SPEECH BY REED HUNDT CHAIRMAN FEDERAL COMMUNICATIONS COMMISSION WOODROW WILSON SCHOOL PRINCETON UNIVERSITY PRINCETON, NEW JERSEY (AS PREPARED FOR DELIVERY) DECEMBER 8, 1995 REVITALIZING DEMOCRACY IN THE INFORMATION AGE I am pleased to be with you today. I want to thank several people for putting together, and inviting me to participate in, this symposium. They are: Ruth Miller, Assistant Dean for Public Affairs of the Woodrow Wilson School, Richard Leone, President, and John Shure, Vice President of Programs, both of the Twentieth Century Fund, and my old college friend Paul Taylor, of the Washington Post, who this semester is visiting professor at the Woodrow Wilson School. I was last at Princeton when the college football team Paul and I rooted for whipped the Tiger eleven in 1968. It's great to revisit this great university and that halcyon (if slightly obnoxious) memory. This speech is one of a series of speeches in which I am discussing how the Federal Communications Commission can craft a new paradigm for the use of the public's airwaves to serve the public interest. In the first speech, at Pittsburgh Law School in September, I discussed the constitutional and policy shortcomings of relying on vague rules to implement broadcasters' statutory obligation to serve the public interest, and the ways broadcasters can use the public's airwaves to do more to educate children. Earlier this week, at the Brooklyn Law School, I discussed how a deregulatory, market-oriented, and First Amendment- friendly approach to the Children's TV Act of 1990 requires that the FCC replace its current vague rules with a clear statement of the minimum number of hours of children's educational television each broadcaster owes the public in return for renewing its license. Today I would like to take the FCC's discussion of the public interest in a new direction: the use of modern communications to reform and, arguably, to save the campaign process as our democracy is swept into the information age. As everyone acknowledges, broadcasters are granted commercial use of the public's airwaves as long as they serve the "public interest." Since the beginning of modern broadcasting after World War II, the FCC has regarded that "public interest" as including the use of TV to develop "an informed public opinion through the dissemination of news and ideas concerning the vital public issues of the day." As it has turned out, however, a principal way that broadcasters help develop "an informed public opinion" about candidates for political office is by selling them huge amounts of advertising time. It's fair to ask ourselves whether the current system is the best way to ensure that the wonderful and ubiquitous medium of television informs the public about candidates and their views on the issues. The cost of TV time-buys makes fundraising an enormous entry barrier for candidates for public office, an oppressive burden for incumbents who seek reelection, a continuous threat to the integrity of our political institutions, and a principal cause of the erosion of public respect for public service. According to the Committee for the Study of the American Electorate, in 1992 the average Senate candidate in a contested election spent $2.4 million on media expenses. Like all averages even this big number conceals the magnitude of the problem. Recall the recent California Senate race where two candidates together spent more than $50 million on electronic media. The average House candidate in a contested election spent $250,000 on media expenses. That translates to needing to raise $2,500 a week every week for the two years between elections. The figure for Senators is a whopping $7,500 per week over six years. These targets typically must be met with lots of relatively small contributions obtained in days and nights of wearisome pleading. In the aggregate, in 1992, candidates spent $300 million on media advertising. In 1994, the amount was $355 million. In 1996, it is expected to top $500 million. And there's no end in sight. Norm Ornstein of the American Enterprise Institute has studied this issue and concluded that "the largest and fastest growing expense in House and Senate campaigns is TV advertising." It is impossible to overestimate the harm to the legislative process caused by the sheer amount of time required to raise funds for TV time-buys. Former Congressman Bob Edgar, a Pennsylvania Democrat, wrote that during an election year, "Eighty percent of my time, 80 percent of my staff's time, 80 percent of my events and meetings were fundraisers." As an aide to a Senator told the National Journal in 1990, "During hearings of Senate committees, you can watch Senators go to phone booths in the committee rooms to dial for dollars." This system visits immeasurable frustration on our finest public servants. It's no coincidence that as the fundraising needs soar incumbents in record numbers decline to seek reelection. TV was supposed to revitalize democracy by bringing us all into the electronic forum for debates and discussion of the issues by candidates. Instead numerous commentators have concluded that TV has enslaved politicians and degraded the electoral process. Broadcasters themselves are interested in reforming the political process. In April, Fox Chairman Rupert Murdoch said the time politicians must spend raising money is a "cancer we have to face up to." He added that "we have to look at systems in other countries where time is given to candidates." Some suggest that caps should be placed on the amount of money spent on campaigns. Even if constitutional, such caps are misguided. We are all bombarded by a blizzard of media every day. Candidates need to compete with sales pitches for soap and software to get attention. They need more time to win that competition for the eyes and ears of voters. Limiting candidates' access to the audience will only limit the information voters get about candidates and issues. And we certainly can't ignore the potential of the electronic media as the source of information about political issues. Our country is far too big for candidates to reach most voters by personal contact. In any event, 70% of the people get 100% of their news from television. We have to use tv to improve campaigns, instead of turning away from the defects of today's process. To reform the campaign process, we need to embrace the communications revolution, not shun it. We need to find ways to make it easier for candidates to get their messages across and to challenge other candidates' messages, as opposed to limiting their ability to do so. The heart of a democratic society is an electorate that is provided with sufficient information to make informed choices. Indeed, enhancing the ability of candidates to communicate their messages over television and radio is the policy that underlies the handful of obligations that the Communications Act of 1934 already places on broadcasters with respect to campaign advertising. For example, when a broadcaster sells time to candidates during specified periods preceding primary and general elections, the rate must be set at the "lowest unit charge" of the station for the same class and amount of time for the same period. This rule takes a lot of work to apply and doesn't work well in practice. The problem is that the rules require the candidates, the station and often the FCC to identify for each of 1,500 TV stations and 10,000 radio stations the "lowest unit charge." Not surprisingly, in each month, in each market, for each station that charge can be difficult to calculate -- especially because stations do not typically offer a commercial rate equivalent to the government-defined "lowest unit charge." The result is doubly bad: the FCC has to get intimately involved in the commercial activities of broadcasters and the legal regime still makes media access extremely expensive for candidates. Some broadcasters have found the lowest unit charge rule so difficult a way to meet their public interest obligations that they have tried to give free time to political candidates. But -- believe it or not -- the current system actually discourages broadcasters from providing candidates with free time. This problem lies in federal election laws. In 1992, EZ Communications, the owner of 8 radio stations, offered free and equal time to federal candidates in each state in which it had stations. It asked the Federal Election Commission to approve the offer. Because of uncertainty in the law, three years later the FEC has still not issued a ruling. So EZ Radio found out it was not at all easy to help further political debate. The same story is being repeated on the Internet. CompuServe recently offered free on-line services to candidates but an FEC spokesperson said the offer could be considered a prohibited in-kind contribution. The FEC may well be right in its reading of the election law. But as Dickens wrote in Oliver Twist, there are times when "the law is an ass and an idiot." Shouldn't Congress consider clarifying current laws to permit communications companies to give candidates free access to the public? Whether or not Congress takes this step, campaigns inevitably will spread to all the lanes of the information highway: cable, broadcast, telephone, wireless, and satellite. Broadcasters, however, will undoubtedly remain the major source of campaign information for some time. In 1968, Senator Al Gore, Sr., stated: "The public owns the airwaves which we give the television and radio stations permission to use, and...we could reserve a certain percentage of time for civic purposes." In 1988, his son -- now our Vice President -- introduced a bill to require broadcasters to provide a total of 6 1/2 hours of free airtime in the weeks before a presidential election. The Center for Responsive Politics, Common Cause, Henry Geller, Delmer Dunn, John Ellis, Paul Taylor, Newton Minow and others have all made wise proposals and recommendations to provide free air time for political campaigns. As the communications revolution makes American an information society, it's high time and the right time to apply these good old ideas to the new media scene. The many fine Americans trying to do the right thing in seeking and holding public office need to be given a break from the ceaseless round of fundraisers. Better use of the airwaves and the other lanes of the info highway can give them more time to serve the country instead of feeding the insatiable beast of time-buys. At the FCC we have already raised $9 billion in spectrum auctions. Wouldn't it be nice if we could recycle even a modest part of that money, place it in a trust fund, and use the interest to provide matching funds to candidates? The annual interest on $9 billion, if we had put it in a trust fund, would easily be enough to fund the current rate of federal congressional media spending. It's possible Congress will send all auction revenues to the Treasury for deficit reduction. But income tax returns have a box for contributing matching funds for Presidential races. Why then don't we build a trust fund for time buys by checking off other boxes for taxpayers to contribute to a fund that could help reform the political process? Another technique would be to establish a time bank from which candidates could draw down during their campaigns. Broadcasters and all other media providers would make deposits into the time bank. Donations of time with a market value of, say, $500 million a year would greatly lighten the burden on candidates to raise money. I recognize that time certainly is money for broadcasters. Congress could also recognize that by giving broadcasters and other donors tax deductions for their contributions to the political process. At the FCC we could consider giving ownership waivers to stations that donate time to be used by candidates for debates or other public-issue programming. Wouldn't that further the underlying purpose of our ownership rules: to promote the presentation of diverse programming? To put it another way, what could more clearly be in the public interest -- and that is the fundamental standard for such waivers. Of course, even if access to electronic media were cheaper and easier, many candidates would still raise money for many other legitimate campaign purposes. But if candidates could be guaranteed access to a reasonable amount of air time, they could certainly cut back on their fundraising efforts and pick up extra time for doing the work for which the public hired them. I doubt that there's an elected official who wouldn't prefer that. How would we divide the time contributed to a time bank? That would be relatively straightforward for Senate races or other statewide races such as gubernatorial elections. Generally, candidates would be entitled to time on stations licensed to their states. House races would be more problematic. But it would be possible to require broadcasters to devote some amount of time to candidates whose districts are substantially in that broadcast area. Whether candidates have access to time or to monies in a trust fund, it will be necessary to let the candidates use the time or cash to use whatever means of communication they deem best. They should have the freedom to select the means of access to their voters -- whether it's cable, Internet, satellite, telephony, radio, or broadcast TV. Some think that if a candidate got time from a time bank or bought it with monies from a public trust, then the candidate should be restricted in how the time could be used -- such as requiring that there be no 30-second attack ads. Candidates, like it or not, compete for attention against the most creative people in the world: those who invent broadcast TV shows and ads. We have to give candidates and their advisers the room to use their own ingenuity to attract an audience and to get their message across. But at a minimum, wouldn't it be a good idea for the FCC to give candidates a clear right to buy time in longer blocks than the much maligned 30-second ads. Shouldn't we write rules that give broadcasters a real incentive to grant candidates requests to buy, say, 5-minute blocks? Some claim that such proposals as time banks and trust funds infringe on free speech. In my view, time banks and trust funds are clearly constitutional. There would be no viewpoint discrimination and no attempt to suppress speech on any particular topic. To the contrary, the goal -- reforming our political system to better inform and motivate the electorate to participate in our democratic system, and to reduce the pressure on candidates to spend the majority of their time raising money -- is of the highest order and requires Constitutional support, not rejection. As Professor Cass Sunstein of the University of Chicago Law School has shown, the original and enduring purpose of the First Amendment is to ensure an educated citizenry able to participate in our great continuing experiment of democratic self- governance. In the 1981 CBS decision the Supreme Court upheld the Commission's authority to revoke the license of any broadcast station "for...failure to allow...access to...time" by a federal candidate. The Court held that "'[t]here is nothing in the First Amendment which prevents the Government from requiring a licensee to share his frequency with others'" because -- and the Court emphasized this portion of its decision -- "'[i]t is the right of the viewers and listeners, not the right of the broadcasters, which is paramount.'" For that reason, the Court explained, the free speech interests at issue in that case were on the government's side, not on the broadcasters' side. The Court's decision was squarely in line with the views of James Madison, who drafted the First Amendment. He said that "The right of electing the members of the government constitutes...the essence of a free and responsible government," and "[t]he value and efficacy of this right depends on the knowledge of the comparative merits and demerits of the candidates for the public trust." A time bank would differ from the proposal at issue in CBS in that some broadcasters would provide a substantial portion of time to candidates for free. But if broadcasters were not paid that would not implicate the takings clause of the Fifth Amendment. Under the Communications Act of 1934, broadcast licensees have no property claim to the airwaves or to a particular frequency. There are, of course, questions of equity implicated by the idea that time would be taken away from the one channel a broadcast licensee operates in a given town. But relying on incentives for broadcasters to contribute that time would certainly address any equitable claims. And again technology gives us new solutions. Digital broadcast has just been invented. Within one or two years, digitally broadcast programs will be offered on currently unused spectrum. Digital broadcasters will have thousands of hours of capacity to fill with entertainment, news, educational TV and -- if we take the right steps -- enhanced access to candidates, issues, and public debate. Suppose the assignees of the new spectrum used for digital broadcast were asked to deposit time into a time bank for campaign advertising? The service is new. No patterns or practices are set. This is the right time and digital broadcast could be the right place to stake out a claim for free and fair political debate. Whatever obligations Congress or the FCC imposes on analog or digital broadcasters regarding free time for political candidates, these duties should be clear, specific, and concrete. In addition, Congress should find ways to lift restrictions in existing law that prevent communications media from voluntarily contributing their time to candidates and that constrain the length of campaign ads. The arrival of digital broadcast television and a host of other new communications technologies gives us all a chance to redefine the problem of how candidates reach audiences in the information age. The new communications technologies give us a chance to put right a system that all agree desperately needs fixing. Too much is at stake for us to give up on finding solutions. I believe the communications media -- and in particular broadcasting -- can lead the way to a better system for citizens and public servants to reshape and revitalize democracy in the information age. -FCC-