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>> this week on "the communicators," a conversation with the new president of the national association of broadcasters, former oregon senator gordon smith. >> host: our guest this week on "the communicators" is gordon smith, the new president and ceo of the national association of broadcasters, senator smith served in the united states senate from 1996-2008, and he was on the commerce committee during that time which is very much involved in telecommunications policy. our guest reporter this week, john eggerton who is the washington bureau chief of broadcasting and cable magazine. thanks to both of you for being here. >> guest: thank you. >> host: senator, i want to start not so much with telecommunications, but with the supreme court decision this week, and i'm going to ask can you what their ruling on campaign finance means for your members. >> guest: well, i probably should admit i never voted for mccain-feingold, so i actually think it's a good decision for freedom of speech.

but ultimately you can't get on tv or radio without paying for it. broadcasters have lots of costs and production of content and, you know can, the american people rely on their tv and radios. ultimately, i suspect it means there'll be more political advertising, but i think that the best part of the ruling was full disclosure, and i think the more that's disclosed, the american people can make a judgment as to who is for whom and why. and an informed citizenry is the best, but i think it does help in terms of at a time when advertising is down, perhaps political advertising will go up. >> host: john and i are going to ask can you lots of detailed questions about policy and current space in washington, but before we get into the nuts and bolts, talk to us about what you see your members' business looking like ten years from now. >> guest: i actually am very

optimistic about broadcasting's future both on the radio side and in terms of high definition radio taking off. i don't know whether satellite radio will continue flatlining or whether it will grow, but i think people love their radios. and it's just a ubiquitous part of being an american, having a radio handy for news, entertainment, sports, politics and certainly emergency services. in terms of television, i think the digital transition has reawakened a future for tv broadcasting with the digital television you get a better picture, you've got 3-d coming soon, and you will find what's called multicasting with stations now able to offer unique channels, perhaps children's channels, sports channels, weather channels in addition to their traditional broadcast signal. this just means more opportunities for the public if

they want to get it the old fashions way -- old-fashioned way, they can get it for free over the public airwaves. >> host: well, to get to that ten-year window, you have to have spectrum, and spectrum reclamation is the elephant in the room in any discussion about broadcasting these days. can you briefly explain the issue and why you are so concerned about it? >> guest: well, the spectrum for your viewers is, basically, the highways of the airwaves, and it's the way the federal communication organizes, you know, signals so that there's not interference from one channel to another. and in an age where people are becoming very hooked to their blackberries and their iphones -- and i have one of each, and i love them -- and with laptops and the demand for wi-fi space, it will in coming years crowd spectrum. for example, when president obama was inaugurated, people

were using their cell phones to communicate and to participate, and it crashed. the system. these are what's known as one to one kinds of uses of spectrum. there's spectrum hogging devices. broadcasting, conversely, uses its spectrum and has historically to provide a one to many kind of distribution of information, politics, entertainment, music, all of those things. the proposal now is so that every american can have wi-fi broadband is to take spectrum from broadcasting or from the federal government or from some areas that are not fully utilized. broadcasters oppose surrendering their spectrum because in a digital age we're using it more efficiently, but we do have a high definition signal now that people are really enjoying. we do have do multicasting which

will expand, and in the future broadcasting will provide to your mobile phone your local television station. these are mobile television, all of these things will require the use of the spectrum that broadcasters have. in addition to all of that, in making the transition from analog to digital i was on the commerce committee when we appropriated $2 billion to help people get the little boxes, the new antennas so they could get the digital signal. i know our industry spent about $15 billion in new equipment to go digital. the american people in the tens of millions went out and bought digital tvs. if the they take broadcast spectrum and some of the trial balloon proposals are to stack tv stations in a way that will ultimately destroy the high

definition broadcast signal, it would take away the multichannel availability, it would eliminate the future of mobile tv. we just think that in the digital the tv shouldn't be sacrificed on the altar of the digital divide. >> host: well, have you made that case to the fcc? because i talked to their top staffer in terms of these scenarios last week, and he said the most extreme case was off the table, basically handtorially taking it back or pushing hd out, so is there some middle ground you can find with the fcc? >> guest: we are open to discussing this and to looking at it and to utilizing the spectrum efficiently, and nobody uses it for efficiently than broadcasting, but i don't know until i see their proposal i've got a moving target. i don't know what i'm trying to kick the ball over or trying, what end zone i'm trying to avoid. we're not saying no blanketly,

we're just saying, let us see the proposal, and we'll try to calculate it. the problem, however, is that these are not straight lines in spectrum. it's sort of a blanket quilt of how it's utilized from community to community, and so when you say let's take it back or turn the it in, i don't know fully how that translates or whether or not we could share the space because the technology broadcasters use is not compatible with the digital technology that one-to-one kinds of devices use. so until i see their proposal, i don't know whether it's technologically feasible. >> host: okay. >> host: while you're speaking of the fcc, you had a chance from your senate position to know a number of fcc chairs and look at them philosophically. when you look at this fcc, what

do you see? >> guest: i've always enjoyed working with fcc commissioners from both parties, and we're certainly willing to work with chairman genachowski and the current members. i know them all. they're wonderful and decent people -- >> host: sure, but what direction do you see them heading? >> guest: i see them true trying to think the forwardly and how to provide wi-fi universeally to everyone, and i don't disagree with that objective. what i would disagree with is if it becomes so activist that they simply sacrifice tv for the sake of a mobile phone. i love my mobile phones, but we all need our tvs for information, entertain thement, news, sports, emergency services. it's a pretty important feature in american life, and i think it ought to have a bright future, and i don't -- after all the billions that have been spent, i think it would be politically impossible for them to sell on capitol hill a proposal that said, well, even though you

relied upon the digital transition, never mind. i don't think that that is a proposal that has much promise. >> host: retransmission consent is another issue that got a lot of publicity over the holidays, particularly with some people fearing they were going to lose their bowl games. can you talk a little bit about it and whether you think there's something broken that needs fixing? >> guest: well, i think what's happening is you're watching the marketplace work. and there have been thousands of retransmission consents arrived at in the marketplace, and that's how it ought to operate. i would simply point out that when you look at cable content produced, for example, by time warner, they charge their cable operators one pocket to another dramatically more than they pay broadcasters for their content. and when you look at what are people watching, well, we all

have cables, i suspect. most of us get through retransmission on our cable system, we're watching broadcast content. and they pay dramatically less for broadcasting content than they do for their own cable content. so if you want to make them equal, that's good for broadcasters. so, you know, ultimately we think that the marketplace is working, and it's very important for the future of television networks and their affiliates to be able to have retransmission dollars so that they can have good journalism in their newsroom and provide local content, localism which provides programming that makes every american community a community. >> host: well, as a follow up to that there was, the fcc launched an inquiry -- not an inquiry, an initiative into the future of journalism. the chairman said rapid tech

technological change has created opportunities for tremendous innovation. it's also caused financial turmoil for traditional media ca calling into question whether they'll continue to play their role providing civic news and information. is he right? >> guest: yeah, i mean, you know, with the very best of intention sometimes government regulates in a way that has unintended consequences and becomes counterproductive. you know, they had ownership caps and vertical ownership prohibitions, and ultimately i think what people are beginning to realize is that legitimate journalism, good investigative journalism costs money, and if you have one news center here and another here and a newspaper and a tv station, they are all suffering with the dispersal of information over so many media, traditional media and new media over the internet, the blogosphere that they're simply failing financially. my point is simply perhaps we

ought to relook at some of this and simply say there are economies of scale that newspapers, radio and television could enjoy together. that means perhaps some relaxation of ownership rules or provide, allowing some vertical integration in communities. it's just one idea. i'm not necessarily advocating it, but i am saying that that is a better option than the federal government subsidizing newspapers when newspapers are supposed to be the watch dog of government. >> host: wouldn't you advocate for loosening rules or getting rid of the ban on newspaper cross-ownership? >> guest: i think that makes a lot of sense and, you know, some of our members, our affiliates don't like some of this, and some of them do, but i'm simply pointing out the obvious, that good journalism costs money. and if you fracture it so much between different outlets that they can't come together to have

the necessary financing to produce what we need to have a, you know, the fifth estate of the media watching government, being a watchdog for the american people, we won't have as vigorous a media as we have in the past. >> host: we're talking about content, we recently have seen another federal trial on indecency standards. from your perspective indecency overall, i mean, what's the right position for this? i mean, where are we going the as a country can with the kind of content we provide? you keep talking about how dispersed the information sources are. >> guest: yeah. >> host: so how do do you get it right? >> guest: broadcasting is in a unique place. broadcasting is a free service, but most of your viewers don't know whether they're watching a broadcast channel or a cable channel. cable channels are subscription channels, and you can get anything you want. any obscenity, even, that you

may -- seen to the viewer or the indecent -- you can get anything you want on a cable subscription service. but when it comes to broadcasting, we have stewardship over the public airwaves and there are public responsibilities not to offend local community standards. there are fleeting exme tiffs, there are -- expletives, there are things which are said, wardrobe malfunctions, there are technological functions to these hiccups in broadcasting. there's the v chip, there's a rating system, there's five-second delays where you can dump stuff or bleep things. i would suggest that that is a better way to manage this than to regulate to the point where broadcasters just are unduly muzzled, but i would point out we're not in, we're not push being obscenity because under the rules now if broadcasters wanted to be obscene, they could

be after 10 p.m. but you don't see letterman trying to be obscene or leno. they, they still cue to the humor, hopefully, without the obscenity. [laughter] and that's the indecency, rather. and so broadcasters understand their responsibility at the same point we do value our freedom of speech. >> host: a number of broadcasters want this to go back to the supreme court on the first amendment issues and suggest that it is community standards, but it should be broadcasters and the community, not broadcasters and the community and the fcc. >> guest: i, john, i acknowledge that some do want that, and i'm -- some of my friends are for it, some of them are against it, and i'm with my friends. how's that for a political answer? laugh the truth is -- [laughter] the truth is there's a range of feeling within the national association of broadcasters.

speaking as a dad, i'd just as soon there wasn't obscenity over the airwaves. indecency, rather. they're different terms. >> host: looking at it from a business perspective, all your competitors, the ones you have to compete against, c-span, our magazine, my web site, they can all speak to their community without the fcc there. doesn't this put you at a competitive disadvantage that you should be trying to level the field? >> guest: it does put us at a competitive the disadvantage, i acknowledge that, and it does, you know, broadcasters want to produce what our constituents, our viewers want to watch. and they have all kinds of options today that are indecent to obscene. and yet, again, we have the restraint unique to broadcasting that we have a public

responsibility. so it is, it is a balancing act that we have to engage in, and i hope we do it better than not. >> host: not to stay with this, but movie services are going to be using the public spectrum as well. >> guest: yes, they are. [laughter] and it's going to be a challenge. but, you know, ultimately to make it fair then everything ought to be the regulated by the fcc, not just broadcasters. >> host: so can we quote you on that? [laughter] >> guest: i'm just saying to your point about a competitive disadvantage. the playing field isn't level on the issue of indecency. >> host: do you want to talk briefly about the opportunities specifically that there are for keeping your spectrum in terms of not only mobile tv and multicasting particularly, i would say? >> guest: well, i think the future's very bright for all of those things. it takes time to ramp these things up and to get the products to market, but i was just at the ces show in las

vegas, saw some marvelous mobile telephone/tv sets. you know, tomorrow's here, and these things will be available to the public. in the washington, d.c. area there's probably a dozen, 20 actually, channels you can get on a mobile phone right now. and i think that as we figure out how to the, how that the expands there'll be advertising opportunities, new revenue streams to broadcasting which will be very important to the industry. >> host: are cell phone companies putting the dtv tuners in their devices now? >> guest: i think it's sort of the chicken and the egg. there are, there are phones being produced that have them. whether they will, it will take off i think that depends on the public awareness of them, their purchase of them. and when one does it and starts to grow, the others will follow in line for competitive reasons.

>> host: we have nine minutes left. at the outset you referred to 3-d as one of the bright spots on the horizon. i'm wondering since we're spending so much time talking about the stresses already on bandwidth whether or not you think all of this sudden emergence of 3-d is a good thing for us to be promoting and talking about? >> guest: yeah, i do. i mean, there will be -- the nfl has already announced i think they said 13 games they're going to film in three dimension. and it takes some new cameras to do that, but, again, at this show that i saw all of the manufacturers, panasonic, sony, mitsubishi, i think, toshiba, they all had 3-d products there, and some were better than others to my view, but they were all dramatic the. and, for example, we went into the panasonic booth, and we saw a football game that had been filmed in 3-d. without the glasses on it's a

tremendous two-dimensional high definition picture. you put the three-dimension glasses on and you are on the field. i mean, when you see it, you can hardly believe that you can have that kind of entertainment quality right there in your tv. but it is coming, and avatar is certainly an example where the public is saying, yeah, we're ready to go 3-d. so i suspect that that will, is a category in the television business and for broadcasters that will grow dramatically. >> host: does that mean that we're all going to have to go out and buy new tv sets in the next year or two? >> guest: well, i think the manufacturers are hoping so. [laughter] >> host: let me talk a minute about children's programming because there's, the fcc is looking at a wide-ranging review of its children's tv rules. and the chairman said again this

week that maybe educational informational programming isn't the place, broadcasting isn't the place for that because their business model is more about aggregating eyeballs. do you agree with that? >> guest: well, if you have a children's program with somebody in front of a chalkboard, kids aren't going to watch that. so you have to interconspiracy children's education with entertainment in a way so you can sell the advertising. i would point out that multithe casting does give networks an opportunity to provide children's programming 24/7. and ion, for example, does have a program that's 24/7 right now for children. so there are some that are trying to get ahead of this, so it doesn't necessarily need to be regulated, but i think it's a real opportunity for us to satisfy a public obligation that we take seriously, the children, to provide more children's educational programming.

>> host: is there a problem in the back story to that? there seems to be back story to a lot of what the fcc is talking about that comes down to the a point that says, well, broadband is really the future, that maybe the tv set is going to become a broadband monitor because there's that inquiry into whether we change the settop into basically a broadband and traditional tv model. is there a problem against lobbying against that particularly since broadband now means health and education and, you know, government services? >> guest: yeah, i mean, you know, i have to say when i was in the congress, most members of congress unless you're on one of the house or senate commerce committees, the understanding of what broadband means is fairly surface level. and broadband is sort of a catch-all for the cure to every societal ill. it isn't that. ultimately, i think what you will see is some new technologies coming along where

broadband and broadcast are blended. for example, i'm not pushing particular companies, but there was this product from a group called sesame, like open sesame, and they blend broadband and broadcast in a way that gets you 200 channels. whatever you've got on cable, broadcast and an antenna that, frankly, cuts the price of cable or satellite dramatically in terms of cost and gives you the clearest picture which comes from broadcast because it moves over broadcast spectrum. >> host: but you talked earlier about how expensive it is to produce that programming, so how do the economics of that work for the content producer? >> guest: well, i -- there's, obviously, a company like that is going to pay retransmission fees to cable and to broadcasters. they just simply have by using broadcast spectrum which is

one-to-many, they can do it at a price that is dramatically less than laying a cable or shooting it up to a satellite. >> host: so they'll be leasing some of the broadcast spectrum to do that? >> guest: yes. and they are already doing it in a number of cities. i know they are in los angeles, and they're just being oversubscribed. so it's, you know, you have to speak to them to sell their program, but i was really impressed. >> host: so maybe the government could adopt a sesame model and lease some of the sprur from there? >> g: i would have to understand more of the technology to answer the possibility of that question. >> host: for many years in front of your commerce committee broadcasters in the cable industry for friend thely adversaries about policy issues. how does the potential comcast/nbc merger change the game? >> guest: you know, the democratic platform was opposed to media consolidation. i assume the obama

administration, therefore, will look at this proposed merger, put lots of caveats and conditions on it which will not make a discernible difference in terms of how it translates from nbc to the its affiliates in relationship to the cable, but that's just supposition on my part. i know that the department of justice, the fcc and the ftc are all going to look at this, and what they decide i can't fully predict. nab has not taken a position for it or against it, but rather let's let the process work and let all the parties make their case and enjoy due process of the law. >> host: but your members have expressed system concerns about it, haven't they? >> guest: our many affiliates have, yes. >> host: what are those? >> guest: well, obviously, if you own a station in in medford, oregon, and you're an nbc affiliate and the potential exists that nbc could simply

program around your local stations, you'd be concerned about that. and so networks and affiliates need each other, and my assumption is that nbc does continue to care about its local affiliates and wants that local news station to follow or precede its national news program. and i think that that is in the interest of the peacock and that they'll continue working out an arrangement even if owned by a cable company that will preserve those essential features with what we think of as localism in broadcasting. >> host: we have a minute left, closing question? >> host: my question is what question should i have asked you when you wanted to come here? >> guest: well, hot issue we've been talking the tv and radio side, obviously, the great debate congress has had many times over whether you pay not

just the copyright owner of a song, but whether radio stations have to pay the performer as well. historically, congress has always backed off of that because they said the promotional service is the equivalent value of the right to play. >> host: and that's what you still think? >> guest: we still feel that way and, frankly, if it changes, you're going to compromise the economics of an awful lot of radio in this country, and i think that's a mistake. >> host: are you, is your industry satisfied with the rate of hd radio adoption? >> guest: it can always be faster. >> host: what's the impediment, do you think? >> guest: i think just getting it into more new cars, getting people familiar with it. hd radio is like the different sound quality of an fm station going to a saw set player. it's -- cassette player. kansas just brighter, it's clearer. new technology to give the consumer a better radio

experience. >> host: so deals with the auto manufacturers is the key? >> guest: it's one of the keys. and it's getting more hd devices in our laptops even in the future. >> host: thank you so much for being here this week, we appreciate it. >> guest: thank you. >> host: john, thank you as