The NAB president faces a new regulatory world as he prepares to head off to Las Vegas for the association’s annual gathering. He talks about his priorities going forward, including finally making the DTV transition, dealing with new chairmen leading the congressional committees of importance to broadcasting and a new FCC majority.
David Rehr is now deep into his fourth year as president of the NAB and none has been easy. At the same time he was trying rebuild NAB congressional and FCC lobbying operations, he has had to face a series of serious challenges, ranging from white spaces to the XM-Sirius merger to a surprisingly regulatory Bush-era FCC.
Things are not unlikely to get any easier — with new chairmen leading the congressional committees of importance to broadcasting and a new FCC with a Democratic majority and as many as four new commissioners.
In this interview with TVNewsCheck Editor Harry A. Jessell, Rehr reviews the Washington agenda in light of the new lineup, makes a pitch for the upcoming convention and reflects on what he’s done right and wrong so far.
An edited transcript:
Do you think we are over the hump on the DTV transition?
We’re over the expectation hump in Washington. I look at it as we’re running the race and the finish line was picked up and moved a little bit. It’s one of those things where we see the finish line and what we can’t do is slow down. We’ve got to finish strong.
Do you think DTV is going to be a problem on the morning of June 13?
I don’t think it’s going to be a problem, but we just need to do everything we can to insure that it’s not a problem. I don’t want to take it for granted and then wake up on the13th and find out that we should have run another rescanning spot.
Do you think the delay to June 12 was a good idea?
I thought it was necessary given the facts at the time. We had about three million Americans on a list to get coupons, which they couldn’t have gotten before the turnoff.
But the delay did cause some hardship for broadcasters, didn’t it?
Well, let’s put it this way: broadcasters did what was expected of them and went way beyond it. The DTV transition is like a puzzle and there are a number of pieces, right? So the first piece was the broadcaster piece and everybody went, Wow, that’s great, you’re doing a great job. Then, there was a piece from NTIA and coupons that they couldn’t quite get it in the puzzle.
The Obama people had a serious concern about all of the pieces in the puzzle not being put in the right place and therefore not having a great picture. I talk to a lot of our members and there are a lot of extra costs imposed on stations, but, at the end of the day, one of the great positives that came out of it is the recognition by the new administration of the importance of free over-the-air television. If they didn’t really care, they wouldn’t have cared what the puzzle looked like.
The FCC is undergoing a major overhaul because of Obama’s victory in November. How is it shaping up in terms of the broadcasters’ interests?
I think it’s going to be refreshing. There’s going to be a very evident and new spirit of cooperation and transparency at the FCC. That’s good for broadcasters.
Julius [Genachowski] used to be in our business. He’s a very smart, very savvy person. I met with him about a month before the election, talked a lot about broadcaster issues. He realizes the importance of radio and television.
We’re still going to have disagreements. We’re still going to have our challenges with cable and with other people who go before the commission and want to affect the outcome as we do, but I’m hopeful there will be a real honest appreciation for what broadcasters do.
When you do sit down with [FCC Chairman nominee] Genakowski when he is chairman in a few months, what are you going to tell him? What are looking for from the new FCC?
I’m looking for, No. 1, an appreciation for the real world business challenges that radio and television broadcasters face every day. In many of the stations out there, it is just a brutal economic environment and every action the FCC takes has a direct economic consequence on stations.
No. 2, a renewed sense of the valuable role that broadcasters play in every community, particularly during economically challenging times.
No. 3, I want the FCC to recognize how the broadcasting business, both on the radio and television sides, is evolving to meet the new technological changes — mobile television and then our effort to get FM chips in cell phones for radio.
What I’m trying to get at is what kind of policy initiatives would you like to see the FCC take with regard to broadcasting? For instance, broadcasters tell me they could use some relief on ownership restrictions. Is that something that you will be pushing for?
Yes. We would like to see that. At our board of directors meeting last October we showed them 72 issues we were engaged in on behalf of broadcasters. About half of those are at the FCC.
What are some of the big ones?
There is not moving forward on these enhanced disclosure regulations, which are a huge burden on local television stations. There is getting rid of newspaper crossownership regulations, which seem to be outdated. Now the court may actually solve that for us, but when we’re at the FCC, we’ll talk about that.
We’ve already been in to see interim Chairman [Michael] Copps and the other commissioners about the DTV transition, some of the new rules they were thinking about and some of the new kind of public service requirements that they were thinking about. There was an effort afoot to, after Feb. 17, wait for a couple days and then turn on a 100-day countdown clock. General Counsel Jane Mago and her team and our folks went in and said, We’ve got to give people a break on this. They agreed it was a good idea. We’ll do it with fewer days left until June 12.
We ended up in the last Congress having 168 members of Congress sending letters to the FCC either outright opposing or calling into question the proposed localism requirements. There is a significant number of members of the House that think that really isn’t productive.
What about relaxation of small-market duopoly restriction in TV?
We need to get relief. If you think about the economy hitting TV stations hard and all the challenges that smaller markets face to begin with, there’s a kind of tornado effect going on. One of the ways to help strengthen them would be to give relief for the duopoly regulations. That’s on the list.
Isn’t getting relief on ownership rules going to be tough at an FCC with a Democratic majority?
I don’t know. One of the options that we have talked about with the TV stations and the lawyers is using the LMA process. It’s not quite the same thing, but seeing if they could use market workarounds in the event that we don’t get duopoly relief.
Also keep in mind that [House Speaker] Nancy Pelosi has suggested that there needs to be some rethinking on newspaper ownership regulations. And you’ve got Chairman Copps, I think, recognizing some of the economic challenges that broadcasters are facing. You’ve got some positive inklings that, perhaps, we’re moving in the right direction, but I just wouldn’t want to bet the store on getting the rules changed.
[Former] Chairman [Kevin] Martin, with a Republican commission with a sympathetic president with, for awhile a Republican Congress, could barely get any relief on newspaper-broadcast crossownership.
Were you surprised by how regulatory the Martin FCC was? Starting in ’07, it pushed localism, enhanced disclosure, the PSA mandates, all of that? Do you have any explanation for it?
No. I’m sure there’ll be people who will reassess it, look at what occurred or what didn’t occur. There’ll probably be books written about it. From an NAB perspective, we just need to look forward.
How is the NAB adjusting to that the fact that we have new chairmen just about every place you look on all the key Congressional committees?
We’ve reached out to the chairmen. We’ve reached out to the key committee staff. I’ve been up there. We have a lobbying team I think second to none in the telecommunications/media business in Washington.
Government relations is now headed by Laurie Knight. Our people are well connected, working hard, they’re up there. I’m up there with them literally every week talking about our agenda. For example, when we had the discussion on what should happen on the DTV date — should it be moved, should it not be moved — every important player on Capitol Hill was touched multiple times by multiple people.
One of the big congressional issues this year is the Satellite Home Satellite Viewers Reauthorization Act (SHVERA). As you know, Representative Mike Ross (D-Ark.) is pushing a provision that would allow satellite and cable to import signals from adjacent markets. The problem is some of Ross’s constituents in Arkansas are in a Louisiana TV market, but they would prefer signals from an adjacent Arkansas market so they could get the news and sports they want.
He has not yet introduced that bill, probably will. We have been in touch with his office. I think he is looking for a conversation with television broadcasters about his legislation, the impact it will have on the business and what it does particularly to smaller local television markets.
We’re working through a number of ideas that will allow the DMAs to remain strong and viable, that solves that issue and doesn’t also undermine syndicated exclusivity and network non-duplication. We’re looking for proactive market solutions.
There’s nothing to prevent the broadcasters or satellite carrier from bringing in football or local news from another market simply by negotiating with a broadcaster there for those particular programs. That might be a way to resolve this issue.
Well a lot of people believe that this isn’t about sports at all, but that it is about retransmission consent rights and that the ACA and maybe the NCTA are pushing it as a way to undermine broadcasters’ retransmission consent rights. If the cable operators can’t make a deal with the local affiliate, they can go to the market next door to bring in the signal. Suddenly they’ve got an alternative. Do you believe that?
No, I don’t think that it is. I don’t want to speak for Congressman Ross, but I think he sees this as how do I get, in two counties of my state, the news and sports that the people there want. The members who have publically expressed their opinions on this don’t look at it as a retrans fight.
Broadcasters certainly look at it as a retrans fight and at your legislation conference [two weeks ago], House Communications Subcommittee Chairman Rick Boucher [D-Va.] said that “it would very likely pass” if put to a vote today.
But he also said that he doesn’t want to see retransmission consent raised as a part of SHVERA.
Do you think that’s the way that cable is looking at it, specifically the ACA?
I’m sure that if our friends at ACA could turn it into a retrans fight or into a way of changing retrans they would. They’re always looking for ways to weaken the retransmission consent system for broadcasters.
The Ross bill would be considered a flanking attack on retrans. Do you think cable will make a frontal assault and maybe try to change the regs on retrans?
If we were in their position, the answer would be yes. So we have to assume they will, which is why — I think you guys reported on this — we released the first empirical study on how well retrans is working. If you haven’t had a chance to read it, it’s just fabulous.
Among other things, it shows the number of people whose television service is disrupted because of a retrans dispute is less than the number of people whose television is disrupted because of a cable service problem. It’s some great stuff in the paper.
Let me back you up on this SHVERA again. I think one of the other things you’re looking for there is the extension of local into local in the whole 210 markets? Are you going to get that?
Yes. Congressman [Bart] Stupak [D-Mich.] has put a bill in for local into local. We’re aided by other members of congress wanting their constituents to get local news, information, weather — to find out what’s happening in their local communities.
And you think that’s doable?
I think we need to press forward on that. I’ve testified before the House Judiciary Committee on SHVERA, looked at the past testimony, the past congressional reports, it all starts with the satellite companies saying, we don’t have the capacity to do it. They said that dozen years ago. It’s just a question of money with them. As long as we can help generate sufficient pressure on Congress to keep the pressure on the satellite companies, I think we will likely expand the local into local.
Well the big issue in radio is the performance royalties …
We call it a performance tax.
Performance tax, then. Even though this is not a radio publication, I bring it up because it is a good measure of NAB’s effectiveness in Washington. Now, Chairman Boucher just said that broadcasters ought to be sitting down and negotiating on royalties. Isn’t that exactly where you don’t want to be? As soon as you start negotiating, you’re losing, right?
That’s right. NAB and I have strong and profound personal respect for Mr. Boucher. We just fundamentally disagree with him. To give you some data points, about 18 months ago when we introduced our anti-performance-tax resolution, we started out with 50 members and ended up with a little over the majority of the House. This time we introduced with 109, twice as many.
I also think the radio business is more engaged on this issue than it was six, eight, 12, 18 months ago. One of the players we needed to bring to the table was the record labels. In the previous 18 months, all you saw on Capitol Hill were the artists saying that this performance tax should be placed on radio stations. At the recent Judiciary Committee hearing, really for the first time, the heads of the record labels were there and publically disclosed that 50 cents of every dollar is going to be paid to a foreign record company. I think that helps us, particularly in this economic period that we’re in.
So are you going to win this fight?
If we execute our plans, I am cautiously optimistic that we will be successful. At the end of the day, the record labels have to pass a bill through the House and the Senate and get it signed by the president of the United States. That’s a hard thing to do.
What are the highlights for the NAB show? Why do you think it is important for GMs and other station-level broadcasters to attend?
In tough economic times, the NAB Show delivers even greater value to broadcasters, other attendees and the exhibitors that know they can’t afford not to be at NAB. The NAB Show matters when it matters most.
It will be great to have all of the affiliate boards from ABC, CBS, Fox and NBC at the show, as well as the entire Fox affiliate body. The TVB board of directors will be in Vegas, too.These are the folks that make the buying decisions at the station level, which is good news for the 1,500 exhibitors.
We’re going to honor Mary Tyler Moore, Bob Newhart, Kelsey Grammer and Vin Scully. Author Malcolm Gladwell, who wrote The Tipping Point and Outliers, will be speaking.
The Open Mobile Video Coalition is going to have an even greater presence at this year’s show, and look for big announcements on the mobile DTV front.That is a huge potential growth area for TV broadcasters and so every station executive with an eye to the future needs to have an eye on OMVC.
3-D HD will be highlighted at the show. For stations looking to improve efficiencies there will be low-cost HD studio equipment and more economic HD cameras.
On the exhibitor side, Avid is back on the floor, which is great news. We’re moving into the video game arena with the addition of Electronic Arts. We’ll have 130 new exhibitors, including MGM Studios. And of course, our big anchor exhibitors will all be in their booths ready to do business — companies like Sony, Panasonic, Harris, Microsoft and Grass Valley.
Bottom line, the NAB Show is still the most relevant and important gathering for broadcasters every year. Fifty billion dollars in sales are generated on the show floor every year. That is a staggering number. In many ways, the NAB Show is the stimulus package for our industry.
But T&E is tight. What do you expect now in terms of attendance?
I think we’re going to have less. We had 104,000 people last year. Even in a good economy that probably would have been a challenge to replicate. We have to wait to see with onsite registration what it looks like. The CES show was down 20-25 percent.
Do you expect that for your show?
I just don’t know. I’m hoping not. Our people are just working their hearts out to demonstrate to broadcasters the value of being at the NAB Show and why it’s important.
How is the economy affecting NAB operations? I know that you just shut down one of your government affairs offices, the one headed by Doug Wiley; eliminated some vacancies and let a handful of other people go.
The NAB is reflective of its member companies. We’re facing some of the same pressures that they are.
Is that why you shut down the Wiley office, money?
We don’t comment on personnel matters. It’s obvious that we face a lot of the same pressures that our members are facing.
You’re well into your fourth year at the NAB now. What do see as your principle accomplishments?
In no certain order, No. 1, we’ve more focused the resources of the association on advocacy, education and innovation. We’ve delivered to our television members on things like the NAB DTV safe harbor. That could really have been less effective and more expensive to television broadcasters if the FCC had adopted the so-called Martin plan.
Now that wasn’t my success. That really was [Hearst-Argyle’s] David Barrett, [Post-Newsweek’s] Alan Frank, [Belo’s] Jack Sander our joint board chair, [Barrington’s] Jim Yager. They really carried a heavy load in helping educate the commissioners on it. It turned out to be just a terrific success.
Wouldn’t it have been better to have no mandates at all?
That was never possible. That was never in the cards. People who would say there would be no mandate have no appreciation for how Washington works.
What about the mistakes, failures. What haven’t you been able to do?
I would say that there are probably three things. First off, I probably would have been a little less aggressive at the beginning.
There was the whole flap on the key vote on the DTV final date of transition. I accept full responsibility for the judgment on that, but I probably wanted to be a little more [aggressive] than I needed to be.
No. 2, I probably would have listened more. You know, this is a very complicated business and I’d like to think I’m a pretty good assessor of D.C. and politics and Congress, but just learning more about the complexities of the business. On our board and among the members, we’ve got very seasoned and experienced people and there probably have been a few times I should have just shut my mouth and listened.
And the third thing is, when I got here I thought it was really important for all the broadcasters to meet David Rehr, right? I was an unknown commodity. A lot of people said, why the beer guy. So I spent a lot of time traveling to meet the broadcasters and a lot of time in the office because, I thought, I’m the chief executive officer I have to make sure this organization hums.
But I probably would have started off more significantly on Capitol Hill than I did. Now, lesson learned, I’ve changed my time allocation and I’m up there all the time meeting with members. I was just up there last week. One of my strengths is that I do know members and I know how they think, having been in Washington for 27 years.