[inaudible conversations] the afternoon. I am so excited to be in this crowd to talk up the sinclair tribune merger and ownership if you dont know me i am a distinguished fellow at the Georgetown Institute on foreign policy. Before we start early to think a couple loved institutions in the institute for public representation that is part of Georgetown Law Center and of those alleged foundation for sponsoring this event also senator Richard Blumenthal we hope to hear from soon and also jaime who is a Research Fellow here georgetown and by personal locklear cantering a fabulous job and also the head of the institution in that you may have heard broke her leg when she and her child was shopping when shoplifter knocked them over down a flight of stairs. So of people could send her well wishes she is doing a fabulous job running the institute also other georgetown students and who will be helping today with logistics. So let me step set the stage. Whether we talking about . Made the shares Sinclair Broadcasting group wants to buy Tribune Media company. It is seeking approval from the fcc and department of justice for the merger if consummated a result in sinclair owning 72 percent of american viewers. The next largest broadcaster would have 78 fewer stations. At the same time the sec will vote tomorrow to eliminate the ownership rules that tv radio and though local tv ownership rules they have already reinstated herbal with the uhf and vhf stations as have the station for purposes of ownership. How many of you know what day uhf and vhf station is . Anybody under the age of 40 . [laughter] well have an opportunity to talk about that later if that was a rule that should have been reinstated or whether chairman pai is engaged of reregulation there really is not his forte. The other thing the fcc has done to eliminate the main studio rule to have a broadcaster having a studio in the county of license that is seems old and not important but when you combine consolidation with getting rid of the need to have a presence in the local community is meaningful and we will get to that today. These issues are timely with the vote tomorrow so we will talk it out of the merger is in the Public Interest and if those rules make sense in this day and age with 500 cable channels with the internet information. Let me talk about how today will go. Senator bloom and fall is not here yet. When he comes we let him speak regardless of what were doing but we will start off with the debate focusing largely on the ownership rules and not so much on the merger but then follow with the panel and then audience question in answer i will not call one people. If you have a question please write it down major hand. They will be collecting the kardashian jaime will go through those we dont have a lot of time but hopefully folks will stay after an answer more questions. Lets start with the debate and we are very, very lucky i got an email this morning to argue in favor of lifting as ownership rules he was unable to come and am still in my pajamas. I was not happy but fatefully he brought in his place a fantastic substitute i have known for years the executive Vice President for strategic and Legal Affairs so literally at the last minute agreed to debate a very good friend that you may know from his appearances on msnbc the a principal of the good son group and also an adjunct professor at Georgetown Law Center. Each will have seven minutes than david will have another two minutes to respond. The floor is yours. I have to say again that gigi is not the only one grateful that jerry showed up. With early last minute notice and has stepped in and that deserves all my things and with that. [laughter] we will hear a lot how the world has changed. The world has changed since the ownership rules were first promulgated back when jerry worked at the fcc a little bit ago. There is the internet and cable tv and a look at all the Different Social Media platforms today and therefore would these antiquated Old Fashioned rules have got to go because that is the way we can only have free over the air broadcast tv the only way to survive in the modern world. If that is where the story ended 1 2 to concede. You win. Thanks. [laughter] go home. But fortunately that is not where the story began it was when broadcasters got a great deal and it was a trade. We will give you free spectrum licenses the best in every market and not only that theyre worth billions of dollars today that under todays lot you can sell and if you want and get billions of dollars more. Free from the United States taxpayer but it doesnt stop there. So the laws passed in this institution and give broadcasters even more value. You are guaranteed distribution social me a business person that would not love that deal guaranteed gesture mission in lock as you the broadcaster are given a legal monopoly. A monopoly under the copyright law to provide Network Programming you were the only one in your part market permitted to do so if i want to buy a newspaper from another city i come by newspaper to go on the internet find content from anywhere in the world but not broadcast television. No. We give broadcasters the monopoly. And we also from time to time when we are worried about the budget like we are right now during tax reform we ask is there any possible way to get additional revenue from these licenses . What if we charge a fee . No. No fee. We you wanted for free as always. We are supposed to get something in return as the American People the argument like this. We get free over the air programming going to wonder to of the households for free. Number two, local news, weather and sports sports, localism. That is the Public Service from the broadcasters and the other thing we are supposed to get is a wide variety of perspective and in diversity we almost we are filled with different viewpoints and the odors boss is a city with the viewpoint to be this bin guess what . That is what it is and we say taken all and have it for free on us provided we get that back. It actually played that out that way with all the different choices and technology 82 percent of americans across all age groups trust local broadcast the most for local news. Local broadcast is trusted the most for local news by the way that survey also found people trust local broadcast news world there and they trust their own family what is going on locally. So in my view if you want the freebies and has to come with what we have passed for in return for you have to provide local news and if you want to take away those restrictions, that is fine but bin giveback the goodies you have gotten in return the House Republican leadership never introduced a bill city will get rid of them beyond have that copyright exclusivity anymore and guess what . What we want is all that matters not what you want as the public matters. Now we talk about a specific transaction and they are represented here today so what happens when big broadcasters get bigger . I will give you a preview. Sinclair advises the station to fire local reporters and staff and sense of function to baltimore and the tribune has a better track record in fact, we had a steady of local news and found the top three stations to provide local news of both companies the tribune provides twice as much. So by that getting bigger they want to prove the local news that tribune provides will be just as good or even better if it passes is the prologue asking people in Oklahoma City or rochester or seattle where sinclair has stations it will not get better. It gets worse so what are we getting from this . And why should these limits we lifted to get bigger . Because then the nations largest broadcaster doesnt work out for the American People. Things were the invitation and i thought about shaving my head today. [laughter] i dont think i could pull off. [laughter] i apologize if i have not read all of the pleadings in this proceeding but since i first worked for the sec in 1975 and spent my time reviewing station in sales in the 70s and the time during the Reagan Administration chairman felt fowler to deal with some of these and cope with them in devising over the past 30 years sorry to bring a of a bit of perspective that could be a my inning but the question today is whether we need sec rules limiting broadcast ownership with higher resolution internet streaming from over the top services and more competition from distribution and we do not in the hyper competitive marketplace those antitrust principles are more than adequate for Television Broadcasting we dont need separate rules of bin mr. Bryan independent agency to impose artificial and arbitrary definitions of competition and diversity which will show decades ago that is in response of how Television Distribution works. The big promise that guides my view is i believe free over the air broadcasting is of Vital National asset sold every say about programming markets or advertising markets or the highest and best use of spectrum i urge you to consider if free over the air broadcasting did not exist in the sec allocated spectrum today with investors provide capital and new broadcasters could outbid the internet or multi channel pay platforms to acquire the highest cost programming to provide hours of live news in every market . And make it available for free . It is no longer a barrier to entry but nobody does these today. Second ive understand there is no free lunch we have chosen to finance by allowing them to compete for revenue in the marketplace so of those profits arent that means broadcasters cannot take anything for granted they have to earn their supply by paying for it and nobody requires them to broadcast nfl games mitt requires the nfl to distribute programming on a platform for free or sell games to end b. C. When fox sports will pay more. When i hear the typical argument for a consolidation the one that has never acknowledged is that broadcasters have to compete with those on regulated competitors for every minute of programming with every dollar of revenue. To giving the original cellular licenses away to the incumbent phone companies for free with no Public Interest and responsibilities and the same was true for the licenses. Dps, cellular and broadcast issue in the changed hands to those that changed market price. More to the point how they got their stations and limits on ownership is the intellectual ownership limits are not logically derivative from how the station was acquired. The fccs politically divided ownership rules have harmful effects of the market. I was an active witness in these consequences of making washington, d. C. A monopoly newspaper when the fcc made joe separate the washington star from its financial mornings nationally we do not need ownership passed because those particular rules present new competition to existing distribution platforms and as patent pointed out in his wall street journal oped they had the effect of freezing the National Television to abc, cbs and fox. Locally we dont need ownership restrictions because we need to allow those who are willing to invest in local markets to organize in a way that allow them to be as profitable as competing platforms. In the system we have chosen for the broadcasting, profits commensurate with competing platforms are not just good, they are essential even if you believe the next question is what is right for 2018 and beyond. I would reject as preposterous the restrictions on the buck at the time people were not the pearl harbor bombings from the over the air networks before facebookthey spoke, before goog, amazon, netflix or direct tv and when at t was a longdistance provider it was the best framework for the century. I sometimes feel like rip van winkle the world has changed. [laughter] get over it. The u. S. Chose the broadcasting profits that was easy when they had no competition except for each other. They had bad consequences but they were not existential threats. If you want the marketplace nfl games, prescriptive programming for everyone for free, you have to let the marketplace figure out how to do it because the programmers are going to sell to the highest bid every single time and the government isnt going to subsidize. Thank you. I said i was happy. I take it all back. You ended by saying the marketplace wouldve figured out and im going to come back to a point i made earlier. The government would have no role whatsoever but as long as they have their thumb on the scale and guaranteed distribution and free licenses at a time when other competitors have to buy them, we the American People get something in return. Heres an analogy i used all the time. Did you know that 22 of the stadiums in the country were built in whole or in part to the taxpayer money in thtax payer mf the billionaire owner and what do you get in return to that . May bmaybe it gets plucked out altogether my view is as long as the American Public is giving something to an industry we have every right to ask for something in return and i think the way to to handle this we do want the broadcast and localism and things available to the public for free. Those are all great things but you only get to argue that those rules should go if you can show somehow theres a disconnect between the value we get into the diversity of the voices on the platform that matters most for local news, broadcast and so far i have seen nothing in the filings submitted that would show that. In fact every time one of us that is opposing the merger suggests the question they could answer why can you please show us how your local news hiring and content compares to the rest of the industry were the tribune, the company you want to buy, crickets, no answer. Except we are going to bring local basketball, high school basketball. Thats great if i can compare it to the rest. Once again, we can talk about the free market all day long but as long as uncle sam and taxpayers are subsidizing the industry, we get a say an in the font local news and diversity. Lets give a hand. [applause] when senator blumenthal arrives, we will give him the podium. Its a lectern, not a podium. Ive been corrected. Let me briefly introduce the speakers on the Georgetown Law Center website they are very easy to find in any Search Engine and im not going to mention any particular. I feel very lucky to be on this panel. It directly to my right we have rebecca hansen, senior Vice President for strategy policy for Sinclair Broadcasting group, executive Vice President general counsel for the tribune corporation. Its a big deal to have the two parties. Then we have the director for policy and Legal Affairs at the Media Coalition and directly to her right is the National Association of black owned broadcasters and then my mentor and a longtime friend and sometimes pain and whatever, Andy Schwartzman, senior counselor and attorney at the Georgetown Institute for public representation. Thank you, everybody. We have very stark visions. One is an industry that gets a lot of government taxpayer benefits and therefore owes something to the public, a fiduciary and one of the things they owe is a diversity of voices. On the other hand we have a scrappy competitor in the competitive marketplace and with a freemarket it ought to rule. Whatever needs to be done to make sure they survive this kind of the way that i read what jerry was talking about so i thought id ask anybody on the panel that they want to respond. Which is it, or is it a little bit of both . David paints a very rosy picture and and a love of the s are not disputable accept the fact we got a section for free and i will be assessing a 4. 4 billion check at some point in addition to the 85 billion that the company has paid over the years and acquisitions that weve made. So there is an investment in spectrum regardless of the origin of the original licenses issued. But the other part of the picture David Pinkett is what you see before you and it is basically the environment in which we try to use the socalled government benefits to create a selfsustaining solid ability to deliver local news. This is a slide showing where broadcasters are in that ecosystem for which we have to work. We have networks for whom we buy programming, 50, 60 billion then where we distribute the programming. To summarize where we are in the landscape, the major challenges they are supposed to provide the Public Benefits include major Revenue Sources like local advertising. Major consolidation of the satellite and Cable Companies with nationwide or near nationwide footprint, consolidation of National Programming networks come increased cost of programming including sports. The entry of massive competitors such as google, netflix and facebook. I want to set the scene but it is not as blackandwhite as david presented it and i will stop there. Lets talk about the spectrum. We own the spectrum, the public owns the spectrum sinclair doesnt own spectrum. What sinclair bought was licenses that expire but they have the rights to the renewal if they earn it. They are supposed to earn it with Public Service but make no mistake about it we own the spectrum and you need to be within that contexview itin thae what youre saying is we the public on the spectrum we can seset up appropriate conditionso it is used to benefit the public and that includes ensuring competition an