Presentation by Paul Taylor, Executive Director, Free TV for Straight Talk Coalition, to the Advisory Committee on the Public Interest Obligations of Digital Television Broadcasters.

December 5, 1997, Washington DC.

How can digital broadcasting enhance democratic processes that's one of the central questions President Clinton and Vice President Gore have asked this panel to address. Your inquiry could hardly have come at a more pregnant moment. I'd like to take a moment to set the political context in which you are deliberating, then offer a few ideas for you to chew on.

In the last election, as everybody knows, our campaign finance system experienced something pretty close to a total system failure. Money and politics is now a relationship governed more by loophole than by law. The media, the Congress and the Justice Department have spent all of 1997 and will doubtless spend a good portion of 1998 poring over the multiple abuses of 1996. We've had a year of headlines, we've had months of hearings, just this week we've had the Attorney General and the FBI Director disagreeing in public over whether an independent counsel is needed. But with all the spectacle and drama, there's been one ingredient notably missing from the stew the public. The sound we've heard from the grass roots on this issue this year has not been an angry roar, but a resigned sigh. The message from "out there" seems to be: they all do it, they've all always done it, and if they pass new laws, they'll all figure out new ways to keep doing it. Congress hears this message, loud and clear it's precisely the message it was hoping to hear. Campaign finance is the last issue on earth Congress wants to tackle, for two diametrically opposite reasons. The first is that it's an issue on which it is genuinely difficult to forge a policy consensus. Politics is a tough business, and you have 535 politicians in Congress who cannot help but view campaign finance reform through the prism of their own fundraising needs and circumstances Do they come from a rich district or a poor one? A big state or a small one? Are they Republican or Democrat? Serving in the House or Senate? Supported by labor or business? Would they fare better with low limits or high limits or no limits? Are they wealthy? Do they have wealthy supporters? Wealthy opponents? The permutations add up to 535. But at the same time, this is also an issue on which all 535 lawmakers share a common perspective that's more potent than all these differences. Every single one of them is an incumbent. Under the current rules of game, incumbents members of Congress out-raise challengers by a ratio of about 5-2. Ask yourself, how enthusiastic would you be to change a status quo that gave you that sort of edge over the person who wants your job, and is prepared to say some nasty things about you in order to get it.

So the bottom line here is: don't expect comprehensive campaign finance reform from this Congress. It may enact a narrowly-drawn fig leaf of a bill in 1998; but absent a great deal more public pressure than it is now receiving, it will not go for fundamental change not this time around. And in particular, don't expect any provision that would require free air time for political candidates. Those of you who followed the fate of the McCain- Feingold bill in the Senate this fall know that its free air time provision was among the first one the sponsors tossed overboard in their unsuccessful effort to win the 60 votes needed to invoke cloture. That's pretty much been the fate of free air time through the decades. One hundred and sixty three free air time bills have been introduced in Congress since 1960 as testament to both to what an enduring good idea it is, and to how difficult it is to move this good idea through a Congress that perceives, quite correctly, that it's a better idea for challengers than for incumbents.

Well, free air time remains today what it has always been, a great idea for citizens and for democracy. I believe is the most promising, the most potentially transforming, way to fix what ails our electoral system. It would work well all by itself as a stand-alone reform; it would work even better if paired with a provision to ban soft money from politics those unlimited five, six and seven figure contributions to political parties that have been at the heart of nearly all the scandal stories of the past year. I believe both reforms are politically achievable, perhaps not this month or next, but in the not too distant future. But it's clear that Congress is going to need a shove from the outside. If this committee, and even more, if the nation's broadcast industry, were to step forward and start to supply such a shove, you will indeed be serving the public interest.

Why is free air time so attractive and so powerful? Let me suggest four reasons.

First, first air time offers a way to change the paradigm for reform from an approach based on limiting the supply of money to an approach based on relieving the demand for money. Or, to put it another way, from a reform based on ceilings to a reform based on floors. Some of this paradigm shift has already started to occur in Congress -- witness the sponsors' decision to drop spending limits from the McCain-Feingold bill. That move made many traditional reformers unhappy. But it's the start of a rethink that will one day lead to passage of a meaningful package of achievable reforms. The problem with spending limits is that the courts have told us that they are unconstitutional if mandatory, and experience has taught us that they are porous if voluntary. Floors, on the other hand, present no such constitutional impediment, nor do they offer such an inviting target for loopholes. If you want to build a floor in politics, free air time is your most efficient mechanism. The cost of political ads is the largest single expense in electoral politics, accounting for roughly 30 percent of the expenditures in Congressional campaigns, 40 percent in Senate campaigns and 50 percent in Presidential campaigns. The cost of political ads has gone up at more than five times the rate of inflation over the past generation, rising from $25 million in 1972 to $500 million in 1996. If you were to provide this much air time for free, you'd substantially relieve the demand for campaign contributions. No, you would not completely eliminate the money chase. My guess is that in our political culture - where money and politics will always mix to some degree you can never completely eliminate the money chase. But you can surely slow it down. A floor will.

Second, free air time would make political campaigns more competitive. Floors, by their nature, are more beneficial to under-funded challengers than to well-funded incumbents. Moreover, the research on campaign spending tells us that the figure that best determines whether or not a campaign is competitive is not how much the incumbent has raised, but how much the challenger has raised. And in particular, whether that challenger has raised enough to get a message out. Why is it so important to have competitive races? Electoral competition is at the very core of the ideal of democratic self-governance. It is quite literally what makes citizens sovereign. If the political enterprise is not competitive, the people are not powerful. In addition, robust competition is what enables political campaigns to be a meaningful forum for policy debate a place where the "outs" can test their ideas against the "ins," a time when citizens can come to new collective judgments or reaffirm old ones, and a platform on which popular mandates can be built, and from which government policies can be launched.

But in order for electoral competition to confer all these benefits, campaigns must be waged in a responsible and substantive manner. Unfortunately, modern campaign discourse has come to be dominated by the trivialized, mud-slinging politics of 30 second attack ads and 7 second sound bites. This sort of discourse does not nourish. To the contrary, its repels. It helps explain why our turnout levels are so dismal, and why our citizens have grown so cynical and disengaged that, in this season of political scandal, they have not summoned the energy to demand a campaign finance fix. This bring us to a third potential benefit of free air time. If we provide air time for free to candidates, we are in a position, either by law or stigma, to require the time be used in a format designed to induce candidates to engage in a more substantive discourse about issues. By my lights, that means encouraging candidates to the greatest extent possible to appear in their own free time spots. That would increase accountability; the record shows that increased accountability produces more accurate and more substantive political discussion.

The fourth reason free air time is a good idea is that it will help insure that candidates remain the most robust communicators in political campaigns. In the past election cycle, we saw the beginning of an important shift in the nature of campaigning large sums of campaign dollars no longer passed into the coffers of the candidates, or even the parties. Instead, well-established groups such as the AFL-CIO and the Chamber of Commerce, and less well-known ones such as the Citizens Flag Alliances and the Coalition for Our Children's Future and dozens of others spent tens of million of dollars in 1996 airing their own TV ads ads that in the eyes of the law were so-called issue advocacy ads, but that for all practical intents and purposes, were campaign ads. These groups are exploiting a loophole that allows them to run such ads without any meaningful disclosure requirements and to pay for them without the limits on contributions that would apply if they were to give the money instead to candidates and parties. This will be an extremely difficult loophole to close, for both constitutional and political reasons. But free air time is at least a partial solution: it insures that the voices of the candidates will not be drowned out in this new cacophony of electoral voices. The public should be free to hear from anyone in a political campaign, but it has a special need to hear from the candidates.

How does one craft a plan that achieves these worthy goals? Over the years, most free time proposals have been structured around one of two formulas either all broadcasters are required to provide X hours of air time per election cycle, or all candidates are guaranteed X hours of free media per election cycle. The trouble with these approaches is, one size doesn't fit all not in politics, and not in media markets. Heavy air time makes sense in some districts, not in others; it's needed in some races, not in others. Under these rigid allocation systems, how do you handle the New York media market, where more than three dozen congressional seats are contested every two years. There'd be nothing but political spots, morning, noon and night.

The solution to this dilemma is surprising simply. All broadcasters could be required as part of their public interest obligation to pay into a special fund for democratic discourse. This payment could be made in money or minutes, and it could be assessed on each broadcaster as a small percentage of their gross ad revenues. The fund could then distribute the air time to the political parties in the form of vouchers. Then, you let the parties the major ones, and the smaller ones that meet qualifying thresholds -- sort out all the messy questions about which candidate get how much air time in which media markets. This brings marketplace flexibility and efficiency to the allocation system. It will also enhance electoral competition, for the parties are the one political institution in our system with as much of an interest in electing challengers as incumbents. Moreover, if you provide these free communication resources to parties, you are in a stronger position to legislate away the soft money that the parties have grown addicted to. Free air time into politics, soft money out that's a formula for reform that is within constitutional bounds and political reach.

How much free time should there be? Well, one target might be the $500 million that candidates spent on television in 1995-966. That's big money in politics, but not a great deal to the television industry -- over a two year cycle, less than one percent of gross ad revenues.

Still, $500 million is not pocket change. Are there ways to ease the bite? One way might be to do away with the broadcast subsidy for political communication that has been on the books for 25 years -- lowest unit rate. Without going into all its many complexities, lowest unit rate doesn't work, for two reasons. One is operational. It is based on a rate card system, while air time has come to be sold in a combination of a rate card system and a sort of running auction. As a result, LUR is burdensome for broadcasters to keep track of, and for candidates to take advantage of. Second, LUR targets the subsidy in the wrong place. It gives the greatest benefit to the best funded candidate. If one goal of campaign reform is to make races more competitive, LUR works at cross-purposes.

I offer these all of these ideas in the spirit of promoting a discussion. Obviously, the broadcasters on this panel know your industry much better than I do. Any proposal that has any chance of doing good will have to make sense to you, for you are the ones will have to make it work. But let me close with one last question, on a subject about which we may all be equally in the dark. How to we provide for democratic discourse in the digital future when no one is quite sure yet how the contours of that future will take shape? As you ponder that question, I would urge you to keep in mind what has been so unique and powerful about broadcast television for the past 50 years: it provides a space for shared national experience. In an ideal world, our election campaigns ought to unfold as shared national experiences -- unification ceremonies where we affirm and celebrate our core democratic values. They ought to be places where we forge the most important working relationship in America the relationship between citizen and elected official. Sadly, modern campaigns have fallen far short of this ideal. Fewer than half eligible adults went to the polls last year; barely a third will go to the polls next year. As we think about the digital future, it seems safe to predict that we will not reverse this steep decline merely by opening up new opportunities for political discourse on some niche channel in a new, multi-plexed broadcast universe. That approach will make those who are already rich in political information even richer. It will build a high-class ghetto for political junkies. But the citizens we really need to capture are the political drop-outs, the information poor. The place we will find them in the digital future is likely to be the place we now find them in the analog present -- on the big channels, watching the most popular entertainment programs. Our challenge, it seems to me, is find a way to deliver to that semi-captive audience a better brand of political communication ideally in short, efficient, substantive and entertaining segments that they will want to absorb. In the first 50 years of television, we haven't managed to invent that form of political discourse. Perhaps in the digital era, either through the time voucher system I have outlined, or through some other innovation you might propose, we can do better. If you come up with a way to cut the cost of politics while increasing the quality of political discourse, you will have gone a long way toward bringing the missing citizens back into our democracy. I urge you Godspeed.