NAB Chief Smith: Broadcasters Turned Down $38 Billion in Incentive Auction

LAS VEGAS -- The number of TV stations that chose not to sell their spectrum in the TV incentive auction demonstrates that broadcasting is the "highest and best use of spectrum," NAB President Gordon Smith said, officially opening NAB 2017 Monday. He also discussed ATSC 3.0 and chips in smartphones.

Hearst CEO Steven Swartz also spoke at the opening, on the viability of the broadcast business. TV broadcasters "turned down $38 billion" in the incentive auction, Smith said. An NAB official told us that number is based on the value of stations that held onto their spectrum in areas where the FCC bought spectrum in the auction. Smith said the money passed up by broadcasters was much higher than the $19 billion paid by "speculators and wireless companies" in the forward auction.

Getting through the post-auction repacking process is one of the most important goals for broadcasters, Smith said during a news conference after the event. FCC Chairman Ajit Pai is believed to be "favorably disposed" toward NAB's petition for reconsideration on the repacking, Smith said. He also alluded to Pai's FCC when he told reporters that the atmosphere on media ownership rules had become "less threatening" to broadcasters. Asked about Pai's proposed re-examining of the national ownership cap, Smith said NAB hadn't taken a position on whether the cap should be changed because members of the association are split on the matter.

Smith told reporters he's pleased with the pace of the FCC effort to approve ATSC 3.0, and he told the crowd Pai said the standard would be approved this year. The new standard will allow TV stations to combine the strength of broadcasting and the internet, and increase "the efficiency and value" of their remaining spectrum, Smith said. ATSC 3.0 doesn't need a tuner mandate to be successful, but he wouldn't object to one, Smith said.

Smith also trumpeted NAB's efforts to get FM chips activated in all smart phones, and said Federal Emergency Management Agency officials have said the option of radio in the phones would be good for public safety. Apple is the only major phone manufacturer that hasn't agreed to activate the chips, Smith said. "We hope our friends at Apple are listening and will soon make this potentially lifesaving technology available to their customers," Smith said.

Though Smith talked up broadcasting's potential, Swartz was more measured. Broadcasting isn't a business that "has the wind at its back" at the moment, Swartz said, though he said he believes it will be again. Broadcasters should look to other ways to leverage their resources in addition to broadcasting, he said, using Hearst's business data offerings as an example.

The concept that online and digital are the future of broadcasting needs to be "unpeeled," Swartz said. Digital is "not that easy," he said. Growth in the media marketplace is "challenged," Swartz said, partly because there are "so many places to put advertising." But he also said Hearst is "certainly open to buying more stations," as "regulations may change."