[ Text Version | WordPerfect Version ]


Washington, D.C.

February 24, 1997

(As prepared for delivery)


NBC's uninterrupted broadcast of Schindler's List last night showed us again the power and glory of broadcast TV. Digital television needs to bring this powerful, glorious medium of television into the 21st century. DTV can mean high-definition, cinema-quality pictures; multiple standard-definition program streams; voice and data transfers; and all sorts of other services. This range of possibilities means that, if unrestricted by excessive regulation, broadcasters can put together different packages of services that will best attract viewers in their market.

The time has come for the Commission to make a number of important policy decisions related to DTV. We have one essential goal for the introduction of DTV, and every decision that we make should further that goal. We want consumers to embrace digital service quickly. The reasons are to assure free broadcast television in a digital world, to guarantee a medium that serves the public interest and to recover analog spectrum.

If broadcasters are to win consumers quickly to DTV, they need the freedom to offer the most attractive packages they can put together. The competition is fierce in the multi-channel video programming market. Cable, DBS, LMDS, and others are competing or will compete for eyeballs and ad dollars. If broadcasters are going to stay competitive, they need to make choices free from requirements that distort their decisions.

That's why I believe that the Commission has no business imposing a high-definition or simulcast requirement on broadcasters. Why would we want to hamper broadcasters' creativity with a bunch of cumbersome restrictions? Why would we want to tell them how to run their operation? What's more, high resolution and simulcast requirements result in over-all less programming reaching viewers than might otherwise arise. The FCC shouldn't squelch speech; it should promote speech. There are many sound reasons broadcasters may want to provide high-definition and simulcast programming. But I believe that it should be each individual broadcaster in each market -- not the Commission -- who decides whether, what, and how much to provide in high resolution and simulcast.

A couple of weeks ago Bob Wright gave a demonstration broadcast of high resolution DTV on the Hill that got those Members of Congress applauding. You could see the impression it made. When people can experience for themselves that great picture and great sound, a lot of them are going to decide they want a digital television set at home. Given that, isn't it ridiculous for some to argue that we need a government mandate for ordering a quantified amount or a specific time of day for high definition broadcasting? Are broadcasters going to show Star Wars in high resolution only if the FCC tells them they don't have a choice?

Aside from the obligation to provide public-interest programming and some free programming, we should give broadcasters maximum flexibility. Broadcasters should provide whatever ancillary and supplementary service they choose. These enhanced services will help to attract consumers to DTV. Additional services -- including subscription channels -- will also allow broadcasters to develop additional revenue streams -- which will also bolster the health of the digital business and further ensure that viewers will receive free, locally-based programming in the public interest.

The FCC can help broadcasters make their businesses successful by permitting them to forge new partnerships to maximize their use of digital technology. I hope to see a lot of business arrangements that will help DTV get off the ground -- arrangements that could help to raise capital, develop business plans, share expertise, or, as James Keelor of Cosmos Broadcasting proposed recently at NATPE, even share facilities to launch DTV, keep down start-up costs, and increase industry know-how. We should be very open to allowing different kinds of financing, joint ventures, and partnering up with DTV licensees.

The ability to send multiple program streams means that broadcasters (like cable and DBS) will be able to provide more multi-channel service. But the opportunity to provide more programming means that broadcasters will have to figure out how to get that programming. Where will it come from? What mix of services works best in a particular market? The Big Four broadcast networks each now have their own cable networks. Shouldn't ABC affiliates be able to show ESPN on DTV, rather than having ESPN pull viewers away to cable. Shouldn't ABC affiliates show ABC's new Soap Opera channel on DTV? What if MTV and the Comedy Channel or even C-SPAN could have been picked up by broadcasters in the markets where they'd been bumped off cable?

The ability of DTV to beat back the competitive threat of cable, DBS and others is not assured -- so our decisions should support alliances between different providers, such as broadcasters combined with wireless cable, with telcos that go into cable via overbuild, with satellite, or whatever.

Broadcasters' ability to attract customers and to remain competitive with those video programming providers who are already going digital requires that broadcasters make rapid progress in construction of their DTV facilities.

That means that our rules must put the burden on the broadcasters who can most afford it: The more households that are exposed to DTV, the better. We want build-out rules that maximize the number of viewers in the shortest amount of time.

Let me commend the efforts and commitment, both financial and technical, that many of you have made in the model digital broadcast station, WHD-TV, located here in Washington. And let's not forget pioneers like Jim Goodmon at WRAL in Raleigh, N.C. and Pat Scott at KOMO in Seattle who are even now beginning to experiment with DTV transmissions. It will be on the foundation laid by these few that the rest of you will build the nation's digital broadcast infrastructure.

It seems reasonable that those with limited resources or in small markets should have more time to get their digital facility up and running. But we need to get the first movers moving. The rapid introduction of DTV will expose viewers to the attractions of DTV, will spur the development of innovative services that will encourage consumers to make an investment in DTV, and will lead to the development and introduction of computer and consumer electronic hardware.

DTV's success depends on consumers. An aggressive build-out schedule will promote that success, by ensuring that large numbers of consumers get a chance to receive DTV and to make the move to digital technology.

Only if DTV achieves wide acceptance can we be assured of the preservation of broadcast television's unique service: free, widely accessible programming that serves the public interest and the local community. To receive this public good, DTV must be quickly established as a thriving, competitive, profitable business.

Everyone agrees that the introduction of DTV should help provide in a digital medium a free programming service. Free TV has come to play an essential role in American society, providing us with news, emergency information, election information, sports, and entertainment.

Because of the indispensable service it provides, I think that our DTV rules must ensure that the American people continue to receive, at a bare minimum, the same amount of free television programming that they get today.

Aside from the free service that broadcasters all now provide, broadcasters must carry their long tradition of public-interest service into the digital context. Indeed, their service to the public interest must expand to keep pace with the enormous increase in capacity permitted by digital technology. Existing broadcasters are getting the first shot at establishing a DTV business -- a privilege that is worth billions. Their capacity will immediately increase five-fold. Isn't it only appropriate that -- in return for the free use of the public spectrum and the right to be first in line -- broadcasters provide the public with something substantial, something that wouldn't otherwise be provided? The question is how, in an increasingly competitive world, to create fair rules that provide public-interest programming.

Everyone here knows of my desire to see that all video programming providers offer significant programming in the public interest. But such requirements should not threaten the commercial success of your business. The public interest standard must be workable -- that is, it must be enforceable; easy to understand and easy to comply with. After all, a vague standard just means more money for the lawyers.

And it must not be so onerous that it keeps broadcasters from making a reasonable profit. After all, if DTV does not succeed commercially, it can't serve the public interest. We need public-interest requirements that don't imperil the DTV business but that do add more to the programming mix that would be generated by the marketplace.

Fair public-interest rules mean that the rules aren't so burdensome that the service is not commercially viable. If DTV or any other service doesn't succeed, it can't provide anything in the public interest. So public-interest requirements must be compatible with a viable business plan.

And broadcasters aren't the only spectrum users that should have public interest obligations. DBS and DARS and LMDS spectrum belong to the public no less than broadcast spectrum. The Commission should guarantee that a portion of that spectrum is used for programming and services that the market alone won't adequately generate.

It should do so not only because the airwaves belong to the public, but in order to ensure a level playing field, especially among those providing services similar to traditional TV and radio. Broadcasters, DBS providers and cable operators all have some sort of quantifiable public interest obligations -- 3-hour children's educational TV guidelines; a 4-7% set aside for educational programming; a percentage of capacity for public, educational and governmental channels, for example. Surely their competitors should as well.

Not too long ago, there was only one way to disseminate television programming: using one of the scarce VHF or UHF channels for analog, over-the-air transmission. That method of transmission had 100% market share. It's now down in the 30% range measured by household, with cable taking up the lion's share of the rest. And new media like DBS, MMDS, LMDS and, yes, Digital TV are rapidly adding, or will very soon add, to the ways television programmers can reach their audience.

We don't know how much TV market share each of these new transmission media will capture. We don't even know whether local broadcasters will have guaranteed access to those media. I can't predict the outcome in the Supreme Court must-carry case, though a decision is likely soon.

The important point is this: If television content is sent to homes through many different transmission media, and if these transmission media together simply replace traditional analog delivery, don't we have to make sure that all transmission media have clear and comparable public interest obligations?

The 1940's FCC Commissioners Paul Porter and Frieda Hennock fought for public interest obligations and capacity for noncommercial television at moments in history when the power and importance of television were more potential than real. Now that we know that TV is the single most powerful social, cultural and political force in our country, how can we take the risk of failing to stake the public's claim?

In 1949, Hennock argued that: "Education now faces its last chance on TV. In order to realize the full educational potentialities of TV, educators must be provided with their own stations, their own homes in the spectrum. Seventy-five percent of the available channels is more than adequate for mere commercial needs." If this was the thinking during the early days of TV -- before anyone even knew it would be a success -- we can certainly propose something practical and meaningful now that we know TV's tremendous influence.

I've been saying this for quite some time. I've also heard the counter arguments.

Some say that DARS, LMDS and other new-media services will serve the public interest on their own by, for example, providing niche services, and that government action is therefore unnecessary.

That is the philosophy advanced by my predecessor, former law partner and friend, Mark Fowler, who said that the public interest is no more than what interests the public. I respect the intellectual honesty of Mark's views, but I strongly disagree with them.

The Communications Act requires the Commission to ensure that all spectrum users serve the "public interest, convenience and necessity." If market forces alone would ensure that outcome in all cases, there would be no need for that provision, the single most important sentence in the Communications Act.

And in its own expression of the meaning of the "public interest," Congress has repeatedly acted on the view that the public interest means more than what the market would generate. DBS is a leading example. Congress didn't simply assume that DBS providers would serve the public interest by providing desirable programming; it required the Commission to adopt public interest rules for DBS providers, including a 4-7% set-aside for noncommercial educational programming.

Some say that the Commission should adopt public interest rules only when Congress specifically directs it to do so.

That strikes me as an excuse for do-nothingism dressed up as argument. Throughout its history, and with the explicit endorsement of many judicial decisions, the Commission had turned the Communication Act's vague public interest language into specific public interest rules. The Fairness Doctrine, the Personal Attack Rule, non-entertainment processing guidelines, and many of our broadcast ownership rules were adopted without specific congressional authority. Often Congress has acted because it was displeased with the Commission's failure to act to promote the public interest -- the Children's Television Act being just one example.

Some say that the Commission shouldn't adopt public interest rules for licenses that are assigned by auction. DBS refutes this argument too. MCI paid almost $700 million for a DBS slot.

The D.C. Circuit regarded this not as a reason to be indifferent to public interest rules, but as proof that spectrum is indeed scarce and that the DBS public interest rules are permissible within the Red Lion doctrine.

Some say that the Commission should wait until a new service is up and running before considering public interest rules. This argument too was rejected by Congress when it adopted public interest rules for DBS before the service became the powerful commercial force it now is.

Congress recognized that the right time to stake a claim for public benefits from public spectrum is before the spectrum is fully opened for commercial development. Imagine if city leaders in Manhattan had unleashed the entire island to commercial development before reserving public space for public purposes. We wouldn't have Central Park today.

The need to address public interest issues earlier rather than later is more pressing, not less so, when spectrum is auctioned. Surely the Commission should put bidders on notice up front that government will insist that some of their capacity be devoted to public interest programming and services.

Today some are saying that it is too early to adopt public interest rules for new media. I worry that our successors will say that it is too late.

I don't disagree that it would be desirable to have further public discussion before public interest rules are adopted for new media. That is what the Vice President said in the context of digital television. But just as we should put digital broadcasters on notice that they will have public interest obligations that are clear and commensurate with the opportunities of the digital technology, and just as we should leave the public interest portion of the digital television proceeding open while we try to settle on new rules as quickly as possible, we should do the same for other new media.

Specifically, before we issue licenses for DARS, LMDS and other new media spectrum, we should:

- clearly put licensees on notice that they will be required to provide public interest programming and services;

- give licensees a concrete sense of the scope of the public interest obligations the Commission may ultimately adopt, such as public interest rules similar to those Congress required for DBS; and

- while moving forward and auctioning the spectrum, keep the proceeding open to allow public discourse and record building on the public interest issue, and then adopt public interest rules as soon as possible.

On DARS, public interest isn't the only issue on which I have a strong opinion. I would not limit the auction for two DARS licenses to the four applicants who filed during the application window several years ago. The auction should be open to anyone who thinks they can make a business out of DARS.

I would also adopt rules that give DARS licensees every ounce of flexibility consistent with the international allocation. DARS licensees will face many challenges. Why should the Commission make their jobs harder by forcing them to hire lawyers to file reams of paper whenever they'd like to provide a service that will help them generate the revenue they need to succeed?

I'm very pleased that Vice President Gore has called for an Advisory Group to study the issue of the public interest in the digital world. This group will be able to gather ideas to create a workable, specific standard that will result in best possible plan to create programming in the public interest.

For example, the Gore Commission should consider the proposal that broadcasters give "stump-time" for candidates -- this would be simple, clear, and an extraordinary addition to public debate. What a tremendous opportunity for broadcasters -- they can be the heroes who cut the Gordion knot of political fundraising. By providing stump time in which candidates can reach the voters, broadcasters could call a halt to the desperate money-chase that dominates candidates' time and that is the subject of so much public concern. I would like the National Association of Broadcasters to come up with a proposal to give the Gore Commission. It could be the centerpiece to a definition of the public interest for DTV licensees.

The Gore Commission may also want to consider whether one free program stream per broadcaster will result in the optimal number of free program streams. And they may want to consider whether the current requirement for kids' educational TV is sufficient. There are a lot of possibilities. I agree with Barry Diller that the best approach at this time may be a menu technique: list the various goals of a public interest standard, and let broadcasters select among them.

But apart from these two requirements -- free programming and some quantifiable amount of public-interest programming -- I think that broadcasters should be unhampered in the services they can provide.

Because of valuable services provided by broadcasters, it is critical that the digital broadcast business remains a strong presence in the video-programming marketplace. At the same time, robust competition in the video market will bring more choices and cheaper service to American consumers. Therefore, our decisions should promote the viability of DTV. This notion is related to the promotion of our second goal, as well.

There's another important objective, in addition to the two I've covered so far: efficient spectrum management. Our engineers have done a great job in designing a channel plan that meets all of the demands of the broadcast industry without wasting a single megahertz, while keeping new interference down to a statistically insignificant difference from other proposed plans which use much more spectrum. The introduction of digital technology gives us a great opportunity to give the broadcasters what they need to move into the 21st Century and to manage the spectrum efficiently. We can't miss this opportunity.

Digital television is finally here. There's no denying that it's a risky business. It is going to be a challenge, at times, for broadcasters, the Commission, and the public to make this important move to digital technology. But we all must remember what DTV offers -- great services for the public, a more efficient use of the spectrum, a new competitive tool for broadcasters, and a new outlet for the American imagination.

- FCC -