Amidst the continuing controversy, B&C asked two of the primary players in the battle over media’s digital future to make their respective cases for the government’s best use of the broadcast spectrum.
In this corner, Sen. Gordon Smith, president of the National Association of Broadcasters, which is trying to preserve a business model and sufficient spectrum to make broadcasting viable in a world of exploding digital competition. In the other corner, Gary Shapiro, president of the Consumer Electronics Association, whose members make all those mobile devices desperately seeking spectrum. Let’s get ready to grumble.
Gordon Smith
What’s the best use of broadcast spectrum? It depends whom you ask.
If you queried Alabamans three weeks ago, many would likely have responded: “For emergency weather warnings, because it was local TV weather forecasters who saved our lives.”
Ask the tens of millions of Americans who can’t afford subscription TV and they might answer: “For free TV, because it is the best bargain anywhere. I watch news, public affairs programming and the best, most popular entertainment, and it doesn’t cost me a dime.”
Those in the growing cord-cutter movement might say: “To supplement my over-the-top TV viewing with live sports and free TV, and to end an unpleasant relationship with my pay-TV provider.”
America’s growing immigrant population—being served by an exploding number of multicast channels—might answer: “For news about my culture and heritage, and programming tailored to my family and me.”
Poll a politician and he or she would probably say: “To reach the masses, and win elections. I may dabble in cable ads and Internet banners. But if I really want to break through the clutter, broadcasting is the most effective media buy.”
You don’t have to be a recovering politician like me to know broadcast television has something for everyone.
Even in pay households, 90 of the top 100 primetime programs each week are on a broadcast channel.
Interested in sports? Last time I checked, we had apps for that, including the NFL, NCAA football and basketball, and marquee events like the Super Bowl, Final Four, World Series, the Masters and the Kentucky Derby—all exclusively on broadcast television.
And when there’s breaking news, an Amber alert child that needs to be rescued, or a weather emergency, Americans tune to local broadcasting for information that can be the difference between life and death.
I get a chuckle from those who suggest broadcasting is “yesterday’s technology.” Never mind the explosive growth in TV antenna sales, the roaring broadcast upfront advertising market, or that poll after poll shows Americans rely on local television as their No. 1 source for news. Never mind that as a “one-to-everyone” delivery system, broadcasting is far more spectrally efficient than cell phone transmission architecture. The “broadcasting is dead” crowd has made up its mind, and, by golly, facts are not going to stand in the way.
What is perhaps most disappointing from the other side is the dismissive treatment of those Americans exclusively reliant on free TV. Nationally, that number is more than 14%—or 42 million people—and growing. Thirty percent of Asian-American homes and Spanish-speaking households rely solely on over-the-air broadcasting. Milwaukee, Boise, El Paso and South Bend are just a few of the cities where OTA penetration ranges from 20% to 32%. Are those people not important? Should their TV viewing suffer to accommodate faster app downloads in Manhattan?
DTV offers limitless opportunity for broadcasters and a chance to reinvent our business model. Mobile DTV will provide on-the-go viewers with live and local programming on smartphones, laptops and the backseats of cars. And coming soon: 3D TV.
To be clear: broadcasters have no qualms with additional spectrum auctions that are truly voluntary, even though TV stations relinquished 108 MHz of airwaves just two years ago. Our concern remains with stations that don’t volunteer. The vast majority of broadcasters that choose to stay in business should be allowed to deliver on the promise of digital television they made to their viewers. Shortsighted policies should not break that promise.
In the final analysis, I have to ask: What part of free and local don’t our adversaries like?
Gary Shapiro
The question is, how should a rare public-owned good, necessary for communication, be allocated so it serves the best interests of the public? By almost any measure it should be allocated to the uses that provide the most information, the greatest choice and the largest return measured in multiple ways.
Television broadcasters today perform a valuable public service, but most of that service now occurs through the must-carry obligation on cable and other video providers.
Each year, the percentage of homes that rely exclusively on an antenna for video service falls by about a percent; so today fewer than 8% of American homes rely exclusively on an over-the-air signal. On the other hand, wireless broadband deployment continues to be a national goal, and our success as a world leader depends on this growth—growth that thus far has been exponential. Unfortunately, we are quickly approaching a brick wall and these devices will be subject to bandwidth restrictions rendering them unusable in many major cities.
Ironically, it is the wireless broadband industry that has not only helped the economy grow, but also contributed to commercial broadcasting success. Last year, the telecom industry was the second- largest advertiser, spending nearly $9 billion. AT&T and Verizon alone spent nearly $4 billion in advertising. So the choice will soon be—should television broadcasters continue to sit on valuable spectrum to serve a sliver of the American public? Or should a portion of that spectrum be redeployed in the interest of the American public?
This does not mean the end of television broadcasting. In the near to midterm, it may mean fewer broadcasters in a number of American cities, particularly those that are financially strained and unlikely to survive longterm. It also provides the option for stations to share transmitters so that their unique content remains available while freeing up spectrum for its best use.
The voluntary incentive auction is an unparalleled window of economic opportunity for broadcasters. Currently, the legislative environment seems to be warm and legislators are willing to compensate the broadcasters and keep the auctions voluntary.
If broadcasters continue to push back and use fear and sheer lobbying clout to block congressional action, they may find, someday soon, that a Congress facing economic calamity may be less charitable and simply direct the FCC to stop renewing broadcasters’ eight-year licenses.
E-mail comments to jeggerton@nbmedia.com and follow him on Twitter: @eggerton
