CHAIRMAN REED E. HUNDT FEDERAL COMMUNICATIONS COMMISSION NABOB CONVENTION Washington, D.C. September 22, 1995 (As Prepared for Delivery) SAME FIGHT, NEW BATTLES INTRODUCTION Thank you, Jim, for that kind introduction. So we are in the middle of a communications revolution. Some welcome it. Some are frightened by it. Everyone is affected by it. The revolution is inevitable. What is not inevitable is whether that revolution will benefit all Americans, or only some. As the French Revolution was unfolding, France was convulsed by change. One of the changes was a huge increase in the price of bread. Working men and women could not afford the new prices. The queen of France, Marie Antoinette, responded by saying, If they can't afford the bread, let them eat cake. The question for the country now is whether, as the communications revolution unfolds, we say to all the small businesses, minorities, children, and others: We will make sure this revolution brings you into the society, makes you part of the economy, gives you a world of opportunity. Or will we say, as we find that small businesses, minorities, and children are not necessarily benefiting from this revolution, Who cares? Let them eat cake. We ought to be concerned right now with all of the following issues: How can small businesses, and especially minority-owned small businesses, participate in the communications revolution? How can the unique point of view of minorities find voice in markets dominated by huge media conglomerates? How can children, especially minority children, be helped and not harmed by the media? Specifially, how can we guarantee that free over the air educational TV can help raise test scores and education levels for all the children in the country -- especially for those who rely on the public property of the airwaves, as well as on the public schools to help deliver the equal opportunities that education can provide. And how can we make sure that the President's vision of communications technology in every classroom in the United States comes true as soon as possible for all children -- not just for those who are lucky enough to go to private schools or to public schools in affluent neighborhoods? You have a special opportunity, right now, to make sure the country answers all these questions in a way that will make us proud for decades to come. The country needs your help and the FCC needs your help. We need your help on all these issues, and not just some. Let me go into more detail about the threat to small business and minority ownership posed by the possibility of overconcentration. As everyone has read, huge media mergers are being manufactured right now. The cash flow and capital formation power of these media conglomerates would be unprecedented. The future for small businesses, and particularly minority-owned small businesses in media markets is quite seriously at risk. The FCC is supposed to decide, as a panel of judges, whether the public interest is served by any proposed license transfer. No transfer can be approved unless it serves the public interest. The transferee, and all broadcast licensees, don't own the public's airwaves. They are just the trustees. Their highest duty has to be to the beneficiaries of this trust: the public. Our concern should be for all members of the public -- including small businesses, minorities, and children. We should be concerned about the effects of concentration on all members of the public. We should be concerned about whether the proposed new trustees will use the airwaves to educate children. The scope and scale of the proposed TV license transfers is so great that the FCC's decisions will certainly shape the future of broadcast TV for a generation. And that means that our decisions will have a major impact on the future of our country, because TV is that important. Surely we all agree that TV is one of the major influences on our society, and particularly on children. It can entertain us -- and there's no doubt that it does that job extremely well. Yet, it can also teach our children. It can also provide all Americans insight into the unique perspectives of the hundreds of minority groups that make up the great mosaic of American life. It can also inform all Americans about the great issues that deserve public debate. Whether television achieves its potential -- in addition to the potential to entertain -- is the fundamental question before us. That is the fundamental question involved in applying the public interest standard to the proposed transfers before the FCC. It is the fundamental question at stake when the FCC considers whether new specific, concrete rules could give real and better meaning to the public interest standard in the future. One example of specific meaning for the public interest standard is this: The FCC has long believed that the public interest would be served if all Americans could participate in the ownership of TV and radio licensees. We established many incentives to foster minority ownership. We have implemented EEO rules to encourage minority employment. The FCC's commitment to minority ownership is in jeopardy for at least three reasons. First, the proposed media mergers may make it harder for small businesses and minority-owned businesses to develop the financial strength to compete. Second, Congress is threatening to remove ownership limits in radio, and to remove certain barriers to cross- ownership. And third, the Adarand case is a serious blow to the FCC's traditional methods of promoting minority ownership. As you know, Adarand requires that any federal programs that make distinctions based on race must serve a compelling interest. I was very pleased to hear at the last Commission meeting that three other Commissioners support my commitment to develop a record that will pass the Adarand test. We intend to conduct a so-called Croson study. Our goal is to demonstrate, as the Adarand case requires, the compelling need to continue to provide incentives, to encourage the participation of minority and women-owned businesses in the communications industry. Overconcentration and Adarand present new challenges to African-American ownership. However, the FCC will continue to consider initiatives to increase access to capital by minorities and women who seek entry into the communications industry. Our Minority/Female Ownership rulemaking proposed a number of incentives. These include the so-called "incubator program." Through this program existing mass media entities would be encouraged, through ownership-based incentives, to assist new entrants into the communications industry. However, this initiative, and others, was based on the possibility that mainstream media participants would receive some relief from ownership limits. If Congress removes ownership limits, the FCC's proposal to encourage mainstream corporations to invest in new entrants would be sorely undermined. Let's talk statistics for a moment. According to the National Telecommunications and Information Administration, in 1993 minorities owned 3.5% of all AM stations and 2% of all FM stations, in the United States. According to the 1994 Broadcast and Cable Employment Report, minorities represented 18.4% of the full-time broadcast workforce, and 12.9% of the managerial workforce. But, studies suggest that minority-owned companies tend to hire minorities, whereas non-minority-owned firms tend to hire non-minorities. This is the case even when those firms are located in minority communities. If minority ownership were further hindered by the suggested new rules of the game, I fear that bright, able, promising minority youth will find it even more difficult to gain the kind of employment experience they need to become successful in the communications industry, or in the workplace generally. Further, I fear they will be unable to get the all- important hands-on experience they will need to perhaps themselves become minority owners someday. Lots of minority youth out there have such a dream -- to own a broadcasting company. Others dream of being a general manager, or a deejay, or an anchor, or a reporter, or a writer, or president of the company. Many of you had those dreams. You understand. To the extent that new interpretations of the Constitution or new laws make it more difficult to realize that dream, both the dreamer and our whole society are diminished. As I explained in my Pittsburgh Law School speech yesterday, the Commission ought to apply the public interest standard in a specific way, with concrete duties imposed on broadcasters. But in thinking about those duties, the Commission should first have a dream. It should have a dream of how our great communications media can make our country grow together. It should dream about how the communications revolution can make equal opportunity be something we take for granted because it is so widely available. It should dream about how the communications revolution can help us win at last the battle against ignorance and despair. These dreams everyone in the country should dream together. These dreams of real meaning to the concept of the public interest in communications have to be encouraged by everyone in the country, and especially by everyone in this room. These dreams, like all beautiful dreams, must be vivid, bright, specific, real. Broadcast TV does and should make millions of dollars for many Americans. It does and it should provide free entertainment for all of us. It does and should create many jobs. But broadcast TV should not just put money in the bank for some people. It should also give a gold coin to our children. And that coin should have two sides. On one side there should be free, over-the-air educational TV guaranteed by every TV license holder for every child in every market. And on the other side, there should be a promise that indecent and overly violent programming will be limited by responsible broadcasters. These are two sides of the same coin. It is a coin that every trustee of the public's airwaves ought to put into the hand of every child in this country. I'm not asking for much. It is only one coin from the stream of cash that commercial TV will generate. I want all that cash to keep flowing. And I want all of us to be proud to see that golden coin of opportunity be put into the hand of every single child. No one has a bigger stake in these issues than African-American broadcast owners. Your moral authority can be tremendously persuasive in the great debate that is occurring over the meaning of the public interest standard. And you have long recognized your special responsibility to your own community. We need you to assume your rightful place in your own bully pulpits and to tell the country what to expect from the FCC, from the media, from the communications revolution. Each one of you knows from your own personal experience that against fearsome odds you can be successful. The odds of success on children's educational TV, overconcentration, excessive violence -- the odds on all these issues are less daunting than the odds so many of you faced when you started your careers. So there's nobody in the country in whom I have more confidence than you. I look forward to your participation in these great debates. We are fighting the familiar fight for opportunity and justice, but we have new battlegrounds. We are going to win.