know congress doesnt approve of it in some degree . Guest i would think they would, but i dont know that they will. It is to the everlasting credit of Barbara Mikulski and senator blount, senator schumer, senator durbin, congressman walden and pallone. These gentlemen on a bipartisan basis, i think, understood at their core that once the rules are set and broadcasters detrimentally rely on those rules, you cant change them post facto. And thats what the fcc did. And the congress said, no, you dont. So i would think they would take note of that. I mean, we were one of the few substantive writers to get through on the last resolution through congress. And, you know, i think that ought to say something. The president signed it. But, again, thats their business as to how theyll respond to it. Host senator smith, whats your current relationship, the broadcasters current relationship with the capable companies particularly when it comes to retransmission . Guest theres always an economic tension this as you can imagine, pete i were. Peter. They want to pay less, and we believe our content is worth more. Were paid 10 of the monies coming from that are disperse disbursed through Pay Television. Theres a disparity between the viewership and the compensation, and obviously, they would like to blame retransmission consent for the inflation in cable bills, but the truth is it has a whole lot more to do with the settop box than it does anything to do with them and broadcasters in negotiations. You raised the settop box issue, and the fccs proposals and nprm are supposed to come up at the next meeting. Nab hasnt really weighed in on that to my knowledge. Broadcast content is a huge part of what theyre selling. Do you have a take on the settop box issue . Guest i respect the fact that the chairman looking at something. Chairman wheeler, if nothing else, he is to his great credit fostering competition. And hes looking at one of the real cost centers in the Pay Television industry. So i understand why hes doing that. I suppose as a consumer myself taking off my broadcaster hat, im saying, okay, who is the new gatekeeper . Is it amazon . Is it google . I dont know. If its one of those, the question that i have is right now we have tough negotiations with directv and satellite or dish or with comcast and cable, time warner, you name it. Those retransmission consent negotiations are happening all the time, and 99. 9 of them end without any difficulty at all. But theyre paying for the content. So if it quos to a new goes to a new settop box with a different gatekeeper i guess my question, putting my broadcast hat back on, is, hey, how about my copyrighted material . Are they going to sell ads on that . And if so, do they have no responsibility for what they then will take from broadcasters for nothing . So, i mean, i think theres some serious legal issues there. And were paying attention. But this is something theyre going to vote on. I think its likely to go to rulemaking at some point, and were going to be participants, pause we want to protect our because we want to protect our content. It has a value, and were determined to protect that. Speaking of negotiations, how worried are broadcasters that theres going to be a lot of changes to the retrans negotiation roles . Guest well, you know, again, this is a solution looking for a problem. I understand as Good Business people and as the pay tv colleagues are, theyre looking to reduce any costs that they can. But, again, were paid far less for our content than they pay themselves for their own content. And our content has a lot more viewership than theirs. So we think theres a disparity between compensation and viewer ship. But it is also true that our friends on the other side of that negotiation, some of them i think dish in particular really relishes when they can get an impasse with some small broadcaster and blow that up into some big deal. And they always time it around the super bowl or the oscars. As night follows day, thats going to happen. And then they go to the fcc, they go to the hill and say theres this huge problem. Opening up in this proceeding, monfy, will probably monty, will probably result in more standoffs, more blackouts x. The best thing for them to happen is for them to close the proceeding quickly, and that sends the message that you should spend less time looking for special favors in government and more time negotiating in business. Thats how its supposed to work. Thats how it has worked. Host gordon smith, what is the impact of a super bowl, of an election season on broadcasters . Is it like Christmas Morning . Guest it is. I mean, lets be honest, its football, the nfl has become kind of a secular religion in our country. [laughter] and half the country was tuned in at least, i suppose. It was just off the charts. Sports have a great value, and theyre very important to broadcasters. And im pleased to tell you that the broadcast picture has never been better. And while theres, you know, my members are also streaming and stuff like that, the architecture of streaming will never support that kind of viewership with the kind of quality we can cowith a good, clear do with a good, clear broadcast . So there will always be niches around it, but the big ca houston that is the big tv with a broadcast signal. Host so when it comes to commercial and people have dvr, etc. , different devices for skipping over those commercials, whats been the impact of that . Guest well, its a concern because most of the revenue to a broadcaster is still advertising based. Retransmission consent is growing, but its still small relative to advertising. So if the people who, like dish, who have the hopper want to say, well, lets undercut 85 of the broadcasters revenue stream, thats a problem. Because we want to be able to say to the advertiser, look, well deliver the eyeballs, and thatll produce customers for you. And if they give people the option just to skip it, some will. In the super bowl, however, people tune in for the ads almost as much as for the game, and theyre pretty amazing. But advertising still remains central to the the revenue stream necessary to great content from networks and to supporting localism and journalism in every local community. Senator, can you talk about the progress of the update to the 3. 0 standard . Do you is it moving in a way that well get it adopted by the time of the repack . Is there a transmission plan . Guest you know, at this juncture nab is very interested in what it can do and the promise is that itll allow members to do with even less spectrum even more than they do now with what they have. Mobility, ip interoperability, still multicasting, channel sharing. It has great promise, but theres no finished standard yet. And is so before i and so before i voice an opinion other than a hope, i want to see the final product, and then well know, then well take it to our television board. And its really our members who would have to make that investment. But it looks promising, but the proofs in the be pudding, and the transition is difficult. Host are there issues that you and Michael Powell at ncta or gary shapiro at cta agree on and all work for the same goal when it comes to congressional issues or fcc issues . Guest yeah. It seems like were often on different sides, but there are many things where were on the same page. It goes issue by issue. But i have, i have high regard for both, and i have a particular affection for Michael Powell. Hes a i was on the senate Commerce Committee when he was the chairman. I thought he was superior, superb. I love his dad, privileged to work with colin powell. Hes just a remarkable guy just like his father and mother. Host has nab taken a position yet on Net Neutrality . Guest we havent. Some of my members are for it, some are against it. Im with my friends. [laughter] its one of those issues that i know ive debated back and forth. I can make you a good case for it, i can make you a good case against it. Host but nab does not have a dog in that race at all. Guest no. And i dont understand why the others do. Host monty tayloe. This is a radical topic shift, but theres been concern about the fcc closing enforcement field offices and keeping up with pirate radio. Is the fcc doing enough about pirate radio right now . Guest well, they have a proceeding on it, and we salute that. I mean, we, you know, it just undercuts legitimate, licensed, legal radio and, obviously, we want we dont want that. But whatever they can do in the future to identify it and eliminate it, we think thats important. I do want to salute on a. M. Revitalization the tremendous efforts by commissioner clyburn, commissioner pai in particular who led that new. It gives the a. M. Radio station a window to apply for f. M. Translators to keep in business and keep listeners. Were very grate the canful to the pcc grateful to the fcc for that ruling. Host 20th anniversary of the telecom act of 1996. Is it time to update it . Guest ing yes. And as i recall, though i was not in the senate when that passed, it preceded me literally by a year, i believe, i think the difficulty with telecom acts is they take a long time because they have the tendency to pick winners and losers and overhang any future telecom rewrite with issues like Net Neutrality, issues like settop box. Things on which lots of capital flows one way or the other. So they become very, very difficult things to do. And the other problem with Telecom Legislation is its the complexity of it. And the constant change in technology. It seems like as soon as they get it done, the technologys moved on, so most of its irrelevant. That said, what i like about the idea of a telecom rewrite is it will look at things in a holistic way. But the more holistic you look at it, the more difficult it becomes to make it into law. My guess is telecom rewrites, therell be more rifle shot than holistic. Theyre just difficult to do because you have big players, big interests who will come and make their case. Host given your past in the senate and your current position as president and ceo of the National Association of broadcasters, what can realistic and this bounces off a question monty asked earlier what can realistically we expect to be legislated in the congress that deals with some of the issues . Guest this year . Host yeah, this year. Guest not much. And the reason is because its a president ial Election Year with. It was my experience, peter, that in an Election Year and doubly so in a president ial year politics trumps politics. Politics trump policy almost 100 of the time until you get to the lame duck. And then the lame ducks dynamics are determined by who wins and who loses. And so were going to be watching for everything and be prepared to make our case all year long so that when it gets gets to the lame duck and the conferees and the leadership are cutting the cards, that we, were going to do the best we can to protect our members against anything that might come up. And i cant even predict to you what that would be at this point. Host monty tayloe, we have one minute left. A few years ago at the nab show wheeler suggested concentrating online and channel sharing and making money off the auction, and he was hugely criticized by the people at the show for that plan. Isnt that kind of whats happening though . Was Wheeler Wright about that . Guest right about that . Guest the criticism is were some of the Biggest Online players already. Were already doing that. And in terms of channel sharing, a lot of that is going to depend on each individual station and what kind of deals that they can structure. All thatll happen anyway. And so he was kind of saying why dont you do what youre doing. And that was the response, was because, check it out, were already there. Host senator gordon smith, president and ceo of the National Association of broadcasters, and monty tayloe of Communications Daily where he is an associate editor. Thank you both for your time. Guest thank you. Thank you. Cspan, created by americas Cable Companies 35 years ago and brought to you as a public it service by your local cable or satellite provider. I am trying still to decide which candidates to support. Im trying to decide between the governors who have executive experience or some of the other candidates like mark cruz and marco rubio. And the most important issue to me is national service. There are more than five million Young Americans that are ready to step forward and serve their country for a year with programs like americorps, the peace corps. Governors from across the country have been meeting here in washington over the weekend for their annual winter meeting, and today is the last day. National Governors Association chair, governor gary herbert of utah, will deliver remarks at the closing session today. This is live on cspan2. [inaudible conversations]