American rail act that was signed into law by abraham lincoln. It allowed several Railroad Companies to make it Union Pacific and then they were charged with the task of building the Transcontinental Railroad that bridged the east and the west coast. They met up in utah and that is really what propels us even farther. We become that point of moving west, one of the gateways towards the west. That is today at 2 00 p. M. Eastern on American History t v. Now to discuss the future of television with a group of industry leaders. Speakers include a former sec fcc chairman michael powell, gordon smith, and Consumer Electronics association ceo gary shapiro. This is part of the conference of the advanced Television Conference committee, which develops standards for television. This is about one hour 10 minutes. Ladies and gentlemen, welcome to this super panel on the future of television. Of course, we have a trio of panelists who lead industries that are vitally interested in that future. Its hard to believe it was 20 years ago in the fall of 1995 that an fcc Advisory Committee made recommendations to the commission for the worlds first alldigital Television Transmission system. And many of you were involved in that epic process. But we all know that time and Technology March on. And today we stand on the dawn of a fully new system, one that promises an even more flexible standard, also alterating High Definition television, and really a marriage between video and the internet. With all this in mind, we ought to turn now and sample the unique perspectives of our super panelists, Television System and industry luminaries. Because they are so well known and mark has almost already introduced them, i will do it briefly. On immediate left is michael powell, who is the president and ceo of the National Association of National Cable you have to use that word cable. Cable. He doesnt like that word. [laughter] cable and telecommunications association. And former fcc chairman. Then we have gordon smith, who is the president and ceo of the National Association of broadcasters and a former United States senator, and finally, jerry shapiro, Consumer ElectronicsAssociation President ceo and a New York Times bestselling author. I have prepared a number of challenging inquiries for our luminaries, but let me begin with a general inquiry to each. What is your vision . Gordon, we will start with you. For the future of television and the role your industry is going to play in the future. Gordon thank you, dick, and my colleagues here. Thank you, dick, for your leadership over many years, and for being a part of this next phase. I see the future of video and Television Broadcasting in particular is remaining bright as long as localism, live free journalism, consumer protections, emergency alerts, as long as those are important parts of Public Policy, i think broadcast television plays the indispensable role. Dick michael . Michael television will be dramatically different. Its going to be much more multidimensional as a Consumer Experience than it is today. I think consumers are clearly delighting in a range of Consumer Electronics devices that provide screens, that provide televisionlike experiences across a myriad of platforms that never existed before, and i think that will continue to proliferate as a legacy of steve jobs begins to continue to create magical devices on which quality video can be distributed. I think the nature of content is going to continue to radically expand. The old adage that life is stranger than fiction is true. A massive amount of consumption will take life merely in the video documentation of reallife. Many, many consumers are spending a portion of their video consumption day watching each other. For why, i am not sure. But they do. We have to acknowledge that. That creates a kind of Community Intensity and Television Watching that is relatively unique. Less about eyeballs, more about commonly shared passions around a piece of content. I think we will see that. I think we will see other expansions in form, longer form, bingewatching, shorter form clips, and each of those will be optimized on different platform and devices. I think we will have an optimization model the will have to transform. Advertising will demand the kind of metadata specifics that internet functionality plays. The cable industry being the leading provider of highspeed internet in the country is going to play a Critical Role in the way the internet evolved, and as it serves as a platform for a lot of that expansion to take place, not to mention i think it will continue to be a home for content that is most highly optimized on that kind of proprietary platform, either because of its expense in being produced, because of its critical need for proprietary heavily quality managed experiences that the internet sometimes has trouble delivering. Dick how about you, jerry . Jerry i should have negotiated that i do not follow michael powell. [laughter] dick first of all, thank you to you, dick, for what you have done for hdtv, an extreme example of leadership that is made a difference for our country and the world. Most americans, 85 of americans , have an hdtv set and they like them. Im very proud of that segment in my life. My tombstone will be 16 by nine aspect ratio. [laughter] dick i want to thank jerry i want to thank you, it has been terrific. I am shocked that i was invited back. I spoke here several years ago. I am not mitt romney. Im willing to apologize when i was wrong. I am wrong. [laughter] jerry in terms of where we are going, over the top is coming really fast and it is hitting. We are going to i. T. Video very quickly and different forms. We have the prior people, your predecessors 11 years ago. I went back and looked at what we said. The whole thing was a focus about how we get to the hdtv transition. You are getting an award and use what you say, and you said some really pressing and things prescient things as well. I listen to what you say. What chairman powell spoke about, and its not just about the tablets. The things you put in your wrist. Theres virtualreality coming. We are starting to feel the beginning of a lot of these transitions. There are new technologies in the video. Some of which you are aware, lcd and things like that. Other things have either not been invented or they are in research labs. Its not just about apple. There are a lot of great companies, like samsung and lg and panasonic, that are doing great things. Theres a lot of expansion in the video space and reason for growth. In terms of what else we will be seeing, in the narrower near term we will see that it is all about ultra hd 4k, which is had a phenomenally successful run. I hear about the sets going off the shelves. The numbers are truly astounding in terms of how they are selling and the price of what you can get. I guess we will get to that, but i am happy to talk more about it. Dick because we are work in washington, d. C. , i suppose the obligatory question will have to be, what can the government do to help, or on the other hand, hinder your industry . Feel free if you want to lay out any concerns you have about the government regulatory issues in that regard. Michael when you are in a period that is marked by explosive innovation, that period also involves explosive experimentation. Regulation is at its best when markets are mature and well understood. They are at their worst when there is a fomenting fire of change and experimenting. I would look for a category of having the commission be committed to incentives that align with that experimentation paradigm and the importance of sort of not letting there being arbitrary or premature reflexive reactions to experimentation in flexibility of packaging, new business models, new rules for interactive or consumers, the role that data will play because all of those things will always have an element of something you might be a little worried about. The second thing is the disincentive that you mention which is frankly just the opposite of that. It is doing things you hope they dont do. I hope at some point the combination of the fcc and Congress Just has to confront the reality they have a myriad of laws based on market and technological predicates that today are utterly and completely false. Not even kind of false, but clearly demonstratively false. Dick such as . Michael Program Access is premised on the cable industry is the only source of distribution of video content and it is premised on the idea that Cable Companies vertically own most programming that consumers watch. The reality is, when that law was passed, Cable Companies owned about 54 of the content that was carried out on the ir systems. Today, that is down to 11 and if you took out comcast, it would collapse almost entirely. Yet the rules still exists. Yet there is directv and dish which are larger Distribution Companies and cable yet they are not subject to the same set of rules. There is a lot of, simply, in equity inequity in the Regulatory Environment because the market grew up on the rules and nobody has tried to go back and address the efficacy of the rules. Its not about whether you win or lose. The government owes you accuracy and a Regulatory Regime that is genuinely and honestly reflective of the actuality of the market and not the way it was 20 plus years ago. Dick gordon, speaking for the industry with the heaviest Regulatory Burden, how do you see this question . Gary i was going to suggest to michael that i have some i would like to give him if he would like. [laughter] michael youve been trying. [laughter] gordon obviously, the elephant in our room is our havey Regulatory Burden and the upcoming auction. And our hope that the fcc will have a successful forward and reverse auction that protects our contours and is mindful of interference. I think there are just so many things that could go wrong with the option with the auction unrelated to the lawsuit we currently have which we try to expedite because we like the function in the rearview mirror. Auction in the rearview mirror. I was on the Commerce Committee when we went from analog to digital and i remember how difficult that was and how by comparison, that transition was like kindergarten recess compared to the complexity of the upcoming auction and the potential for disruption that poses. But i can name ownership rules and regulation and i could go down a long list. I mean, they havent, the fcc hasnt simply kept pace with the requirements and ownership issues. That presents its own sets of challenges. I would hope the fcc would see the enduring value of localism and free, and that it is a video future for all the American People and not just those who can afford pay video. The world we grew up in and the world we should bequeath to our children is one which irrespective of your income, you should be able to have local news, weather, sports, emergency alerts, which so often are the lifeline to rescue. So i think that those durable values should always be kept in the forefront of the fcc keeping a dedicated band for broadcasting. Between the analog transition to looking forward to the auction coming up in 2016, broadcasting will have relinquished two thirds of its spectrum and there is just simply a limit. If we are going to keep broadcasting in the important place that it occupies in telecommunication. Dick we are going to follow through on some of those issues a little later that you raised very effectively. Gary, how about you . Gary i will sit back and say the competitive strength of our nations innovation and innovation is what we are great at. I have to share michael wash concerns michaels concerns, if you have to go to the government and ask permission before you do Something Different and thats slowing you down. Government plays a valuable role and the transmission system. That was the primary role and we agreed as a nation that we would recommend something at the fcc and that worked out great. But there is a limited amount of space. So much of what we do is based there. There is a debate that i am struggling with over the last few years about rich versus poor , and some of it is the resentment that somehow people get government monopolies and they get special treatment and make a ton of money and we have to keep that in mind. A lot of these regulatory things were created so long ago. The way we view it is we want to see a healthy broadcast and healthy cable. We want competition with every type of broadband provider. If there is competition, a lot of the need for regulation goes away, and eventually our policymakers will get this. What can we do to foster this tremendous competition and in broadband . One thing the fcc has not done right in my view is that they have claimed authority over you regarding the internet in a way nobody ever anticipated in the 96 act, this is your authority we want open internet, and this is a good thing. Rather than the fcc saying we can do anything we want and could be requiring weight you come to us which is not a healthy thing for our country. Dick we are here at atsc and i think we should talk about what hopes and concerns you have for a possible new standard. Either way, congratulations on the private sector role you played on atfc. Gary this is an elegant standard that does a lot of great things. They are willing to introduce and try things and if there is not support in the market lays, you will see that dry up. Marketplace, then you will see that dry up. If the broadcast industry gets behind it, it will succeed and it can be the last opportunity to expand market share. But if they dont, it will fail. I was reading about your predecessor, talking about how hdtv is the last chance for broadcasters to step up. We worked so hard on it and it we thought the broadcast entered the endall, beall space of broadcast tv, and when we started the process most of the country relied on over the air antenna. Most of the country does not rely on over the air and on air over the air and broadcasters darted out fast but got slow compared to satellite fiber and others. It can come back with atsc 3. 0. They have created a standard for this. Netflix is already streaming but the trendline is there. Americans want goodlooking pictures. They love that. The number of americans with sets over 40 inches is really high. I have it. It is 79 of americans. That was not true when we were doing the transition. The Research Also shows the content is very important. Even without content, its an experience of people buying it anyhow. Dick senator smith, after two decades of development, we went through a transition just six years ago, a nationwide transition to digital television. Do you foresee this time around that theyre going to have another nationwide transition . Or will it be, perhaps marketbymarket and if so, how will that work out . Gordon let me surprise you and say i agree with what gary just said, and probably to the irritation of some of my members. I believe 3. 0 is necessary to have the flexibility and incentive to do new things with less spectrum. I believe it is actually critical, even if you are a broadband provider like michael or the telephone company. I dont think there is an of spectrum to do all video, why broadband . It will always be an expensive experience and i believe it is important for more than just a great new picture. It is important for mobility and again, in emergencies, that becomes critical. If you have a mobile device, you can actually get a broadcast signal. I think broadcasters need to be ip interoperable. It opens up the world of the future so broadcasters can continue to play its vital role, whether you get it through subscription tv or over the air. Gary and i will quibble over the numbers, but it is probably 60 million americans exclusively over the air. When you add up second or third tvs, its a lot more than that. Broadcasting is as a matter of Public Policy needs to be there. Dick we just paid all of that money for the big screen that now we have to go through it all again . Gordon it could be rolled out in stages, but a National Deadline worked well and will probably require that again. Thats not an easy opposition. I was part of the last transition and i know what it took. This will be just as big and just as important, but i hear chairman wheeler talk a lot about channel sharing. That becomes possible with 3. 0 in a way that it is not possible with 1. 0. Flexibility. My hope is you all will finish this job. Its good for broadcasting, its good for telecommunication. It means more than just a pretty picture. It means all kinds of development leap of faith such on behalf of broadcasters such as they made going to hd, but that needs to be done again. Richard what about cable this time around . Given the key rule that you personally played on atsc 1. 0, how do you see it rolling out this time . Michael we are a proud partner and founder and supporter of everyone in this room. People are to be commended but i do think the circumstances are meaningfully different and probably more challenging in terms of a rollout. Theres not a Second Channel to jump to which makes me believe that suggests market by market more clearly than it does nationwide switch. It is important to say that i think the government currently has a fascination with internet overthetop video and i dont know if it will be as easy to galvanize around an incremental chang