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April 1, 2014
Dennis Wharton
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Testimony of Gordon Smith at Senate Commerce Hearing on STELA Reauthorization

WASHINGTON, D.C. -- NAB President and CEO Gordon Smith testified today at a Senate Subcommittee on Communications, Technology, and the Internet hearing on "Reauthorization of the Satellite Television Extension and Localism Act."

Below is a transcript of his testimony as prepared for delivery.

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Good afternoon, Chairman Pryor, Ranking Member Wicker and members of the subcommittee. It is a pleasure to be back before you to share NAB's views on the STELA reauthorization.

STELA and its predecessors have achieved their intended goal of fostering satellite competition to cable monopolies and NAB feels STELA should be allowed to sunset, as Congress originally intended. However, if this Committee determines that STELA should be reauthorized for another term, we support a clean bill free of controversial and unrelated provisions harmful to America's broadcasters.

As you all are well aware, the principal challenge in legislating any telecommunications matter before this Committee is the rapid pace with which industry evolves and the desire to not stand in the way of innovation, job growth and the delivery of new services to consumers. The same is true in the video marketplace.

Local television is evolving to provide viewers with the programming they crave where and when they want it. That said, now having served almost six years representing America's local TV broadcasters, I would like to share with you a few things that I have learned.

First, the locally-focused system of television stations in the U.S., which is the envy of the world, is largely taken for granted in our country. We have a system that is not regional or national, not government-owned or subsidized, but one that delivers to our citizens something no other country does – local service that plays a vital role in every community across this great country.

Localism underpins each of our FCC licenses and can never be replicated by broadband or pay-TV service providers. Our stations demonstrate their commitment to this promise in times of every emergency, reminding us of broadcasters' important role as first informers.

We are here to be the public's eyes and ears…to serve them during times of crisis…to share profound moments…and to connect to our family, friends and neighbors. In this era of bill by the bit services that stress the budgets of every family, our medium is free, over-the-air to all, regardless of race, creed, color, gender or socioeconomic disposition.

Second, the business of broadcasting, which enables us to serve our local communities, produces the best shows on television and delivers that content free to over-the-air viewers, has never been tougher. Today, broadcasters compete with wireless companies, pay-TV providers and over-the-top services for eyeballs and advertising.

To be clear, we welcome competition. It makes us better at what we do and benefits viewers, regardless of how they choose to consume content.

The truth is local television today is sustained by only two revenue streams: retransmission consent fees paid by those who resell our signals to paying subscribers, and advertising. Without this economic foundation, we could not do what we do.

Congress should resist efforts from the pay-TV industry to upset the current retransmission consent framework that enables broadcasters to fulfill our fundamental mission of localism, and look upon with great skepticism regulators that choose to re-regulate local television's joint selling practices while turning a blind eye to the pay-TV providers' joint selling practices. Policymakers and regulators need not intercede on behalf of the largely unregulated pay-TV industry to "balance the playing field" particularly when the top four cable and satellite companies control 67% of the video market already.

Finally, pay-tv's misinformation campaign that hypothesizes increased bills for consumers are somehow related to broadcasters is groundless. To fix this they have offered a number of proposals, both regulatory and deregulatory, that are designed to distort what currently is a marketplace that is working. NAB will continue to oppose those efforts in Congress, at the FCC, and in the courts if necessary.

I leave you with a plea for caution and diligence in the video space, and to please be mindful that unintended consequences could eliminate the benefits our country enjoys from free, local television. It is my fervent hope that this Committee shares this belief and will reject haphazard, piecemeal legislative proposals proffered and supported by our competitors which are specifically designed to undermine free local television.

In conclusion, to preserve the value of localism and to foster a competitive video landscape, we ask that you do nothing in STELA to jeopardize your local stations ability to serve the public.

Thank you and I look forward to answering any questions.

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About NAB
The National Association of Broadcasters is the premier advocacy association for America's broadcasters. NAB advances radio and television interests in legislative, regulatory and public affairs. Through advocacy, education and innovation, NAB enables broadcasters to best serve their communities, strengthen their businesses and seize new opportunities in the digital age. Learn more at

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