June 5, 1998
"Out of the Gate in '98"
It is always a pleasure to speak to the members of AWRT. Your organization is at the forefront of helping women professionally to achieve their full potential. And you have always done a superb job in briefing the Commission on issues of concern to your membership.
I'm delighted to be with you in Louisville -- home of the Kentucky Derby.
There's another race I'd like to talk about for a moment -- that's The Race for the Cure -- that will be run in markets across the country tomorrow. The event will raise money for breast cancer research. They're expecting 50,000 participants in Washington, D.C. alone. Our NBC station in D.C., WRC-TV, is one of its many sponsors. Over the past few weeks, WRC has been doing what it does best -- promoting the event, with spots featuring its reporters and anchors.
There is no better promotion vehicle than television. And it was heartwarming to see the women of television working tirelessly for this important cause.
THE RACE FOR COMPETITION
"Real Quiet," was the winner of this year's Derby and the Preakness, and may even become the winner of the Triple Crown. But there is nothing "real quiet" about what is happening in Washington, D.C. right now.
I'd like to talk about some of the important decisions being made at the FCC that impact the broadcasting, cable, and new media industries -- and how these decisions will affect you.
A. Finalizing our ownership rules.
What we decide this summer will substantially affect the degree of competition and diversity in the media market. I understand the natural desire of companies to expand, and I recognize that larger companies may have the resources to make technical improvements, provide more news and public affairs, and bestow other benefits on the public. But I also believe it is crucial that ownership of the media is widely dispersed among many different owners.
The Supreme Court has said that the First Amendment relies upon a marketplace of "diverse and antagonistic sources." In the best sense of the word, "antagonistic" sources come from different owners who have truly independent points of view.
For example, we know that NBC programming is available in three different flavors, NBC broadcast network, MSNBC, and CNBC -- all to the good. But true diversity comes from the kind of independent ownership behind three other kinds of choices -- CNN, Fox News, and MSNBC.
As we consider whether to loosen the limitations on common ownership of radio and television, I wonder at what point we would lose the robust and healthy dialog that separately-owned media brings. New combinations of radio and television or newspaper and radio may decide it's unfriendly to criticize their new "sister" stations. Is this in the public interest?
Should we allow television LMAs and duopolies? That's a big question that can be answered in two words: "It depends!"
Local Marketing Agreements, oddly enough, are counted as "owned" stations in radio, but are not counted in television. We are overdue to count television LMAs towards ownership, especially if we also consider modifying the duopoly rules.
Where stations have doubled up, they may have a substantial competitive advantage over others -- but if two small stations double up, they may be able to provide better programming and improve the overall level of competition in the market. Indeed, it may be that one of the stations would go dark, absent the LMA. As I decide whether to vote to further relax our rules limiting TV duopoly, I will keep in mind the balance between benefits to the public and loss of diversity.
We have experienced tremendous consolidation in the radio industry as well as the television industry. Some of these mergers have been positive, but some transactions may result in one company owning all the best facilities and an alarmingly high percentage of total radio revenue in the market. Is that in the public interest? Can the remaining stations survive?
The rules for radio ownership are based on a provision of the 1996 Telecommunications Act. It sets forth the maximum number of stations that one owner may control, depending on market size.
The FCC implements the Act, and our decisions have faithfully reflected the letter and spirit of the law. We are directed by Congress to insure that all license transfers are in the public interest. I take that responsibility seriously and believe that the FCC should look at the facts in each case where the merger arguably may affect competition and diversity in the local market adversely.
But the FCC also has an obligation to the parties to rule expeditiously on applications for transfer of licenses. I am sensitive to their need to know quickly whether the assignment will be granted. Any market assessment must be completed without delay.
B. Diversity in Employment
I am troubled by the number of high level women departing the executive ranks of large, visible media companies:
I am concerned by the lack of successors for these management stars. There are so few "women at the top," these announcements appear to deplete the ranks. Moreover, it is important to younger women and girls to hear the names and see the photos of women who have conquered corporate challenges in their chosen fields.
But what is happening, I think, is that these high level women who have left their corporate worlds are seeking a more attractive alternative -- one which they control. These women are thinking about what's beyond corporate life, and having obtained the tools -- experience, financial security, skills -- are ready to build their own enterprises, to achieve their own dreams and visions of the future. I wish them well.
Government efforts at affirmative action have repeatedly been struck down by the courts. You may be aware, through AWRT's excellent information network, that last month the FCC's equal employment opportunity rules were found to be unconstitutional by a federal court. I share AWRT's disappointment at that decision.
The Commission is seeking the court's reconsideration of the ruling and we believe that we will prevail in explaining that the Commission has not established hiring quotas. Instead, the FCC's program has been based on recruitment and outreach efforts, which we believe are consistent with the law.
I applaud those broadcasters who have voluntarily recommitted themselves to workplace diversity in light of this decision.
For the last several years, I have called upon the larger group owners to take voluntary steps to enhance opportunities for talented women and minorities within their organization. These multiple station owners can use their smaller stations to provide management training and advancement for up and coming leaders -- something like a farm team.
Success in smaller market stations leads to better positions in larger stations. Management experience is also critical to those who wish to become owners.
Unfortunately, the Commission does not have any hard data on the number of stations, cable systems, or other licensees owned by women. We cannot chart any progress without a benchline from which to start. I look to AWRT to help me make the Commission more proactive with respect to women -- as owners -- in the communications industries.
C. The Race for Multichannel Video Competition
Whether you are involved in the cable industry, the broadcast industry, or are simply a cable subscriber, you probably care about what is happening in Washington on cable regulation.
A key question is whether Congress will extend the FCC's authority to regulate rates beyond the statutory March, 1999 sunset date. Competition is far more effective than rate regulation to achieve tangible consumer benefits such as lower costs, more program choices, and better service. And the Commission is doing everything within its power to jumpstart local video competition.
Although we are seeing isolated pockets of local telephone companies competing with cable to provide multichannel video services, the full scale competition which Congress envisioned in 1996 has not developed. For the moment, Direct Broadcast Satellite appears to be the most competitive alternative to cable.
With some cable rate increases in the double digits, the Commission has begun to look into certain components of cable rates, especially the skyrocketing cost of sports programming. Unlike broadcasting, where advertisers generally bear the brunt of the costs and there are competitive choices for advertisers, in the cable world, the majority of revenue is derived from subscriber charges -- subscribers who do not have many choices.
Additionally, the programmers who are incurring higher costs, appear to be relying on increased license fees, not more advertising revenue, to recover those costs.
As I continue to examine the components of cable rate increases, a multitude of issues must be kept in mind. Consumers benefit from additional program choices, improved physical plant and new services like cable modems.
But some consumers do not wish to have more choices and more services, so we may be reaching a point where cable operators may wish to consider special offerings tailored to different types of consumers. The argument against "mini-tiers" and a la carte offerings, however, is that they will frustrate the introduction of new cable networks.
Other cable proceedings are underway to improve our program access rules -- the rules which allow competitors to contract for cable programming on nondiscriminatory terms and conditions.
We have also seen pro-competitive benefits from new legislation to allow DBS and MMDS subscribers and others to mount antennas on property where local zoning or other restrictions had previously prohibited them.
In short, the Commission is endeavoring to promote competition to cable wherever we can.
D. The Race for Digital Television
We are also racing to launch digital television.
Each station in the country has now been assigned its digital twin and the digital television service rules have been finalized. There are 24 stations in the top ten markets that have volunteered to construct new digital stations and be on the air by November, 1998.
Their progress reports show that almost all are on or ahead of schedule. New DTV sets are also expected to be on the market for the holiday season.
The Commission is taking steps to assist broadcasters and municipalities where there are DTV tower siting problems.
We will also initiate a rulemaking to determine how the must carry rules should work during the transition to digital. And we have a proceeding underway to set the fees for non-broadcast services that may be provided over some of the digital capacity of the 6 MHz channel.
Cable programmers are also making their digital plans. And, of course, all new media are digital: the Internet, digital video discs (DVDs), and CD-Roms.
In fact, some proposed in the 1980's that digital video should only be offered to Americans by satellite, cable, or other pay services. Such a scenario would have made it impossible for free over-the-air television to provide high definition video and audio along with the other new services made possible by digital technology.
Instead, free over-the-air broadcasting is in the forefront of the digital conversion. The opportunities are enormous for those with vision to launch enticing new services and generating new revenue streams.
I believe that new opportunities will be created for sales and marketing people, for production and technical people, and for people with creative, sound business ideas. For example, new camera techniques will have to be developed to work with the new, more rectangular shape of the screen. Producers and directors will need to adapt the planning and execution of their shows. New advertising inventory will be available on the second channel, either to be sold separately or perhaps to be packaged with the existing programs.
Women should be among the first to step forward and let their management know that they are willing and able to take on the digital challenges.
THE RACE TO THE TOP
A piece of advice: Do not be intimidated -- by people or technology.
You might be surprised to find out that women played a significant role in the creation of one of the most significant (if not the most significant) technological innovations of this century: The computer.
The very first 'computers' were actually 75 women who calculated firing and bombing trajectories for the US government during World War II. Six of these women eventually programmed the very first digital computer -- the ENIAC -- in 1946.
And just imagine: There were no user's guides, no operating systems, no computer language, and no Bill Gates. These women programmed the first digital computer with just hardware and human logic.
They also accomplished that feat in an era in which their government job rating was SP, or "subprofessional," and a part of their duties was to straighten up the clutter left by male engineers.
These women believed that computers would flourish only if they were easy to program and operate. However, this was not an easy task. As Betty Bartik, one of these programmers, once described, "I spent half the day trying to figure out what people needed in computers, and the rest of the day trying to convince the engineer it was his idea."
The Commission must be more pro-active in assisting women to become full participants in this "horse race" of new and established competitors. We can help by fostering new technologies like DTV, broadband to the home, and digital radio.
This race has a multitude of finish lines. Many extraordinarily successful companies today did not exist five years ago. The only thing that stands between you and the winners' circle is your desire -- to learn about the possibilities, to recognize your opportunities, and to take advantage of them.
Be informed. Be creative. Be bold. And be successful!