Two recent NYT articles cover it: March 31 and April 1 (though these items in the former paper-of-record will likely be behind paywalls before too long). There's some discussion over at the Patry blog about it, too. While locking up the film rights to the entire collection of a great, semi-public institution raises a lot of red flags, the deal may not be so bad in the end. For one, it's a right of first refusal, meaning that if a documentary filmaker comes to the Smithsonian for some significant help or content (such as film or music from their extensive historical collection), then the soon-to-be-created Smithsonian network (that will be a joint venture with Showtime) will essentially have an option to on rights to show the work. The details of the deal are key, and unfortunately, they haven't been made public. If the Smithsonian network gets a right to the work at some artificially low price they set, then yes, that would be bad. On the other hand, if the network just gets to match whatever offer is on the table, it might not be such a bad deal (although there are certainly situations where the existence of a right of first refusal out there could put the kibosh on some projects).
Fred Von Lohmann's worried comments over at Patry -- emphasizing how the deal would be especially bad if the WIPO Brodcast Treaty were to pass -- are certainly justified. Since the treaty would grant quasi-copyright rights to broadcasters of content, and Showtime would have some rights to broadcast documentaries are made with Smithsonian content, the combination of the deal and the treaty could effectively lock up a lot of Smithsonian content for 50+ years. Someone wishing to use, say, some film footage that's in the public domain for copyright purposes, where the original is held by the Smithsonian, and snippets of the footage have been used in a previous documentary broadcast on Showtime, would either have to obtain the footage from the Smithsonian (and submit to a deal with Showtime, if Showtime wanted it), or would have to grab the snippet from the previous documentary broadcast on Showtime -- and under the Broadcast Treaty, that would require permission from Showtime, even if the clip were in the public domain (and leaving aside issues of fair use if the clip is short, etc.)
But look on the bright side, this is a paradigmatic example of why the Broadcast Treaty is bad. If Smithsonian hadn't entered into this kind of deal, opponents of the Broadcast Treaty would have had to invent the deal as a hypothetical example of the kinds of bad things the treaty would do. This is the flagship float in a parade of horribles. Imagine how that might go over on the hill. "My God, you mean all that good old American history over at the Smithsonian would be owned by a cable network -- the one that makes all those shows about lesbians?! Are you serious?"
On the other hand, if only Showtime would just pick up the option to bring Arrested Development back, maybe there'd be some room for negotiation...