Incentive Auction Didn't Deliver on Extravagant Promises, Says NAB's Smith

Former FCC Chairman Tom Wheeler promised the incentive auction would be an “extravaganza,” but it didn't deliver, NAB President Gordon Smith said on C-SPAN's The Communicators, scheduled for broadcast over the weekend. “It was nothing of the case,” Smith said, saying the lower-than-expected results of the auction show the spectrum crunch it was meant to alleviate never really existed. Smith said promises of large payouts to broadcasters and to the Treasury weren't fulfilled. Broadcasters will receive around $10 billion from the auction, and the Treasury over $6 billion (see 1702100064). Those numbers are smaller than was promised, Smith said: Those promises were “bravado.”

“The fact of the matter is it is one of the most successful auctions in history, both freeing up 84 MHz of licensed and unlicensed spectrum and contributing to deficit reduction," Wheeler told us in an email.

Smith was also critical of Wheeler's stance on ownership rules. Wheeler's policies were “big-hearted but didn't make a lot of sense,” Smith said. FCC rulings on joint sales agreements and the UHF discount made it harder for some news-producing stations to exist, Smith said. With national media currently not well regarded by the viewing public, local news has become more trusted and important, Smith said. It isn't logical that large entities in other industries can merge and grow freely while broadcasters are restricted, Smith told us in a recent interview. FCC policies are disproportionately tough on broadcasters when huge national media corporations such as Charter Communications and Time Warner are allowed to combine but a broadcaster isn't allowed to own multiple stations in Peoria, Illinois, Smith said. “Why are we kept small and treated like we’re some giant?” Smith said on C-SPAN.

In both the C-SPAN interview and an interview with Communications Daily, Smith raised concerns about the repacking. Forcing broadcasters to repack in 39 months isn't “politically sustainable” Smith said on C-SPAN, and he told us he believes FCC Chairman Ajit Pai is sympathetic to the broadcasters' plight. Pai “has understood from the beginning the issues of timing and resources” connected with the repacking, Smith said. Pai discussed his interest in broadcasting in a speech Thursday (see 1702160070). Smith noted on C-SPAN that all current commissioners have said they won't support forcing stations to go dark after the 39-month deadline.

Pai's focus and interest in broadcasting isn't unexpected, Smith told us. The chairman has long been “openly positive toward broadcasting and he's acting on that,” Smith said. NAB is “thankful” for what's seen as a rapid pace by Pai toward addressing broadcast issues, such as the ATSC 3.0 NPRM set for commissioners' Thursday meeting, Smith said. The new broadcast standard will allow broadcast content to reach all mobile devices, which will pay dividends for public safety, Smith said.