December 2008

Statement of Lois Jean White

As a member of the Advisory Committee I must make a stronger statement regarding the digital broadcast industry's obligations to the children and families of this Nation than is contained in the Advisory Committee's Report. The recommendations contained in the Report do little to promote, and nothing to secure, the interests of families and children. As the president of National PTA, I hold those obligations that directly affect children and families to be of tantamount importance and believe they must have a greater focus in the Report. Because we agree that the digital spectrum is a "national resource," we urge the use of that resource to directly support the educational, cultural, entertainment, and community needs of the Nation's citizens.

The absence of a discussion on children's educational programming in the recommendation section is very distressing. Child advocates fought long and hard for the current rule requiring the broadcasting of 3 hours per week of educational programming for children. In the digital age, with expanded broadcast capacity, this obligation should be increased to include airing no less than 1 hour of children's educational programming each day on the main channel. A related issue is that of violent content in children's programming; broadcasters should be required to reduce the amount of violence shown in programs that are targeted to children. Because we are aware of the impact of advertising on youth, we would further insist that advertising of alcoholic beverages, including beer and wine, and tobacco products be elimi- nated during those hours when children's programming is aired.

Broadcasters should also be strongly encouraged to make consistent use of a universal television rating system in tandem with the v-chip. Although both industry representatives and children's advocates agreed on a ratings system, recent studies show that broadcasters have not applied the ratings in a uniform or consistent manner, giving parents and families an incomplete or, at times, wholly inadequate "rating" of a program. The v-chip will never be a useful tool if the ratings system is not utilized to its fullest capacity.

As the world of digital television evolves, so will its capacity for interactivity, targeted marketing, datacasting, and data retrieval. Children and youth are vulnerable and must be protected from commercial exploitation and intrusive or deceptive marketing activities. Public interest obligations must be established to protect our children from these practices. Additionally, information transmitted via datacasting should be sent to all public schools and libraries in a station's broadcast area, however, this should not be the only public interest obligation that broadcasters need to fulfill. As a national resource, the digital spectrum could play an important role in providing aid to families and children by implementing a public service program that airs photographs of missing children. Providing this information would aid in the prevention, investigation, and recovery of missing children.

We strongly support the use of collected fees from multiplexing and ancillary and supplementary services to enhance the public interest in broadcasting -- in particular, applying them to noncommercial education, community service, and children's programming. We are opposed to using general revenue funds that are currently targeted to other children's health and education programs for this purpose.

Because of the important need to fund and secure noncommercial educational, community service, and children's programming, we support new funding mechanisms. A 2 percent fee on the gross revenues of broadcast, cable, and satellite operators could provide a predictable funding stream to ensure increased programming that benefits our citizenry.

We have serious concerns with the "pay or play" opinion. Public interest obligations should not be bought or sold. An obligation is just that, a requirement to serve the public.

I believe that parents, broadcast media, content providers, and the Federal Communications Commission have a responsibility to support, monitor, and improve the quality of television programming. Our children are this Nation's future and we must protect their interests.

Statement of Cass R. Sunstein

, in which Charles Benton, Frank M. Blythe, Peggy Charren, Frank H. Cruz, Richard Masur, Newton N. Minow, Gigi B. Sohn, and Karen Peltz Strauss join

I agree with the report and recommendations of the Advisory Committee and write separately to emphasize two points. The first is that one of the central goals of the system of broadcasting, private as well as public, should be to promote the American aspiration to a deliberative democracy -- a system in which citizens are informed about public issues and able to make judgments on the basis of reason. Thus broadcasting is no ordinary commodity, to be governed by the usual operation of the marketplace. Contrary to the suggestion of a former Chairman of the Federal Communications Commission, television is not "just another appliance," nor is it a "toaster with pictures."

The second point is that in order to promote the goals of a deliberative democracy, government should rely whenever possible on the least intrusive means, by fostering disclosure of information and voluntary self-regulation, and by using economic incentives.

Flexible Instruments

The Committee's recommendations are entirely consistent with the suggestion that Government should prefer, as its instruments of choice, (1) information, (2) voluntary self-regulation, and (3) economic incentives, as opposed to (4) more rigid Government controls. This approach is part and parcel of a quite general and highly salutary trend in Government regulation.(1)

Disclosure. As the Committee suggests, it would be especially desirable for every broadcaster to make public the full range of public interest and public service activities in which it engages every year. Every licensee should tell the public what it is doing. In the environmental area, disclosure requirements of this kind have done a great deal of good.(2) One virtue of such requirements is that they are relatively inexpensive, for the Government and for broadcasters alike. Another virtue is that they can enlist moral norms, public pressures, and social conscience on behalf of the public interest. I hope that the FCC will take prompt steps to implement them.

"Pay or play." It would be highly desirable for government to experiment with "pay or play" approaches in which broadcasters have an obligation to provide public service programming but can buy their way out by paying someone to provide that programming instead. Such approaches have also had considerable success in the environmental area, despite reservations very similar to those being expressed here; those reservations have generally been shown to be unconvincing.(3) Just as pollution is a kind of social "bad," public interest programming is a kind of social "good," and those who provide such a good should be better rather than worse off economically. A system in which those who do not provide public interest programming must pay a kind of "fee" is far more flexible than one in which the Government imposes uniform obligations on everyone.(4)

The Public Interest and What the Audience "Wants"

Ours is a deliberative democracy, which aspires to a degree of reflection and deliberation, not merely to the expression of "preferences." Regulation of television should be undertaken with this aspiration firmly in view. In a deliberative democracy, there is a large difference between the public interest and what interests the public. The case for complete or near-complete deregulation, though pressed seriously before this Advisory Committee on constitutional and other grounds, has not been made out. There are five points here.

First: It is not the case that broadcasters are now engaged, in a systematic or scientific way, in catering to public tastes. There is a good deal of simple imitation, as networks provide a certain kind of programming simply by imitating whatever other networks are doing.(5) This imitative behavior actually creates a kind of homegeneity and uniformity, and thus makes for problems in terms of providing what viewers "want."(6)

Second: Television is not an ordinary product. When an ordinary producer gives consumers what they "want," this is because of the system of supply and demand, in which consumers pay a price, determined by the market, for a good that the producer supplies. But viewers do not pay a price, market or otherwise, for television. On the contrary, it is more accurate to say that viewers are a commodity, or a product, that broadcasters deliver to the people who pay them: advertisers. This phenomenon introduces some serious distortions. Advertisers have issues and agendas of their own, and the interests of advertisers can push broadcasters in, or away from, directions that viewers, or substantial numbers of them, would actually like. This is a substantial difference from the ordinary marketplace, one that can justify a governmental response. (7)

Third: The public's "tastes," with respect to television programming, do not come from nature or from the sky; they are partly a product of current and recent practices by broadcasters and other programmers. What people want, in short, is partly a product of what they are accustomed to seeing. It is also a product of existing social norms, which can change over time, and which are themselves responsive to existing fare. In an era in which broadcasters are providing a good deal of public interest programming, dealing with serious issues in a serious way, many members of the public will cultivate a taste for that kind of programming. In an era in which broadcasters are carrying sensationalistic or violent material, members of the public may well cultivate a taste for more of the same. "Just as culture affects preferences, so also do markets influence culture."(8)

Fourth: There is a difference between what people want as viewers (or consumers of broadcasting) and what they want as citizens. A democratic public, engaged in deliberation about the world of telecommunications, may legitimately seek regulations embodying aspirations that diverge from their consumption choices. When participants in democracy attempt to make things better, and do not simply track their consumption choices, it is not helpful to disparage their efforts as "paternalism" or as "meddling." Consumers should not be confused with citizens; this is a form of democracy in action." (9)

Fifth: Individual choices by individual viewers may not produce an optimal level of public interest programming in light of the fact that the benefits of such programming are often enjoyed by third parties, and not fully "internalized" by individual viewers. For example, a culture in which each person sees a degree of serious programming is likely to lead to better political judgments; media portrayals of violence can produce harm to others; more knowledge on the part of one person often leads to more knowledge on the part of others with whom he interacts.(10) Perhaps most important, serious attention to public issues can lead to improved governance, through deterring abuses and encouraging governmental responses to social problems. In these various ways public interest programming can produce social benefits that will not be adequately captured by the individual choices of individual citizens.(11)

Sound-Bite Democracy, Sensationalism, and Competitive Pressures

No one should deny that there has been a great deal of wonderful, public-spirited programming in the United States. Moreover -- and notwithstanding the qualifications described above -- competitive pressures can do a great deal in providing programming that people would like to see. But competitive pressures also have a downside. They can lead to sensationalistic, prurient, or violent programming, and to a failure to provide sufficient attention to educational values, or to the kind of programming that is indispensable to a well-functioning deliberative democracy.(12) Thus I accept the suggestion that "[I]ncreasingly impoverished political debate is yet another cost of our current cultural trajectory. Complex modern societies generate complex economic and social problems, and the task of choosing the best course is difficult under the best of circumstances. And yet, as in-depth analysis and commentary give way to sound bites in which rival journalists and politicians mercilessly ravage one another, we become an increasingly ill-informed and ill-tempered electorate."(13) The idea of a voluntary "code" of good programming is specifically designed to respond to the problems that can be introduced by market pressures. Many journalists in the world of broadcasting would very much like to do better; competitive pressures are the problem, not the solution, and a voluntary code could help them and the public as well.

The Need for More Facts

Any system of regulation should contain built-in mechanisms for obtaining more information. Reasonable people may and do debate how much good would be done by (for example) having more educational programming on television and more public affairs broadcasting on each television station, at least if these come from uniform Federal mandates. Above all, there are important factual issues. How many children would watch compulsory educational programming? More particularly, how many more children would see good programming as a result of such programming? How many children would in any case be watching good programming, on, for example, "Nickelodeon"? There are similar questions about public affairs broadcasting. If the broadcasters provided free airtime for political candidates, how many people would watch? And what kind of programming would be provided on that free airtime? The National Association of Broadcasters (NAB) has compiled information about existing public service activities, and it should certainly be commended for doing that. But the NAB study is based on extrapolations from a far from overwhelming response rate -- merely 60 percent -- and also on self-reporting, in response to a request for information from the NAB. As a result, the data may not be reliable. What the NAB has done is a commendable start toward a serious, sustained, and continuing public accounting.

Constitutional Law

In the course of our deliberations, some people have suggested that any regulation of broadcasting, or at least any "content" regulation of broadcasting, would violate the First Amendment to the United States Constitution. I do not believe that this is the correct reading of the First Amendment, and although this is not the occasion for an extended analysis of constitutional law, a few brief notes may be helpful.

It is true that the Government must tread cautiously whenever it purports to favor one kind of programming over another.(14) It is also true that the government can rarely, if ever, favor one viewpoint over another.(15 ) But the First Amendment does not enact a system of economic laissez-faire, any more than the due process clause enacts Herbert Spencer's Social Statics.(16) On the contrary, the First Amendment has, as one of its central goals, the creation of a system of deliberative democracy. Because this is one of the central goals of the First Amendment, content-based regulation that promotes democracy, in a way that favors no particular point of view, does not offend constitutional principles. (This was the central suggestion in Red Lion v. FCC,(17) and on this point Red Lion has not been overruled or even drawn into serious question.) Indeed, certain forms of regulation -- producing more educational programming and more concern with public issues -- are best understood as promoting, not undermining, First Amendment goals.(18) A system of economic laissez-faire may well compromise those democratic goals, or at least Congress, or the FCC, may reasonably conclude it does so. The recommendations of the Advisory Committee are in accord with the highest aspirations of our First Amendment tradition.

Additional Recommendations

Although I agree with the recommendations of the report, they seem to me to be too tepid in a few places. Even with a strong presumption against command-and-control regulation, I would tentatively favor two additional obligations.

The first is a requirement that in an election year, each broadcaster should offer a specific amount of free airtime to candidates (say, 3 hours), perhaps with a "pay instead of play" option for some or all of that time. The second is to give serious thought to the following simple idea: During every presidential election, a certain specific period should be set aside for nationally televised debates, to be offered to the serious presidential candidates by all of the major networks, at the same time and for free. There has been a considerable level of voluntary activity in this direction, with specified hours (usually 4) being devoted to presidential and vice-presidential debates; what I am suggesting is that there should be a general understanding that this kind of arrangement will continue, even if there is no profit in it. It would of course be far better if this were done voluntarily and not by mandate; but I would not exclude the possibility of a mandate, to reaffirm the importance of the right of democratic self-government. It is not -- I suggest -- too much to expect American broadcasters to set aside a specified period (say, 4 hours) during each presidential election year, even if doing so is relatively expensive. This proposal is on the basic model of a national holiday, understood here not as a vacation but as a kind of civic obligation—designed to underscore the importance of democratic self-government, and to ensure a kind of celebration of that basic commitment.

Endnotes

1) It is impossible to avoid Government regulation. A system of so-called "laissez-faire" amounts to the Government creation of property rights and governmentally conferred rights of exclusion. There is no avoiding Government regulation. (This is why the term "deregulation" is a misnomer.) The only question is what system of regulation makes best sense and does the most good.

2) See James Hamilton, CHANNELING VIOLENCE (1998).

3) See Robert Stavins, What Can We Learn From the Grand Policy Experiment? Lessons from SO2 Allowance Trading, 12 J. ECON. PERSP. 69 (1998).

4) Some members of the Advisory Committee appear to believe that public interest responsibilities are simply part of the public trust and that broadcasters should not be permitted to "buy their way" out of those obligations. With all respect, I believe that this is largely a bit of rhetoric. What if a broadcaster was willing to give $10 million to PBS in return for every minute, or every 30 seconds, of relief from a public interest responsibility? Would the Nation not be better off as a result? Of course, it may make sense to impose certain minimal duties on everyone, and of course any "play or pay" system must be carefully administered to ensure that American viewers do receive a large amount of public interest programming. But these are matters of relative detail, and could be handled by good administration.

5) See Sushil Bikchandani et al., Learning from the Behavior of Others, 12 J. ECON. PERSP. 151, 164 (1998); Robert E. Kennedy, Strategy Fads and Competitive Convergence: An Empirical Test for Herd Behavior in Prime-Time Television Broadcasting (Harvard Business School, January 1998). 6) See id.

7) See C. EDWIN BAKER, ADVERTISING AND A DEMOCRATIC PRESS (1994).

8) ROBERT FRANK & PHILIP COOK, THE WINNER-TAKE-ALL SOCIETY 201 (1995).

9) See C. Edwin Baker, Giving the Audience What It Wants, 58 OHIO STATE L. J. 311 (1997).

10) See BAKER, supra note 7, at 350-367.

11) See id. at 355-56; see also HAMILTON, supra note 2.

12) See HAMILTON, supra note 2.

13) See FRANK, supra note 8, at 203.

14) See, e.g., Metromedia, Inc. v. San Diego, 453 U.S. 490 (1981).

15) See, RAV v. St. Paul, 505 U.S. 377 (1992).

16) See, Lochner v. New York, 198 U.S. 45, 61 (1905) (Holmes, J., dissenting).

17) 395 U.S. 367 (1969).

18) See, Turner Broad. Sys. v. FCC, 512 U.S. 622 (1994); Turner Broad Sys, Inc., v. FCC, 117 S. Ct.

1174 (1997), and Justice Breyer's concurring opinion, id. at 1186.

Statement of Newton N. Minow, dissenting to Recommendation 6

: Improving the Quality of Political Discourse, in which Charles Benton, Frank M. Blythe, and James Yee join

Howard Stern's new television show featured Stern shaving a young woman's pubic area. Have our broadcast standards descended to a level where public interest is confused with pubic interest?

Our assignment was to search for the meaning of the public interest in digital broadcasting. Will digital television only bring us clearer, brighter pictures of Howard Stern? Is it to bring us better, sharper sounds of Jerry Springer's bleeps and punches? Or can the public interest amount to more?

When digital channels became available, police wanted to use them for public safety. Firefighters wanted to use them to save lives. Schools and libraries wanted to use them for education. Hospitals wanted them for better health. Then, broadcasters decided they wanted them for digital television: to make more money.

Our Government said no to the police. No to the firefighters. No to the schools and libraries. No to the hospitals. And yes to the broadcasters. A gift -- exclusive use of precious public property worth an estimated value up to $70 billion.

One wise public official, Senator Robert Dole -- then Senate Majority Leader -- objected. Senator Dole said, "We don't give away trees to newspaper publishers. Why should we give away more airwaves to broadcasters?" Senator Dole wanted broadcasters to pay for spectrum, just like everybody else. He asked why should we give away a national resource that could be worth as much as $70 billion? Think of giving Yosemite to the Coca Cola Corporation. Nobody listened. Congress did add a tardy reminder that those receiving such a generous gift from the public have a responsibility, in exchange for this gift, to serve the public interest. Our Advisory Committee was then created to try to figure out whether this means anything in the digital age.

Years ago, the National Association of Broadcasters (NAB) developed an excellent Code of Standards for television. Some in Government foolishly objected to the Code, attacked it in court as a violation of antitrust law and stopped this worthwhile effort. The Code does not exist today. Members of our Advisory Committee asked the NAB if it would revive the Code, provided Congress exempted it from the antitrust law. No, things are just fine without the Code, was the answer. The marketplace is the solution.

If the marketplace is the solution, broadcasters should want the digital channels to be auctioned. Broadcasters prefer a different kind of auction. This is an auction where candidates for public office buy back the public airwaves from broadcasters. We finished the most expensive off-year political campaign in American history with the lowest voter turnout in 50 years. Most of the hundreds of millions of dollars was spent on television advertising. Yet the NAB argues that television's unique capacity to use the public airwaves to inform and enlighten us should be left only to a marketplace auction. A Senator must raise $25,000 a week in fundraising throughout his term to participate in the broadcaster auction for campaign commercials. This puts us in the company of only two other countries in the world which do not require public service television time in political campaigns, Malaysia and Taiwan.

Other countries do better. British broadcasting in political campaigns serves the public interest. The British system grants political parties, by law, public service time on radio and television in the 3- or 4-week period before the election. The parties have complete freedom to make their cases; smaller parties receive time on an equitable basis. There is no sale or purchase of broadcast time, no money is involved. The campaign is mercifully short, and the voters are well informed. Indeed, because the campaign programs are simulcast on all channels, there is ample political discussion for the voters.

Digital broadcast licenses should not be awarded without a broadcaster's explicit commitment to provide public service time in campaigns and not to sell time. We now have a colossal irony. Politicians sell access to something we own: our Government. Broadcasters sell access to something we own: our public airwaves. Both do so, they tell us, in our name. By creating this system of selling and buying access, we have a campaign system that makes good people do bad things and bad people do worse things, a system that we do not want, that corrupts and trivializes public discourse, and that we have the power and the duty to change.

Objectors to this idea claim it would violate the First Amendment. Can Congress constitutionally require broadcasters to provide time? Senator John McCain is a courageous man who suffered 4 years of torture as a war prisoner in Vietnam, 4 years to reflect on democracy and freedom. Senator McCain said: "Let me go back to the First Amendment thing. What the broadcasters fail to see, in my view, is that they agree to act in the public interest when they use an asset that is owned by the American public....I have never been one who believes in Government intervention, but I also believe that when you agree to act in the public interest -- and no one forced them to do that -- you are then obligated to carry out some of those obligations....If I want to start a television station, I've got to get a broadcasting license. And that broadcasting license entails my use of something that's owned by the American public. So I reject the thesis that the broadcasters have no obligation. And if they believe that there is no obligation, then they shouldn't sign the statement that says they agree to act in the public interest. Don't sign it, OK?"

Senator McCain is right.

Our valiant co-chairmen, Norman Ornstein and Leslie Moonves, tried to bring our diverse group to consensus. But the price paid for this laudable effort to accommodate conflicting views left us with a low common denominator at a time when we need a broader vision equal to the promise of new digital channels. Today we take only timid, baby steps when we should take giant strides to match the giant leaps offered by this most promising technology. Our grandchildren will one day regret our failure to meet one of the great communications opportunities in the history of democracy.

Those broadcasters who do not want to serve the public interest in this way have an easy alternative. If they are unwilling to accept the privilege of exclusive use of valuable public property in exchange for public service, they can turn back the digital channels. They can be auctioned off for many billions of dollars, and the money can be earmarked for education. This is what our Nation did in the last century in the Morrill Act when we sold public lands and used some of the money to build our great land grant universities. Or they can be reassigned. The police, firefighters, schools and libraries, and hospitals are still standing in line.

Since the dawn of civilization, each generation has believed that from those to whom much has been given, much is required in return. Future generations who look back at the dawn of digital television will decide that our generation believed that from those to whom much has been given, nothing much is required in return.

Statement of Paul A. La Camera

The opportunity for digital broadcasting brings with it a corresponding imperative for affirmation of the public interest obligations of those who are its beneficiaries. Accordingly, the Advisory Committee's Report ("Report") contains a number of key recommendations that I fully support. The Report contains other recommendations, however, to which I respectfully must dissent.

I endorse and, in fact, played a role in framing the Report's recommendation for "Disclosure of Public Interest Activities By Broadcasters." Enhanced disclosure will facilitate public review of each station's community service and serve as a self-audit for the broadcast industry. The industry has an enviable record of public service; it should not be reluctant to disclose it.

I also support the creation of a broadcast industry voluntary code of good practices prepared and administered by the broadcast industry. The broadcast industry is imbued with a public trust, and the implementation of a code of good practices will create a forum for public debate on evolving national and local standards for broadcast service. Self-regulation, if responsibly administered and enforced, will avert First Amendment tensions associated with government regulation and provide an impetus for continuing reassessment by the industry of its public interest stewardship.

Given the conspicuous role television plays in the nation's political discourse, I endorse Core Recommendation No. 6(b) that television stations voluntarily provide five minutes of time for appearances by candidates each evening during the 30-day period before an election from 5:00PM to 11:35PM (or the appropriate equivalent in non-eastern time zones). What is so compelling about the latter is that it offers a broadcaster flexibility and creativity, while advancing in a meaningful way the interests of a more fully informed electorate. This proposal would also serve to further the substantive and documented offerings already made by broadcasters in the form of political debates, campaign issue reports, candidate profiles, etc.

I am troubled, on the other hand, by other aspects of Section 6, notably the proposals regarding so-called "free air time" and the establishment of a "broadcast bank for airtime" to be controlled by political parties. Such approaches, while well intended, may very well exacerbate, rather than ameliorate, the abuses that exist within the current political campaign system.

I firmly endorse those portions of the Report addressed to Improving Education Through Digital Broadcasting, which in many ways could be one of the most far-reaching and beneficial products of the work of the Committee; Disaster Warnings In The Digital Age; Disability Access To Digital Programming; and Diversity In Broadcasting.

Conversely, I am not able to support Core Recommendation No. 3 for government mandated minimum public interest standards. "One size fits all" government mandated standards would not advance the public interest. Intrusive, content-based regulation that would likely flow from government mandated standards would, on the other hand, impede experimentation and the development of digital television and frustrate attainment of the very goals the Committee envisions for this exciting new service.

In many ways, the 10th and concluding section, New Approaches to Public Interest Obligations In The New Television Environment, presents the greatest difficulty for me. The Report in this section, as well as in the section related to Multiplexing, would legitimatize the "pay or play" concept. "Pay or play" is repugnant to the underlying principles on which the nation's over-the-air broadcast service is based. The potential benefits that might come from a "pay or play" scheme could never achieve the sum of the public service contributions currently made by the broadcast industry.

Broadcasters do not ask to be relieved of their public interest activities or obligations. The great and exciting opportunity presented by digital technology, as noted at the outset, necessitates a corresponding affirmation of those responsibilities. However, certain sections of the final report, as I have tried to articulate, go far beyond these bounds into a new regulatory environment that threatens to undermine the special bonds that local broadcasters currently enjoy with their respective communities of interest and to retard the full potential that digital offers our medium and those we serve.

I have every confidence digital broadcasters will honor their public service responsibilities, and it is my hope that the work of this Committee will serve to facilitate continuing and constructive public and industry dialogue on the important issues contained in the Committee's Report.

Statement of James F. Goodmon Supporting Minimum Standards for Digital Television Broadcasters

Beginning with the first Advisory Committee meeting, when I handed out a copy of the original NAB Code to every member, I emphasized my view that it is very important to establish minimum public interest standards and a voluntary code of conduct for digital television broadcasters. Throughout the proceedings, I have consistently promoted that view. I believe that it is very important to reaffirm the principles of localism and public service as we enter the digital broadcasting era.

The consensus Report of the Advisory Committee takes a moderate position regarding digital broadcast "regulation." It goes something like this:

(1) In lieu of paying money for a digital broadcast license, the licensee will agree (in effect, enter into a contract) to "serve the public interest" through the operation of its station.
(2) What does "serve the public interest" mean? Good question—the Advisory Committee views this as a three-step process:
- (a) All stations should be required to meet certain minimum standards of public interest performance. These minimum standards should be broad and flexible.
- (b) A voluntary code of conduct should be put in place to encourage higher than minimum standards for the broadcast industry. (The NAB did a good job with this in the past.)
- (c) All stations should be required to report quarterly on their public interest activities.

The devil, of course, is in the details, and the Advisory Committee encourages the FCC to work with broadcasters and public interest groups to hammer out the specifics. The Advisory Committee Report, with its attachments, includes some specific suggestions regarding minimum standards, the voluntary code, and quarterly reporting.

To my comments I am attaching the "Minimum Public Interest Requirements for Digital Television Stations" submitted by the Working Group on Minimum Public Interest Standards.(1) I chaired this Working Group. I need to point out that this is not a consensus proposal from the Working Group, although I do believe that a majority of the Advisory Committee supports its contents.

A suggested voluntary code is included in the full Advisory Committee report. (See Appendix B.) A suggested quarterly reporting format is included in the Advisory Committee Report. (See Appendix A.)

Our consensus Report necessarily avoids two widely divergent positions regarding broadcast "regulation." It is interesting that both poles of the argument use the "free market" principle (profit motive) as the basis for their positions. One states that there should be no regulation because the "free market" will (by definition) cause the stations to operate in the public interest. That is, the only way to make a profit is to operate in the public interest. Their argument is that regulation in any form is costly, stifles creativity, is onerous, outdated, and unnecessary. This leads, quickly, to the rejoinder that if broadcasters will not commit, in a meaningful and quantifiable way, to serve the public interest in return for the free use of public spectrum then their licenses should be auctioned in the "free market" to the highest bidder. Again, it is my feeling that the Advisory Committee Report takes a sensible middle road between the two extremes.

As a broadcaster, I do not view these minimum standards as regulation. In return for a license to use a public asset for private financial gain, a broadcaster agrees to serve the public interest. The broadcast company is fulfilling a contract between itself as the user of a public asset and the public body that owns the asset. As with all contracts, both parties to the agreement need to know exactly the responsibilities that they have to each other. With minimum standards spelled out, there is no question.

As a broadcaster I would like to know what is expected of me in serving the public interest. Required minimum standards and a voluntary code provide the benefit of certainty to broadcasters. I like to know what the rules are.

Report of the Working Group on Minimum Public Interest Standards:

Minimum Public Interest Requirements for Digital Television Stations

With Attachment

1) I am in full agreement with the "Minimum Public Interest Requirements for Digital Television Stations" that is attached to my comments. In fact, if any of its provisions are inconsistent with the body of the full Advisory Committee Report (i.e., political programming), I support the matter as presented in the Working Group report.

Statement of Barry Diller

Since its invention, local broadcast television has performed the powerfully important service of delivering public interest programming, at no charge, to all Americans. If we mangle the transition to digital broadcasting, we will lose that unique public service.

I support the Advisory Committee's recommendations because, on the whole, they will help rather than hinder the preservation of free local broadcast television and its benefits as broadcasting enters the digital age.

One proposal will accomplish the opposite: the idea of taxing the provision of multiple free television signals. I disagree with it.

* * *

Free local broadcast television is the only video programming service that has provided everyone in the country, at no cost, with national and local news and information; public affairs and other programming serving the local community; public service announcements; programming for diverse and underserved audiences, such as shows for minority audiences and educational programs for children; and other public interest programming. Nothing on the horizon will change that fact.

It follows, in my view, that recommendations concerning the public interest obligations of digital broadcasters should flow from the following two principles.

1. Broadcasters have unique public interest obligations because broadcasting is our only free and ubiquitous video programming service.

2. Public interest obligations on broadcasters are meaningless unless broadcasting remains a free and ubiquitous video programming service.

The Advisory Committee's recommendation that broadcasters have minimum public interest requirements stems from the first principle. As trustees of the public airwaves, broadcasters must serve the public interest. In an ideal world, voluntary guidelines would suffice. In the real world of commerce and competition, where economic incentives run counter to the provision of public interest programming, it is appropriate for the Government to insist on enforceable minimum public interest standards.

Some disagree with the notion that the Government should adopt clear, minimum standards for broadcasters. Especially in an increasingly competitive television world, that position, if accepted, would inevitably diminish the amount of public interest programming broadcasting provides and seriously weaken the public trustee concept, which has for so long provided enormous benefits to the country. For similar reasons, I disagree with the notion that broadcasters should be able to shunt their public interest obligations on to others -- the notion of "pay or "play," which the Report discusses but rightly declines to endorse.

Minimum public interest standards should be reasonable, flexible, and limited to areas appropriately subject to Government enforcement. Other areas should be handled through a voluntary industry code of conduct, and I agree with the Report's recommendation that the television industry adopt such a code.

Because television is available so widely, and because it is the country's main source of news and information, it is not surprising that television has become the main way that candidates reach voters. The problem, of course, is that it is an expensive way for candidates to reach voters. There is no question that this country's scheme for financing elections is a dirty mess and that the high cost of advertising is part of -- though certainly not all of -- the problem. Broadcasters should participate in the solution, and I support the proposal that broadcasters issue a challenge to Congress on campaign finance reform. If Congress adopts real and comprehensive campaign finance reform, broadcasters should, can and, I expect, will ensure that candidates have enough free television time to reach voters.

Minimum standards, free time and other public interest efforts of broadcasters are ultimately meaningless if broadcasting does not continue to reach everyone in the country -- the second principle I mentioned above. Broadcast channels that are not universally received cannot remain a free service; the advertising base would be too small to support a competitive product. The reality is that most viewers receive broadcast television through wires controlled by the local cable operator, and as Congress and the Supreme Court have found, it is appropriate to ensure that all broadcasters can reach everyone in their audience. I support the Advisory Committee on must-carry for digital broadcasters.

There is another regulatory issue that must be addressed if broadcasters are to continue to have the wherewithal to create and distribute public interest programming. Many of the Federal Communication Commission's outdated limits on television ownership no longer serve their purpose. In fact, in the current highly competitive television landscape those rules hinder their purposes of competition, diversity, and localism. FCC rules wrongly prevent broadcasters from entering arrangements that would make it economically sensible to provide significant amounts of local programming, news, and other public interest programming. Although the topic of ownership goes beyond what the Advisory Committee was asked to address, we should not kid ourselves: current ownership rules seriously threaten broadcasters' ability to serve their local communities.

Finally, I wish to state my opposition to the Report's treatment of multiplexing by digital broadcasters. The Report suggests that a fee be imposed on broadcasters that provide multiple streams of programming. If broadcasters charge a subscription for such programming there are separate rules requiring fees on broadcasters, as the Report acknowledges. Thus, this proposal is solely about the provision by broadcasters of multiple free signals. The notion of taxing or otherwise penalizing free broadcasting defies logic. For decades, it has been Government policy to encourage the provision of free over-the-air television. There is nothing about digital technology that warrants the replacement of that policy with one that will discourage free television.

Many of the Report's other proposals can and should be refined as we learn more about the technology and economics of digital broadcasting. But in the pre-dawn of the digital television era, it was appropriate to bring this group together to consider the public interest obligations of digital broadcasters, and it is right to reaffirm the status of the broadcast industry as trustee of the public airwaves with real obligations to serve its audience.

Statement of Robert W. Decherd, Harold C. Crump, and William F. Duhamel, Ph.D.

This statement summarizes our response to the Report of the Advisory Committee with regard to the public interest obligations that should be applicable to over-the-air broadcasters as the nation's television system shifts from an analog to a digital transmission format. We applaud the Advisory Committee's conscientious efforts to achieve a consensus and agree with a number of the concepts set forth in the Report. We regret, however, that it appears that a majority of Advisory Committee members are not prepared to embrace a public interest model for the coming digital age which appropriately reflects (1) the tremendous commitments to localism and public service programming long demonstrated by the industry, and (2) the marketplace incentives which will ensure an ample supply of non-entertainment programming in the future.

Section II of the Advisory Committee Report espouses historical and legal notions from the history of television industry regulation that will have very limited currency in the digital age. We see no scarcity in electronic outlets for free expression now or in the future and thus take exception to this section.

Having worked diligently and participated faithfully in the work of the Advisory Committee, we are disappointed that we must disagree with many of the recommendations. We continue to believe everyone's purposes would be better served if the Advisory Committee had taken a more general approach such as the one set forth in our statement. The digital world is evolving at a stunning pace and no one can predict with certainty today how public interest obligations -- or most other aspects of digital television -- will play out. We believe quality journalism and public service will carry the day with viewers no matter what the technologies or delivery systems of the future might be.

Additional Public Interest Programming Expectations for Digital Broadcasters Who Choose to Multiplex

The Advisory Committee's report addresses "whether the public interest requires a different formula" for television broadcasters who decide to use their DTV allotments for multiple channels of commercial programming. The Report recommends that, after a 2 year moratorium for experimentation, Congress or the FCC should require the payment of fees or "inkind contributions" (e.g., dedication of one of the channels to public interest purposes, or provision of free time to political parties) by broadcasters who realize a substantial increase in revenue from multiplexing. With this fee or inkind arrangement in place, statutory or other public interest obligations would attach only to the primary channel.

We support the notion of a moratorium to allow broadcasters to explore the many possibilities offered by DTV but believe it is inappropriate at this point to contemplate the imposition of fees or the extraction of specific public interest concessions from broadcasters based only upon speculative assumptions about the possible use of DTV channels. Television broadcasters will have strong incentives to continue to provide news and other nonentertainment programming to meet the needs and interests of their audiences as the transition to DTV progresses. At this early stage in the DTV implementation process, however, it is impossible to determine precisely the manner in which the transition to digital broadcasting will unfold, or the economic impact of that transition on television broadcasters and the marketplace in which they compete. That transition will be achieved most rapidly and efficiently if broadcasters are free to experiment with HDTV, multiplexed SDTV, and other variations of digital transmission and to develop innovative programming and other services to take full advantage of the enormous potential of digital technology. The transition to DTV will be expensive and difficult for broadcasters. Congress and the FCC should proceed with caution and avoid the imposition of any additional burdensome regulatory requirements which may stifle experimentation and slow the implementation of digital technology.

In these circumstances, existing public interest obligations should be maintained but certainly should not be increased for broadcasters who determine to use their DTV allotments to provide a single channel of high-definition television service. Those broadcasters will be providing a one-for-one replacement of existing NTSC service, which carries with it significant trusteeship obligations already tailored to that service. Similarly, because channels devoted to ancillary and supplementary services will be subject to fees under existing law, a broadcaster's decision to offer such services in addition to a single channel of DTV programming should not trigger any additional public interest obligations.

Television broadcasters who choose to transmit more than three channels of digital programming may reasonably be expected to devote some additional time to public interest programming. However, the imposition of fees or any sort of specific quantitative guidelines for additional public interest programming contributions are unnecessary and inappropriate. Accordingly, broadcasters choosing to multiplex their DTV offerings should be given the flexibility to determine the appropriate level and scheduling of such additional public interest programming and to decide whether that programming will be aired on one or more of their digital video channels. The community will be the judge of the sufficiency of these multiplexed program offerings. As the transition to DTV unfolds, broadcasters will learn from the reaction of the marketplace whether they have accurately gauged the needs and interests of their local audiences.

Retention by Public Television Stations of a Second Channel in Each Market to Be Devoted Primarily to Educational Programming

We strongly support the Advisory Committee's recommendation that, in each market, a second transition channel be retained permanently to be used for additional educational, instructional, and public interest programming by noncommercial TV stations. In this way, the availability of such programming can be expanded without displacing the programming currently available on PBS or commercial TV stations.

We also support the suggestion that the existing local public television station (or stations) be given the first opportunity to operate the additional educational DTV channel. We are opposed, however, to the Advisory Committee's suggestion that the FCC would have the power to approve or disapprove a plan for programming the station or for involving the local community in the station's operations; such additional regulatory oversight is unnecessary.

We also agree with the Advisory Committee's suggestion that the fees charged commercial broadcasters for ancillary and supplementary services can be used as one source of funding for the program services on these second channels. Further, the Corporation for Public Broadcasting (CPB) should continue to act as the umbrella organization for allocating funds to local noncommercial stations. Reliance on CPB to perform that function would also avoid the need for establishment of any new bureaucracy. Additionally, as the Advisory Committee suggests, Congress may wish to consider devoting a portion of the proceeds of the auctions of returned analog television channels to the support of additional noncommercial programming to serve local educational and informational needs.

We share the belief of other members of the Advisory Committee that the availability of a second public television channel would strengthen noncommercial broadcasting and provide new opportunities for public access to the airwaves, including outlets for independent program producers and local residents and community organizations. Additional spectrum dedicated to public use could also create a permanent pipeline for political candidates to communicate with the electorate.

Reliance on Voluntary Adherence by Television Broadcasters to Broadly Shared Public Interest Principles

As the Advisory Committee's Report recognizes, for many years, the great majority of broadcasters have voluntarily adhered to generally accepted, industry-wide principles in providing public interest programming to serve their local communities. We strongly believe that continued voluntary adherence to these salutary principles, updated as may be appropriate to reflect the intentions of television broadcasters as they enter the digital age, will serve the industry and the public well.

We are prepared to commit to the following public interest principles and objectives for the DTV era:

Renewed and systematic efforts by station licensees to identify the concerns and interests of their local communities.
A continuing commitment to provide public interest programming responsive to those concerns and interests.
Provision of programming (including educational programming) specifically addressed and intended to be responsive to the needs and interests of children.
Coverage of debates and other candidate forums.
Voluntary provision by television stations of air time for uninterrupted statements by candidates for public office, to encourage a meaningful dialogue with the electorate on the central issues of their campaigns.
Airing of town meetings and similar open forums for discussion of local issues by area residents, officials, and community leaders.
Continuing efforts (such as closed captioning) to utilize available technology to make the benefits of broadcast television more widely available to individuals with disabilities.

We do not believe, however, that it is appropriate for the Advisory Committee either to identify the industry group expected to develop a new code, or statement of principles or standards, or to provide models of what such standards might look like. First, the NAB and the majority of broadcasters have made clear that the implementation of a new code by the NAB is not feasible. Any suggestion that a new code is expected, that it should conform to some "model," or that, as some members suggest, the FCC might step in if the industry does not produce such a document, is inconsistent with the concept of truly voluntary self- regulation.

Mr. Crump disagrees with this language and supports a new voluntary code of conduct to replace the old NAB Code of 1952.

Minimum Public Interest Requirements

The Advisory Committee's Report suggests that "not all broadcasters will subscribe to voluntary guidelines" and that "a set of mandatory minimum public interest requirements for digital broadcasters" should be developed. Indeed, some Advisory Committee members would use the occasion of the DTV transition as an excuse to reinstate governmentally mandated programming standards, such as formal ascertainment procedures and quantitative guidelines, that were rescinded as unnecessary and ineffective.

For the reasons set forth above, we strongly oppose the imposition of such mandatory standards. The vast majority of American broadcasters have demonstrated their awareness of and responsiveness to the concerns and needs of their local communities. The marketplace, moreover, provides very substantial incentives for broadcasters to provide locally oriented news and other informational and public service programming. These incentives will only increase in the digital era, and broadcasters will need maximum flexibility to experiment and develop suitable programming and other digital services. The dawn of the digital age should not be accompanied by a return to government micromanagement of programming service.

Disclosure of Public Interest Activities by Broadcasters

To assist individual communities in assessing and understanding the public interest programming efforts of local TV stations, television broadcasters should be encouraged to disseminate more broadly information on their efforts to identify and address local concerns in their public interest programming offerings.

We do not believe that it is necessary or appropriate for the FCC to impose specific additional recordkeeping or reporting requirements. Rather, television station owners navigating the difficult and expensive transition to DTV operations will have every incentive to take appropriate steps to ensure that they identify and satisfy the needs, interests, and tastes of their audiences.

Voluntary Provision of Airtime for Coverage of Federal Election Campaigns

We are cognizant of the widespread concern with respect to the increasingly important role of television spot advertising in political campaigns and of the accompanying issues such as negative campaigning and fundraising abuse. Therefore, broadcasters should be strongly encouraged to provide airtime to candidates on a voluntary basis for more meaningful discussion of campaign issues and proposals. A number of TV station licensees already do so, and others have expressed the intention voluntarily to provide such airtime in upcoming election periods.

Broadcasters also should be encouraged to consider, on a voluntary basis, a broad range of programming and other options to help elevate political discourse. This process should not be mandated by the Federal Government; it can and should be a voluntary standard agreed to and promoted by the industry and its leading members. Thus, the Advisory Committee should not attempt to articulate or endorse any particular plan for the use of airtime for political messages. Further, as the Advisory Committee Report notes, "television is only one part of a campaign system filled with serious problems." Broadcasters can and should be expected to do their fair share to contribute to solutions to those problems.

Disaster Warnings in the Digital Age

As the Advisory Committee Report recognizes, broadcasters have always taken seriously their fundamental public interest responsibility to warn viewers about impending natural disasters and to keep them informed about disaster-related events. We join in the Advisory Committee's exhortation to broadcasters to work with emergency communications specialists and equipment manufacturers to utilize digital technology to transmit emergency-warning and related information in a manner that will be as effective as possible, with minimal intrusion on bandwidth or undue burdens on broadcasters. We also agree that regulatory authorities should coordinate with manufacturers of DTV receivers to ensure that new digital TV sets and converters are fully capable of handling such emergency transmissions.

Disability Access to Digital Programming

We agree with the Advisory Committee recommendation that broadcasters should be encouraged to explore vigorously ways to provide greater access to the disabled, including expanded closed-captioning and video description where feasible, as well as creative uses of data streaming, in ways that will not create an undue burden on broadcasters. Again, as the Advisory Committee Report suggests, the FCC and/or other regulatory authorities should work with set manufacturers to ensure compatibility and maximum utilization of available technology. Broadcasters should not be subject to specific additional requirements, beyond those already enumerated for the television industry in general, by virtue of the initiation of DTV operations.

A New Approach to Public Interest Obligations

In the final section of its Report, the Advisory Committee states that "[a]pplying existing public interest obligations to [the] variegated universe [of DTV offerings] will not be easy, and will certainly not entail a simple one-for-one exchange." We strongly agree that "flexibility to fit the different patterns that will develop and that will change over time will be increasingly important."

We do not believe that the "pay-or-play" model identified in the Advisory Committee Report offers an appropriate model for future public interest regulation. In essence, it would appear to require broadcasters either to meet governmentally mandated standards or to pay an alternative tax for use of the airwaves. We believe that this sort of approach would be inconsistent both with the tradition of public trusteeship on which broadcasting has been built and on the history of reliance, to the maximum extent possible, on the good-faith discretion of licensees to meet the needs of their audiences.

Conclusion

For the reasons set forth above, we recommend that Congress, the FCC, and the television industry proceed cautiously at this stage in the transition to digital, avoiding the imposition of any additional and onerous regulatory burdens that may stifle the rapid introduction of DTV service and the expanded programming services it will make possible. As the country moves forward with the introduction of digital television and we gain a clearer understanding of the future shape of the industry, it may then be appropriate to consider whether the adoption of any additional measures are warranted. At that point, we would expect to have a much more meaningful basis for evaluating any further steps.

Statement of Frank H. Cruz, in which Frank M. Blythe and Newton N. Minow join

Under the Chairs' leadership, we have crafted a document that will help guide broadcasting's future as it transitions into the digital age. However, I must register my strong concern that the Report does not go far enough in securing the role for public broadcasting in the digital future. My concerns center around the lack of an endorsement for public broadcasting as the entity that operates the new educational public interest channel, and the fact that the Report does not discuss cable television's carriage of a public service broadcaster's digital signal. To begin, I wanted to commend the Report for recognizing the vitality of equal opportunities for all Americans in broadcast ownership, employment, and programming. As the Report acknowledges, opportunities for women and minorities should be fostered at all levels of broadcasting. The rationale for this policy is simple. America is enriched by a diversity of voices broadcasting their opinions over the airwaves. A diverse pool of broadcasters and programming is one of the best ways to ensure that an abundance of views are shared with the public. Digital television will provide numerous opportunities for entrepreneurial enterprises in station operation and programming. All Americans should reap the benefits of the digital revolution; the best way to ensure universal benefit is by promoting equal opportunities. Next, I am glad that the Report recognizes that, as a first priority, Congress must secure long-term, stable, adequate funding for public broadcasting. Public broadcasters' record is unparalleled in public interest service. Although channels and choices will multiply in the digital age, most will be commercially supported, and any public services that commercial channels offer will necessarily be subordinate to their central need to return revenues to shareholders. Therefore, it is essential to the public interest that we support public broadcasting, whose sole mission is nonprofit public service. The Report acknowledges the vital nature of public broadcasting by urging Congress to create a trust fund to ensure permanent and adequate funding.

I am disheartened by the fact that the Report only presents public broadcasters as one option for operating the new educational channel. The Report should have rewarded public broadcasting for its long and accomplished public service history by recommending that public broadcasting stations be given the first opportunity to be entrusted with the special educational channel. Through giving local public television stations the first opportunity to operate each educational channel, the Report would have recognized that one of the prime benefits of digital technology is that it will revolutionize the educational process, particularly for those now underserved by information resources. Public broadcasters are dedicated and mandated to provide educational programming to all Americans. It simply makes sense that the Report recommend allowing public broadcasting to put its experience and expertise to use. Public broadcasters are already well advanced in their plans to deploy digital spectrum in the public interest, and stand ready to create and deliver abundant digital content. The educational channel would allow public broadcasting to truly fulfill its universal public service mandate. The Report should recommend that such a result be guaranteed.

Of course, I presume that any operation of the educational channel would be free from editorial control of Government entities. The role of the Department of Education and Federal Communications Commission must be explicitly defined so that the Government will not be involved in programming decisions, as this is not an appropriate role for it. The Report does not recommend that Government entities be removed from editorial decision making, and it should.

Finally, I would be remiss if I did not express my disappointment that the Report did not more fully address mandatory cable carriage of local broadcasters' digital signal (also known as "must-carry"). The Report does a disservice to digital signal must-carry obligations by merely endorsing must-carry as a concept, but shying away from recommending any sort of imple- mentation scheme. At a minimum, the Report should have recommended that the FCC require that the digital signal(s) and all accompanying digital enhancements of nonprofit educational stations be carried by cable systems under any implementation scheme as soon as they begin digital broadcasts. More specifically, instead of "throwing its hands up" at an implementation schedule, the Advisory Committee should have urged the FCC and Congress to adopt regulations that require a cable operator to carry both the analog and digital signals (with enhancements) of public television stations and other operators of newly designated nonprofit educational channels such as the educational channel described herein, if different from public broadcasters.

Without must-carry obligations for the digital signals of public broadcasting stations, the public will be deprived of the opportunity to experience the expanded and enhanced public interest services made possible by this new technology, services that have been supported by tax dollars and direct contributions. Despite my feeling that the Advisory Committee should have gone farther in recognizing and strengthening the contributions of public broadcasting, I think the overall Report is something of which we, and all Americans, should be proud. It is the beginning of a blueprint for broadcasting's new millennium, an era that promises to be full of opportunities for public service and the entrepreneurial spirit.

Statement of Charles Benton on Funding New Education Digital Broadcast Channels

Frank M. Blythe, Peggy Charren, Frank H. Cruz, Newton N. Minow, Cass R. Sunstein, Gigi B. Sohn, and James Yee join

The Administration and Congress should fund additional noncommercial spectrum capacity and noncommercial educational programming through a combination of several of the following options: (1) spectrum auctions; (2) digital broadcast ancillary and supplementary service fees; (3) pay or play fees; (4) a "2 percent solution" of a 2 percent fee on the sale of broadcast and/or telecommunications properties and a 2 percent fee on broadcasters' gross revenues; and (5) allocation of funds for this purpose through the reauthorization of Federal legislation supporting educational institutions, including the Elementary and Secondary Education Act, in 1999.

The recommendations of the Advisory Committee include a new and imaginative dedication of capacity to expand the flow of information and communication to students within and beyond our traditional school systems. This recommendation will be a hollow promise if Congress does not act to fund this potentially powerful capacity. The acquisition and use of knowledge will be the major resource for our society in the coming century and is pivotal for democracy, our quality of life, our economic development, and indeed our security. Without adequate funding we risk repeating the history of other noncommercial capacity reserves such as the marginalization of cable's public access, education, and government (PEG) channels, with franchise fees going into the general budgets of municipalities rather than being invested in public interest programming.

The Advisory Committee's recommendations propose that Congress and the Administration examine three funding sources for the new educational capacity: (1) spectrum auctions, (2) digital broadcast ancillary and supplementary services fees, and (3) "Play or Pay" fees. Items 1 and 2 might have been appropriate and sufficient funding sources but unfortunately have already been scored to balance the Federal budget. Moreover, the Federal Communications Commission's recent decision to levy a 5 percent gross receipts fee on only the most narrow set of "ancillary or supplementary" services will ensure that this source of funding will be inadequate.(7) Item 3, Play or Pay fees, is a good first step in suggesting alternative funding sources, but is unlikely to generate the predictable funding mechanism needed to support this new capacity.

For these reasons, we suggest new funding mechanisms to support new educational outlets and programming in the age of digital broadcasting. These mechanisms should include a 2 percent fee on the sale of broadcast and/or telecommunications properties and a 2 percent fees on the gross revenues of broadcast, cable, and satellite operators. This "2 percent solution" will provide the predictable funding mechanism needed to support what would then become the Advisory Committee's greatest legacy: a new local, educational telecommunications infrastructure. The programming provided on this infrastructure could address the educational needs for every American from preschooler to university student, from youngster to lifelong learner.

In an increasingly competitive global economy, it should be noted that other countries are making much better use of television in education than we are. For example, in England there are dedicated public and commercial school television services that now spend more than $50 million per year in producing new programs for school use. We spend a tenth of that for new school productions in a country with four times as many people. Further, the United Kingdom has adult education, training, and lifelong learning broadcast services that annually invest tens of millions more in new programming for public use. Digital television could bring computers and television together to meet educational needs in powerful new ways we can hardly imagine.

Therefore, the Administration and Congress should realize the special opportunity to examine these funding opportunities while reauthorizing the Elementary and Secondary Education Act in 1999. Some $20 billion from the Federal Government are made available annually for education; a portion of these funds should be allocated to educational institutions, libraries, and other community-based groups for access to the public airwaves with new educational programs for "the public interest, convenience and necessity." To ensure the participation of communities, Congress should require matching local funds to ensure multi-institutional cooperation around shared goals.

The full powers of digital television need to be mobilized for addressing our educational challenges in the next century.

7) See Report and Order, FCC No. 98-303 (released Nov. 19, 1998).

Statement

of Charles Benton, Frank M. Blythe, Peggy Charren, Frank H. Cruz, Richard Masur, Newton N. Minow, Jose Luis Ruiz, Shelby Schuck Scott, Gigi B. Sohn, Karen Peltz Strauss, and James Yee; Cass R. Sunstein and Robert D. Glaser join in Part I only

Part I: Political Discourse The FCC should require broadcasters to provide a reasonable amount of "free time," to national and local political candidates, under conditions that promote in-depth discussion of issues and ideas.

Part II: Mandatory Minimum Standards The FCC should adopt processing guidelines based upon 3 hours per week of local news and 3 hours per week of locally originated or locally oriented educational and/or public affairs programming outside of local news.

Part III: Multiplexing The FCC should not consider a broadcaster's revenues in determining when new public interest obligations attach for multiplexing.

I. Political Discourse

The FCC should require broadcasters to provide a reasonable amount of "free time," to national and local political candidates, under conditions that promote in-depth discussion of issues and ideas.

The Advisory Committee's recommendations on political discourse are well-intentioned, but insufficient.

We recommend that, unless Congress enacts comprehensive campaign finance reform legislation by the end of 1999:

The FCC should require broadcasters to provide "free time" to national and local candidates for candidate-centered discourse;
The FCC should consider whether a portion of this "free time" should be administered by political parties;
In implementing this obligation, the FCC should consider whether it should specify an administrative scheme such as the "time bank" or "voucher" models presented to the Advisory Committee by the Alliance for Better Campaigns and the Center for Governmental Studies; and
The FCC should give broadcasters broad discretion over the format of candidate appearances, except that qualifying "free time" segments must be of no less than 1 minute in duration, and the candidate should appear for no less than one-half of the duration of the segment.

The Advisory Committee recommendations on political discourse include, among other things: (1) a challenge to broadcasters to support "free time" proposals that are part of comprehensive campaign finance reform legislation and (2) broadcasters' voluntarily providing 5 minutes per night of free candidate centered discourse. For the reasons discussed below, we believe that these recommendations will likely fall short of achieving the very worthy goals of ensuring that citizens have broad access to candidate speech that results in informed decisions at the ballot box and reducing the influence of money on the political process.

First, despite what appears to be majority support in both Houses, Congress failed to pass comprehensive campaign finance reform last year, and is unlikely to do so in the future.(1) Despite this fact, it is possible that campaign finance reform legislation will be reconsidered. However, if Congress does not pass comprehensive campaign finance reform, including a "free time" component, by the end of 1999, the FCC should require broadcasters to provide a modest amount of free candidate-centered discourse. This approach allows Congress to have the first opportunity to act to broaden political speech. If Congress does not act, we believe that it is necessary for the FCC to step in.

Second, we believe that exclusive reliance on voluntary standards in this area will be ineffective. Many broadcasters provide candidate-centered discourse today and the new mandate will not affect them. Rather, this obligation is directed at the substantial number of broadcasters that have chosen not to do so. There is no reason to believe that voluntary standards will impel those broadcasters that choose not to carry any such programming to do so now. It is this reasoning that led the Advisory Committee to recommend mandatory minimum requirements for local public affairs programming and public service announcements. In light of the expanded capacity and increased opportunities that digital transmission will provide for broadcasters, the burden on broadcasters of providing a minimal amount of free candidate-centered discourse would be small. Among other things, the FCC has ruled that, under 47 USC §315, providing "free time" does not reduce a broadcaster's lowest unit rate to zero.

Although we recommend that the FCC should require broadcasters to provide "free time," the obligation should not be unlimited. The Advisory Committee has been presented with several "time bank" and "voucher" models that would result in broadcasters providing very modest amounts of "free time" for political candidates 60 days before a general election. It has also considered other models that would require broadcasters to provide some specific amount of time (for example, 5 minutes a night for the 60 days before an election). Although we do not endorse any particular model, we believe that the FCC should consider these well-conceived proposals, along with such other new proposals as may emerge in fashioning the "free time" requirement. None of these models will unreasonably burden broadcasters, and all provide them with flexibility in the choice of the format.

The goal of ensuring an informed electorate will not be achieved, however, if the benefits of "free time" are used only for 30 second attack ads and 7-second sound bites that are segregated onto one of multiple channels. If the FCC provides a benefit of "free time," it may, and should, also require that this time be of a specified minimum length, and that candidates actually appear for a specified amount of time. It should also prohibit broadcasters from segregating the candidate-centered programming onto one of multiple program channels. Such segregation would violate Federal candidates' rights to "reasonable access" to the broadcast airwaves,(2) and might also violate candidates' rights to equal opportunities.(3)

II. Mandatory Minimum Standards

The FCC should adopt processing guidelines based upon 3 hours per week of local news and 3 hours per week of locally originated or locally oriented educational and/or public affairs programming outside of local news.

We agree with the principle underlying the Advisory Committee's recommendation on mandatory minimum public interest requirements—broadcasters should be required to provide some minimum amount of public interest programming in return for the free use of the public airwaves. We write separately to address the absence of specific minima in the Report. At the very least, we believe it is critical to specify how many hours per week of each type of public interest programming should be carried, and to specify the time period in which it should be carried (to ensure that such programming is not relegated to hours when few viewers are watching).

In addition, to ensure that all broadcasters serve the public interest, the FCC should adopt minimum public interest requirements that are stronger and more specifically targeted to address the absence of local news and locally originated and locally oriented educational and public affairs programming over many broadcast stations.

We recommend, therefore, that the FCC adopt a processing guideline calling for 3 hours per week of local news and 3 hours per week of locally originated or locally oriented educational and public affairs programming outside of local news. A broadcaster that airs this minimum amount would receive automatic approval of that portion of its license renewal application that addresses local programming. Local programming, outside of local news, should be dedicated to programming that addresses issues of local importance and/or is specifically tailored to meet a need in the community that is otherwise underserved, including minority communities. To ensure that such programming is not buried in "graveyard" time periods, the Commission should specify that a significant amount of this programming should be aired between 6 p.m. and 11 p.m. and that no programming to fulfill this mandate should be aired before 7 a.m. or after 11 p.m. Public service announcements would not fulfill this requirement.

The proposed recommendation has its roots both in the Communications Act of 1934 and the Telecommunications Act of 1996. Under the 1934 Act, television broadcasters are licensed to serve localities to which they are licensed.(4) It has long been understood both by the FCC and by broadcasters that at the core of this local licensing requirement is an obligation that broadcasters provide locally originated and locally oriented programming. Most broadcasters take this obligation to serve as public trustees for their communities seriously, and consequently provide programming that meets local needs. However, evidence presented to the Advisory Committee demonstrates that a significant number of broadcasters provide neither local news nor local public affairs programming, and avoid controversial topics, no matter how important.(5)

As discussed above, broadcasters receive a license to use public spectrum free of charge in exchange for providing inkind payment through programming services that are not market-driven. Under the same rationale, the FCC, pursuant to Congress' mandate in the Telecommunications Act of 1996, gave incumbent broadcasters free additional spectrum (for a period of no less than 9 years) to convert to digital TV. In the 1996 Act, Congress emphasized three times the need for digital broadcasters to provide programming and services that serve the public.(6) The processing guidelines discussed above will ensure that broadcasters that provide little or no local programming do not benefit from the free grant of spectrum in the digital world. We believe that these guidelines would not burden those broadcasters who already provide adequate amounts of local news and programming.

III. Multiplexing

The FCC should not consider a broadcaster's revenues in determining when new public interest obligations attach for multiplexing.

We agree with the broad principle, and most of the specific provisions, contained in the Advisory Committee's recommendation on multiplexing. Broadcasters that use their free, extra public spectrum to provide more services and garner extra revenue should provide increased public service.

We write separately to address one issue.

We do not believe that the FCC should consider a broadcaster's revenues in determining whether new public interest obligations attach. The Report suggests that new obligations should attach "upon the extra channels reaching a particular revenue goal...." Conditioning the provision of public service on broadcasters' revenues will ensure that such service is never provided. Creative accounting can always ensure that any revenue "goals" the FCC adopts will never be attained, especially because much broadcasting revenue is traditionally obtained via "trade-outs" for inkind goods and services.

Importantly, consideration of revenues is unwarranted in light of the fact that broadcasters have been given multiple billions of dollars worth of public airwaves, at no cost, to convert to digital TV. Moreover, the ability to multiplex gives broadcasters far greater opportunities to increase revenues than are available today. Digital transmission technology currently permits broadcasters to provide at least five to six video programming streams of quality equal to today's television picture, as well as other nonprogramming services such as data, paging, internet, and telephone services. Rapid advances in digital compression will likely expand that capacity even more. Additional public service obligations should be commensurate with these additional benefits, and should not be conditioned on whether those services generate a predetermined amount of revenue or profit.

Endnotes

1) See S. 25, 105th Cong., 1st Sess. (1997); H.R. 493, 105th Cong., 1st Sess. (1997).

2) 47 USC §312(a)(7), CBS v. FCC, 453 U.S. 367 (1981).

3) 47 USC §315(a). See Becker v. FCC, 95 F.3d 75 (D.C. Cir. 1996).

4) 47 USC §307(b).

5) See, e.g., University of Miami, Content Analysis of Local News Programs in Eight U.S. Television Markets (1997).

6 )47 USC §§336(a)(2), 336(a)(5) & 336(d).

Benton

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