NBC Didn't Contact FCC After Trump's 'License' Tweet, Chairman Lazarus Says

NBC didn’t contact the FCC after President Donald Trump’s tweeted questioning whether the network's “license” could be pulled, said NBC Broadcasting and Sports Chairman Mark Lazarus during panels (see 1710180023) at the NAB Show New York Wednesday. Lazarus declined to comment on Chairman Ajit Pai’s remarks that the FCC wouldn’t unilaterally take a station’s license. Asked about the president’s tweets, he said NBC News valued editorial independence and he's confident in NBC’s reporting: “We have great confidence that the FCC will stand by our First Amendment rights and support us and we have every confidence our licenses will be renewed.” FCC Chairman Ajit Pai faces heat for not addressing more squarely the tweets. Some Democrats won't get a Senate Commerce Committee FCC oversight hearing on the matter.

Lazarus said NBC supports ATSC 3.0, but broadcasters should work “in conjunction with MVPD partners." The proliferation of 3.0 could drive cord-cutting, which would cut into broadcasters retransmission consent revenue.

Other CEOs at a separate workshop also indicated support for 3.0, and Hearst President Jordan Wertlieb said his company set aside funds to invest in it. In another panel, Fletcher Heald broadcast attorney Francisco Montero touted the new standard’s potential, but warned that broadcasters need to prevent it from going the way of HD Radio, “a medium that had a lot of promise but didn’t live up to expectations.” Since under 3.0 broadcasters will need only 10 percent of their spectrum for broadcasting, the new standard could prompt regulators or wireless companies to seek a portion of the spectrum allotted to TV that remains after the incentive auction, said Summit Ridge Group President Armand Musey.

Broadcasters erred in allowing competitors such as Netflix to use their content, said Sinclair CEO Chris Ripley and MoffettNathanson analyst Michael Nathanson. Most of the most popular content on Netflix comes from broadcasting, Nathanson said. Studios “made a mistake” in trading “short-term profits” for the creation of a long-term competitor, Ripley said. “The people who have supplied their arms to Netflix realize they need to take their weapons back,” said Nathanson. NBC stations are careful about what content they put on Facebook, except in disaster situations, said NBC-Owned Stations President Valari Staab.

Broadcasters are better positioned to make money from their own content than virtual MVPDs are, because companies such as Netflix operate with little profit or return on investment, Nathanson said. Though internet companies such as Facebook and Apple have seen growth in their digital advertising at the expense of print and other modes of ads, they aren’t yet taking advertising dollars away from broadcasters, Nathanson said. Digital and TV advertising serve two different ends, and are complementary, Ripley said.

Programmatic advertising hasn’t advanced as much as it should have, said Tegna CEO Dave Lougee. Broadcasters need to “take the friction out” of making national ad buys from broadcasters, Ripley said. Though broadcasters have seen a drop in national spots, their local ads are going strong, the CEOs said. Political ads are expected to be up in 2018 and 2020, Lougee said. Though Trump is expected to run again in 2020, there won’t be a repeat of “the Trump effect,” where parties spent far less political ad dollars than expected, Lougee said. That was caused by a lack of fundraising, and that won’t be the case if Trump runs for a second term, he said. Nathanson and all broadcasters agree broadcasting’s biggest assets are live content such as sports and local news. Thursday night NFL games will be due for renewal soon, and Lazarus expects interest from digital companies such as Amazon and Facebook. Abandoning broadcasting isn’t in the best interest of sports leagues, Lazarus said.

Broadcasters are in a sort-of “stand-off” with Congress and the FCC over the repack timeline and reimbursement, Lougee said. The $1 billion the FCC released upfront this week (see 1710160060) isn’t enough, he said. With the short timeline and paucity of tower crews, it's inevitable that broadcasters will be unable to meet the FCC repacking deadline, he said. “It’s physics.” That standoff will be broken once stations appear to run out of time and appear likely to go off air, likely triggering a strong reaction from the public and lawmakers, he said.

Trump Tweets Notebook

The Senate Commerce Committee “has no plans for an additional FCC oversight hearing this year,” despite a Tuesday bid by nine committee Democrats to bring all five FCC commissioners to testify, a spokesman said. Senate Communications Subcommittee ranking member Brian Schatz, D-Hawaii, and the other Democrats sought the hearing specifically to probe the commissioners on Trump threatening to challenge NBC licenses over the network's reporting on his administration's activities (see 1710110075). The request followed a Tuesday speech by Pai in which he said the agency doesn't have the right to review a station license based on content. Schatz and other congressional Democrats said they weren't completely satisfied with Pai's comments (see 1710170022). A House Communications Subcommittee FCC oversight hearing, which will likely include discussion on Trump's comments, will happen Oct. 25 (see 1710120028 and 1710180072).

Pai's “failure to quickly respond and denounce these threats is shocking and raises questions about the ability of the FCC to truly act independently under Chairman Pai’s leadership,” the Senate Commerce Democrats wrote committee Chairman John Thune, R-S.D., and ranking member Bill Nelson, D-Fla., saying Pai and his fellow commissioners should “address this Committee and respond to [Trump's] stated desire for regulatory abuse of his perceived critics through the FCC.” The Democrats urged Commerce leaders to hold a previously requested hearing “on the state of the U.S. media landscape more generally” (see 1705220065). Pai “has already appeared twice” at Senate Commerce hearings this year and Thune “is confident in the FCC chairman’s commitment to the Constitution and the law, as well as his ability to distinguish political rhetoric from actual First Amendment threats,” the committee spokesman said. Nelson would “welcome more oversight of the FCC,” a spokesman said.

Commissioner Jessica Rosenworcel, in a Cosmopolitan opinion piece, said some fellow commissioners “stayed silent for too long” on Trump's comments. “My colleagues and this agency should make crystal clear it will not revoke licenses for broadcast stations simply because the president dislikes content or coverage. I don’t think history will be kind when this agency is silent and does not clearly and unequivocally refute interference like this from the president.”

Many of the same Democrats "mastered the art of threatening FCC investigations" in response to broadcaster coverage they deem to be a partisan attack, Tech Knowledge Director Fred Campbell wrote in a Forbes piece Tuesday pointing to political outcry that Sinclair faced over its 2004 plans to air a documentary critical of presidential candidate John Kerry (see 0410130161). If Democrats believe the FCC can investigate broadcast licenses based on broadcasters' editorial decisions, then "they have no grounds to ask the current FCC chairman to repudiate Congress’ intent," he said.