Broadcasters’ madness hurting the public

In Alice in Wonderland, the Mad Hatter asks, “Have I gone mad?” Alice takes the Mad Hatter’s temperature, confirms the diagnosis and confides that all the best people have also gone mad.

That classic vignette keeps coming back to me as I watch broadcasters’ recent antics, imploring the federal government for all sorts of favors while completely ignoring what the public wants and needs. At the National Association of Broadcasters (NAB) convention in April, NAB President Gordon Smith even asked the government to “create a national broadcast plan.” 

{mosads}It was encouraging to hear Smith recently agree that viewers should be able to access content “anywhere, on any device, anytime they want it.” But the broadcasting industry as a whole is too dependent on government favors for growth and innovation. This hypocrisy leaves consumers to deal with fewer viewing options, blackouts and rising costs of subscription-based content. Consider the broadcasters’ actions in just the past 18 months: 

·       The NAB – the broadcasters’ lobbying arm – has done all it can to delay implementation of voluntary spectrum auctions. In 2012, a bipartisan Congress enacted and President Obama signed a law creating these auctions so Americans can get broadband on their tablets and smartphones. Yet the NAB has dragged its feet since the law passed and is seemingly discouraging broadcasters from participating in the auction. Smith has even said the auctions, which are slated to take place in 2015, could harm broadcasters. 

·       Broadcasters have by action and word abandoned their commitment to provide free content to the local public they are supposed to serve. They are suing innovative startup Aereo, which expanded broadcaster reception to local viewers who either could not receive a signal or wanted to get content on new devices like tablets and smartphones. Aereo relies on the statute and a court of appeals decision (Cablevision) to create its innovative technology. Instead of embracing a tool to increase viewership, the networks have sued Aereo all the way up to the Supreme Court. At the same time, the broadcaster PR machine spread the word that Aereo was “stealing” its content. This is absurd. How can anyone steal something broadcasters are by law supposed to give away for free?

·       Last year, CBS leadership reversed a decision by 40 CNET editors who voted the DISH Hopper Sling the best innovation at the 2013 International CES^®. CBS and other broadcasters sued DISH over its ad-skipping Hopper, but so far the courts have said this feature is legal. Worse, CBS’s top executives ordered their editors to lie about removing the Hopper from the “Best of” CES list. 

These actions are particularly appalling because broadcasters are supposedly providing a public service. Based on this public service, every eight years the government gives them licenses to use public spectrum for free. Forty years ago, all U.S. households relied on antenna service for their TV viewing, but today as little as 7 percent do. That should tell us something about the public service broadcasters provide – it’s no longer needed or even wanted, and the public is turning to other devices and services for TV content. 

It’s also tough for broadcasters to argue that they’re operating in the public interest, when they punish consumers with blackouts if they can’t reach retransmission consent agreements with satellite and cable providers. Cable and satellite companies must pay hefty fees to offer over-the-air programming to subscribers, and these fees continue to rise. In the end, high prices and punishing blackouts hurt consumers – the very people broadcasters are supposed to be serving.

It’s time to take back broadcaster-controlled spectrum. Broadcasters’ blatant attacks on innovators like DISH and Aereo show they do not have the public interest at heart, but are interested only in maintaining their control of the market, using government mandates to keep competitors away. Congress should consider changing the law governing spectrum use. At the very least, the FCC should no longer automatically renew broadcasters’ eight-year TV licenses. Before receiving free use of the public spectrum, broadcasters should have to prove they’re acting in the public interest.

The federal government must not continue to protect an industry that fights innovation at every turn, squatting on the valuable public asset of spectrum and actively working to thwart viewers from easily getting the signal it is required by law to provide. If broadcasters won’t serve the actual public interest, they must turn over their spectrum to companies that will. 

As Alice remarked before her trip down the rabbit hole, “If I had a world of my own, everything would be nonsense.” Broadcasters’ expectations that the federal government should provide a plan for further protection and favoritism of their industry would fit nicely in Alice’s version of Wonderland. 

Shapiro is president and CEO of the Consumer Electronics Association (CEA)^®, the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times best-selling books, Ninja Innovation: The Ten Killer Strategies of the World’s Most Successful Businesses and The Comeback: How Innovation Will Restore the American Dream. His views are his own. Connect with him on Twitter: @GaryShapiro.