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William E. Kennard
Federal Communications Commission
NAB Radio Convention
Seattle, Washington
October 16, 1998

Standing here today, I have a distinct feeling of deja vu. You probably do too, because like many of you, I have been to many radio conventions.

My first job out of law school was with the NAB. It was a great job. And one of the best things about it was the opportunity it gave me to travel around the country attending broadcast conventions. I learned a lot about your industry and what it takes to run a radio station.

In fact, I have been a fan of radio for as long as I can remember. In college, I worked at the college radio station. Every college with a radio station has a group of students who spend more time at the radio station than in class or in the library. I was one of those students.

And the reason I have this job today is because of my early fascination with broadcasting and broadcast policy during my college years.

So I am glad to stand before you today as Chairman of the FCC when radio is as successful and profitable as ever.

The industry had over 13 billion dollars in revenue last year. Radio stocks have seen record growth. And radio is part of the daily lives of virtually every American. Ninety-five percent of Americans listen to radio every day. They spend an average of 20 hours per week listening to the radio.

But, of course, radio means much more than profits. Radio connects people to their communities -- perhaps more than any other medium. Radio is our nation's first electronic medium. And after all these years, radio remains unique, and most importantly, it remains local. It is the lifeblood of local information in our culture.

Last month, when hurricane Georges raged over the Florida Keys, WWUS-FM, a station that normally broadcasts oldies off a satellite for most of the broadcast day, became a local life-line. You see, the station's satellite dish blew away that morning. After receiving calls from the frightened residents, the station switched to a live local call-in format.

Bill Becker, the station's news director, soon realized that his broadcast was the only source of local information for the community. Even the county sheriff said that he turned to the station as his main source of information.

The New York Time wrote about this story. It wrote that "In an industry dominated by group ownership and satellite-fed formats with dismembered voices, the sound of neighbors holding hands on the air seems almost old fashioned."

Well, of course there is nothing old fashioned about that at all. To me, and to many of you, it still defines what the public interest is all about.

Since its beginnings, radio has been the quintessential local service. When Westinghouse got KDKA Pittsburgh on the air in 1920, that station's first pioneering broadcasts were all about local events -- local news, religious services, theater performances, sporting events.

For many stations, that hasn't changed. To this day, your stations, and sometimes only your stations, provide your communities with vital local news and information -- weather and traffic reports, agricultural forecasts, school closings.

But there is much that has changed in radio.

The Telecommunications Act of 1996 brought unprecedented consolidation to your business.

At the local level, since the passage of the 1996 Act, we have lost an average of about three owners in each of the top ten radio markets and about one owner in each smaller market.

Broadcasters are finding new ways to distribute their product on the Internet. Five percent of U.S. radio stations are now webcasting. Broadcast.com carries some 345 commercial radio stations and sports broadcasts for 350 college and pro teams.

As a matter of fact, I can even pick up my old college radio station on the Internet.

You are facing competition from other technologies. Many cable television systems are offering packages of digital audio programming. Satellite delivered radio is just around the corner. And, like all the electronic media, you face the challenge of converting from analog to digital.

In this rapidly changing and increasingly challenged radio world, I ask myself, what is the proper role for the FCC? What must we in government do to guard the public's interest in the airwaves?

It comes down to two things.

First, we must let the marketplace work. We must trust in the marketplace, and let the competitive forces unleashed by the market spur innovation and creativity that benefits the public.

And, second, as guardians of the spectrum, we must do everything we can to ensure that it is used efficiently, and that we maximize its potential to provide outlets for many voices and viewpoints.

So what are we doing to advance these goals?

Well, we're working hard at streamlining our rules to make it easier for you to interact with the FCC -- and to help you respond more quickly to a quickly changing marketplace. We need to make sure that our processes work. And that they work for you and not against you.

Before I came to the FCC, I spent a dozen years as a lawyer representing broadcasters before the agency. And I know firsthand the frustration that many of you feel when FCC filing requirements seem more burdensome than necessary. Or regulatory approvals take too long.

Last month we amended our main studio and public inspection file rules. The new rules give you much more flexibility to locate your main studio and your public files. They also lessen your burden in maintaining the public file.

But I want to do much more to streamline regulation.

Next week, the FCC will vote on proposals to fundamentally change our broadcast application and licensing procedures. I want to streamline all broadcast forms and applications -- 16 forms in all -- and introduce electronic filing.

I also want to streamline our technical rules. In June we started a proceeding to rework these rules to give FM broadcasters greater flexibility. We proposed rules to allow you to negotiate interference agreements, to give you greater flexibility when you want to modify or expand your facilities.

Now, I know that the NAB has concerns about these proposals on negotiated interference. And I will consider these concerns carefully. But I encourage each of you to look hard at these proposals because they are designed to give you more flexibility to adjust to market conditions so that you can compete more effectively in the marketplace.

We will also be vigilant about enforcing our rules against pirate broadcasters. When I became chairman last year, I made it very clear that I would not tolerate pirates -- that you could count on me to enforce the law. And we have been more aggressive in shutting down pirate stations that any FCC in history.

In the last 10 months we have shut down over 250 illegal stations -- thanks to the terrific leadership of Rich Lee, Chief of the FCC's Compliance and Information Bureau. In July alone, Rich and his team shut down 15 pirate stations in the Miami area. We will continue to send the message to pirate broadcasters that this FCC will enforce the law.

Now let me turn to the FCC's goals of promoting competition and opportunity in radio.

Perhaps nothing is changing the radio business more today than the pace of consolidation in this industry. Since Congress relaxed the ownership rules, we have seen dramatic and unprecedented consolidation. I believe that it's happening faster than anyone predicted. And it's changing the character of your business.

I am concerned about this. I am concerned when I talk to small, independent broadcasters who tell me that they are being squeezed out of their markets. I am concerned when I talk to advertisers who tell me that large multiple owners have locked up certain demographics in many markets. And I am concerned when I talk to small entrepreneurs, including minorities and women, who tell me of their fears that they will have to abandon their dreams of ever owning a broadcast station.

We have had a tradition in this country that cherishes many voices in the broadcast marketplace. It is a good tradition. As Vice President Gore said recently, "this isn't just a question of diversity, it's a question of democracy."

So I worry about the consequences if more and more radio stations are concentrated in fewer and fewer hands. The FCC is in the process of re-examining all of its broadcast ownership rules this year. And I intend to consider the impact of consolidation on diversity of ownership and diversity of voices in the marketplace. I need your input on these questions. And we need to hear from all of you.

I also need your input as we grapple with the challenge of continuing to promote equal employment opportunity in the broadcast industry. A federal appeals court in Washington, DC, recently struck down the FCC's EEO rules. For 30 years these policies opened the door of opportunity for a generation of minorities and women in the broadcast business.

I have talked to many broadcasters about the EEO rules and I have never talked to a broadcaster who did not believe that these rules served a worthy end. We sometimes disagree on the means. But everyone agrees that reaching out and finding talent in your communities -- of all races and genders -- makes your stations stronger and improves your service in the public interest.

And I am encouraged that many broadcasters have pledged to me that they will continue to abide by EEO principles. But we also know that there will be some among your ranks who won't do the right thing. So I encourage you to work with me and my colleagues at the FCC to design new rules that address the court's concerns but that ensure that broadcasting is an industry of opportunity for all.

And I also encourage you to work with the Broadcast Executive Directors Association which has pulled together a Model Program to promote diversity in the radio industry. This is an important effort. Work with them on this. Incorporate their ideas into your own recruitment efforts.

I also need your input on ways that we can manage the spectrum more efficiently and create more opportunities to use the public airwaves. I am talking about microradio. As I have travelled around the country, I talk to many, many people who want to use the airwaves to speak to their communities -- churches, community groups, universities, small businesses, minority groups.

There is a tremendous need for us to find ways use the broadcast spectrum more efficiently so that we can bring more voices to the airwaves.

We are seriously evaluating proposals for a new microradio service. I believe that we have an obligation to explore ways to open the doors of opportunity to use the airwaves, particularly as consolidation closes those doors for new entrants.

But let me be very clear. Here is what we will not do. We will not undermine the technical integrity of the FM band. Our job is to be the guardian of the spectrum, not to degrade it.

And we will not do anything to prevent the conversion to digital.

Just last week, Michael Jordan of CBS presented me with USA Digital Radio's petition to establish an in-band, on-channel digital broadcasting service. While we're considering this petition, we'll also continue to follow the testing and development of in-band digital systems by the National Radio Systems Committee set up by the NAB and CEMA. This is a great start, and I will do my part to make sure that local radio is not left on the sidelines of the digital revolution.

As we examine the microradio proposals, we will be mindful of interference concerns, and the need to convert to digital. But it we cannot deny opportunities to those who want to use the airwaves to speak to their communities simply because it might be inconvenient to those of you who already have these opportunities. So I need you to work with me to develop these proposals in a way that will not degrade the broadcast spectrum.

Being at this convention these last couple of days has been like a homecoming of sorts for me. I have reconnected with many people whom I met long ago when I started my career as a lawyer with NAB. And I have seen many people who I've known throughout my professional career. And I've been thinking a lot about my days in college radio -- my own road not taken.

When I had a radio show, I didn't play jazz or oldies. I did news and public affairs. You see, back then I was dreaming about a stint on "60 Minutes."

I loved going into the community and doing interviews -- piecing together stories. Stirring things up on the airwaves.

I went to Stanford University which is located near East Palo Alto, an African American community. We worked hard at the station to try to use the airwaves to integrate the life of the campus into the life of the black community. And I think we had some success at it.

And I learned back then -- first hand -- about the power of radio as a community voice. It was one of the most exhilarating times in my life.

And now, as I stand here, privileged to be chairman of the FCC, I want to do whatever I can to provide opportunities for others to use the airwaves to speak to their communities.

This is the foundation of your business, and it is what makes your business so strong and so important to our country.

Thank you.