NAB CEO Gordon Smith Delivers Inaugural State of the Industry Address


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But if the record company can't find the performer or the background musicians, it would keep 100% of the money. You know, it's amazing in the age of Google that the record labels are having a hard time finding artists to whom they owe money. According to one report, the labels had trouble locating the Mormon Tabernacle Choir. Here's a suggestion: start looking in Utah.

And that's not the half of it. Look at the case histories. Artists from Benny Goodman to Count Basie, from the Beatles to Pink Floyd, from Cher to Eminem. And new groups I have never heard of routinely sue their record labels for unpaid royalties. One case alone included 300 performers.

Now yes, satellite radio and the Internet do pay a fee for the songs they play. But what we're talking about here is free, local radio -- available to everyone. If you choose to pay to listen to Sirius you won't hear the local news or weather updates on the Elvis channel.

And you have to ask, can you name a single Grammy winning artist that would be in that position were it not for radio?

The centrifugal forces of modern life are fraying the bonds that tether our citizens to their communities. Broadcasting, however, serves to keep our citizens connected to our communities and gives those communities coherence. That is a public good. And that's why we will continue to fight the record labels in their attempt to save their business model on the backs of free, local radio.

Now let's turn to two issues that are paramount to broadcast TV: the great spectrum grab of the new National Broadband Plan and the continuing battle over retransmission consent rights for broadcasters.

Let me first say that I applaud FCC Chairman Genachowski for the truly comprehensive effort he made to meet Congress' request for a broadband plan. We all want a plan that will help America move into a bright communications future. And broadcasters are willing to help.

We agree that broadband is good for America. And we also know that broadcasting is good for America. We want to see a bright future for both.

Our concern is that the broadband plan would yank away more than one third of the spectrum used for TV broadcasting so that wireless broadband companies can have more.

Now, broadcasters just spent $15 billion to meet the government-mandated transition to digital; the government, incidentally, spent another $2 to 3 billion to ensure a smooth switch for viewers. In fact, American consumers have spent untold billions swapping out analog TV sets for HDTV sets in detrimental reliance upon the urging of the United States Congress.

In that transition, we gave back more than a quarter of the TV spectrum, which the government then auctioned off to broadband companies. And they haven't even started to use it yet. Unfortunately, this plan appears to be an example of unnecessary government intervention when technology in the marketplace is already working through the issue.

And if history is a teacher, industry innovation solves issues far better and far faster than government.

Remember the 1996 Telecom Act? The ink was barely dry before it was substantially outdated due to technological advancements. The National Broadband Plan took a year and a half, and over $20 million, to draft. Imagine all the innovation that took place while the plan was being drafted.

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