TV, Radio Get on Same Page on More Issues; May Help at FCC, on Hill

Speaking for all broadcast TV networks, most affiliate owners and many radio stations may give NAB more sway with lawmakers, FCC members and aides, some executives said. The association can take advantage of CBS and Fox lobbyists’ relationships with officials on Capitol Hill and at the commission, they said. Speaking for additional members is important as the FCC considers a petition from 14 pay-TV companies and public-interest groups for changes in the handling of retransmission-consent disputes, a congressional rewrite of the Telecom Act looms, the commission seeks congressional action on TV spectrum reallocation and music labels seek a performance royalty on terrestrial radio. CEA President Gary Shapiro said the NAB seems “engaged effectively” on the issues before Congress that affect broadcasters: Performance royalties and spectrum.

Smith showed broadcasters that they're better off working together rather than letting business disputes get in the way of a united lobbying front, executives said. That ought to help industry make its case, said seven executives, whose companies have 132 TV and 953 radio stations total. They credited Smith with seeking consensus and fleshing out NAB’s positions on issues to existing and new members. Executives at CBS and Fox and long-time NAB members said unity can help broadcasters deal with financial and technology challenges.

"I think we have found over the years that the NAB has been most successful when they can represent the entire industry, and that’s exactly where we are today,” said executive committee member Paul Karpowicz, president of Meredith’s TV operations. On “every issue that is out there today and those that will come up in the future,” he said, “we're just undoubtedly a stronger industry if we can have the NAB representing all of those constituents.” The TV networks have offices in Washington and employees with “outstanding relationships with the FCC and the offices in Congress,” said Karpowicz. “It’s just a much better dynamic when you have everyone working in concert on these issues."

Smith’s leadership and the need for broadcasters to speak with one voice to accomplish policy goals played into CBS and Fox’s return to NAB, the network executives said. After the 1996 Telecom Act led to tension between broadcasters seeking different regulatory outcomes, “the industry got off track and began to think that our intramurals were a greater threat than what we faced externally,” said Executive Vice President Martin Franks. “That’s why CBS left. Some people would say we were kicked out.” But “any of those disputes are just de minimis compared to a threat to retrans, [spectrum], a performance tax. Who knows what may come up in a telecom rewrite,” he said. “Broadcasters over the last decade gave our opponents many, many too many cracks and divisions to exploit. We invited them to divide and conquer. I think now we've served notice that we're much less interested in seeing that happen."

Performance royalty proponents “are not just fighting the radio industry, they are fighting the broadcasting industry,” said Franks of CBS, which owns TV and radio stations. “That’s a big difference. That probably portends a more vigorous advocacy for broadcasting.” He noted that many TV stations have run spots against the Performance Rights Act (PRA). By rejoining NAB, CBS -- always “a terrific advocate on radio issues” -- “helps the industry get stronger on all public policy issues, said Senior Vice President Jessica Marventano of Clear Channel, operator of more than 800 radio stations. Chairman Peter Smyth of Greater Media, with 23 radio stations, thinks a more unified NAB will help ensure that the PRA (HR-848) doesn’t become law, he said. The music and broadcast industries ought to “put down the rhetoric” on royalties, Smyth said. “Everybody’s making these inflammatory statements. Let’s turn down the power and have an intelligent dialog about what benefits both industries.” The sides have discussed the subject (CD Feb 11 p5).

"The economic challenges to broadcasting have really forced us to focus on our key priorities” and work together, said CEO Jack Abernethy of Fox Television Stations (FTS). “Broadcasters are severely challenged, not just fighting amongst themselves for large sums of money, but severely challenged by the marketplace,” which “focuses your attention,” he added. “We've learned over the last five years that you can compete and collaborate at the same time,” such as through news-sharing, which FTS stations do in most of their markets. Broadcasting’s financial outlook is improving, but consumers still are “healing” from the recession “and we have a long, long way to go and both radio and television are a reflection of consumer spending,” said Smyth.

Learning from Cable

"It is the gravity of the threats to broadcasting that fosters unity better than I can,” NAB’s Smith said. He senses a recognition of that unity on the Hill and at the commission, and said affiliates and small-market stations illustrate localism to policy makers while networks “bring the gravitas of their marquees and their great public outreach and the public identifies with these marquees.” A telecom rewrite gives broadcasters an chance “to retell our story and to more firmly fix our place in a world of broadband and broadcast,” Smith said. “Most broadcasting issues do not register Republican or Democrat.”

The industry may be learning from cable programmers and operators, seen as having had a unified voice via NCTA, said executives inside and outside broadcasting. The NCTA declined to comment. An FCC member told President Robert Prather of Gray Television that NAB’s lack of unity had placed broadcasters at a disadvantage against cable in recent years, he said. “It’s hurt us,” Prather said. “It definitely helps to have a unified voice. I think that’s one of the reasons the cable industry has been pretty much successful in recent years.” Smith helped the industry become more unified, as the issue of retransmission consent “is important to all the broadcasters,” said Prather.

To Shapiro, the NAB board seems “unified and strategic in its thinking,” and that helps “bring back everyone to the focus of the industry.” The group is “stronger and more focused” as Smith has focused NAB’s members on spectrum and performance royalties in the legislative arena and mobile DTV in the technical realm, Shapiro said. “NAB may have turned around because they've learned or Gordon Smith is giving background as to what good corporate governance is."

There’s a “very good alignment of interest from all parties” on the legislative and other policy issues facing broadcasters, said CEO Vincent Sadusky of LIN TV. He expects to hear that more broadcasters which opposed ownership deregulation now see as a good thing allowing them to own multiple stations in a market. “There are two distinct camps” in broadcasting, he said: Some companies that own low-rated stations with no local news interested in auctioning their spectrum and others wanting to keep it. NAB is made up mostly of those that want to keep their spectrum, Sadusky said.

NAB has members such as Cox that also own cable systems, so having a member like NBC that’s controlled by the largest cable operator isn’t a “new phenomenon,” said Franks of CBS, which like Comcast also is an NCTA member. “We've faced this problem for years, because you've had newspaper guys who owned television stations,” he said. “Everybody is pretty good at checking their parochial interests at the door. … You're looking out for what’s best for broadcasting, not how this is going to affect the other parts of my company.” A combined Comcast and NBC would be “big into broadcasting like we are,” said Abernethy. “So we're going to have the same interest in many cases and a need to focus on them and work through them.”

The NAB can handle having NBC controlled by Comcast, Smith said, noting that he and the group have no position on regulatory review of the deal. “I have no doubt we can manage this successfully.” A combined Comcast-NBC Universal, with ownership of content distribution and delivery systems, “would obviously have an interest in preserving both in a vertical integration somehow,” he said. “I believe that broadcasting is one of America’s essential industries. And I believe that that is a value that we need to re-instill in the minds of lawmakers and policymakers, and I think … they will see it as such.”