Gordon Smith on What Lies Ahead

Shortly before the start of the 2011 NAB Show, The Daily News spoke with NAB President and CEO Gordon Smith about his first full year at NAB, policy issues facing broadcasters and his expectations for the show.

DAILY:This is your second NAB Show and you've been in your position as head of the NAB for over a year. How's it going?
SMITH: Over the past year, I've had the opportunity to meet with broadcasters from across the country. The more I learn about this great industry, the more thrilled I am to serve at its helm.

Indeed, broadcasters are serving local communities, embracing new technology and evolving their business models to meet rapid change. The industry is facing some challenges in Washington, and NAB is working diligently to ensure that no regulatory or legislative policy will undermine broadcasters' ability to serve their audiences and grow their business.

DAILY:How is the NAB Show shaping up for 2011?
SMITH: The NAB Show truly is a global event, drawing more than 90,000 attendees from all over the world. The level of international participation is astounding with more than a third of the show's attendees traveling from outside the United States.

Year after year, the NAB Show serves as a launching pad for new products and technologies. More than 1,500 companies will be on the show floor displaying the latest technologies that are revolutionizing the industry.

I'm excited to be among an impressive line-up of keynote speakers and presenters slated to headline this year's show. From renowned filmmaker James Cameron to broadcasting legend Leslie Moonves and influential regulatory officials including FCC Chairman Julius Genachowski, attendees will have a chance to hear from some of the industry's top decision-makers. I also look forward to honoring a good friend and former long-time NAB President Eddie Fritts with the Distinguished Service Award.

We appreciate the support of our exhibitors, sponsors and partner groups who are crucial to the convention's success, and we salute the participants and attendees who come from near and far to be a part of this spectacular event.

DAILY:What are the main legislative and regulatory issues facing NAB this year?
SMITH: NAB is following many issues in Washington, but our main concerns for television are proposals to reallocate spectrum and revise retransmission consent negotiation procedures. On the radio side is the performance royalty issue. How these issues play out will have lasting effects for broadcasters. We're working to educate lawmakers about how these issues could impact broadcasters and the viewers and listeners they serve.

DAILY:Spectrum auctions have been proposed to reallocate broadcast airwaves for future broadband use. What impact would auctions have on digital TV?
SMITH: First, NAB believes before any auctions are held, we need to conduct an inventory in order to create a plan that makes efficient use of spectrum. We do not oppose spectrum auctions that are truly voluntary. But we also believe broadcasters who choose not to volunteer should be held harmless, and not subjected to onerous spectrum taxes or forced to relocate into an inferior band.

We just made the switch from analog in which the industry returned 108 MHz of spectrum to the government. Since then, there has been an explosion of innovation made possible by digital broadcasting, including multicasting and mobile DTV. These developments would not be possible if broadcasters were forced to relinquish more spectrum. We think policymakers should adhere to the promises made in the transition so viewers can enjoy the full potential of digital TV.

DAILY:Do you believe the retransmission consent system should be overhauled?
SMITH: No, the system is working. The truth is while there are rare blackouts, more than 99 percent of retransmission negotiations are settled without interruption and without pay-TV subscribers even knowing they occurred.

We have a market-based system that allows all parties to negotiate fairly. Government intervention would only serve to tilt the balance in favor of one side, and only incentivizes pay TV operators to game the system.

DAILY:Where do negotiations stand with the music industry on the performance royalty term sheet NAB proposed last year?
SMITH: Last year, we came closer than ever to an agreement with the recording industry. NAB opposes any performance fee legislation which would put local stations at risk and hurt artists' efforts to break into the business.

However, our offer still stands, and we hope the recording industry will come back to the table so we can reach a mutually beneficial agreement.

The important thing to keep in mind is that the Internet broke the recording industry — we don't want to break radio to resolve this issue.