Text Version


June 5, 1997

(As Prepared for Delivery)

Thank you for inviting me to speak with you here today. Thank you also for extending to me the honor of being first FCC Chairman in memory to address the U.S. Catholic Conference.

Our discussion today and your participation in FCC proceedings fulfills my hope of seeing a multitude of religious and other non-traditional advocates share their views on matters before the Commission. The communications revolution is of critical importance to all Americans in their workplaces and in their homes. For religious bodies not to be involved in its effects and its choices would create a distance between religion and real life in America that none of us would welcome.

Last week, I sent a letter to President Clinton asking him to begin the process of selecting my successor as chair of the FCC. I told him that serving at the FCC has been a high honor, but I also told him it is time for me to spend more time with my family. My children are growing up fast, and I cannot afford to miss any more of their childhood. Of course it may take a little time to persuade them of that. When I advised my 8-year-old daughter Sara of my announcement and my hope of spending more time with her, Sara responded with a appropriately Washington-savvy "We'll see."

I also told the President that I am immensely proud of the contribution made by everyone at the FCC to public service during the three-and-one-half years I have been privileged to serve at the Commission. We have met or beaten each of dozens of deadlines for new pro-competition and pro-public interest rules required by the historic Telecommunications Act of 1996. We have helped strike the enormously successful World Trade Organization telecommunications agreement and raised billions of dollars for the Treasury through spectrum auctions. We have guaranteed that every family in America, people of low income, people with disabilities, people in urban and remote rural areas, as well as classrooms, libraries, and rural health care clinics will all have access to the information highway. And we have re-invigorated the interests of the American family in the use of the public's airwaves. Monday's New York Times talked about our legacy of a "focused agenda and energetic leadership."

As a parent and Chairman of the FCC, I'm convinced that families, children, and communities are at the heart of the communications revolution, which promises the American Dream of opportunity and prosperity for all. At the FCC we have pursued these lofty goals by attempting to bring competition to every sector of the communications market and to ensure public benefits from communications technologies.

Competitive markets produce innovation, consumer choice, lower prices, and better services. Deregulatory, pro-competitive policies have also resulted in billions of dollars in investment and the creation of millions of new jobs. While trusting markets, however, we must verify that they are truly serving the interests of families, of children, and of communities. Where they are not, government should intervene to promote public needs. We should use modern communications to intermediate between the media and children, and to reform our political process.

One of the greatest opportunities for families has been to renew and reform the social compact between broadcasters and the public. In exchange for use of the public's airwaves -- airwaves that belong to your family and mine -- the Communications Act requires broadcasters to serve the "public interest, convenience and necessity."

It is this compact that denotes the unique relationship between the broadcasting business and America's families. Television, after all, is a regular houseguest in most of our homes, reaching into our homes an average of 7 hours per day. It often arrives quite welcome. NBC's uninterrupted broadcast of Schindler's List earlier this year showed us again the power and glory of broadcast TV.

With its power to entertain and to inform, television can promote the values of diversity and tolerance that we all cherish. TV is also uniquely accessible to children, who watch an average of 22 hours per week. We also know the value and impact of television. If it had no impact, advertisers would not routinely spend 400 to 600 thousand dollars for a 30-second spot during a Thursday night sitcom such as Friends or Seinfeld. More than 2/3 of Americans get their news from television, compared with 37% for newspapers and 14% for radio. As Frank Rich put it recently in The New York Times, "a handful of entertainment conglomerates have more clout than any Washington blowhard." I hope he wasn't talking about me. In any event, he has a point.

The power of modern media is why, as Reverend Jesse Jackson and I discussed yesterday, we must take steps to promote diversity and opportunity in the ownership of the media and telecommunications. It's why the mergermania that seems to be sweeping the business community must not be welcome willy nilly by government or the people.

It's little surprise, given its impact on our culture and especially on our kids, that the media, especially TV, is a major part of the values discussion in our country today. The national discussion about the V-chip ratings system, for example, is primarily a discussion about whether broadcast TV will again become a family-friendly platform. This is also what Senators Lieberman, Brownback, and others are looking for when they strive to allow broadcasters to develop a Code of Conduct so that broadcasters can establish and adhere to standards that they set for themselves.

It is appropriate that TV finds itself at the center of many of today's debates about how to get the good to drive out the bad. Broadcasting, after all, is specially favored by the government. Broadcasters themselves persuaded the Supreme Court of this earlier this year when the Court ruled that the right of the cable industry to control their own content could be reasonably infringed by the must carry rights of broadcasters. Broadcasters also persuaded Congress they deserve the first shot at establishing a Digital Television business -- a privilege that is worth billions. DTV, which can mean high-definition, cinema-quality pictures; multiple standard-definition programs streams; voice and data transfers; and all sorts of other services will bring the powerful medium of television into the 21st century. Broadcasters persuaded Congress to award them new spectrum for DTV rather than award the spectrum through competitive bidding.

With special rights, however, come special obligations.

By special obligations I do not mean that government should seek to involve itself in the business of broadcasting. Rather, I have a two-point policy for broadcasting.

First, as a general rule, when it comes to the business of broadcasting government should promote competition and deregulate. We eliminated Fin-Syn and PTAR and reduced hugh backlogs in license transfers in order to deregulate the broadcast business.

Second, as a specific rule, where competition does not guarantee certain public benefits from the use of the public spectrum, then we should write clear, quantifiable, viewpoint-neutral rules to get those guarantees.

Broadcasting, after all, is a commercial enterprise engaged in an increasingly competitive multichannel video programming marketplace. If unrestricted by excessive regulation, broadcasters can develop their new DTV licenses to assemble whatever package of services that will best attract viewers in their market. Broadcasters will need this freedom to stay competitive in a fiercely competitive video programming market in which cable, DBS, wireless cable, and others are competing or will compete for viewers and for advertising dollars.

The launch of DTV also reminds us, however, how broadcasting is different from free-market competition. With DTV, broadcasters received a doubling of their spectrum and the exclusive opportunity to develop the DTV franchise. Aside from the free service that broadcasters all now provide, broadcasters must carry their long tradition of public-interest service into the digital era. Indeed, their service to the public must expand to keep pace with the enormous increase in capacity permitted by digital technology.

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 by marketplace competition? As TV, the single, most powerful social, cultural, and political force in our country is about to enter the Digital Age, how can we take the risk of failing to stake the public's claim?

The question is how, in an increasingly competitive world, to create fair rules to protect that claim.

We can begin by ensuring that public interest obligations are clear, quantifiable, and viewpoint neutral. Although broadcasters should provide significant programming in the public interest, such requirements should not threaten the commercial success of their business. The Commission should also guarantee a level playing field by ensuring that a portion of the DBS and DARS and LMDS spectrum is used for programming and services that the market alone won't adequately generate. This spectrum, after all, belongs to the public no less than broadcast spectrum.

Public interest rules must also be clear. Vague rules don't give broadcasters notice of what's required of them. They are also unenforceable because relying on vague rules to punish speakers is an offense to the First Amendment.

The public interest standard must be workable -- that is, it must be enforceable, easy to understand, and easy to comply with. Moreover, if public interest obligations are stated clearly, they can modified as public needs change, immunized from ad hoc political intervention, and measured so as to assure everyone that they are economically bearable. And broadcasters aren't the only spectrum users that should have public interest obligations.

Our children's television guidelines illustrate why public interest requirements must be clear and specific to be workable. In 1984 the FCC repealed the policy that stations should air children's educational and informational shows. Predictably, the three major networks went from 11 hours a week of such shows to 2 hours a week in 1990. The same year, the FCC repealed regulations on commercial time limits in children's shows. Predictable, toy-based programs for kids boomed from 13 in 1980 to more than 70 in 1987. In reaction to the FCC's philosophically principled abandonment of any effort to give meaning to the public interest standard, in 1990 Congress passed the Children's TV Act.

Charged with the duty to implement the Act, the FCC chose not to require specific time commitments for children's educational TV. As a result of the lack of specific public interest duties and the rigors of competition, the traditional networks aired no regularly-scheduled weekday children's programming. As long as the FCC failed to ask all broadcasters to deliver concrete, specific, public interest services, in the heat of competition no single broadcaster -- not even the most well-intentioned and altruistic among them -- can afford to do anything less commercial than the next broadcaster. If every broadcaster had been under concrete public interest obligations, then all stations could have added to the supply of quality and educational children's television.

The status quo changed last year. Notwithstanding heavy lobbying against any specific children's TV requirements, the FCC received more than 20,000 letters from parents, teachers, social scientists, and child advocacy groups all demanding better television for America's kids. President Clinton, Vice President Gore, a majority of the House of Representatives and a third of the Senate wrote to endorse a three hour per week requirement. Last summer, the FCC achieved something that many thought impossible: we voted unanimously for guidelines calling for a minimum of three hours a week of educational programming for children. Under the revised guidelines broadcasters must identify upcoming fall shows that are educational. The programs themselves must be identified as such by using an announcement or an icon at the beginning of the program. Families for the first time will know which programs broadcasters have designated as educational and informational and can decide for themselves whether these programs meet that description. Equally important, broadcast licensees for the first time will know precisely what children's TV programming efforts are expected of them as a condition of license renewal.

One question that is coming up is the question of "preemption." Broadcasters and networks want to know how much a kids' educational program can be preempted and still be considered a regularly scheduled weekly program so that it can qualify as core programming. This issue comes up in the context of live sports events, which can interfere with the Saturday morning shows.

What do you think is reasonable? How much can a show be preempted and still have the continuity that can allow it to build an audience? These kids' shows need the same support that other shows get -- prominent promos that tell viewers when they can tune in, reliability in scheduling so that the audience can know when to catch a program they like, without constant disruption, and of course, great ideas and great creativity. Some level of preemption is probably ok, and won't get in the way of making good, quality programming available to kids, but of course at some point preemption will interfere with the goals that the kidvid rules are intended to promote. How should we measure the level of preemption that is happening? By particular show, by percentage of the amount devoted to kids' education TV?

Just as the marketplace drove broadcasters away from airing educational shows for kids, market forces are today making it difficult for broadcasters to avoid carrying advertising for hard liquor.

Next week marks a sad anniversary. Hard liquor advertisements appeared on TV for the first time in decades, one year ago Tuesday.

For decades, the broadcasters adhered to a code of conduct, which included a provision against advertisements for distilled spirits. While the code was abandoned in 1983 over antitrust concerns, liquor ads did not appear on TV until June 1996, when a U.S. liquor company broke from the distilled spirits industry's own voluntary restriction on TV advertising. Ads for hard liquor aired first in Texas and soon appeared in other parts of the country as well.

Five months later, the Distilled Spirits Council of the United States amended its Code of Good Practice to abandon the past practice of forbearance and to include the advertisement of distilled spirits on television and radio in its industry guidelines. Monday's Wall Street Journal reported that liquor companies and their advertising agencies are toasting my departure by "laying the groundwork to expand the nation's current trickle of TV ads for spirits."

The courts have consistently held that the "public interest" standard includes limits on broadcasters' ability to air certain kinds of programming. And, in Anheuser-Busch, Inc. v. Schmoke, the Fourth Circuit said a city could ban billboards advertising booze where kids are expected to walk to school or play. The law clearly recognizes that liquor ads should not be treated like Pizza Hut or Nike ads.

As trustees of the public airwaves, how can it be in the public interest to air hard liquor adds at times of day and on shows that inevitably, knowingly, and certainly will reach audiences composed of children? So long as a few profit chasing distillers are willing to pour liquor ads across the airwaves, however, the decision by some stations to carry such ads puts pressure on those who don't want to by placing them at a competitive disadvantage. If 50 or 100 broadcasters are running the ads today, the marketplace is going the drive the situation so that 200 will be doing it 6 months from now. And at some point the wall will collapse and all broadcasters will be forced to run the ads. The industry position works to protect the renegades rather than protecting those who want to continue to serve as public trustees.

The President, dozens of Members of Congress, numerous States, this Committee, Mothers Against Drunk Driving, and hundreds of other public interest groups and individuals have asked the FCC to examine the issues raised by the introduction of distilled spirits advertising on TV. As Bishop Costello wrote to me Monday, currently there is no public forum in which all interested parties may submit facts and debate the legal and public policy issues raised by TV liquor ads. Don't all of the citizens who have petitioned the FCC to redress their grievances about liquor ads on TV have a right to serious, open, on-the-record consideration? Wouldn't the FCC be abdicating its duties under the "public interest" standard if it failed to give open, on-the-record consideration to all the pertinent facts and legal issue?

The Notice of Inquiry will launch an open and public debate about the effects of liquor ads on kids. The Inquiry will develop a written record so that the debate can be based in fact, not anecdote. The hard liquor industry and its supporters invoke the First Amendment to justify airing the ads, but they refuse to engage in a First Amendment debate at the Commission about whether those ads will harm kids. That is offensive to the spirit of the First Amendment. It is also an insult to the President, the numerous states, the dozens of members of Congress and the 240 public groups that have asked for this inquiry.

The hard liquor industry has said that the Commission lacks jurisdiction to adopt rules addressing liquor ads. The Commission should decide the jurisdiction issue based on a fully briefed record, not knee-jerk reactions. The debate about jurisdiction is a reason to issue the NOI, not an excuse for killing it.

What would happen if the networks started running ads for Uzis and ammunition? What if Smith and Wesson started a campaign on TV and radio? Would the FCC be powerless to inquire into the effects of that? Would we accept the argument that such ads were unlikely to have any effect on the viewers? Yet we've heard this jurisdictional objection to a Notice of Inquiry on liquor advertisements. I suggest that we tackle this issue too -- head on and with a full and public record, with comments from anyone who wants to weigh in on this issue. A Notice of Inquiry doesn't prejudge anything.

Indeed, we would be remiss not to act upon this new appearance on the screen. For one thing, the FCC decided almost 20 years ago that it had the jurisdiction, under the broadcast public interest requirement, to examine the issues raised by broadcast cigarette advertising. The jurisdictional question is the same here as it was in the cigarette context. That's what I think, but I also believe that everyone should have a chance to make their best arguments.

The fact is, we need the facts, and we don't have them. So we need a Notice of Inquiry. Now we know that the networks, for their owned stations, and the major groups have decided not to carry these ads. I applaud them. The facts may show that, across the country, individual broadcasters have looked into their hearts and minds and each decided that this isn't good for their viewership, and decided not to carry them. If so, that's great news. If that's true, it means that what used to be the hard-liquor industry's unwritten rule has become the broadcasters' unwritten rule -- that they won't carry the ads. And if that's the case, that's great. All that matters is that our kids aren't exposed to ads for products that are dangerous and unlawful for them to have.

We hope to launch the Notice two weeks from today. Nothing fancy -- just about 9 pages setting forth some background, asking for interested parties to give us the facts and their views on the proposals we've received, as well as anything else they'd like to comment on. I hope we can find common ground among Commissioners to find out the facts and see how widespread the broadcast commitment not to carry hard liquor ads may be. Thank you for help on this issue. I hope that you will all continue to support me in my effort to get the facts on this important topic.

Meanwhile, Congressman Joe Kennedy has introduced legislation, modeled after the V-chip legislation, that would allow broadcasters to come together to devise their own voluntary code to set standards for alcohol advertising. Broadcasters should also encourage Senators Lieberman and Brownback to endorse and expand their bill to restore a TV industry code of conduct so that it provides a clear legislative exemption to a voluntary industry code that protects kids from ads that are dangerous or unsafe to advertise to them, because of their potential impact. However we get there, restoring the ban on liquor advertising is pro-kids, pro-family, and pro-broadcaster. This isn't censorship -- it's an industry licensed by the American people taking responsibility for itself.

Similar market forces are at work in decreasing the amount of time broadcasters are devoting to Public Service Announcements. It is a regrettable trend because PSA's can have a tremendous impact. From "A mind is a terrible thing to waste" to "You can learn a lot from a dummy" to "Friends don't let friends drive drunk," they have entered into our popular language. Each of these ads has had an enormous impact on public behavior and safety. As your own experience has shown, pro-social messages can often be more easily placed with PSA's than with long-form programming. Because of the good that PSA's can do, it's important they remain a robust presence on the airwaves.

The statistics we've seen, however, indicate that the time broadcasters spend promoting their own shows is rising and the time broadcasters devote to PSA's is shrinking. Statistics provided by the American Association of Advertising Agencies and the Association of National Advertisers in their 1995 "Television Commercial Monitoring Report" indicate that PSA's occupy a small fraction of available prime-time hours. For every minute of PSA's, broadcasters run 146 minutes of commercials, and 58 minutes of self-promotional ads. In other words, for every minute of time used for a non-commercial purpose (PSA's), broadcasters use 204 minutes for commercial purposes (commercials and self-promotions). Meanwhile, network self-promotion time increased from 3:18 per hour in May 1993 to 4:21 per hour in November 1995. At the same time, the average time for network PSA's is a startlingly low 5 seconds per hour -- down from 12 seconds just three years ago.

I am focusing on network prime-time because that's where the eyeballs are. While local stations runs PSA's, which is terrific, if PSA's are to have the wide impact we want them to have, they need to be placed in network prime time. The public needs PSA's because the public needs the messages they can deliver so effectively. The FCC has never thought it necessary to impose a specific requirement to provide PSA's on broadcasters. But PSA's have been a part of the service that broadcasters point to show that they are, indeed, using the public's airwaves in the public's interest.

So based on all of this, what might clear public interest requirements look like in a digital world? The question is one the FCC will begin to address this Summer. Our Order setting forth new public interest rules did not adopt specific new public interest rules for broadcasters. Instead, we stated our intention to issue Notice to collect and consider all views on how broadcasters' public interest obligations should be reconceptualized in a digital age. This Notice will afford all Americans an opportunity to advise us on the appropriate nature and scope of specific public interest obligations for broadcasters. We have foreclosed nothing from consideration, and broadcasters are no notice that with new DTV licenses may come specific new responsibilities. I hope that you will take the opportunity afforded by the Notice to share with us your views and ideas for specific public interest requirements.

Vice President Gore will also be creating an Administration Advisory Group that will gather ideas to create a workable, specific standard that will result in the best possible plan to create programming in the public interest. There are a lot of possibilities.

One that both the Gore Commission and the FCC should consider is the proposal that broadcasters give "stump-time" for candidates -- this would be simple, clear, and an extraordinary addition to public debate. Since the beginning of modern broadcasting the FCC and the Supreme Court have regarded one of the basic tenets of national communications policy as, in the words of Justice Breyer in the Turner case, "promoting the widespread dissemination of information from a multiplicity of sources." As it turns out, however, a principal way that broadcasters help develop to disseminate information about candidates for elected office is by selling them huge amounts of advertising time.

Candidates for the U.S. Senate last year spent an average of 40% of their campaign budgets on media, most of which went to TV. The percentage appears to be higher in many races for the House of Representatives. That's why Senators McCain and Feingold have included a free-time proposal within their campaign finance reform legislation, and why 23 Members of Congress have written in support of a free time obligation. The cost of TV time-buys makes fundraising an enormous barrier for entry 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.

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. They may want to consider whether the current requirement for kids' educational TV is sufficient. If PSA's cannot be guaranteed in the traditional ways of the past, what new practices should be developed that would keep TV on the side of all the public service goals that PSA's have so successfully served? You may have other suggestions. One approach suggested by Barry Diller and others is a menu technique; list the various goals of a public interest standard, and let broadcasters select among them.

During the remainder of my time at the Commission I am committed to pursuing the twin goals I've set forth for you today -- promoting private competition in communications while insisting on public benefits from communications. Not only will we continue in this same direction until a new chair is chosen, but I am also confident that the President will choose a new chair who is committed to these same goals.

When it comes to articulating the public interest in the use of our airwaves, all of us, as the beneficiaries of these policies, need to have a voice and to make it heard. I assure you the FCC will hear from industry. You are an essential part of the process. So continue to comment and to write to us. And continue to talk with the Commission staff and the Commissioners. We need you.

Thank you.