Remarks by Gordon Smith at MMTC Broadband and Social Justice Summit

WASHINGTON, D.C. — This morning, NAB President and CEO Gordon Smith delivered the opening remarks of the FCC Commissioners’ Breakfast at the Multicultural Media, Telecom and Internet Council’s (MMTC) 7th Annual Broadband and Social Justice Summit.

Below is a transcript of his remarks as prepared for delivery.

Thank you to MMTC for the opportunity to be here today. We appreciate your tireless work to close the digital divide by promoting equal opportunity and civil rights in media, telecommunications, technology and broadband. The National Association of Broadcasters is grateful for your partnership and your advocacy on these important issues.

We’re just 20 days into the new year, but there is already little doubt that 2016 is going to be an incredibly important year for broadcasting.

Following years of hard work by the dedicated staff at the Federal Communications Commission, we are poised to begin the broadcast spectrum incentive auction this spring.

This auction presents an exciting opportunity, and all eyes will be on the FCC as the auction unfolds.

One measure of a successful auction will be whether the Commission sets the stage for the broadcast industry not just to survive, but to thrive following the auction.

This is important because of the value and contributions broadcasting makes every day to the American people. Because it is always available for free over-the-air, broadcasting plays a critical role for all Americans, especially those who are traditionally underserved.

That concept is pretty remarkable when you think about it. Frankly, if it weren’t for the existence of free, over-the-air TV, we likely wouldn’t be able to muster the political will here in Washington to create it. Emerging services today are all rated, metered or littered with overage charges.

But fortunately for the American people, our world-class free, local broadcast television industry is not a fantasy. It’s our reality, and American communities thrive with access to it. We should be working together to make this irreplaceable, inimitable service one that is thriving and prosperous in the future.

With this in mind, I believe there are at least three key measures of the FCC’s ability to ensure that the U.S. maintains its lead in broadcasting: serving viewers; fostering innovation; and maintaining a balanced marketplace that benefits all consumers, regardless of socioeconomic status.

First, the FCC must ensure that viewers are not left behind. During the DTV transition, the FCC, NAB and an army of consumer, public interest and diversity-focused organizations locked arms to ensure that consumers were all afforded the opportunity to successfully transition to digital television.

Today, we face a similar challenge in the repacking portion of the incentive auction: repacking television stations into a smaller band to make room for wireless companies. Many stations will be assigned new channels, and moving to a new channel will be complex.

Early in the process, the FCC established a deadline of 39 months for all stations to move. At the end of this period, all stations are required to go dark on their old channels, regardless of whether or not they’ve been able to complete their moves.

Broadcasters would love to see repacking completed within 39 months, or even sooner if possible. But, as we sit here today, there’s literally no reason to believe 39 months is the right number. That is because we don’t yet know how many stations will have to move to new channels.

Setting a 39-month deadline without knowing the scope of a job is like asking your mechanic to tell you how long it will take to fix your car before he knows what he’s repairing. The FCC should instead commit to an expeditious timeline but establish the exact one right after the auction. This will help the FCC ensure a smooth transition for viewers and wireless consumers alike.

Second, the FCC should be actively encouraging broadcaster innovation and investment while continuing to find new opportunities for diverse entrants. The FCC’s proposal to give away spectrum in the broadcast band to Microsoft and Google threatens that future.

It throws up unnecessary impediments to any potential move to a next generation broadcast transmission standard. It will also deprive the most vulnerable Americans of free service by forcing many low power and translator stations off the air. And it will upend the FCC’s traditional diversity goals by closing off opportunities for new entrants, and disproportionately displacing minority and women-owned stations.

Third, the FCC must resist the pay TV industry’s attempt to further pad its wallets through unnecessary government intervention in retransmission consent negotiations. The pay TV industry’s goal is obvious – as former monopolists, these companies would rather not pay for something they once got for free.

They have no plans to pass along any savings to consumers, reduce equipment fees or make bills comprehensible. The best way for the FCC to reduce the already low number of actual service disruptions resulting from retransmission consent impasses is to close its proceeding promptly to make clear that cable and satellite bargaining should be with broadcasters, not the federal government.

The giants of the pay TV industry should not be rewarded for creating selective impasses to pad their claims of a problem with retransmission consent.

Similarly, the cable industry’s push to eliminate the FCC’s non-intrusive program exclusivity rules should be rejected. These rules help encourage and ensure robust local broadcasting service.

Communities around the country want local news, not a watered-down service that pipes in stations from New York or Los Angeles. Since we have them here today, I want to thank the FCC commissioners for taking a hard look at this issue and choosing not to vote for the Chairman’s proposal.

There is a rising and diverse tide of Americans turning to broadcast TV. Over-the-air television is relied upon disproportionally by Asian-American, Pacific Islander, African-American, Hispanic and Spanish-speaking households and by older Americans. It is also relied upon more and more by Millennials: the cord-cutters and the cord-nevers, who love all the great things that wireless has to offer but who also want live TV, local news and don’t see the value proposition in pay-television.

The market is confirming that broadcasting is the perfect complement to wireless. That’s why the Commission’s actions in the coming months are so important.

At the end of the day, the Commission will need to ask itself whether it really wants television to be available only to those who can afford expensive cable or satellite service. Or do we want to allow a free, over-the-air option to thrive, grow and innovate – to complement wireless broadband and provide meaningful competition in the marketplace?

Broadcasters are excited about our industry’s future. We hope the FCC is, too.

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