FCC Chairman Reed E. Hundt Address Before the NAB Radio Show (As Prepared for Delivery) Los Angeles, California October 13, 1994 Thank you, Nancy, for that kind introduction. It's great to be back in Los Angeles, the city where I lived when I first started law practice nearly 20 years ago. I love L.A. It's also great for me to come to my first radio convention. Like almost everyone else, I think, I listen to radio every day, and it often stirs some of my fondest and oldest memories. Hopefully you can't see my gray hairs and you will be surprised when I tell you that I remember a time when my family did not have a television; when radio was our only broadcast lane on the early version of the information highway. Back then, in a tiny apartment in Arlington, Virginia, our electronic entertainment was to sit on the rug in front of the radio listening to Sergeant Preston of the Yukon, Johnny Dollar and the Shadow. Television of course didn't destroy our habit of listening to the radio. All through the 1950s my family attended to Ed Walker and a large, cheery fellow now known as a TV weatherman, Willard Scott. They were the Joy Boys of Radio, who "chased electrons to and fro." And my favorite radio figure was Church Thompson, who showed courage above and beyond the call of duty as he faithfully reported one defeat after another of my beloved Washington Senators. When I went away to college in Connecticut I was stirred from slumber every morning when my clock radio went off and someone screamed in my ear "wake up." Since I just went to my 25th college reunion, I hope that Don Imus won't mind my reminding everyone just how long he has been popular. But radio wasn't always about the ever changing programming that your audiences and I have come to love. When the engineers at AT&T were first developing the technology of radio, they thought the medium would be used for one-to-one communication over long distances. They imagined a phone booth of the air: their plan was that you could go into the booth, plop down a quarter (which was no small change back then) and get a channel to transmit a message to someone with radio tuned to that frequency. -2- As one of the engineers later said, "we had everything but the idea." In the meantime, an advertising executive working on selling Pepsodent toothpaste happened to be listening to a variety act that was being experimentally broadcast on a channel in New York. He said to himself, why don't we interrupt this show with advertisements. And being a creative advertising executive, he had the additional inspiration of claiming that there was a product named "irium" in Pepsodent that made your teeth especially white. Well the advertising jingle in praise of irium sold tons of Pepsodent -- even though irium didn't exist. And the idea of using radio as a medium that gathered listeners for the purpose of advertising to them -- the idea that has driven commercial radio -- was born. Since that date, radio has had dozens and dozens of new ideas. Radio now doesn't just sell toothpaste, it sponsors forums for political debate; it tells the stories that become our modern fables; it encourages people to vote; it raises money for charity; it fills the airwaves with more than a million informative PSAs every week; it warns communities about emergencies. The new ideas for the radio are never ending. Ten years ago, everyone said there were not more than 50 identifiable formats for commercial radio. Everyone said all the new entertainment ideas had already been thought of. Since then, more than twenty new formats have been created, including my current personal favorite, Triple A. Of all the formats, people are probably today talking the most about talk radio. This format has grown tremendously over the last several years. In the last five years, the number of stations with talk radio formats has tripled. One out of every seven dollars in revenue earned by radio in 1993 came from talk radio. Talk radio plays a hugely important role in communicating information to all Americans. To quote my friend and mentor Jim Quello from a terrific speech he recently gave in St. Petersburg, Russia: "The major impact of television and radio today on the American way of life is in news and news analysis, not in entertainment programs." -3- Polls back up Jim's wisdom. One-third of all talk radio listeners say they listen in order to keep up with current issues of public importance; only 1 percent say they listen because of the host. It's terribly important to the whole country that radio help keep us informed. More than 70% of Americans receive 100% of their news over the broadcast medium. Because radio and TV reach everyone, we have the potential to live in the most well informed society in history. This is also an enormously complex society. Economic prospects challenge everyone. The educational demands of the 21st century are hard on all of us. The public issues of modern life are difficult. America is a country that has come together from all the other countries around the globe. In total, Americans speak more than 400 different languages. Yet we live in an interrelated, interdependent society. We have to learn how to get along. Most important, we have to be able to come to common conclusions about common problems. We have to be able to reach consensus on the many issues that determine how we should govern ourselves. You've all heard about the Congressional failure to pass health care reform, telecommunications reform, campaign finance reform, and many other serious, important measures. There's a lot of fingerpointing, excuse-making and blaming going around on Capitol Hill, but the real story of what happened, I think, is that the process broke down. I don't mean just the legislative process. I mean the public reasoning process. I mean the process of coming together to agree on facts and to share opinions about what to do about these facts and, ultimately, to come to agreement about the right course of action on all the crucial issues: from reforming the political process to fixing the 1934 Communications Act, from guaranteeing affordable healthcare to all Americans to finding more efficient ways to clean up our environmental problems. We can come to agreement on all these important issues and all the issues of the future as well only if we have forums of public discussion that work well for everyone. -4- In this discussion, we have to be willing to explain our views to others and we have to listen to what others have to say. We also have to be interested in learning the true facts about the subject of discussion. After all, when we agree on the true facts, we are far more likely to agree on matters of opinion. This sort of public discussion today goes on over the air. It takes place, among other places, on talk radio. And in truth the broadcast mediums are the only way this public discussion can involve all Americans, as it must. The old AT&T phone booth of the air has become a forum of the air. We should all rejoice in the power of this forum. But this is a good time also to ask ourselves some important questions about our electronic public discussion. Do modern communications increase or decrease our willingness to listen to the view of others? Do talk radio and broadcast television help us learn true facts or do they spawn misinformation and enhance disagreement? In short, does talk radio help us come together as a country on important issues of public discussion, or does it engender such skepticism and disbelief that as a country we just can't get anything done? Now, as I've said before, the primary mission of the FCC is to promote competition among and between the five plans of the information highway. The FCC is in effect working to become the Federal Promotion of Competition in All Communications Markets and Protection of Consumers from Monopoly Commission. What we don't want is for the FCC to be the judge of the quality or content of public discourse. We don't want the FCC to be in the business of deciding who has spoken truly or falsely. We don't want it ever to become the Federal Censorship Commission. -5- Learning the truth about important public issues is up to people on their own. Discussing important issues and coming to agreement is a responsibility of Americans. It is part of their duty to the country. It is the way to guarantee the freedoms that we prize so highly and for which we so long fought. So if Americans are going to assume this responsibility and come to agreement on public issues through participating in the electronic medium, we should praise private citizens like Diane Rehm who want to make that medium work better. Diane Rehm is, as you may know, a talk radio host in Washington, D.C. She recently wrote a profound article in The Washington Post about talk radio. She asked the following questions: "Should there be as careful an examination of statements uttered on the air as there is of words printed? Is there any way in which talk programming can be monitored to ensure factual presentation and correction of error? How can we as citizens participate more fully in the process of questioning and demanding accuracy?" These are excellent questions. They start with the premise that as a society we need solutions to public disinformation and misinformation that don't involve governmental intrusion but that also don't leave us callously indifferent to truth or falsity. My friend Jim Quello expressed similar views when he said, "Editors, publishers and broadcast executives have the responsibility to make sure reporters are not wrong too often or to such an egregious degree that they are an embarrassment to their organization or profession. In may view, broadcast owners, executives and managers should more and more assume the role of publisher or even editor-in-chief... Top management must emphasize truth and responsibility in news and public affairs reporting over individual or corporate quests for ratings, money and power." I don't think Jim or I or anyone want the government to issue regulations ordering radio to take these steps. But I think I'm not the only one who can learn from Jim's wisdom. What Jim is basically saying, as I understand it, is that radio could use more new ideas to address the challenge of conducting responsible public discussions through the electronic media. -6- Another area where we need new and better ideas is in connection with hiring and training minorities and women in broadcasting. In our most recent Annual EEO Trend Report, we noted that 46 percent of all employees in the national workforce are women but only 33 percent of radio station officials and managers are women. Minorities are 23 percent of the national workforce but only 13 percent of radio station officials and managers are minorities. We want to work with radio broadcasters to develop new and more successful ways not only to hire but also to train, promote and empower women and minorities in this industry. Just as I'm asking you to develop new ideas, I'm expecting that at the Commission we will come up with our own new thinking about lightening the regulatory load on broadcasting and simplifying our processes. For example, at our open meeting on October 20, we expect to vote on reconsideration of our radio ownership rules. Within the next several months, we will need to address satellite digital audio broadcasting. I know you won't argue that our pro- competition Commission should absolutely bar innovative uses of this new technology. But I do want you to tell us how innovation and technology ought to be accommodated so as to be phased in harmoniously with exiting businesses. I've met with some broadcasters already on this subject, and I invite others to share their views with us. I think the approach we used in connecting with AM expanded band makes a lot of sense. We need to focus carefully on the ways that improvements to service can be made, especially in the technical quality of exiting service. I'm happy to report, in that connection, that the FCC this past week adopted an Order that clears the way for implementing the expanded band. We hope to have available for you the allotment plan for the expanded band very soon. As part of our reinventing government initiative, we're working to improve our customer service. It should be equal to the best in the business. Let me share with you an example. The FM Radio Branch determined that because of an unclear form and instructions, 60% of the license application forms filed with the Commission contained errors that contributed to a processing backlog of 600 applications. The FM Branch redesigned the form and instructions to make them easer to understand. As a result, errors were reduced by 60% and the processing backlog was almost entirely eliminated. -7- A critical part of our reinventing government effort involves taking advantage of the capabilities that new technologies give us. Two weeks ago we began to provide immediate access to Commission documents such as news releases, public notices and fact sheets through a free "fax-on-demand" service. [The number is 202-418-2830.] We hope that soon you will be able to obtain copies of forms through the fax-on-demand service, like the one provided by the NAB. We want to set things up so you won't have to call your Washington lawyer to get the latest release or a form you have to file. Earlier this year we began to make public notices and Commission documents available on the Internet. This has proven to be an extremely efficient means of distributing Commission publications. Nearly 4,000 FCC documents are downloaded by the public over the Internet each week. Ultimately, we hope to establish what one could call a "virtual public reference room," where people have full remote access to commission decisions and parties' pleadings. We're also working to develop electronic filing systems. The Commission currently has more than 20 electronic filing initiatives that are in various stages of development. We hope that broadcasters will find this a less costly way to file documents with the Commission. We're continuing our efforts to streamline the licensing and license renewal processes. For example, within the next several months we hope to propose changing our rules to provide for antenna structure owners, and not licensees, to register their antenna structures with us. This will reduce the number of registrations form 850,000 to approximately 70,000, which will save the FCC and licensees hundreds of thousands of dollars annually in filing and processing costs. It also will considerable reduce the processing time for requests for changes in coordinates, height, and obstructing marking and lighting. Finally, it will improve the accuracy of the tower data, and create a database that can be accessed by the public and the FAA. We also hope to adopt soon a procedure that allows a station owner to file license renewal applications for translators simultaneously with and on the same form as the owner's main station. -8- From what I hear at this convention, after seven lean years, radio is well into seven or even more fat years. You know our goal should be to make the best of a great situation. We should take advantage of the economic well being of your industry to think anew about the regulations we impose on radio. We should all develop the best ideas for meeting your public interest obligations. In this time of new thinking, we should remember that there once was a time when no one understood even that radio could be supported by advertising. Then a new idea created this industry and gave everyone in American a whole new way to participate in our national community. Tomorrow someone in this room will have a whole new idea about how radio can elevate the level of public discourse in this country. -- How radio can help us find ways to reach consensus on important matters of national policy instead of succumbing to terminal negativism. -- How the FCC can discharge its responsibilities cheaper, better, faster. -- How radio can make sure that it not only has women and minorities in its audience but in its ownership, management and employee ranks. I'm looking forward to an exciting and innovative time of working with all of you to develop these new ideas. -FCC-