David Smith: Congress Must Save TV’s Future

David Smith, CEO-president of Sinclair Broadcast Group, sees congressional and/or court action required to rebalance the regulatory environment so that broadcasters can effectively compete with broadband, telephone and cable companies.

In the meantime, Smith said during the company’s quarterly conference call, uncertainty surrounding the regulatory environment is making it tough on broadcasters.

Noting that the NAB recently sent a cease-and-desist order to the FCC over its plan to scrutinize shared service agreements on a case-by-case basis, Smith wondered what’s next.

“What, if anything, is the NAB going to do in the legal context?” he asked. “You’ve got Commissioner Pai standing up making some pretty bold statements — [in effect] will someone please sue the FCC because they’re violating the law. It may be reasonable to assume it will end up in some venue with a judge making the determination. If it’s found to be illegal, then what do we do?

“There’s a lot of instability that will sort out, maybe not in a time frame where we want to get some things done, but in a way that will benefit other broadcasters.”

Sinclair is following the FCC’s new marching orders on JSAs, selling three stations so that it can close on its $985 million acquisition of Allbritton. It is also restructuring sharing agreements with two other stations to ensure approval. Sinclair hopes to close on the Allbritton purchase sometime in the third quarter.

At the same time, it’s buying WGXA, the Fox affiliate in Macon, Ga., for $33 million, pushing it right up against the 39% ownership cap.

That’s another FCC regulation Smith would like to see fade into history. “We think it is completely lopsided,” he said. “I think we have to look to Congress to do what it needs to do to reset the marketplace and give broadcasters the opportunity to compete,” adding that he’s optimistic “about Congress doing what it needs to help us compete.”

Smith said he views adoption of a new broadcast standard — ATSC 3.0 — as an essential tool to maintain competitiveness. “As a television company, we have not agreed that 3.0 is the precise standard, but we philosophically agree” that there needs to be a new standard.

“We need to be everywhere 24 hours a day, 365 on every device,” Smith declared, acknowledging details remain to be worked out. “Anything less than that is not good for the industry.”

In an effort to devise robust standards, Sinclair recently joined with Coherent Logix in a venture called ONE Media to develop an alternative to ATSC 3.0.

On one FCC pet project — the voluntary spectrum incentive auction set for next year — Smith said he’s indifferent. “We have nothing for sale,” he said. “In the markets where we are, there are no constraints …. Get on with it, get it done so we can get the repacking done.”