TRANSCRIPT OF PROCEEDINGS
TAKEN ON JUNE 8, 1998
AT 9:38 A.M.
[Click to view the afternoon session]
BARBARA J. STROIA, RPR
2 TRANSCRIPT OF PROCEEDINGS, taken on the 8th day of June, 1998, commencing at 9:38 a.m., at the Marquette Hotel, 710 Marquette Avenue, Minneapolis, Minnesota, before Barbara J. Stroia, notary public. APPEARANCES MR. LESLIE MOONVES, Co-Chair, President and CEO, CBS Television. MR. NORMAN J. ORNSTEIN, Co-Chair, Resident Scholar, American Enterprise Institute. MR. CHARLES BENTON, Chairman and CEO, Benton Foundation, Public Medica, Inc. MS. PEGGY CHARREN, Visiting Scholar, Harvard University Graduate School of Education, Founder, Action for Children's Television. MR. HAROLD C. CRUMP, Vice President, Hubbard Broadcasting, Inc. 3 MR. FRANK H. CRUZ, Vice Chairman, Corporation for Public Broadcasting. MR. ROBERT W. DECHERD, CEO, Chairman of the Board and President, A.H. Belo Corporation. MR. BARRY DILLER, Chairman and CEO, HSN, Inc. MR. WILLIAM F. DUHAMEL, Ph.D., President, Duhamel Broadcasting Enterprises. MS. KAREN EDWARDS, Designated Federal Officer, NTIA. MR. ROBERT GLASER, Chairman and CEO, RealNetworks, Inc. MR. JAMES FLETCHER GOODMON, President and CEO, Capitol Broadcasting Company, Inc. MR. PAUL A. LA CAMERA, President and General Manager, WCVB-TV. 4 MR. RICHARD MASUR, President, Screen Actors Guild. MR. NEWTON N. MINOW, Professor, Communications Policy and Law, Northwestern University, Counsel, Sidley & Austin. MR. JOSE LUIS RUIZ, Executive Director, National Latino Communications Center. MS. SHELBY SCHUCK SCOTT, President, American Federation of Television and Radio Artisits. MS. GIGI B. SOHN, Executive Director, Media Access Project. MS. KAREN PELTZ STRAUSS, Legal Counsel for Telecommunications Policy, National Association of the Deaf. MR. CASS R. SUNSTEIN, Karl N. Llewellyn Distinguished Service Professor, University of Chicago law School. 5 MS. LOIS JEAN WHITE, President, National Parent Teacher Association. MR. JAMES YEE, Executive Director, Independent Television Service. * * * 6 CHAIRMAN MOONVES: It is June 8, 1998. We are in Minneapolis, Minnesota. First of all, I'd like to thank Mr. Crump for his fine hospitality. Great to be in your fine city, and you've done a spectacular job and, we're very happy to be here. In addition, Rob Glaser in RealNetwork, we'd like to thank them for sponsoring this broadcast on the NTIA website. Frank Blythe will not be here, and Barry Diller will be participating via telephone, as will Richard Masur and Shelby Scott from Geneva, Switzerland. Are we trying to get in touch with them now via the operator? MS. EDWARDS: Yes, we are. CHAIRMAN MOONVES: So because three of the members will be joining us by telephone, please identify yourselves so they will know who is talking. In a moment, Norm is going to talk about the process we would like to do, take today in terms of an outline that he has drawn up about the various issues. I'd like to thank all the members for participating, and there's a lot of very good thought put into the process. I'd 7 like to thank Norm for drawing up an outline which at least gives us the framework to begin our discussions today because I think there will be a lot of interesting things to come out of it. As you know, our next meeting officially was scheduled for September. There is a real possibility -- and it depends on what happens today and in the next few weeks -- there's a real possibility we may have to add a meeting in August, so we should leave open that possibility. Once again, that's something that we won't be able to determine for a few weeks to see how close to a consensus we are. As I said, my guess is we probably will need another meeting. And Norman, I will turn it over to you, your opening remarks. CHAIRMAN ORNSTEIN: Thanks very much, Les. I also want to thank Harold, and I urge all of you to look out the window and see the beautiful lakes that makes this the area of -- it's actually more than 11,000 lakes, but for public relations purposes, they've said 10,000 lakes. I speak as a native of this 8 state born in Grand Rapids, Minnesota, the birth place of Francis Gump. People here know some others, Judy Garland, of course. But I find whereever I go, people ask me why there is a typo on my resume when it should be Grand Rapids, Michigan. So it's good to be in a place where they know the reality here. As Les suggested, we're going to try to work through the major areas that we have identified and that you have identified as core of what we might recommend here and try to come as close as we can to reaching understanding on both the broad ones -- some areas we clearly already have -- and as many of the specifics as we possibly can. I think the process that we'll follow is at the conclusion of this meeting, we will canvas all of our members again and see where we are. The meeting, I suspect, will be just like our previous ones in that it will not be simply an opportunity for members to exchange views, but we will -- we all learn from and change, to some degree, our perspectives, and so we may have somewhat different ideas, especially on some of these specifics. 9 And from that, over the course of the few weeks that will follow, Les and I will canvass you all again, talk amongst ourselves, begin a drafting process, we hope, and it's quite possible, although nowhere near certain from that, that we'll actually be in a position where we won't have to have another meeting. But at this point, it is also something we needed to reserve. Yes, Bill? MR. DUHAMEL: How are we going to do the drafting process? I don't understand that. CHAIRMAN ORNSTEIN: We are in the process of -- our staff has been in the process for a while of taking bids from professional writers who have both been experienced in drafting reports of this sort for different advisory committees and who are knowledgeable in this area, and they are going to pick some individual or two. It's possible it will be an individual to do a lot of the first drafting, and then somebody else will work the production through because we're on a fairly tight time frame. That's all for drafting purposes, and 10 obviously, we circulate whatever comes out of that among the group we hope several times along the way. MR. DUHAMEL: Of course I know dealing with my lawyers they say the power of the first draft is important. That's why we always have our lawyer do the first draft. Who does the draft is important in this. CHAIRMAN ORNSTEIN: There's no question about it. This is, from what I can gather, the practice that is normally followed with advisory committees. MR. DUHAMEL: Which writers are we looking at? CHAIRMAN MOONVES: Karen has brought a number of writers to our attention. And once again, Bill, I think the important thing is -- and I don't disagree with you in terms of the first draft -- the important thing is we will all have ample time to comment in great detail to every line in that draft. CHAIRMAN ORNSTEIN: We have left it up to our staff to go through a professional process of picking the writers here. We're not doing it. So if you're suspicious that either 11 Leslie or I are going to try to manipulate this process so that we can have our lawyers do it, rest assured that this is being handled at a different level. Anyhow -- CHAIRMAN MOONVES: By nonmanipulative persons. CHAIRMAN ORNSTEIN: Having gone through the calendars that we have generally pretty much settled on, it appears -- of course it's difficult to find any date in the summer when we can get the vast bulk of our members together -- it appears that August the 5th, Wednesday, August the 5th, seems to be the date that works for the most members. It's a Wednesday. I'm sorry that it's a Wednesday. We tried to pick something that had the least absences, and I'm sorry that it's a Wednesday. It's just one of those things that happens. By the way, Barry Diller is now joining us. Here's not in Geneva, he's in Los Angeles, I think, but welcome, Barry. We were saying that we were going to try and go through the areas today that we think will possibly comprise the core of any report recommendations that we'll make, try and come 12 as close as we can today to a consensus on the larger issues and some of the specifics. If we can't, in the weeks that follow, begin to pull things together, if there are a few areas even where there are serious matters of contention among the members, then we're going to reserve the date of Wednesday, August 5th for another meeting. So let's -- if you can, just simply put that aside and hold it on your calendars. MR. RUIZ: For those of us who finance our own -- (inaudible) -- it's a $1,700 ticket. CHAIRMAN MOONVES: If it doesn't go through a Saturday? MR. RUIZ: Yeah. MR. DUHAMEL: $1,500 from Kansas City. CHAIRMAN ORNSTEIN: Well, we'll try to figure out something or work with you as best we can. We've set out in all of our meeting to try and pick dates that would facilitate weekend travel. This one we may not even have the meeting, but this just seemed to be the date that worked the best. 13 MR. DUHAMEL: What about the following Monday? CHAIRMAN ORNSTEIN: I'll give you a couple of tricks. MR. DUHAMEL: Monday the 10th, which would allow a Saturday night stay Saturday night stay. There's an alternate date listed there of Monday the 10th when Paul La Camera -- MS. EDWARDS: I think we were trying to keep it as close to the beginning of August as possible, I think the thinking there that you would need a final meeting. So the thought would be end of July, which is absolutely impossible. MR. DUHAMEL: The middle of the week is an expensive trip, while a Friday or a Monday, you know, allows a Saturday night stay, and it literally makes a difference of $1,200, you know, between $1,500 and $300. CHAIRMAN ORNSTEIN: Yeah, it is a big difference. We wanted to make this late in July if we could. CHAIRMAN MOONVES: I think the five days between the 5th and the 10th. 14 CHAIRMAN ORNSTEIN: All right. CHAIRMAN MOONVES: Change to the 10th. CHAIRMAN ORNSTEIN: That one doesn't work for you, Paul? Can you phone in? MR. LA CAMERA: I'll be in Sicily. It might be difficult. CHAIRMAN ORNSTEIN: Well, we've got two phoning in from Geneva. I don't know. We've set precedent. CHAIRMAN MOONVES: We may need some help from Sicily at that point. CHAIRMAN ORNSTEIN: Let's see if we can get that outline. MS. EDWARDS: Yes, we'll do that today, Xerox that. CHAIRMAN ORNSTEIN: Well, let's -- I think we ought to start with the Code of Conduct. CHAIRMAN MOONVES: Did you pass out the outline? CHAIRMAN ORNSTEIN: Yeah, it's being Xeroxed now. MS. CHARREN: Can I ask one question? I take it that the date of the 15 September meeting-- CHAIRMAN ORNSTEIN: We're not going to set that yet until we see where we are. We'll work that one through. We have had a couple of task forces working and doing a tremendous amount in the last couple of weeks so that we could try and take the areas where we clearly seem to have an overall agreement, a voluntary Code of Conduct and some variation of the education proposal that both Gigi and Robert came up with and work through some of the details to try and come up with as much as we can before this meeting. So maybe we should start and spend as much time as we need to, certainly this morning, on those two, and perhaps we should start with the Code of Conduct. You have all seen, I hope, and read the draft that Cass Sunstein, who chaired this committee and put a tremendous amount of work into coming up with hopefully some understanding for us of the antitrust issues here, and reading, in particular, that letter from Sheila Anthony, the head of the antitrust division, on why we had controversies over 16 antitrust questions in the Code of Conduct. It at least made it clear to me that we shouldn't have any difficulties with what we're doing here. That was a very narrow question of trying to preclude -- basically trying to raise the price of advertising, which I don't think we need to worry about, but we can easily come up with a rationale there, and with a draft of specifics of the code, including how it might be monitored and enforced down the road. And Cass, maybe you could start with a few minutes on what you did and where you are. And we also have now a fairly interesting proposal that perhaps Jim Whitman can discuss on the table, specifically for minimum level of obligations, but let's hear from Cass first. MR. SUNSTEIN: Yeah, I wanted to make sure that the members of the Broadcasting Task Force got copies first. So all of the members of that task force have had faxed to them what I did. The rest of you may or may not have it. I'm not sure. MS. SOHN: We haven't gotten it. MR. SUNSTEIN: Okay. Is it 17 being copied now, Karen, for everybody? MS. EDWARDS: Did you want everyone to have a copy? MR. SUNSTEIN: Yeah, let's make a copy for everybody. I wanted to make sure that the task force people had a crack at it first, but let me just describe it. It's very simple. The first idea is that this idea of codes, actually, has a very long history. What surprised me was that the 58 Code was a successor to a long series of practices of self-regulation in the broadcasting industry that were followed until the antitrust challenge, so there's a discussion of the history here. So it wouldn't surprise you the concerns that have come up since 1923 or so are about the same with changing technologies as the concerns that we have. The antitrust issue is more easily remedied and less of a concern than I and I think some others had feared. The lower court's opinion, district court opinion, involved a narrow segment of the old code; that is, that segment that seemed to control 18 advertising time in the interest of driving up advertising revenue. So it really wasn't an antitrust challenge. The Justice Department didn't bring an antitrust challenge to those parts of the old code that tried to protect programming content. It was about restrictions on advertising time. It seemed like a traditional form of collusion. That's what the court held. There are two lower court opinions, also, upholding content controls as against antitrust challenge, and there's a Justice Department, an official position by the Justice Department in 1993, suggesting that efforts to regulate violence on television through something like a code wouldn't create an antitrust problem. So the basic idea is that the kind of restrictions that we're talking about; that is, voluntary restrictions, would probably have little adverse effect on competition, they'd allow a large room for competition among the signatories to the code, and they would probably be upheld under the Rule of Reason, which the antitrust law applies to regulations of this kind. 19 There's a lot of technical detail here, but I think it would really be boring. So just the bottom line is the antitrust concern isn't trivial, but it's not a lot more than trivial. There's an important First Amendment notation that should be added here, which is that if there's a sense that the government is mandating this code or imposing it on threat of coercion, then the First Amendment kicks in. The code, by itself, so long as it's genuinely voluntary, raises no First Amendment problem at all. But if there's a sense that we're threatening or mandating a code, then there is a problem, so this has to be handled very delicately as a suggestion, which if adopted, would be adopted only voluntarily and without any coercion in the background. With respect to the content of the code, basically what I've done is to take the old NAD code to delete the provisions that seem unrelated to our concerns, to take away those provisions that raise antitrust problems and basically to do maybe a tiny bit of tinkering and updating with those old provisions of the code that seem connected with what our mission 20 is about. I guess the way to think about this is that there's a general principles and rationale section which is a very slight amendment of the old NAD code. Then there are substantive provisions for which maybe the most important to us involve responsibility to our kids and covering elections. Those that have been kept tried to steer middle course between the vacuous and the unduly specific. And then there's a provision on enforcement, which is very much like the old NAB enforcement provision, but it's put in a little more in the way of carrots; that is, rewards for good programming and a tiny bit more in the way of at least symbolic sticks in the form of notification to the FCC of egregious or continuing violations, notifications which are, by themselves, entirely without legal force and effect. That's very important, maybe a First Amendment problem otherwise. I'm not sure what way to organize the discussion, but we have provisions here which have been based on our previous discussions and 21 some informal discussions between me and some of you. But basically, these are, you know, an introduction to discussion, and I bet we can do a lot better. They're just my, with consultation, minor revisions to the old NAB codes with a few editions. CHAIRMAN ORNSTEIN: Okay. I think there are, clearly, several areas we need to consider, Cass. We need to consider the substance of the code itself, what we would recommend specifically, go into it in each of these areas. We need to consider what follows from the code, including reporting requirements of public interest activities and how we want to frame those, and we've had some discussion of that, as well as monitoring the performance and highlighting the adherence here. And I think with that, especially given your admonition about the First Amendment considerations, we need to have some discussion of how we can keep this a voluntary process while making sure that it achieves -- or if not making sure, enhancing greatly the chances that it will achieve what we want it to achieve, 22 which is stations adhering to the code. MR. SUNSTEIN: Right. It should be voluntary. Our relationship to the broadcasting industry should be one of recommendation and nothing else. CHAIRMAN ORNSTEIN: Yes. MR. SUNSTEIN: It is fine if the broadcasting industry makes the code mandatory on its members. So self-enforcement that has strict punishment, so long as it's not government mandates, that's fine. CHAIRMAN ORNSTEIN: What if we, as an independent body, but which has its genesis in the federal government, recommended, not only that broadcasters create a code, but that it be taken into account in the license removal process. MR. CRUMP: This is what occurred, you may recall, in the old code. This is exactly how it was handled. It was strictly a voluntary basis on the part of the broadcaster, but there was a little section in the old license renewal form where you had to indicate whether or not you were a code member. And if you were not, it simply opened 23 the door for perhaps further investigation, and usually did, on the part of the FCC at license renewal time. So you had an implied situation there that I think this is good. CHAIRMAN ORNSTEIN: I'll give you my own. This is a personal preference. What I would like to see happen down the road is that if you end up with stations that fall way below any of the minimum standards that we set that, in effect, you turn around the license renewal process. The burden goes to the broadcaster to show why he has not come anywhere close to this, and in a way, strengthening what became the practice of the FCC under Chairman Wiley when stations were not performing their public interest obligations, the license renewal got racheted up to the level of the commissioners themselves. MR. CRUMP: Well, I would remind you again that under the old code, the way it was enforced, the code itself had it's own enforcement wing, and they pushed this and they did mean it. They did put clamps on the guy. It was not a government regulatory portion at all. 24 CHAIRMAN ORNSTEIN: Right. Well, we don't want to make it that. Clearly, the other area we need to discuss is what kind of enforcement wing would emerge in the industry itself. MS. CHARREN: Peggy Charren. There's some aspects of the codes that are very easily enforced, especially if they tend to be taught the numerical way of thinking about content, some percent of, or you must do this when it's very specific, just the way the advertising limits in the Children's Television Act are carefully enforced by the FCC and stations are getting fined for going over those limits. That's an easy thing to count. When it comes to defining for the FCC to talk about the educational programmings, they're going to find that very tough if they try to do it, and that's always a part of the problem of that law because that's, you know, that's one person's opinion versus somebody else's. There are aspects of the old code, like the description of how to serve children, that were never paid any attention to. They 25 actually sounded like I wrote them, and if they were happening during the 30 years that I was in business, I never would have started to act. It was a very nice description of what the public interest obligation to children was. I'm looking at Paul La Camera who understood them and started the life of that station when it was taken over by -- what was it called? MR. LA CAMERA: Boston Broadcasting. MS. CHARREN: Boston Broadcasting with a daily children's program. So there are some broadcasters who do pay attention to even the soft and fuzzy language. But when they don't, I suggest that it's going to be impossible even for the industry to say they're not doing it, and that we shouldn't think that that part of the code, which is different from some discussion of free time maybe, which is easy to see if they're doing that or not doing that, that came into the code. That will never work, and just as a commission, we should understand that it will 26 never work to be enforced. I don't mean it's illegal, but we'll never be able to enforce it, so that we shouldn't have that as the way we think that that programming is going to happen. CHAIRMAN ORNSTEIN: We also have to consider what our alternatives realistically are, and I think, frankly, there are always going to be areas of subjectivity where form location alone won't work. What one has to hope in that process is if you can have a disclosure of what stations are doing and you have a process where outside groups and others bring public attention to what they feel are the failings here. MS. CHARREN: And that's what happened with children, but I'm just saying 30 years later it still isn't fixed. CHAIRMAN ORNSTEIN: Sure, but we don't have a better way to do it. MS. CHARREN: We shouldn't get too optimistic about what it's going to mean for public interest in the question. MR. BENTON: Charles Benton. Just to question your having raised the issue 27 from your 30 years' experience what should be, what should we do because, clearly, to have, as Cass said, the big question is the vacuous issue specifically -- I thought that was a great point. If the old description of children's programming falls into the category of vacuous -- MS. CHARREN: I don't mean the description is vacuous. I mean the enforcement has to be vacuous. That's different. Even the description wasn't bad in the original document. MR. BENTON: What should be done about that? MS. CHARREN: What should be done? My solution had nothing to do with the code, and therefore, I would rather discuss those at other parts as we go into the report. CHAIRMAN ORNSTEIN: It is important to emphasize that this is not the only recommendation we're going to make here, obviously. It interacts with the others. Some of what you're talking about may be dealt with with minimum standards, too. And Goodmon has a question. 28 MR. GOODMON: Just for information, how many stations are in the NAB? How many are in the NAB? That's for information purposes. I mean, there could be -- not everybody is going to subscribe to the code. We're not suggesting everybody has to subscribe to the code. Minimum standards, from my point of view, is outside of the code, so that there's a minimum standard for everybody. And then the next level is in the voluntary NAB code, and rather than having minimum standards in the code as a voluntary basis. Maybe I'm just missing the -- CHAIRMAN ORNSTEIN: No, if -- MR. GOODMON: But how many stations are in the NAB, is my question? I don't know that. Jack is -- MR. JACK GOODMAN: About 1,100 television stations. MR. GOODMON: Out of how many overall. MR. JACK GOODMAN: 1,500 full power stations. CHAIRMAN ORNSTEIN: So 1,100 out 29 of 1,500. So what you're talking about, Jim, is a set of minimum standards that would apply to all 1,500, every broadcaster, every full-power broadcaster. MR. MINOW: Newt Minow. Jim's point is a very good one. The best broadcasters belong to the NAB. The worst broadcasters do not belong to the NAB, and you're very often preaching to the choir. Now, I know Cass has said that it would not be proper to require membership in the NAB. However, I would point out under the Securities Act, every broker/dealer must belong to the National Association of Broker/Dealers which is able to discipline broker/dealers for violating its code. I don't know why that isn't relevant -- or a relevant precedent here. MR. SUNSTEIN: I didn't mean to take a position on that. MR. MINOW: I recognize the problem. I favor mandatory membership in the NAB. MS. SOHN: Is that a possible thing to do? I mean, can you make membership mandatory? 30 MR. MINOW: Congress would have to pass a law. MR. SUNSTEIN: Versus who would the "you" be. If the "you" would have to be Congress, it would appear, and then the question would be, would there be a First Amendment problem if Congress required all stations to be in the NAB with the knowledge and hope that participation required adherence to a code which had substantive control. MR. MINOW: My argument, Gigi, is I don't think broadcasters are less important than broker/dealers, and I think if Congress looked at it, they'd see is. MR. DUHAMEL: It may be a First Amendment. Broker/dealers don't have a First Amendment. MR. MINOW: If the NAB created its own standards. MS. CHARREN: Peggy Charren. I think I understand what you're saying, and I used to take that position about advertising to children; that it should be like a disclosure when you put a stock up for sale instead of what we do. 31 But I think that in the court of public opinion, it's better to have the broadcasters not belong and sort of take the people who do that kind of thing can take them apart for being part of the -- you know, there's the 400, the Society 400. We can have the Broadcaster 400 who put it to the industry. It's sort of a nice way of separating the wheat from the chap maybe. And given that I don't think the code is going to be a very significant way to get public interest anyway, I don't really mind that the broadcasters don't belong. How does a station that just does home shopping manage to get to be part of some wonderful series of things that we should do in the public interest? You're changing the whole way broadcasting functions today by doing that. CHAIRMAN ORNSTEIN: Of course, one of the things, we're going to, no doubt later on, have an animated discussion on the pay or play issues. I mean, partly my support for provision of that sort is because it seems to me that stations that do shopping or religious programming, that we'd be much better 32 off, instead of requiring them to put on the kind of programming for which they are ill-suited, to have them pay in lieu of those things and put the money into better broadcasting, although we have a wide range of views here. Let me just focus our discussion. We can have a very interesting discussion about mandatory membership, and I don't know what the NAB's position on this would be either, but we don't need to get into that at the moment. All those revenues against a government mandate, an interesting balance to strike, but let's not discuss that now. And since Jim has put a proposal on the table for us, which most of us haven't read yet about minimum standards, but this is outside of the code. Well, at one level we might want to consider that first. I think it is appropriate to consider it later and give us a chance to read it, perhaps, and discuss it after lunch. Obviously, if we agreed on the set of minimum standards that either fit these specifics or came close to it, then it does change the dynamic here in terms of the code itself as 33 well, and so that's something that we need to come back to. CHAIRMAN MOONVES: This is getting away from the volunteerism, this minimum code, is that what you're saying? CHAIRMAN ORNSTEIN: Well, what Jim Goodmon, I think, has thrown on the table is a set of minimum standards that would not be incorporated into the code, but rather be a separate entity so that it brings in all broadcasters, including those who are not members of the NAB and who, therefore, don't adhere to the code. MR. BENTON: One factual clarification. Charles Benton here. There are 1,541 broadcasters, as I understand it, of which about 350 are public broadcasters. That leaves approximately 1,200 commercial broadcasters. I'm wondering, of the 1,100, are these mostly commercial broadcasters? Is the preponderance of absence among the public broadcasters? What are the facts here, Jack? MR. JACK GOODMAN: I don't have that number at hand, but the large number, there are a large number of public 34 noncommercial stations in membership, but the percentage of membership among noncommercial stations is lower than it is among commercial stations. I don't have the numbers at hand. MS. SOHN: I'd like to get the numbers. MR. BENTON: Yeah, let's get the numbers. We need the facts here. CHAIRMAN ORNSTEIN: Let's then, for now, separate out the issue of minimum standards for what I suspect will be a vigorous discussion later on, although we should note for the record that this interesting proposal has come from the president of Capitol Broadcasting, and talk about the code itself. And maybe, Cass, we could just go through not every specific, but the sort of bullet points in these areas that we've raised and then have some discussion. Let's go through each of them seriatim and then maybe talk about a self-enforcement mechanism after that. MS. SOHN: We still don't have Cass' thing. CHAIRMAN ORNSTEIN: It's a little slow to get them produced on the 35 copier. MS. SOHN: Can I just ask a question really quick while this is getting copied. On the antitrust thing -- and I don't know why I didn't read this, I thought I've read every piece of paper I've been sent in the last month, but I guess not. Tell me a little bit more about the antitrust concerns. You said they're not huge, but there are still -- you still have some antitrust concerns. Can you tell me what they are? MR. SUNSTEIN: Well, you could imagine a lawsuit brought by a disappointed producer who wanted to get programming which would violate the code. They'd have to show an antitrust injury. It's not at all clear that they could show that. They'd have to show their inability to get on television is a product of the code. Extremely speculative. Possible they could show an antitrust injury, and what they'd claim then is that this caramelizes the industry in such a way as to prevent certain programming from getting on the air. 36 And then the question would be is this Cartel, subject to -- this is going to be really boring, so I apologize. Is it subject to a per se rule of invalidity which the antitrust law applies to price fixing. That would be a shock. That would be like a meteor hitting the earth tomorrow. It's very unlikely. And if they show an antitrust injury, the question is whether this fails under the Rule of Reason, and the first question would be whether this actually decreases competition rather than increases it, and it's not -- that's not clear. It might increase competition by putting on shows that wouldn't otherwise be on shows, increasing viewer choice, and there would be internal competition among signatories to the code in different areas. So it's not at all clear that this isn't pro competitive. If you can show that this has anti- competitive effects, the question is whether it can be justified by social welfare consequences, which may be such things as producing more programming for kids, serving 37 educational goals for adults as well, serving political process codes by entering more informed electorates, so forth. Those sorts of things the court has shown some hospitality to in cases involving what Newt is describing; that is, efforts by professional associations to engage in self- regulation. CHAIRMAN ORNSTEIN: We don't need to get into anymore detail. MS. SOHN: I just have one thought, if I could just ask about. Perhaps one thing to do -- and this is not a cure-all yet. I've enjoyed this, but probably only one of the people that has. But perhaps it's not a complete code. Perhaps one of the things that could be done is maybe one of the networks and some others, some other broadcasters, could kind of like, if this code develops, say, you know, we believe this is legal, certified this is legal. That, obviously, wouldn't stop anybody from eventually bringing an antitrust suit, but the point is to try to get as many people to say, yeah, this is kosher, this is legal and perhaps 38 sort of serve as a beacon that this code is okay. MR. SUNSTEIN: I'm going to do some more work on this, and I have talked to a bunch of antitrust specialists, and not one think this raises serious antitrust problems so far. If it, otherwise, does raise an antitrust problem, the fact that the signatories certificate that it's legal won't help. MR. DUHAMEL: One question that I have on this, in Sheila Anthony's letter, she says, "The conditions of the exemption --" this is the antitrust exemption "-- that any guidelines be truly voluntary and the collective activity not result in the boycott of any person." Wouldn't that raise the, you know, the satisfied producer who didn't -- wouldn't he be just almost -- MR. SUNSTEIN: It wouldn't be a boycott victim. If someone is excluded because there's an agreement, there's a difference because someone is excluded because there's an agreement that you can't have, let's say, 39 really violent programming on and a boycott of a particular person. The reference is to if there's a boycott of a particular producer or some such, then you have a hard time, but if you have people that don't get on because of the agreement, that's a different -- MR. DUHAMEL: I was worried about that collective activity because this is essentially what a code is, it's a collective activity. MR. SUNSTEIN: She's referring to something very specific, that is a boycott, and the exclusion, the de facto exclusion that might result from this -- this is very speculative -- wouldn't be what she's talking about. Basically, what this letter says is that Senator Simon's exemption from the antitrust laws was entirely unnecessary, that if there was an agreement on guidelines, that agreement, by itself, would raise no antitrust problem. Now, that's the Justice Department position. That's very important because the other case was brought by the Justice 40 Department. That's one reason the court took it very seriously. The Justice Department has a very strong position here. There's only one sentence that I think is any concern at all in that letter, and that's the sentence that says there's a difference between agreements on a code and an effort to enforce its provisions. The enforcement action, she leaves a little bit of an opening there, and that's the sentence maybe that is worth underlining. But I really think this is not worth worrying about very much, the antitrust. CHAIRMAN ORNSTEIN: Yeah, we don't want to take anymore time on getting into the specifics of antitrust other than to make it clear that the reasons that caused the original code to be withdrawn, we should be able to deal with, handle it here, and we do have some questions about enforcement that we're going to have to be sensitive to, and we discussed that. MR. GOODMON: I think we should mention at least twice in the last few months, Congress has suggested that if the industry 41 will adopt a voluntary code, they, Congress, will help us with the antitrust and have suggested we do it. We might have problems, but I think we also can get some help. CHAIRMAN ORNSTEIN: We needed to be sensitive to this, and we need to in the presentation of our recommendations, but I don't think we need to spend a lot of our precious time on this. MR. BENTON: Norm, as a final point of clarification, as I understand it, the antitrust really applied entirely to the advertising part of the code and not to the programming part of the code. CHAIRMAN ORNSTEIN: Yes. MR. BENTON: The program part, that's not -- and this is not an issue, the antitrust, as I understand it. CHAIRMAN ORNSTEIN: We want to be sure that we don't raise red flags. We also want to be sure that we cover our bases, and we will do that. Well, what we have here and what Cass has done, and I hope will be delivered to you all momentarily, we have a set of -- let me just go 42 over these quickly and you can supplement -- a set of general principles and a rationale for a code, most of which was taken from the original code, basically the broadcasters of public trustees, that there are some obligations that have been imposed on broadcasters, but that the government has generally restrained itself from going further because of a belief that broadcasters are doing themselves, voluntarily, what should be done, that most broadcasters do take their obligations seriously going beyond the requirements of law, and they do offer public service announcements, provide educational programming for children, offer community services, cover substantive issues in a serious way, avoid exploitation, sensationalism and attend to important issues, public debates and elections, and the purpose of the code is to reflect an explicit and voluntary commitment to certain basic principles, to ensure that broadcasters generally act as public trustees and are not penalized in the marketplace for doing so, and it explains why we need a code. Then we move on to some of the substantive 43 areas. MS. STRAUSS: Norm, I think that she has the copies. It would be helpful to people. CHAIRMAN ORNSTEIN: Yes. MS. STRAUSS: Can I just ask a quick question while they're being passed out? I'm a little confused about the relationship between the codes and the public interest obligations that we arrive at, and here's the source of my confusion. It seems to me that the code is going to be above and beyond the obligations that we determined, and therefore, it would seem to make sense to determine those obligations first. I understand that you just want to go over the code, but it doesn't make much sense, it seems to me, to determine what the code is since that's a voluntary effort because I know that, for one, I'm not sure what I want to agree on within the code, and I don't want to say it has to be in the code if it's already in the obligations, but I do have to worry about it at least getting into the code if it's not 44 in the obligations. CHAIRMAN ORNSTEIN: Well, we don't have to agree on every -- we're not going to vote on line items in a code, Karen. MS. STRAUSS: No, I understand. CHAIRMAN ORNSTEIN: I would argue, even if it's an obligation, an obligation can be given and taken away, and whether it's an obligation or not doesn't mean it's redundant to have it in a voluntary Code of Conduct. But for our purposes of discussion here, since this is an area, if we start to discuss the areas where we have disagreements or potentially deep disagreements and leave for the end getting to the specifics of the areas where we have some agreement, we will probably never get to those. MS. STRAUSS: I was hoping to discuss the areas where we had agreement first within the obligations. Is that-- CHAIRMAN ORNSTEIN: I'll tell you what. If you have questions about the code that you want to raise after we've discussed those, then we will come back to them, but I 45 think we can safely go through most of the general principles here and see where we highlight disagreements. And if you would turn, basically, I think to page -- page 12 had the general principles. The first 10 pages of this are a very nice discussion of the antitrust issues. 11 gives the overall code provisions, and then 12 was that first discussion. I'm looking at the -- CHAIRMAN MOONVES: Oh, got it. CHAIRMAN ORNSTEIN: Look at the top, the faxed pages. So turn to page 13 of the 20 or page 12 at the bottom of your page, and that's the first substantive discussion. MS. CHARREN: Page 12 at the bottom? MR. SUNSTEIN: Most people are looking at page 12 at the bottom. CHAIRMAN ORNSTEIN: 12 at the bottom. So what we had a couple of pages earlier was the outline on page 7 at the bottom, the general principles and rationale, which I think we've basically covered. It's more or less what was there before, and I think it's largely boilerplate, and we can talk about 46 responsibilities towards children. MR. SUNSTEIN: This is very much like the old provision. Maybe number 4 is the one we might focus on, which is about educational programming for kids, including a minimum of or a reasonable number of hours of. The rest is, I think, entirely vacuous because you can imagine what an egregious violation would look like. MS. CHARREN: For all the help that is. Peggy Charren. I always was able to imagine what an egregious violation would look like. For example, I think it's egregious to promote violent programming in programming that you want children to watch, like sports programming, so that the minute or half minute of violent content of a program that isn't as violent as that promo because, after all, that's contexted in the movie but there isn't in the promo. It would be nice if it that didn't show up in sports programming. I could talk myself blue in the face for 100 years and I couldn't do anything about that. So that my only concern is that, as a body, we don't look at this and say, we have 47 dealt with the need to take care of children on television. I think it's perfectly reasonable to have this in the code. I used to use it in testimony in Washington. I would read what the industry said about what it should be doing, and I'd read it, and then I would take it apart. I'd make fun of it. I would say, if they did it. It's sort of an excuse for people like me to have something to talk about it. But let's understand that this doesn't then qualify as this committee's way of dealing with the needs to serve children. It does not bother me that this would be in a recommendation for broadcasters anymore than it bothered me that it was there. It only bothered me when the NAB used it to prove that they were taking care of kids. MR. RUIZ: Peggy, what is the age group when you say children? MS. CHARREN: The industry has made it 2 to 17 by working on the legislation, to deal with 2 to 17. My feeling was it sort of stopped at 15 because if you call any 16-year-old a child, they'd have a nervous breakdown. 48 On the other hand, I am willing to go to 17, which NBC says it is serving. It would be nice if they did some election-related programming so kids might vote when they got to be 18, but I don't mind that. That's the number. For advertising purposes in the law, it's 2 to 12. There's two different numbers. They can't decide which children are in that law, but that's the way it is. MS. STRAUSS: I think I didn't articulate myself well enough before, but this is exactly what I was getting at. What Peggy, I think, is saying is that there are principles in here that we can all live with, but the question is, is this going to be the be-all and end-all of what we require, and that's why I think it's fine to go through it now, but I think that the only way that we can agree on what's in the paper is to first agree on what are the obligations that we want to require. CHAIRMAN ORNSTEIN: I think you can discuss the principles that we can all agree on and recognize that, for most of the 49 members, a code may be a necessary but not sufficient recommendation to make. We're not suggesting this is the only thing that we're doing, so -- MS. CHARREN: These are very content-sensitive rules as they're put here. I mean, violent programming, you know, a civil rights drama is violent, and we hope that they're not going to do in a civil rights drama in the interest of children, especially if it's a children's program, which can also be violent if it's a good children's program. But there's nothing in here about advertising, and one of the major programming problems of programming for children is in the content of the advertising, and we could discuss at some point in this endeavor whether we can talk about the content of the advertising in terms of where it appears, when it appears. And I would ask Cass, would that get us in too close to a constitutional problem without making the rule of you can't do it, just suggest? After all, this is a suggestion. Maybe we can suggest that you don't promote 50 their worst programs directly to children. MR. SUNSTEIN: No constitutional problem but a possible antitrust problem. But we shouldn't be terrified of the word possible antitrust problem from my -- if you think about it. CHAIRMAN ORNSTEIN: We can also recognize that, basically, we're not -- any voluntary code is going to be put together by the broadcasters. All we can do is recommend language, and the greater the unanimity we have or consensus we have in our committee, presumably more impact it has, but we have to start with that premise, that nobody is going to take this and adopt it in toto. MS. CHARREN: For example, when it says three hours, which is what's in the law now, it also has limits on advertising in the law, which are very high, but you might want to put them in again because the FCC is already finding stations that go over it. That can't really be a problem. MS. SOHN: You can make a broad statement about how children can't really express themselves in the marketplace and 51 broadcasters should be careful not to, you know, over -- MS. CHARREN: We do that for programming. MS. SOHN: The other thing that I saw was missing, also, was we were talking about different ages. There isn't anything about serving children of different ages. I mean, I just skimmed it. Did I miss something? Because if all your shows are directed towards kids between the age of 4 and 7, then what about everybody else? You might want to put some language in there about certain different age settings. MR. RUIZ: I would answer that, you know, some of the demographics. You may have areas where they're largely a Native American population, and the programming -- MS. CHARREN: Could you talk a little louder? MR. RUIZ: You may have areas of large Native American, Asian, Latino populations, yet the program is not reflective of that society. Are they seeing themselves? 52 Are they seeing their world in the programming? There's no mention of that. MS. CHARREN: That diversity covers a lot of various public interest concepts. CHAIRMAN ORNSTEIN: Any other suggestions in this part? I think maybe what we can do here is go over that and subsequently we can embellish or change. MR. SUNSTEIN: This is helpful. There are three new provisions we can think about. CHAIRMAN ORNSTEIN: Maybe briefly discuss -- let's move on to the next one, public elections. MR. SUNSTEIN: Yeah, what this tried to do is a couple of things. One is emphasize the role of television in promoting democraticals, another is stressing the value of coverage of federal, state and local elections, as well as initiatives and referendums, and a third is to have some language about the value of having covered the substantive oriented issues rather than sound byte issues and horse race issues. I'm 53 thinking of the Belmont stakes, tragic loss. And the last -- the last is to say something, and this is Section 5, about the need for candidate-centered discourse, not defined, in the evenings. Now, this may be too specific. It would be interesting to get people's reactions to all of this. MS. STRAUSS: I have a question. CHAIRMAN ORNSTEIN: Yes, Karen. MS. STRAUSS: I had a question about Number 4. You say that the station would focus on races and candidates the station believes is important and deserving of attention by its viewers. Can you give anymore thoughts about how the station would determine that and whether you could add something about making such determinations based on ascertainment of community needs for information in certain elections? MR. DUHAMEL: You're going to overwhelm the station in detail. The stations know -- the news people know where the interest is. In other words, there's occasions we've 54 had debates on attorney general candidates. Typically we don't, but when you have an important attorney general's race and it looks like there's interest in it, we will cover it. Otherwise, some of those are just routine, and nothing happens. You can't get into -- if you really want to run surveys, the general public, the general public does not understand -- not understand -- the general public does not want -- I've never seen anything. They vote by viewing, and I've never seen anything that says they want to have half hours of discourse with candidates. I think a station that ran half hours, the public would vote by leaving. They would go alternate places. MS. STRAUSS: I'd be interested in hearing some other views on this, whether you feel -- I mean, this is not my particular area of expertise. This jumped out at me, that the station decides. So other people around the table that have had more background in this, I'd be curious to know your views. MS. SOHN: This is Gigi. I'm not trouble by -- 55 MS. SCOTT: Hello? CHAIRMAN ORNSTEIN: Shelby? MS. SCOTT: Yeah, I can barely hear anything. CHAIRMAN ORNSTEIN: Because you're too far away, Shelby. MS. SOHN: We can hear you, Shelby. MS. SCOTT: Well, that's great, but I can't hear a thing. I hear mumbling like in the background. CHAIRMAN ORNSTEIN: Well, we'll try and speak up and speak right into the microphones. MS. SCOTT: Thank you. MS. SOHN: Shelby, this is Gigi. I'm not that troubled by allowing broadcasters to use their discretion on what races are important. What I am troubled by are sort of absolute blanket bans on either covering or even selling time to candidates. Now, we've seen this, I think -- did you, Charles, attach an article to your issues and consensus memorandum about how basically some 56 of the California stations are absolutely refusing to sell time to down-ticket candidates? That's something of great concern. So reasonable -- the point I was going to make, Cass, is that reasonable access has to mean that you just can't -- the law says, this is CBS versus FCC certainly says this, but you can't have blanket policies refusing to even sell time. I think broadcasters should have a firm obligation to cover these races. You can't just say we're only going to cover the governor's race, and that's what's been going on in California. But generally, Karen, I'm comfortable, you know, within the grander scheme of ensuring that, you know, local and important local races are covered. Why should a broadcaster have to cover the race for the dogcatcher where the guy is going unopposed or he's going up against a crank candidate. CHAIRMAN ORNSTEIN: Well, I guess the question there, Gigi, would be whether that sixth provision, which is the station should provide reasonable access, is 57 enough to cover those concerns. The term reasonable access is, in fact, one that comes out of the law, is it not? MS. SOHN: Yeah, and in fact, the way the law has been interpreted, it's been interpreted -- again, CBS versus FCC -- that a broadcaster cannot make a blanket policy of refusing to sell. Remember, reasonable access under 312 (A)(7) is only for federal candidates, not for state. CHAIRMAN ORNSTEIN: The use of the term reasonable access here ought to take that into account, I would think. MS. SOHN: I'd make it more specific. I would say this means that broadcasters cannot have a right to refuse -- MR. LA CAMERA: That's different. Are you mandating what item -- this is Paul La Camera -- mandate that television stations provide access to local and state candidates, news access? MS. SCOTT: I hate to interrupt, but am I still hooked in? MS. STRAUSS: You're hooked in. MS. SCOTT: You cut out 58 completely. I'm hearing static. MR. LA CAMERA: Right now we're obligated, obviously, with federal candidates but we'll have a similar obligation with local and state candidates. MS. SOHN: Yeah, that's what 6 says, that stations should provide reasonable access to candidates of state and local offices, as well as to federal candidates, and I'm all for that, but -- MR. LA CAMERA: I'm sorry, Gigi, are you talking about news public peer coverage, or are you talking about access in terms of purchasing commercial time? CHAIRMAN ORNSTEIN: Yes. MS. SOHN: Well, you have to ask Cass. He wrote it. I'm assuming that he means in terms of selling time. MR. SUNSTEIN: I wrote it, and I have no idea what it means. CHAIRMAN ORNSTEIN: I think the reference here is, in the context of what's here, is selling time, and that is a response to what has become a practice that's occurred in a number of areas. 59 MR. LA CAMERA: I know it happened in the Washington, D.C. market. CHAIRMAN ORNSTEIN: Not only the Washington, D.C. market, but it happened some in California, and that is, as Gigi said, it's not just a selective refusal; we don't have the time, but we will accept no time even for those who have cash in hand for these races. And, of course, in California, that also included no news coverage of the races either. So I think, you know, this is an attempt through a code to get at the need for some sensitivity to -- MR. SUNSTEIN: One question is should we clarify it to say that, and another question is so clarify that people like it. I consider myself agnostic right now, but -- MR. LA CAMERA: I'm fine on the issue of the commercial time. I mean, I'm always uncomfortable when we start dictating journalistic policy. MR. CRUZ: That was covering elections. MR. GLASER: That's what I was saying to Karen. I'm fine with the broadcaster 60 choosing what important races to cover. What I'm not fine with is a blanket policy that we will not sell time to candidates. That's what's been going on. MR. LA CAMERA: I have no problem with that. Just in item 5, just for the sake of reality, 6:00 p.m. to 11:00 p.m., 11:30 p.m.. Make that 11:35 p.m., which is the reality of late night local news. MR. DUHAMEL: In the mountains, a lot of times our prime local newscasts is 5:30, and we have a higher proportion of adults watching the 5:30 than we do -- MR. LA CAMERA: 5 o'clock p.m. MR. SUNSTEIN: Should it be 5:00 to 11:30? MR. CRUZ: California starts in at 4:00 in the newscasts. If you want to blanket the country, let's go with that. CHAIRMAN ORNSTEIN: If you want the evening hours here, 5:00 is okay. Charles, Charles Benton? MR. BENTON: Charles Benton. Cass, I'm just as the original. The old NAB code broke itself into program standards and 61 advertising standards. It seems to me that, especially in this elections area, you might -- there might be some refinement in not just lumping everything in together, but of thinking about it in terms of program standards and advertising standards. Clearly, in the program area, the notion of diverse views and conflict is the -- and avoiding propaganda or avoiding unbalanced coverage of competing candidates is kind of a part of it. And in terms of the advertising time, there's -- there were a lot of comments in our various papers about no less than one minute of spots are given and no less than one minute, and the candidate has got to appear 75 percent of the time, issues like that. I'm not -- I'm not enough of an expert to dictate precisely what those things ought to be, but the general point has been to try to move away from the manipulation of advertising, especially as done by outside forces and having the candidate be more directly -- if free time is to be given and all that free time were given -- 62 CHAIRMAN MOONVES: We're not dealing with free time here. MR. BENTON: All right. CHAIRMAN MOONVES: And may I add that I think this is a very good document. The more we get bogged down with tiny specifics, the harder it will be to draft something that we will get a consensus on. I think there are a lot of very good points in here, and I know I may feel differently than some of you, but the generalism of it is a very positive thing. MR. BENTON: I hear you, but I think still thinking it through, both from the standpoint of programming standards and the commercial standards would be very good. CHAIRMAN ORNSTEIN: Some of that is in the next section as well, which we can turn to with news and public events, which also has relevance for elections. How much of this, Cass, was in the -- basically in the original? MR. SUNSTEIN: Most of this was in the original. I think the third sentence under 2, I think the word "gossip" I added. 63 CHAIRMAN ORNSTEIN: Well, that would really test whether there's any meaning to a code. MR. SUNSTEIN: It should be undo. MS. CHARREN: Might do in the news altogether. CHAIRMAN ORNSTEIN: Actually, if we took all the gossip out, we'd leave enough time in the newscast for whatever free time we wanted to provide for candidates. CHAIRMAN MOONVES: How about the stories of crime or sex, or take out crime, sex and gossip. We would have had a hard time covering the government the last few months, wouldn't we, if you adhere to that. CHAIRMAN ORNSTEIN: It's mostly gossip about government. MS. CHARREN: A lot of blank screens. CHAIRMAN ORNSTEIN: Maybe we should take a minute to just read this, but most of it is, I think as Cass suggested, was in the original. MR. SUNSTEIN: I added 9. 9 is 64 the only one I added, and the word gossip. MR. BENTON: Is there an 8? MR. SUNSTEIN: Yes, but it's mysterious. MS. CHARREN: There's something about saying undo the simple versus complex issues. Something I feel I need a lot of the time is for a very simple discussion of a complex issue so that I can manage to understand it, and I think that this could be misconstrued somehow. I mean, I know what it means, but -- MR. CRUMP: I have to agree with you because, to me, the purpose of a newscast is to explain to the general public what's going on when they're getting all the gobbledygook that are being putting out, many times, by the constituents themselves. MS. CHARREN: I think this can be misconstrued. MR. SUNSTEIN: What would be better? MS. CHARREN: I don't know. MR. SUNSTEIN: Maybe we could just delete the first phrase, "The station 65 should make an effort to devote sufficient time to produce --" MS. SOHN: That's a good idea, yeah. MS. CHARREN: That says it, right. MR. DUHAMEL: I think you're right, sure. CHAIRMAN ORNSTEIN: Let's move on to community responsibility then, and we could move through some of the substantive stuff here really quickly and then turn to what is a more contentious, I suspect, or at least a more difficult question, and that is the question of how you revise and enforce. Maybe the responsibility was also largely taken from the previous code. MS. CHARREN: I like this. Is this new? MR. SUNSTEIN: A lot of it's new. It's from one of our colleagues. MS. CHARREN: That's nice. CHAIRMAN ORNSTEIN: Yeah, Jim? MR. YEE: Jim Yee. Luis brought it up again, but also, since this code, should 66 we also reflect the changes of the community in the issue of how do you address the fact about issue of diversity and makeup? I know it's sort of a static term these days. I'm just wondering how can we reflect the changes? I'm looking to you, Cass, for that. And also, there was discussion last time, predominantly about the PSA about being such a major centerpiece of the commercial broadcasters when we had not talked about local programming or had it represented in the language as much as it should be. Again, that's an area I hope could be addressed. MR. SUNSTEIN: I think that's an interesting idea, a provision that says the broadcaster shall attend to the diverse demographic segments of the community and provide a reasonable service for all viewers. CHAIRMAN ORNSTEIN: I think that would be a very wise thing for us. MR. LA CAMERA: I think the others addition there would be an emphasis on local groups that's in other documents and not necessarily on this page. MS. CHARREN: Is this a good 67 place to talk about the fact that in public service speech, particularly, with diverse populations, the use of the same way we do the captioning can help in terms of language, for example. It's very important that everybody vote, and if you have a language problem, where do we -- there's an opportunity there for broadcasters to make use of technology in that area to help that process a little more. I don't know where that belongs, but it just occurred to me when somebody said something. MS. STRAUSS: Well, I'd like to respond. I'm kind of sitting here again thinking that most of the captioning rules do not cover most of the principles in here. Again, the captioning rules, right now, don't require captioning on political debates, PSAs, local news, or at least not real-time captioning. So that was part of my concern, because the question is where do I go for broke? Do I go for broke on here on the code of the voluntary code or -- CHAIRMAN ORNSTEIN: Again, I don't think they're mutually exclusive. 68 MS. STRAUSS: One possibility is in general principles and rationale to have this overriding statement that indicates the need for disability access where it's not an undue burden, which would be consistent with all of the federal laws on that. MS. CHARREN: And in talking about captioning, we could add language there, which is a way of dealing with people who can't speak English. MR. DUHAMEL: You said where it's not an undue burden. That's an important -- MS. STRAUSS: Oh, yeah, I have no problem with that. That's been the law of the land for quite some time, the undue burden. MR. DUHAMEL: In South Dakota, it was going to cost South Dakota broadcasters about a billion dollars a year. MS. STRAUSS: No, it's reasonable to have a defense where it's going to be a financial hardship, and that's always been incorporated in the Rehabilitation Act of 1973, Americans with Disabilities Act, and now the captioning provisions of the 69 Telecommunications Act. But I do think it would be nice to have something in here that recognizes disability access since that was not on the radar screen when the original code was created. MR. SUNSTEIN: There are two ways to do it offhand. One is to have it in the general principles, another is to have it under some of the provisions. MS. STRAUSS: Right. I suppose that my preference would be to specifically have it under the individual provisions, especially the election provisions, the news and public events and the community responsibility. MS. CHARREN: Peggy Charren. I think it's also important because we're talking about the future here. This isn't supposed to be a rewrite of the code for broadcasting as we know it now. It's for digital television, right? And these kind of opportunities are going to be more easier to make it happen in a digital universe. CHAIRMAN ORNSTEIN: It seems to me a provision that basically says that 70 broadcasters will be sensitive to the diverse elements of a local community to make sure that all of these provisions of news and programming otherwise will, as much as possible, without undue expense, be sensitive to the needs of the disability community or other groups, including through language, to meet what would be perfectly -- MR. SUNSTEIN: Let me think about whether that should be under general principles or under the specifics, and we can certainly -- CHAIRMAN MOONVES: Peggy just brought up a very interesting point in that she said this is for digital television. Digital television, we're looking into the future. Is this a Code of Conduct for today, for right now? Are we dealing with analog and as we move forward? I think we have to specify if that is, in fact, the intent of what we're doing here. CHAIRMAN ORNSTEIN: One element of that, Les, is that a little further down where we're talking about revisions and enforcement authority, we don't need to get too 71 far into it here, but there's a provision to basically go back and reconsider the code periodically as digital television changes. CHAIRMAN MOONVES: Well, Norm, there are certainly things that we're obviously going to get into a little bit later on about HDTV and multiplexing and talking about the eventuality of that world, what would happen if there are three channels or four channels or five channels, et cetera, et cetera. So I think it's very important on every issue to distinguish whether we are talking about what is going to go on with broadcasting today. Are we including any other people, such as cable? We really have to distinguish between what is happening with the world and, when appropriate, if we're looking down the road. Charles? MR. BENTON: Yes, Charles Benton. I think Les has made a very good point. What was sent out to us in preparation of this meeting was this NAB code, which I believe is over 20 years old. We were handed out, at the last meeting in mid April, a four-page quote "statement of principles" of 3 72 pages -- 3 and one-third pages statement of principles, and clearly, and given the antitrust blanket that NAB has apparently applied to, not only advertising but programming standards, maybe this has fell into, if not disuse, much less use now, and so the move from analog to digital does give the profession and the association a leadership opportunity here to rethink through the code and how it should apply today and in the future with technology. So I think it's a great opportunity for the NAB to reassert its leadership role in this, which historically, as I understand it from talking to some of the broadcasters here last night in particular, it was very important in the life of broadcasters 20 years ago. Obviously, this is fallen. There are a lot of changes many of us don't understand or don't know, but the move from analog to digital does give it an enormous opportunity for reasserting leadership by the profession and by the association here on the standards to help reposition broadcasting, vis-a-vis the competition of cable and the tel cos. 73 So therefore, this is a real opportunity, it seems to me, and shouldn't be looked upon as a threat or thou shalts, et cetera. There's a real opportunity for leadership. CHAIRMAN ORNSTEIN: We do need, I think as Les is suggesting, to be sensitive to what are principles that apply no matter what the electronic era brings us, and many of them here clearly do, and where we begin to get into specifics and specific standards and quantification, we clearly need to be very sensitive to the reality of what applies today may not make sense a few years down the road. And I think since our core responsibility is digital television broadcasters, we can, obviously, recommend strongly a code for the NAB here in a separate spot assuming that we can all reach agreement on many of these issues. It is utterly appropriate for us, it seems to me, to recommend that some standards apply in other areas as we move into the digital age. But it also means, Les, that we need to be sensitive to what we, I hope, will get to in a few minutes, which is the question of how you 74 have an ongoing process of altering the code to take into account these changing realities. So let's turn to controversial public issues, and I think we probably can work through most of these relatively quickly. MS. SOHN: Norm, can I just -- I like this language very much, though one thing that's missing. MS. CHARREN: Which language? MS. SOHN: The controversial public issues, except local is missing. There's not one mention of local. And the thing I am a little bit concerned about as I look through community responsibility and controversial public issues is some sort of statement about covering local communities, underserved communities. Jose and Jim did mention that. I don't know exactly where that would fall in, whether it would fall in under E or F or somewhere else but -- CHAIRMAN ORNSTEIN: There's probably no problem with mentioning sensitive to local concerns in each of these areas. You can add a clause here that basically says alter the life or welfare of a substantial segment of 75 the public, including the sensitivity to those issues that are specific to a local community, or something of that sort. MS. CHARREN: I'd like to add something as wispy as that also, to the children's page, because serving the particular needs of children in the community is different than national programming for children, and very productive. MR. SUNSTEIN: We can do that. MS. SOHN: I just wanted to add one other thing on a technical thing. You could add something either to Section A, or again, to any of these saying how the broadcasters should deploy new technology to ensure access, you know, a broad statement about employment of digital television to sort of A, B, C. Just a thought. CHAIRMAN ORNSTEIN: Okay. Let's move on to special program standards, crime, violence. MR. SUNSTEIN: There's actually nothing here on sexual materials except sexual violence, and I just noticed that the NAB's current principles has some material on 76 sexually-oriented material. It isn't bad. CHAIRMAN ORNSTEIN: Then maybe if that's in the NAB's current material -- MS. CHARREN: Read it. MR. SUNSTEIN: Okay. "Obscenity is not constitutional for speech. It is, at all times, unacceptable for broadcasts." That's the least controversial. "Where significant child audiences can be expected, particular care should be exercised when addressing sexual themes. All programming decisions should take into account current federal requirements limiting the broadcast of indecent matter. Creativity and diversity in programming that deals with human sexuality should be encouraged. Programming that purely panders morbid interests should be avoided. In evaluating programming dealing with human sexuality, broadcasters should consider the composition and expectations of the likely audience and the context." All that's good. We might want to have a separate provision on sexual violence, something about special care with respect to sexual violence. 77 MS. CHARREN: That's a good idea. MR. SUNSTEIN: I did add, already, a section in the last sentence of 2. MS. CHARREN: I think that's very good. Peggy Charren. I once asked a big-deal psychiatrist who was at Yale, what is the most -- the worst thing that children can see on television, because a lot of what we talk about is okay if we use it to educate. What's the worst thing they can see? And his answer was, sex with violence. CHAIRMAN ORNSTEIN: And gossip and lying. MR. SUNSTEIN: We'll add something along those lines. The trick here is that, you know, you wanted to say something that gives guidelines but not something that restricts diverse views. So there's this last sentence. MR. RUIZ: How much of this will apply to cable? CHAIRMAN ORNSTEIN: How much of it will apply to cable is the question, and the 78 answer, at least on the surface, is this would be a code created by the NAB for broadcasters. There is nothing that I can see that would prevent us from recommending that, among other things, the National Cable Television Association adopt a comparable code and that whatever association exists for satellite broadcasters also adopt a code and for strongly recommending that that occur. MR. RUIZ: You mentioned gambling, point 3 here. They now have on cable handicappers for ball games with 900 numbers that diagnose the game and then have you call them for -- I don't know how much they charge and stuff like that, and a lot of kids are watching this, high school and college kids, and I haven't seen it on the commercial broadcast, but I see it on cable, and I think they're buying the time. CHAIRMAN ORNSTEIN: Well, again, we have no compunction about strongly recommending that, if not the same code, a very comparable code that may have some particular sensitivity to those issues. MR. MINOW: Newt Minow. I'd 79 emphatically endorse that. I think it's unfair now to have the cable industry, which is getting more than half the audience in prime time, not subject to the same rules, standards of broadcasters. MR. SUNSTEIN: Barley Diller has said exactly the same thing. MS. SOHN: But understand, I don't necessarily disagree with you, that there is very little local -- local programming on cable and non -- MR. MINOW: That's a different -- MS. SOHN: It is if you're talking about -- if you're talking about requirements to do local programming. I'm just saying -- I'm not disagreeing with you, Newt. I'm just saying you have to be sensitive. You can't really impose local requirements on DBS. They don't do any local programming. It's all national. MR. SUNSTEIN: We can write it up in such a way to apply those provisions that make sense to apply to cable. MS. CHARREN: Yes, because a 80 diversity provision that is appropriate for somebody legally mandated to serve the public interests is different than mandating that kind of diversity on a channel that is just a cartoon channel or that is -- you know, channels are different for cable. CHAIRMAN ORNSTEIN: Let us recognize that there are, of course, public interest obligations for cable. The way they've been defined is through this set-aside of channel space which, presumably, is sensitive to local programming which, for the most part, has not been. And I frankly -- although our mandate is, one again, broadcasters, making a strong suggestion that perhaps the local content that comes through that channel space be strengthened and changed and made meaningful certainly ought to be within our purview to recommend as well. So we can hit the local issues. MR. MINOW: The viewer has no understanding or no care about whether he sees a program on cable or over the air. It makes no difference to the viewer, and it's wrong for 81 us to separate those two things. Put yourself in the viewer's position. CHAIRMAN MOONVES: Especially the younger viewer who has grown up with 50 channels in his house. Channel 33 is no different than Channel 2 to the average kid. MR. BENTON: Maybe this is a question. Charles Benton. Since our commission mandate is the public interest obligations of digital television broadcasters, how can we structurally address this very important issue that has been raised by several people? What do you suggest is the structural approach on this? CHAIRMAN ORNSTEIN: Some of this we will have to work out in the process of drafting a report, but it seems to me that, among other things, we are looking at the public interest obligations of digital television broadcasters, which means that we're trying to look at public interest obligations in a new era, and in the process of doing that, since every aspect of the use of the spectrum is going to change. And what is likely to happen is that a 82 continuation and enhancement of what Les just suggested; namely, a blurring of the lines here for viewers, at least, that -- and since we are also making recommendations that go formally to the vice president, but which are clearly going to include recommendations for action by Congress or by the FCC, as well as by the broadcasters, that's suggesting, for example, Congress revisit the question of the set-aside space for local programming and community needs by cable to take into account some of these considerations. I don't see why we can't make that suggestion or even a suggestion or report to the vice president that the strong recommendation be made to the cable industry to get their own house in order through voluntary means the same way that broadcasters are. Where we include it may be a question, but how we include it should be a fairly easy thing to do. MR. BENTON: Thank you. Can I raise one more question? Most of these issues under the special program standards are dealing with the extremes and aberrational points, and they seem fairly 83 self-evident. I want to come back to Les's point about the application of these standards and just say a word about the treatment of news and public affairs. A number of foundations recently have been studying local news in particular, and the facts of the analysis are really depressing. 39 percent of local news is crime, most of it violent crime. If it bleeds, it leads. 45 percent is involved in sports, in weather and commercials. That leaves 15 percent for everything else. Now, maybe Cass, in the treatment of news and public affairs, one can say something about the mix of content to try to see if there can't be some breaking of that pattern that is, I think, causing increasing dissatisfaction on the part of the public. You know, it's the body count, we're tired of the body count. The competition of the local level is more violence. CHAIRMAN MOONVES: You're getting very dangerous. MR. CRUMP: This is Harold 84 Crump, if I might jump in here for just a moment. Let's not forget that we have, in every market, usually a number of stations who are competing for audience at the same time with newscasts, and if you don't believe that the reason for the amount of coverage that is given to the various stories has to do with, one, what we think the public needs to know about, and two, what the public will accept itself, and therefore, watch this station, then the assumption, I believe, is incorrect. And we have -- we go through cycles. If you've been in the business a long time, as I have, you see cycles where various types of newscasts come and go, and they generally come and go because of the interests of the viewer itself. He votes every day when he turns his set to one channel or another. And you want to put on a quality newscast, but if no one sees it, then you're saying, gee, I need to wiggle it here a little, and it's an awfully hard call. And this is where we get back, I think, into trying to say -- dictate what the program 85 content would be, and that's going to be tough because that's what we should not be doing. MS. CHARREN: I think that's right. If we come out with micromanaging the news, we'll get ourselves in big trouble. But that's what I find, if we're talking now about the code, the code says it. The first one is news schedules should be substantive and well balanced and devote substantial attention, and it's there. It doesn't say 20 percent, and I don't think it can. And I think that we have to be careful on that score. Those of us who, after the fact, talk, and some people are more likely to talk about news than others of us, can keep making that point, and few can keep going to those meetings, and -- but it does say -- MR. BENTON: It's the same gap between the reality of what's on the air and what's in the code, and Peggy was talking about it earlier. MR. CRUMP: There's another gap here, too, that we're not mentioning, and that is let's not forget that 20 years ago, most television stations that were in the news 86 business had either one or two half-hour programs per day. And now when you look at the expansion that we have with the early morning hours, with the expansions in the afternoon, just as Frank was bringing up in really large markets, the news starts at 4 o'clock in the afternoon, what you have -- the percentages may be the same, but the total amount of time that's devoted to these -- all of these types of stories is totally different and much, much enlarged. CHAIRMAN ORNSTEIN: We take it, I think, as far as one can reasonably take a code that talks about what's appropriate. MR. CRUZ: Yeah, I would agree with that also. It's difficult to get into the realm of dictating newscasts and so forth. I would agree to take that kind of approach. One of the other factors that has played into this is the evolution of the industry itself. Not too many years ago, you didn't have cameras like this that were capable of going out into the field and covering stories. One of the concerns, I guess that you have as a news director and a producer of a 87 newscast, it seems odd that you will spend an inordinate amount of time covering a fire, really of no major consequence, but you can spend a lot of time on air because the public supposedly is interested in that and tuning into that, yet the next day, it's only a minor paragraph on page 28 of the Los Angeles Times. MR. CRUMP: What you see in the newspaper is yesterday's news. We put it on today. Thank you for the point. MR. CRUZ: It's the length of time. And I guess the other concern that really goes to some of the sensitivity of the coverage of the news, for example, in Los Angeles, there's been an inordinate amount of coverage on high-speed automobile chases. A highway patrolman recently said that they've been going on for a long time. It's only you folks that have gotten interested lately with helicopters and so forth. It came, all of that, to a screeching halt recently when the police thought, the highway patrol thought that they were after another high-speed chase and a young man pulled over on 88 the Harbor Freeway in Los Angeles and blew his head off, and it was covered. So that's the kind of area of concern that we have to be very, very sensitive to, and I think we have to make sure the code does cover it in that context. MR. CRUMP: But you know, you make a good point there, Frank, in that as our technology has changed, being totally candid, we are changing with it, but it's an educational process. We're learning what we can do that we couldn't do yesterday. We have to deal with what is acceptable, what is not acceptable. Hopefully, I would say I -- I would hopefully think that you would agree -- that the news itself has changed in many ways that is much better than it was before and makes the American public much more aware of what is occurring at the time that it's happening, and that's what the live coverage has gotten us into. When you get down to the coverage of the Viet Nam War, it was the first one where we hear over and over again where the American 89 public really understood what war was all about. MR. CRUZ: I just mention that it's a sensitive area that we have to be very careful. MR. CRUMP: I'll agree with you, but we learn as we go, unfortunately. CHAIRMAN ORNSTEIN: One of the reasons, it seems to me, why this is an important recommendation for us, it isn't just boilerplate, is that we're moving into an era where newspapers don't just present yesterday's news, but they go right up on the web to try and compete with television stations where you've got the drudges of the world and others who are out there as journalists, and it's going to change the competitive environment for broadcasters and for others on television. And if we can't -- appropriately can't get into questions of even voluntary codes for internet providers or websites, it may have even more impact to suggest that, under these circumstances, broadcasters and other journalists have codes that they adhere to even in a very different and changing and 90 competitive environment, and we need to be, obviously, sensitive to that. Let's talk about enforcement. MS. CHARREN: Something I forgot, and I don't know if this belongs, but it's been a concern of mine for 30 years, and I don't know if Cass can fit into this kind of paper, maybe either in responsibilities to children or in the news page, some sense that it's appropriate to have news programs for young audiences; that if we expect our nation's children to vote at age 18 and we consider them children up to age 17 for purposes of broadcasting, that if we're encouraging all kinds of programming, it makes sense to encourage news programming for young audiences. And obviously, I don't mean two-, three-, four-year-olds, although when there was a set of assassinations in this country, Mr. Rogers, in public broadcasting, did a program for kids, for preschoolers. It was Mr. Rogers on assassinations. You can handle even those kinds of things sensitively. And it's a big poll in the broadcasting schedules of this country, something that in 91 the late '70s was working. CBS had 20 people in their news department doing news. I don't expect that to happen again. CHAIRMAN ORNSTEIN: CBS has 20 people in their news department. MS. CHARREN: This was news for children. CHAIRMAN ORNSTEIN: I'm not going to comment on that. MS. CHARREN: It's an opportunity to make a point that's sort of worth making. CHAIRMAN ORNSTEIN: I would think under the -- CHAIRMAN MOONVES: Peggy, I think that gets a little too specific. You're going to demand or request that each local station, all 1,500 of them, have a children's news program? MS. CHARREN: This is not news. This is a recommendation to the industry to do the kinds of things that we would love to see on the television, and one of the things we would love to see on television, which is not a mandate from the government -- it's not a 92 mandate from anybody -- is more programming, news and public affairs programming, for young audiences. CHAIRMAN MOONVES: As long as it's phrased that way, absolutely. That's fine. CHAIRMAN ORNSTEIN: The easy way to do that is going back to the responsibilities towards children, under 3 where it talks about programming for children should take into the account range of interests and needs of children from a structural and cultural material and a wide a wide variety of entertainment material to include a provision on news and public affairs. MS. CHARREN: That's all I meant. MR. RUIZ: And I also think that the age group -- (inaudible). MR. BENTON: Not to beat a dead horse here. CHAIRMAN ORNSTEIN: Let's move on, Charles. We've beaten this horse. Cass, why don't you briefly describe the enforcement? 93 MR. SUNSTEIN: What the old code did is it had two bodies. It had a television code board, which was basically in charge, and it had a code authority general manager who was likely day-to-day authority. Now, I've added a few things here, you know, after talking to Norm and others about this, and the idea, really, was to try to use rewards for good programming as the first incentive. So there is this old provision, which is a seal of approval for complying stations, and then there's this notion of special public recognition for those who had a public -- an excellent public service record. That's new and wouldn't do a whole lot, but it might do something. Then the question is what to do to punish those who haven't complied, if anything, and one idea is the old idea; that is, to deny the seal of approval. Another idea is to have publicity for noncomplying or egregiously noncomplying stations. And another idea is to have that go to the FCC and to Congress. Norm was actually talking about something 94 a little tougher, which was to say that in cases of continuing or egregious violations, the burden would be shifted to the station to show that it should be renewed. Now, the code itself would not raise First Amendment problems if it did that, but insofar as the FCC relied on the violations of the code to deny a license, then there would be an as-applied First Amendment issue. It's not to say there would be an as-applied First Amendment violation, but if someone was denied a license because of violations of some code provision calling for lots of programming involving public affairs, on one view of the First Amendment, there would be a problem. CHAIRMAN MOONVES: What currently goes on? MR. SUNSTEIN: Nothing. CHAIRMAN MOONVES: Absolutely nothing? MR. SUNSTEIN: The last sentence of the principles are timorous, I think is the word. It's like they're cowering maybe is the word. It says, "This statement of principles is, 95 of necessity, general and advisory. There will be no interpretation or enforcement of these principles by NAB or others. They are not established basically to do anything other than reflect existing practice." MS. CHARREN: Is that what it says? MR. SUNSTEIN: That's what it says. MS. CHARREN: That makes my point at the beginning of this meeting. That's why I was a little concerned about us focusing too much time on the code. MR. LA CAMERA: I think it's a reflection of the fact that they've been made gun-shy about litigation that they've experienced in the past. MR. SUNSTEIN: The old code had a enforcement provision that was similar to this. It had somewhat less in the way of rewards, and it had somewhat less in the way of punishment. There was a denial of a seal of approval, and the informal understanding was that repeated code violations would become an issue before the FCC. So one reason for 96 compliance was concern about that, so it is said. CHAIRMAN MOONVES: No, no. I'm having trouble understanding it. This code board, however it's formed, is going to meet twice a year to go through 1,500 stations to see who the good guys are and the bad guys? MR. SUNSTEIN: This is just a description of what was under the old code. There was the old code, which lasted a long, long time, and then there was the antitrust challenge, then there was fear, then more recently there was these principles, which are fearful both of antitrust challenge and the absence of such principles, which Congress is very upset about. This is staring between two perceived tigers. CHAIRMAN ORNSTEIN: If we, to get very quickly back to the antitrust issue, if we accept the idea that having moved away from a portion of the code that deals with advertising issues, we have really gotten away from the serious core antitrust questions, there are still, obviously, questions to be raised about enforcement, but it seems to me 97 that we can then move away from timorousness and towards boldness in terms of trying to build some teeth into this, and -- MR. DUHAMEL: Except it's voluntary. The more teeth you get into it, the less voluntary it is. MR. SUNSTEIN: It's voluntary, vis-a-vis government. It's not voluntary -- MR. DUHAMEL: You got 1,500 broadcasters, and some of them are going to say, shove it. You get something that's really wicked, I tell you just some of the small guys, some of the independent stations, you know, they're just lucky to be surviving. You know, they don't have much of a news department, and you start dumping a lot of stuff on them, they're going to say, hey, I got other things to do in this world than voluntarily comply, and they'll say, we'll take public deals and just say to Congress, we don't have any money. MR. SUNSTEIN: I should say I have no position on this. I just want to hear what people have to say. The thing that would seem least controversial maybe or the special 98 commendations for excellent service broadcasting, or is that, in itself, controversial? CHAIRMAN MOONVES: Well, I don't think it's controversial. As I said, the practicality of it, I'm hoping of the 1,500 stations, 1,200 get, you know, the special seal of approval. And I don't know how this board does it, and frankly, the ability of the enforceability of this group is going to be very difficult. MR. SUNSTEIN: I see the problem. CHAIRMAN ORNSTEIN: There is a problem here, but let's face it. We either want a code because we just want to avoid dealing with any of the issues of public interest so we can put something out there that is a bunch of words that has no meaning whatsoever, or we want a code so that, in effect, not that there's coercion here, but that there is at least peer pressure, and that if these broadcasters want to say, forget it, we're not going to do anything, then what the NAB has said about the sterling record of 99 broadcasters in performing public interest and dealing with the public, there ought to be some obloguy brought upon these stations, and they ought to pay a price for it, at least in the public eye, and if you don't think they should pay a price for it then, in effect, Bill, you're aligning yourself with the worst performers. MR. DUHAMEL: I'd say that's a small group, but there's a lot of small independent stations that are struggling. I'm talking about the high UHF stations out there, and they don't have big staffs, and those are the people -- I can see a lot them just saying, hey, I'm surviving, and I'm not -- I'm not -- I just can't do it. CHAIRMAN MOONVES: Bill, it's a much larger issue than that because now we're getting into the question of how voluntary are we? What are we talking about? You know, we use the word voluntary and obligation in the same sentence, and I think we have to stop doing that, if I may pose the question without editorializing like my co-chair. 100 CHAIRMAN ORNSTEIN: Oh, I think you're editorializing very nicely. CHAIRMAN MOONVES: All right. Maybe just a little. MS. CHARREN: I am so sensitive, though, Les, to what you're saying, that I think that for us to set out enforcement standards that include things like special public recognition, which means we're telling the NAB to recognize their good members. I mean, what kind of organization has to tell another organization to make nice on people who are doing good by their own rights? I think that a paragraph saying that we hope the industry is going to pay some attention to the substance of these guidelines and take appropriate action to encourage more, you know, paying attention to them is one kind of thing. I think -- this is somebody who has spent her life in front of the FCC asking for things, so it's not like I object to the FCC saying things out loud about broadcasting, but I don't see how the -- what the code is relates to the FCC overseeing it. I just can't get my arms 101 around that as a way of doing business with broadcasting. I think we can say all kinds of things in the rest of the report that the industry isn't going to like, and as a president of CBS won't like either, and maybe will never say them, but that's where that should get said, and the enforcement mechanism for this code has to be within the NAB itself. And to tell you the truth, given what they have put out over the last years whenever they're up against it with issues in terms of what they're doing right, I tend not to believe most of it anyway. MS. SOHN: Norm? MR. SUNSTEIN: Can I just say this is the NAB's own mechanism from the old code. The mechanism is just what they had. Does anyone here now how it worked? Because Les's question is very good about can you oversee 1,500? Has anyone here -- we're all so young. MR. MINOW: The way it worked was at the FCC, if the station came in with the seal on it, the FCC said, well, they're 102 complying pretty much with the industry standards, and that's no longer true. I take very seriously what Les said, but I want on the record I disagree. Nobody makes anybody become a broadcaster. Nobody makes anybody become a broker/dealer. If you decide to become a broker/dealer, you subscribe to the NASD. You know that going in. Congress should do the same thing here. You want to get the FCC off peoples' back, the industry has got to regulate more of itself. If they don't want to, then you're going to have more and more government and more and more First Amendment issues. MS. SOHN: Norm, I've actually a more sort of basic point to make, and that is we're a body that's gathered here to make recommendations to the FCC and to Congress and to the Vice President. We've already spent all morning on this code. Do you have any guarantee that the NAB is going to adopt it? That's point number 1. MR. CRUMP: You don't have a guarantee Congress is going adopt it, Gigi. All this is is a recommendation. 103 MS. SOHN: I agree, but we were not formed to make recommendations to the broadcasting industry, okay. We have -- we don't have control over what anybody does, that's true, but we've gotten some assurance over the NAB has been at the table -- it's been a major player here -- that it would be inclined to adopt such a code, I might feel a little more comfortable. I want to make a second point, and it relates to two things that Bill said. I think, Bill, you make an excellent case what Peg has been saying all morning, and I haven't had to say it because I think it's pretty obvious, that the fact that a significant number of broadcasters can say "go to hell" is the reason why we need minimum guidelines. MR. MINOW: Is the reason what, Gigi? MS. SOHN: That we need some sort of minimum guidelines, and that's why this afternoon discussion is going to be very important. Voluntary, you're right, it is voluntary, and I am troubled by the mix of voluntary 104 enforcement, and I am very concerned, and I'd like to find a way we can legally put teeth into this. I'm not so sure. You're second point, Bill, is that, well, some broadcasters, they're small, they're this, they're that, they can't afford. I have to agree with Newt on this point. Turn your license back in. If you can't do it, there's somebody else who will. There has to be a certain base minimum about which you serve the public interests. You just can't say, I don't have enough money justify my license. If you don't have enough money, go sell donuts. MR. DUHAMEL: The things we got to get down to are what these minimums are that you're talking about. Why do you say take 20 percent? A lot of small broadcasters don't have 20 percent to the bottom line. MS. SOHN: I'm not saying -- MR. DUHAMEL: You're the one, in April, proposed that deal. MS. SOHN: It's a proposal, Bill. MR. DUHAMEL: It's outrageous. MS. CHARREN: That's something 105 else, and we're going to talk about it. MS. SOHN: I told you, if you listened to what I said the last meeting, I said I'm not laying any particular number. The next meeting I said that. MR. GOODMON: I still am very positive about the notion of a code, and we all know that you don't have to join, you don't have to comply, but I'm hoping that, as an industry -- and I believe that, as an industry, we can do this and make it a source of professional pride that we subscribe, and we do it. I mean, that's not hard. I mean, that's -- and some people will and some people won't, but I believe that we can do that, and it's just as simple as that. Here's the code, and as a mater of pride, we want to follow it and be part of that and say that we are, just like we did before, and I believe that will work. I mean -- and it is certainly preferable to increased regulations and stuff. I'm positive about that. I see more positives than negatives is what I'm trying to shift. CHAIRMAN ORNSTEIN: To follow that with what Gigi said, I don't have a 106 problem making recommendations that hit broadcasters, and it seems to me, going back to some of the things Cass said early on, if we look at our various models, I believe, as he does, that it's preferable to do this without regulatory mechanisms if we can. And that, in the first instance, the industry, on its own, creates a set of standards and regulates itself internally, making a regulatory apparatus or legal changes unnecessary or superfluous, we are all better served. Creating a challenge to the industry by putting as much explicitly as we can out there in recommendations, including using an enforcement mechanism that existed before that is self-enforcement and maybe even enhancing it a little bit so we can make sure that the stations that meet those standards are out there, which means that those that don't are going to have to justify it in some way in the court of public opinion, or possibly in the regulatory arena, would be a preferable way to go. And if, in the end, the industry, through 107 its association, does not step up to the plate in that regard, that any recommendations that we make to Congress or the agencies ought to then have more resonance because, in effect, what the industry itself has said, that we can do this, would ring more hollow. So that makes, it seems to me -- that's why we are spending this much time on a voluntary code and why it is important to make sure that it isn't just out there without any mechanism internally. MS. CHARREN: Internally? CHAIRMAN ORNSTEIN: Internally. That's what we're talking about here. MR. BENTON: Following up on this great speech that you've just made, we have a representative to the NAB here. Are they open to what we're talking about? MS. CHARREN: I don't want to discuss that now with them. CHAIRMAN ORNSTEIN: We're talking among ourselves here. MS. SCOTT: The NAB attorney is here in Geneva. Do you want me to ask him? CHAIRMAN ORNSTEIN: Geneva would 108 be a good place for those negotiations. Let me just add, from what I can gather, the NAB didn't drop its code like a hot rock because it wanted to. What ended up happening after the antitrust challenge was a consent decree, basically. And there is no sense out there -- and certainly the broadcasters that we have on this panel, many NAB members in good standing and active in the organization, have given us no indication that would suggest the NAB would be adverse to returning to a code if there are no legal or antitrust implications, isn't that correct? MR. CRUMP: I think we all speak for ourselves, but that's certainly my personal opinion. MS. CHARREN: Peggy Charren. I think the best thing is that this is a separate organization appointed to look at how broadcasting is working, and for us to have, as part of this report, these kinds of suggestions enables the public, that court of public opinion, to be more specific about what it's talking about, whether its station is doing what it should do. It's kind of an education 109 for activist groups in the broadcasting arena to hold their stations to some kind of standards. And from that point of view, I think it's helpful outside the industry, but not for the FCC to hold the stations to this standard. I just think like that relationship, the more likely to get it thrown out. But the public can say anything it pleases. CHAIRMAN MOONVES: I think Cass asked a very good question. I would love to know how this code board operated way back when, how it, in fact, functioned, what was its authority, et cetera, et cetera, et cetera. I think that's a fairly important question. MR. BENTON: A lot of it is built into this code that was passed out that's 20 years old. CHAIRMAN MOONVES: We have no -- in January, they went through 750 stations and in June they went through 750 stations, and these stations got a star and these got a slap on the wrist. I mean, I think that's an important question. MR. CRUZ: And I think the conversation also indicates there's an 110 evolution of the applicability of these states over years, and that has changed. So you're really looking at something that's metamorphosed over X amount of years, right, Newt? MR. MINOW: Right. Right. CHAIRMAN ORNSTEIN: Well, perhaps since we have a task force on this subject, we can ask the task force to communicate with the NAB and find some people who are a part of that old board and see what worked and what didn't and maybe adjust the standards to fit those recommendations. One thing we should note here is that if we do build in a robust reporting requirement, that it doesn't require an inordinate expenditure of resources from the stations, but that works. It will make that task of a board easier if, in fact, they have what the stations themselves have done. MR. SUNSTEIN: I suggest that what I'll do in the next few days is incorporate the many good suggestions and wait for any E-mails or faxes or phone calls and get out something to the broadcasting -- to the 111 code task force within the week and then get something out within two weeks to everybody. MR. RUIZ: Would that include checking with the NAB as to whether we would recommend to Congress that all broadcasters become members of the NAB? MR. SUNSTEIN: Checking on their position on that? Happy to do that?. CHAIRMAN ORNSTEIN: I think more significant is checking to see whether that's kosher, whether we can actually do that within the constitutional framework. MR. SUNSTEIN: That's a hard one. CHAIRMAN ORNSTEIN: That's a harder question, but if we can surmount that barrier. CHAIRMAN MOONVES: And I still think we have to reserve the right that we have some serious enforcement questions at this point. MR. MINOW: As a member of the task force, I want to thank Cass for a great job. (Clapping.) 112 CHAIRMAN ORNSTEIN: Now, we can either discuss reporting requirements at this point in terms of the reports of stations on their public interest activities, or we could move to the educational arena. I suspect the minimum standards is something we ought to put aside until people have had a chance to read it, and that's, obviously, going to be something of real contention there. Maybe we should move on to the educational task force and see how far we can get before we break for lunch. Perhaps Lois Jean White who chaired it and Frank Cruz and who drafted up some of the consensus recommendations. Ms. White? MS. WHITE: Thank you, Mr. Chairman. There is a bit of housekeeping that we need to do. CHAIRMAN ORNSTEIN: Move the microphone a little closer. MS. WHITE: There's several documents in front of you. One is dated June 3rd, and it was an operative passed out to you in error. Would you please turn that back in. 113 At the top it says, Corporation for Public Broadcasting, June 3rd. This is a copy -- this is a copy that was meant for the committee members only for their discussion and comments. The one we will be discussing is dated June 5th, and that's the one that you need. MS. SOHN: It's one of the smaller typed. MR. DUHAMEL: Oh, is that what that is? That's the small type. MS. WHITE: Do we have the old copies here, because they're completely different. Committee members made changes, additions and what have you, so you do not need to be looking at the June 3rd edition. Okay. The committee met, the committee to discuss educational programming for the digital age, met on May 28th via a telephone conference a conference call, and I'm very pleased to say that all of the committee members participated, and I'd like to thank them for doing that. I'd also like to thank Frank Cruz, as Norm alluded to, for printing the draft and passing it out. The committee members also adhered to the 114 timetable, which enabled to us have this presented to you at this time. I thank you also for that. Our committee members are sitting at various seats of the table; let's see, Frank Cruz, Peggy Charren, Gigi Sohn, Robert Decherd, and they will be participating in the discussion as they wish. MS. CHARREN: And Richard Masur. MS. WHITE: Right, Richard. Is he on? MS. CHARREN: Yes. MS. WHITE: He's probably joining us by telephone. The report is in three parts. The first part is an introduction, the second part consists of a discussion area, and the third part on the back page is a recommendations from the subcommittee. The introduction does not involve the definition of educational programming, and I suspect that all of us have our own particular definitions for that. I'll give you mine if you'd like to have it. We'll do that later, too. 115 Our recommendations you can read. I think the most important area of this report was the discussion area, and that begins on the second page. What I'll do is just sort of go down each bullet, and our committee members may give their input, whether they agreed, disagreed. Is that okay? And we'll go as far as we can go. The first bullet is allowing public broadcasters to retain a second channel, which would further the committee's goal of increasing public service broadcasting. I'll read it. If you have some comments, you may stop. The second channel would enable public broadcasters to explore new ways to provide greater access to local educational, civic, cultural, minority and other nonprofit organizations. Public broadcasting can achieve increased public service only with guaranteed adequate public support. Proposed sources of funding for the additional public service channels may not be adequate. Fees imposed upon commercial 116 broadcasters from ancillary and supplemental services is speculative and may not be sufficient. Creation of a trust fund for public broadcasting by Congress that will adequately ensure public service in the digital age. No comments? Funding of a trust fund to come from various sources. Educational trust fund to be administered by CPB with a percentage going to an alternate system for independent producers. Programming content of extra spectrum to include children's programming, nonfiction, news, public affairs, KidSpan, local programming and programming for underserved and diverse audiences and audiences with disabilities, long-distance learning and universal access, job training and arts education. The next bullet is trust fund monies should also go to independent producers and other noncommercial television providers. The last bullet on that page, a $5 to $6 billion dollar trust fund for public 117 broadcasting covers only the current annual appropriation by Congress and not enough for additional services. New opportunities would require additional sources for revenue. No unfunded mandates. MR. DUHAMEL: Do you have any idea how much you're talking about? MS. WHITE: Committee members, who dealt with that? Was that you, Gigi? MS. SOHN: What was the question? MR. DUHAMEL: The question is the current $5 to $6 billion dollars, does anyone have a feel for how much -- (inaudible). MS. SOHN: Frank should be the person you ask about that. MR. CRUZ: It would be difficult to come up with an accurate figure. Basically what we mean by the $5 to $6 million basis, is that would basically cover the annual allotment Congress makes for public broadcasting in FDR as it stands now. If added responsibilities were added on to public broadcasting, as has been suggested by some of the proposals, that would be additional 118 funding. That would be determined by whatever those additional services might be. MS. CHARREN: That should be part of what we covered in our discussions of what our rules have been for how we make all these things happen, and we didn't feel that the length of time we were together created an adequate answer to that question, which is certainly an important question, but it was understood, by at least most of us, I think, that just funding public broadcasting to the extent it's underground is not enough to cover a digital age. MS. WHITE: The next bullet on page 2 is establishing an adequate trust fund would get public broadcasting away from the catch 22 of asking Congress for money, and at the same time, doing pledge weeks and more commercial underwriting. MR. RUIZ: Did you say the trust it was established -- (inaudible). MS. CHARREN: Could you speak into the microphone? MR. RUIZ: Jose Luis Ruiz. I think this is dangerous. I don't think you 119 should say this because many stations, especially the larger ones like WNT or KCT, the congressional funding is a very small portion of their annual budget. Their larger portions come from their membership. A small radio station perhaps, but they're not going to give a pledge in that membership base, in that database that they have established in Los Angeles and -- MS. WHITE: Remember, this is just for discussion. MR. CRUZ: The key word here is an adequate trust fund. MS. WHITE: This is not recommendations now. MS. SOHN: Just something we talked about. MS. CHARREN: This was something we talked about, but that was not a recommendation because I don't agree with that either, and I was on that committee. MS. WHITE: What we tried to do is record everything that we discussed, just so you know. MS. CHARREN: This was not 120 decisions made by this group. MS. WHITE: The next bullet is concern not to fund additional public broadcasting services from commercial broadcasters' revenues because they were given a great gift. MR. DUHAMEL: What does that mean? I don't understand the second sentence. MS. WHITE: Who brought that up? MR. DECHERD: I made the point in response to the renewed suggestion that we're dealing with a great gift here, and I thought we had left that subject in November. MR. DUHAMEL: What? MR. DECHERD: The idea that spectrum is this great giveaway to broadcasters, and therefore, we should extract from broadcasters some sort of economic concession, and we got -- these are just discussions. MR. DUHAMEL: I agree with you on that. Just the English, I wasn't sure what that sentence really said. That's what I was having trouble with. 121 MS. WHITE: It was taken from the transcript, so we were talking then. MS. CHARREN: Peggy Charren. Extremely disagrees, violently disagrees with that statement. MS. WHITE: Please remember that these are -- CHAIRMAN MOONVES: Very difficult ideas. MS. WHITE: Please remember these are not the recommendations, just the discussion. CHAIRMAN MOONVES: Keep going. MS. WHITE: Concern that delving into the relationships between CPB, PBS, Congress and the administration regarding a trust fund risk getting into highly divisive and contentious issues. It is important to give a broad definition of what educational programming is and then permit broadcasters to determine how to fulfill the goal. This is a discussion, not a recommendation. Digital technology provides additional 122 spectrum, and our commission should recommend constructive ways it can be used and let the broadcasters decide the details on how to use it. Public interest obligations for commercial broadcasters in the digital era should be the same as exist now and could involve more depending on how digital television evolves. The broadcast industry is spending billions of its own dollars on public interest programming, and the broadcast industry will oppose any additional mandates. Debate over whether commercial broadcasters have any or minimal public interest obligations with multiplex channels, creating an option for commercial broadcasters to have a channel with educational programming. Belief that commercial broadcasters should work with those advocates who favor Congressional funding for public broadcasting. Chances of getting congressional funding greatly improve with a united effort. There should be incentives for commercial broadcasters to do more public interest 123 programming by having 80 percent of the funds go to noncommercial broadcasters and 20 percent to commercial broadcasters. This is still discussion. MR. RUIZ: Which one are you on? MS. SOHN: This is my suggestion based on conversations I had with Barry Diller's staff, that there needs to be -- that there's no incentive for commercial broadcasters, commercial producers to produce good public interest programming. There's also something I heard. I gave a speech on a kids program in digital age in New York, and several producers came up to me and said, you know, the money is not there for us to do this stuff. I thought maybe one way -- and again, let's not get -- I'm not wedded to these numbers at all -- that maybe some of the money should go to commercial producers to do public interest programming, and you would apply just as you would apply to CPB for a noncommercial programmer, you'd apply to CPB to get funding for a good public interest programming. 124 MS. CHARREN: Let me reiterate that this was not this committee agreeing to anything. MS. SOHN: It was my idea. MR. DUHAMEL: Incidentally, I think Gigi has got an interesting point there. I really do. CHAIRMAN ORNSTEIN: Well, if we strongly recommend, and if we ever got anywhere with the notion of taking revenues from the auctions and putting them into a fund to produce programming for public interest purposes focusing on education, and I think we have to emphasize here that what we would be talking about is public interest programming beyond the specific obligations that exist, that there, clearly, is a case to be made that in areas where it's simply not commercially feasible to have some revenue available. MS. CHARREN: Let me remind everybody that this creates a content- sensitive decision, and that NBC's idea of what is educational, like "Hang Time" and "Saved by the Bell" is not really mine. Now, I am not the genius to decide, but I 125 think whenever you get into public money going to commercial interests, there's something that's defined as good, you have the problem of what is good. CHAIRMAN ORNSTEIN: In this case, Peggy, it would be, presumably, either NBC or an independent producer making an application to an entity like a foundation, probably CPB, and if they made an application for funding for " Saved by the Bell", trying to make the case that it's not commercially feasible otherwise and this would serve the public interest and it's beyond the three hours that they have, they'd have to make an awfully good case. MS. CHARREN: I accept that, and they were separate caveats that go with this kind of recommendation. MR. RUIZ: The recommendation, I think there's public affairs programs, informational programs, and there's educational programs. Most educators are going to tell you -- and we're not talking about preschool -- that an educational for them to use has to fit into their curriculum. 126 Nova, for example, is a great science series, but it's information. A teacher can recommend that the children see it that evening and watch it, but they cannot build a class curriculum around it. MS. SOHN: Well, that's why that you'll see one of the recommendations, once we get to them, is that educational program needs go beyond classroom learning. I don't know -- I think the majority -- I don't want to say there's nobody, but the majority of the subcommittee thought that educational programming definitely needed to go beyond curriculum type stuff. Otherwise, we wouldn't be talking about it. MS. WHITE: My definition doesn't even include that. Would you like to hear my definition? MS. CHARREN: If we're talking about -- be careful because if we're talking about long-distance learning, that is classroom. MS. WHITE: That is true. MS. CHARREN: This is no longer the code. This is recommendations for a 127 digital age, and curriculum-related educational programming is certainly part of what you would hope would happen in a digital age. MR. RUIZ: I think if we're discussing partnership with the libraries and school systems that are especially involved in distant learning, we should have something that is uniform. CHAIRMAN ORNSTEIN: Well, it would seem to me that we obviously need to spend some time discussing what we mean here by educational programming, and we'll get to your definition in a minute. But suggesting that educational programming goes beyond classroom and instructional programming, whether it's distant learning or in the classroom itself, doesn't mean that it excludes such programming. So I don't think any of us would suggest that an educational channel or a channel devoted to education oriented public interest programming should set aside instructional learning, but I doubt, Luis Ruiz, that you want to suggest that issue do only such programming. MR. RUIZ: No, I'm suggesting 128 that maybe we add another word here so that educators don't go crazy. MS. WHITE: I think we could probably add it in the definition, more definition of educational program in the introduction. MS. SOHN: You do. You have some introduction. You say, in the first sentence, educational and instructional programming, including local, educational, children's and other public interest programming. You can't get much broader than that. MS. STRAUSS: I have a question for Gigi on your suggestion about the 80 percent, 20 percent. First, were you referring to educational programming or all public interest programming? And secondly, if it was educational, are you proposing that it be above and beyond the three-hour requirement? MS. SOHN: Well, again, I would define educational to include just about every public interest program. I would define it very, very broadly, and you know, that's 129 basically -- public broadcast stations were originally tasked -- Frank, please correct me on the history if I'm wrong -- to do educational programming. It was thought of as this more kind of narrow learning type concept, and over the years, it's evolved to be much, much, much, much more. I don't see any reason to why we should go back to what it was eons ago. So that's the answer to question number 1. Tell me what question number 2 was. MS. STRAUSS: Well, that kind of answers it, I think. I was asking whether it was three hours. MS. CHARREN: Three hours, that's a legal mandate. That's a law that says every broadcaster has to provide, and I think this doesn't apply to that. CHAIRMAN ORNSTEIN: No, this is over and above that. If they want to do additional programming, that's not feasible. Charles? MR. BENTON: Charles Benton. I think we do disservice to the idea of educational programming by following Gigi's 130 definition of throwing everything into it that is public service. I think this is not appropriate. Let me speak to Robert Decherd's very imaginative and even courageous proposal that he shared with us in April. The struggle between defining noncommercial television as educational or public has been the history of the business. The Ford Foundation put a quarter of a billion dollars on the line in the '50s to support educational television. Cardine Corporation wrote its reports in 1967 giving us a paradigm shift and moving us to public television. And I think now that we're talking about educational television, we ought to be clear about what we're talking about, and it doesn't mean everything. And that, it seems to me, was the heart of what Robert, in responding to the panel as I remember that we had in January about educational programming, I think if we are to adopt the number one proposal here on this list, the discussion area; namely, allows a broadcaster to retain a second channel, which is not recommended by certain members of the 131 committee, for example, if we are to adopt that idea, the only way Congress is going to go along with this is having us devote the second channel down the line because I know it's being led now, and we're talking not just the next two or three years, but we're talking the next 50 years, and we got to be thinking about this. The only way Congress would allow that is by having that second channel devoted to education. Now, I'm not thinking narrowly curriculum or K-12, but a preschool education, K-12, open university type of programs, Mr. Adenburg's original dream following the British, and then lifelong learning, but those are not public affairs programming and access programming, and they're not children's entertainment programming. Those are different things, and I think we really do need to be more explicit about what we mean by education. And I believe that the other -- the second general point, which picks up on Luis's point, is by encouraging the linkage of community level with the other institutions that have the word public in them, the public schools and the 132 public library and public television would really provide the basis then of cooperation at the community levels with public schools, public education -- I'm sorry, public schools, public library and public television where you have the institutional basis to be level, to be supplemented by a lot of others that would support education and programming and then public interest. So I think keeping the integrity of the word education and meaning what we say, not just it's everything and we're going to throw in the kitchen sink in public service, and I think, Bob, that's what you had in mind, and I really subscribe to that, and I think we ought to be very clear about that and stick to that vision because if we depart from that vision, then I think the idea of the public service broadcasting, keeping the second channel instead of having to return it as the commercial television will is -- just won't happen. This could drive that decision long-term, and I'd like to have your reactions to that and what you had in mind with your bold and 133 imaginative proposal. MR. DECHERD: Charles, that is essentially what I had in mind, and as you'll recall, the proposal also suggested that if this 6 megahertz is multiplexed in the future, that there might be a purpose there well-served for public interest or political time. I think it's interesting to look at CPB's submission here because their focus, Frank, if I am reading it correctly, is on this very point. Said another way, with our existing 6 megahertz, we have our hands full providing adequate funding for this large array of programming that fits under these other headings; public broadcasting largely defined, public affairs, community affairs and so forth, and I interpreted that document to suggest that CPB and PBS have a very ambitious agenda already to take advantage of the potentially five additional channels which they can program within the 6 megahertz. MS. CHARREN: Can I ask you, you just said -- you mentioned political speech, free time or something. MR. DECHERD: Right. 134 MS. CHARREN: Which set of megahertz were you thinking for that, the original or the second? MR. DECHERD: Well, what I had originally proposed, Peggy, is that if you look at this additional spectrum as being primarily for educational purposes as Charles has defined it, that if you, again working through this evolutionary logic, believe that that's its primary purpose, and at the outset we might have our hands full putting one good and effective interactive educational channel across 50 states, but as that evolved and it became an accepted new medium almost, that it could then, through multiplexing, have the capacity to address unserved public interest requirements or even political speech requirements. But that's not its primary purpose, and then when you then overlay CPB's proposal, I think where you come back is to the crux of Charles' point and question; namely, should we put these two things together as we, as a committee, address a broad array of public broadcasting. And I believe it's a mistake to 135 do that. I believe that we need to follow Frank's and CPB's lead here and say, today we have a funding shortage for public broadcasting as it's evolved. And then, on a separate page, if you will, say there is this choice, and that choice is to fund, in a discrete and separate way, a truly interactive educational national medium in cooperation with public schools, public universities, private universities, public libraries, the people Charles is talking about, and if other things evolve there, fine, but the real issue is, can we or should we propose that as a stand-alone idea which must be funded on a stand-alone basis. I think it would be a terrible mistake to, in effect, realize CPB's fears that we're just going to create more capacity with no additional funding and look up in ten years only to discover that we now have 12 megahertz allocated to the existing PBS, CPB regime, if you will, and no funding. MS. CHARREN: Have you got specific ideas for funding that second educational focus? 136 MR. DECHERD: Yes, my proposal was whatever fees are obtained from the sale of spectrum in the future, and I said at the outset, and still believe, if it's so meritorious and an idea around which all political philosophies can rally, that Congress ought to fund it and assume that there will be funding from public schools and public universities and people truly interested in education who are the people we heard from in January. I sensed a tremendous amount of enthusiasm to come up with creative ways to obtain funding and create that capability, but that's completely different than the idea of a permanent trust fund for public broadcasting. I think to mix those two things is a nonstarter. I would be opposed to recommending additional spectrum if that's the only -- MR. BENTON: If I could just add one final specific, and others that want to come in here, right now, the most important new money for schools and libraries is in the New Schools and Libraries Corporation, which has two and a quarter billion dollars as a part of 137 the Universal Service Fund, and all that does is help with connections. It does not help with programming. So there is no money for programming short of thinking about this as a new challenge, and I come back to my basic point in support of your proposal, Robert. Unless we can be explicit about this educational vision, if you will, and public telecommunications in the educational from cradle to grave, really, I do not think it will attract additional funding nationally. But if we can stick to that, with two and a quarter billion dollars that are already there, one might look towards a -- CHAIRMAN ORNSTEIN: Let's see what areas Gigi has. MR. RUIZ: I think this is a very complex idea, mainly because public broadcasting is so complex. I think some of these work very well in especially state networks like Kentucky, Iowa, Alabama, but when you move into states like California, Texas, the licensees are so different. You have anywhere from a community licensee to a university licensee to a board of education 138 licensee. You have all the overlapping stations. You have San Bernardino, Orange County, two in LA, and you're going to leave all these spectrums there. CHAIRMAN ORNSTEIN: There are a couple of additional areas here that we need to discuss at some length. We clearly have a problem that exists in places in California, it exists in Washington, D.C. where we have two public television stations, of setting aside one channel and figuring out which one. We also have the question which I would raise, which we've discussed a little bit before, and I put a suggestion on the table as well, as to whether this just automatically under every circumstance goes to a local public television station or not, and it shouldn't. MR. GOODMON: Should not. CHAIRMAN ORNSTEIN: And what I would suggest is if we can resolve the question in areas where there's overlap which one moves forward, that any station be required to submit a plan for how it would use this spectrum to fit the objectives that we lay out, and that 139 plan go to the FCC, which can accept it or reject it. And if it's rejected, then it would be open for bid by other entities in the community to come up with a comparable plan so we can have at least some competition here with the initial nod to the local broadcast. We do have to resolve the question of overlap, but let's see if we can at least come to a consensus on the other areas. We, I think, have a consensus that we should recommend that public broadcasting in one fashion or another, if we can resolve the overlap, be able to keep its analog share of the spectrum rather than turn it back as other broadcasters will have to do with the proviso that it be used in a dedicated way to educational programming which we still need to define, and that adequate funding be there so that it not be an unfunded mandate. I would suggest to you that the obvious and logical thing, since we're tying this to the analog spectrum and since, presumably, public broadcasting is going to lag a little bit behind many of the others, is that our recommendation being simply that the funding 140 for -- that come from the auction of the other analog spectrum, which now in the law go toward deficit reduction, and it seems logical to suggest that this be linked directly to that. Suggesting that the fees go to some entity. I assume we're talking about the Corporation for Multibroadcasting to then allocate it among the other -- these new entities, and that a portion, which we can discuss, 15 or 20 percent, be set aside for open bidding to cover educational programming that otherwise would not be commercially feasible by commercial stations over and above whatever explicit legal obligations they have. I think we can probably all agree on that. Where we need to talk a little bit further is how we define the educational programming and how we deal with the overlap question and whether that process that I've described of creating a plan and bidding for it would be adequate. MR. RUIZ: I'm not so sure that I can agree on all that. I think, first of all, if we want a level playing field and we didn't have various underserved audiences, and 141 how many years have we been dealing with the minority question in broadcasting. Here we have an opportunity take some very bold steps and try to level that playing field. Instead, we have to take safe steps, and we're going to go safe areas that we've always been in, we feel comfortable in, and I'm concerned that if you've got all these analog systems, wouldn't it be wonderful if we could build a system that serves reservations and makes people who feel that they're not part of the American public, that they've been defeated in war, that they've lost all their country, start to become part of the American society and see programming that reflects their culture, that reflects them, that reflects them in positive ways? Can't we see a -- we look at the ghettos of this country where kids don't often see themselves in the way they should be seeing themselves in television in positive ways. If you're going to use that system, let's use it to level that playing field. Let's go into those areas that we've never gone into before. Let's go into programming and really 142 bring this country back together, and let's talk about the underserved. Why give it back to the overserved? Are we talking about building a system that today has more British programming in its prime time schedule than that underserved audience? Why do we want to do that? Public broadcasting is primarily, when you get into prime time schedules, it's a very elite group. It's college-educated. They can afford the membership. When we talk about the school districts, who's going to have -- what's the have and have-nots? It's going to be the poor school districts that aren't going to have the capacity. That's who we should focus on. MS. CHARREN: I suppose, in theory, that learning piece of the spectrum should be serving those audiences. The question is what you do in the meantime, but we're talking about digital television. CHAIRMAN ORNSTEIN: And we're not talking about replicating the prime time schedule of public broadcasters. MS. CHARREN: What do you think 143 would happen, for example, with the second -- MR. RUIZ: I think there are very specific things in here. History will repeat itself, and those that have will get more, and those who have not, who don't have, will, once again, be left out. MS. CHARREN: How would you propose to affect the long-distance learning, for example, of the Native American community? MR. RUIZ: I would put money aside for that, and I would say specific money here would go for the underserved audiences. If we can write independent producers, can't we prioritize this money to go to the underserved audiences, those spectrums to go to the underserved audiences? Can't we build a trust to start to level that playing field? Can anybody argue? MR. YEE: I support you in the politics and the history of what you're talking about because I've been there, and I don't think that is an automatic guarantee it is going to go to the present PBS stations -- better not because I won't support it. But I do think, when asking the commercial 144 counterparts, we're also asking the public television counterparts to come up with a new plan, a new vision with accountability built in, because we're just giving spectrum to that is one thing, but I don't want to be, necessarily, going to the same people either. So I think there are ways of doing that. It's got to be dealt with in the details. Certainly it will not be a continuation of public television as it stands. If it is, I think a lot of us would just walk out of the room, but I don't think by -- the issue of a trust fund is a magnet, and already we're seeing the magnet taking on a lot of connotations, a lot of layering. I think we have to be very careful about how we do that in terms of microengineering, because -- (inaudible) in the next two, three months working it out. But I believe that the recommendations that I see a lot of in all these reports, there's something promising here. I don't want to kill it. I also don't want to be exclusive either, and I think we've got to be as inclusive in this experiment as possible. 145 Start creating set-asides which I do believe and I think is a way to navigate the language of that in terms of priorities and accountability, but I don't think -- I agree with what you're saying. I think we got to be a little bit more farsighted rather than just -- CHAIRMAN MOONVES: I don't think they're mutually exclusive. I think there is a way. What is set up here is a mechanism, basically, for financing educational programming in a new and exciting way. I don't think it's impossible to also incorporate language that says that those that are underserved should be part of this time, and I think you could accomplish both. MR. RUIZ: I would like to see more than just part of it. I think the priority should be a level playing field. CHAIRMAN ORNSTEIN: Well, we may not be able to come to a complete agreement on that, but I do think we clearly are trying to send a signal here, first of all, that this space would have to be justified by stations as distinct from and very different from the 146 programming that they do otherwise. It is a new and different entity. It would have to be justified in terms of its links to local communities and organizations that -- with a cooperative and interactive effort. And clearly, it is designed to complement the Schools and Libraries Act, which probably needs more of a focus on making sure that the underserved schools are wired first. But just to wire them isn't going to matter if you don't have something to put in there, and that's what we're designed to do, what we're trying to design something to do. And we want to make this a competitive process so that stations don't just get it and, in a cavalier way, ignore those communities. So I would hope we can, as James suggests, work out language. MR. BENTON: Norm, a very concrete point, the majority of money in elementary and secondary education under Title 1 is aimed specifically to the underserved. So by tying in this with legislation, ESEA and the Higher Educational Act, which is up for renewal next year, and 147 LSTA, these are the three acts to think about all this in big terms. CHAIRMAN ORNSTEIN: Just to take one example, a couple of which you mentioned, South Dakota Public Television, for example, is given this opportunity to do educational programming and given funding to do it. I would have a hard time imagining that South Dakota Public Television wouldn't go out of its way to serve the Indian reservations in that particular community, and if they came up with a plan that didn't do that, then the FCC would be well-justified to reject it and open it up for bidding and maybe some other group, including an Indian group, might come forward with a better plan. MS. CHARREN: I have a question. It seems to me that I hear two funds; one fund is for public interest programming that is separate from this other way of thinking about education, which I think is good and important, and the other is mostly spectrum auction of a piece for the education channel or the education hunk of spectrum. CHAIRMAN ORNSTEIN: Well, I 148 think what we're suggesting, there are actually three things that are out there on the table. One is a suggestion that has come from all of those in the public broadcasting world, which basically is set up a trust fund for public broadcasting and fund it so that along the way it can reach a level of $5 or $6 billion dollars and we can do what we need to do with the digital age of public broadcasting. What Robert is suggesting, what many others I think agree with, is put that issue aside from a dedicated channel for educational purposes and see if we can come up with a specific link. You know, we may very well want to recommend that Congress fund a trust fund for public broadcasting. MS. CHARREN: So it's two. CHAIRMAN ORNSTEIN: It's two. Now, we could also consider a third area, which is -- and we haven't discussed in any detail now what to do with the fees, which maybe small or may not, specifically for ancillary and supplementary uses, which now are going to have to be collected by the FCC, and we also haven't discussed yet, but we will get 149 to, the question of whether funds come in on a separate track if stations move towards multiple channels of commercially-driven programming, which we'll get to at some other time. So there may be multiple streams of funding coming in. The question is what gets dedicated to what or what we recommend. MS. CHARREN: At least there are two big hunks now. If the public system is to keep its second one, and that is really a way of thinking about a democratic society and how it works and how education isn't working, and it starts to deal with some of the real problems in the way of this country is going. It does have two things, and I think that's good. CHAIRMAN ORNSTEIN: What Robert is saying, which I think most of us would agree with, is we do not want to commingle the idea of making sure that public broadcasting as an entity is funded adequately for its move to the digital age, and adding a new educational component to this that would be separate and distinct in term of its programming, though 150 there's some overlap, obviously, and its intent that we would try to fund separately. MS. CHARREN: I like that because I didn't understand that from the initial thing. MR. CRUZ: I think it's evolved. I think, in fairness to Gigi's proposal and Robert's proposal, what we attempted to do in the proposal that public broadcasting, as a whole, has submitted to the committee members -- and I trust, I hope by now all of you have gotten a copy of it -- what we try to do is we try to talk about the need for the creation of a trust fund so public broadcasting can do its job well that it's doing now into the digital era. And then we look at if you agree to recommend that public broadcasting take on those second channels and those added ancillary responsibilities, then that should be something that should be with a proviso of adequate funding for that also in that context. And I think if you look in our proposal, it's pretty well spelled out in that context. MS. SOHN: Well, I really like 151 the way CPB, on pages 7 and 8 of their proposal, have laid out the types of public services they provide with a channel. That's how I would define -- I mean, if we're saying you can only do educational programming on the second channel, this is how I would define that, and it's really very broad, but it may be too broad for some folks. MR. CRUZ: Does everyone have a copy of the public broadcasting proposal? If not, I've got some extras here that I can let you have. MR. DUHAMEL: What's the date? MR. CRUZ: Well, we dated it for today, but I had it Fed Exed to everyone, I think Wednesday or Thursday of last week. But I've got some extras here. MS. SOHN: Once everybody has that in front of them, I would suggest two just minor, minor changes, editorial changes, but otherwise that's -- pages 7, bullet point at 7. MR. DECHERD: May I just make one observation, and it really relates to Peggy's point about how these things momentarily need to be emerged and now we're 152 separating them again. The idea that on the outset on our part is that they be separate, and I think the funding mechanism for them as described are absolutely the place we should begin, but I will also say that I think if this works, that the inclination of the Congress to provide funding for this separately would be an entirely different political discussion than funding of PBS. I mean, it's hard to imagine anyone being against this for work. There's just an incredible yearning, I mean back to Jose Luis's point or anybody. This is one way. MR. BENTON: If I may add again, I think it's really important to be clear about what we're saying. We're talking about educational outreach. Here is -- the CPB, in its testimony to Congress, is passing out this brochure, which this is sort of the case in point, in effect. This is Maryland's, Maryland's idea, but it's kind of the model that CPB is putting out for the world here. And here's the analog for a single channel here, and the four channels, digital television 153 and the multiplexing, the first channel, children's channel, ready to learn. This is just one state's idea now. The next one, Maryland Public Service, Maryland Public Service. Then there's educational instructional, and then there's business and information. Okay. This is one vision of the use of digital television in a multiplexing world. These kinds of things can be done with and in line with DT's broad definition of all the public programming there is room for within this one channel, but what we're talking about now is phase two. After this has been done over the next five years, talking about phase two, which is another channel, and that's the channel we're talking about now, vis-a-vis education, because if -- MS. CHARREN: Five channels. MR. BENTON: In the current situation, one can do, for example, a national campaign on literacy, and we need a national campaign on literacy, can do job retraining programs. We need job retraining desperately, and television can play a major role. Those 154 are ideas that can be experimented with in this role model. But that is not speaking to Bob's -- to Robert's vision of keeping the next 6 megahertz for education, which then can, in effect, evolve in its definition so that we can really roll out, in a major way, mid 2005. CHAIRMAN ORNSTEIN: Let me just procedurally suggest something here. Karen had a comment she had wanted to make. Let me say that our schedule, in our schedule, we were supposed to break at 12:30, but we were actually supposed to stop our discussion around 12:15 for a brief period of public comment, which is required under the law, and I would suggest that we take Karen's brief comment and then open up for our public comments, and when we return after lunch, we can, I hope in an expeditious way, move to our discussion of how we want to define under these circumstances educational programming, have at least a brief discussion of where we want to go in terms of this problem of overlap, and then conclude with this area and move on to our more contentious area. MS. CHARREN: Somebody just gave 155 me this public interest obligation broadcast, and I don't know where this came from. MR. GOODMON: I didn't mean for that to be passed out. I had it copied. On one side is the current. I want to pass it out when we talked about public interest obligations rather than now. On the left side is what the public interest obligations of broadcasters are now, and on the right side is what they had been at various times in the past. CHAIRMAN ORNSTEIN: So retain that for our discussion later on. MS. WHITE: I actually have more recommendations. We dealt with some. CHAIRMAN ORNSTEIN: But some of these in the pay or play vein, for example, are in areas that move beyond the specific ones. We'll take them up. MS. STRAUSS: This is just a minor point again. I just noticed that in all the discussions, again the Disability Act is not mentioned, so I just wanted to add that where funds -- I would propose that where funds are distributed to stations, whether they be 156 public stations or commercial stations, that there be a condition imposed on those funds that the programming used or the programming that uses those funds contain closed captioning. CHAIRMAN ORNSTEIN: Yes. MR. GOODMON: I'm trying to think through how we keep Robert's idea going and this is six, seven, eight -- if it's 85 percent, I don't know what it is, but I think it would be important for us to say we need to keep this spectrum, and if we set up some mechanism to work on how to do it, I mean to define this and somebody set up a task force or something, to keep this -- I'm afraid this will be lost. I don't know how. Since this could be six or eight years from now, we need someway to -- CHAIRMAN ORNSTEIN: It has to be embodied in the legislature, basically. Among other things, the Telecommunications Act specified that the revenues from any auction of the analog spectrum would go to the general treasury, so you need a legislative fix anyhow. 157 But I think, as Robert said, it strikes me as being so politically attractive and nonidealogical that I don't think we'll have any difficulty finding support if we want to move this forward. MS. CHARREN: It's a hell of a thing to impose. CHAIRMAN ORNSTEIN: Therefore, we can pinpoint those who will oppose it. MS. CHARREN: That's right. Exactly. CHAIRMAN ORNSTEIN: We will now open up for public comment. We're going to have a second period of public comment in the afternoon, so I would ask that if there are public comments, that they be basically tailored or targeted towards what we've discussed this morning. Is that appropriate -- or whatever else. Please identify yourself and step up to the microphone. MS. FRENZEL: Hi. My name is Sue Frenzel, and I live in Minneapolis, and I think I should tell you a little bit about myself so you know where I'm coming from. 158 I was raised on a dairy farm. My background is German Lutheran -- or German Catholic and Swedish Lutheran, and I was in Girl Scouts and 4H, and I'm engineer, and I'm working as a legal secretary right now, and I'm unemployed, which is why I can be here today. I worked as a disk jockey. I love the media, but boy, do I have criticisms for you. After being here today, more than ever I feel that the public that owns the airways should be leasing the airways so that we can cut the plug on people that aren't representing us. There's another thing that I'm not sure the people know because it's just been discovered in the past 20 years. Men and women's brains are different. Men have 20 to 40 times the amount of testosterone than a women does, and those are the things that drive aggression and that drive lust, and that's why women are less interested in sexual and violent programming than men are. You're not serving us. The majority of the demographics in the United States is female, and I've really been thrilled by the fact that the women on your panel have been so 159 active and that you men have listened to them so well because they really represent the majority of the population in the United States right now. What else did I want to say? Let me look at my list really quick. Oh, yeah, this is really important to me. Even though my last name is Frenzel, I'm not related to Congressman Bill Frenzel in Minnesota, and I care very much that we're not getting the coverage locally of political issues that we care about. Our system is being subverted by the lack of publicity that some of our politicians get when they do things. 75 percent of this area, of this state, is a canopy state, and the right now the land is being cleared by the City of Minneapolis at the tune of $12 million dollars, and during the last elections, no one told what the different city council members in Minneapolis's views on the stadium were. I knew because I went to the city council meeting, so I knew where they stood. By the newspapers wouldn't listen to me because the newspaper is in favor of the stadium. 160 So I want to see things like the school boards. The school board a real hot issue in Minneapolis right now. It's explosive, and you didn't see the school board's nominees in front on the TV. Do not cover them the way the politicians want to be covered. Do not give them free ad time. Ask them the hard questions about what their stands on controversial issues are so that we know who they are. I want to know what their religious background is and if they're favoring the religious rights or not. That's all I have. CHAIRMAN ORNSTEIN: One thing I should mention to you is there's an organization now called the Minnesota Compact. It's not exactly an organization but it's a coming together of a variety of interests here in Minnesota, including broadcasters and newspapers and others with an agreement to move towards robust, in a voluntary way, robust coverage of election issues, such as the ones that you mentioned. So there is a movement here, which I think will be a model for the rest of the nation 161 actually, of having responsible broadcasters and other journalists join together with the political parties and organizations like the League of Women Voters to try to do some of the things. MS. FRENZEL: Still, I want to see teeth, and I want the public to have teeth, and the only way we can have teeth is if we lease the airways instead of -- (inaudible). I listened to you talk this morning about voluntary, and what I see on TV is what we got right now because of voluntary compliance, and it's not sufficient, and it's not okay. CHAIRMAN ORNSTEIN: Go ahead. Go to the microphone. MR. VOLARI: Hi, my name is Steve Volari. I live in St. Paul. I would, first of all, agree strongly that I think the airways need to be leased because we have a lot of large corporations that have a great deal of money and an ability for freedom of speech, and you have not a really powerful mechanism to prevent them from imposing what they would consider speech out on to the world versus what we, the citizenry, would say we 162 want to hear and putting the mechanisms into the digital broadcasting medium would give us the ability to have a much stronger voice in terms of how that content is laid out and what parts of that content belong to what minorities or what specific political movements we, in our community or other communities, would feel. So I would like to see a law set up so that, for example, you might have -- you might lease the airways for 10 years at a time and have a five-year review process, and after that five years, if a specific company doesn't meet the review process, then, you know, a third of their profits are turned into the Congress of the United States and they're used to fund either other public television broadcasting interests or interests that the organization that handles that funding would use. My second comment would be specific to this board, and that would be I was looking at the schedule, and I was kind of angry because I felt like 90 percent of the citizens of the State of Minnesota might want to make a comment, but if you travel to the State of Minnesota and put this board together and start 163 talking about the topics but give 30 minutes of public commentary at 12:15 to 12:30 and 4:15 to 4:30, it becomes very difficult for us who work during the day to take an hour and a half or so out of our day and make our comments. It might be better to set the board up so that the comments came from -- you might convene and have an hour and a half or two hours, from 5:30 to 7:30, and make it a little bit more publicly available for those of us who have jobs and work and so forth to come down and make comments related to how we would like to see the content laid out and to other parts of your discussion. CHAIRMAN ORNSTEIN: I should note that we've had, in previous meetings, we had some hearings, but we have a website and we get a very vigorous amount of public comment that comes in over the internet. Karen mentioned the address, and we welcome and have circulated among all of our members, and we pay great attention to what we get that comes in that way that doesn't require you to come in person. MS. EDWARDS: And Steve, I would 164 just add to that, certainly the committee wants to hear from you. And often, the best way to do that is not to talk here but really write in. All of the comments that we receive are circulated, I know they are read and considered. So don't think of this opportunity as the only opportunity that you have to share your views. Certainly you can contact me directly. I think one other thing I'd want to say, I think it's a good point you're making about having an evening meeting. This committee doesn't really make decisions itself about exactly how to run it. It is governed by the Federal Advisory Committee Act, and that act has, as part of it, a requirement that the meetings be held during normal business hours. So part of your concern here I think needs to be taken a little bit above this committee, and you say to your Congressman that you don't like that, that you think that there is value to having the meetings be after hours, but just so you have a bit more context about why the meetings are scheduled as they are. CHAIRMAN ORNSTEIN: Mention the 165 website address. MS. EDWARDS: Sure. You can access it through the home page of the National Telecommunications Information and Administration, and that's WWW.NTIA.DOC.GOV, and you can get that information right out here on the table if anybody else wants it as well. MR. VOLARI: Thank you. MR. CASHMAN: (Through interpreter). Good afternoon. My name is Mike Cashman, and I'm with the State of Minnesota's Department of Human Services for the Deaf and Hard of Hearing. I'm really happy to be able to come to this meeting at the last minute. I just read the article this morning. I have a very important issue that I wanted to bring up that focuses on captions, and that's during the -- on the TV stations. I know that that's their responsibility to have real-time captioning. It's not really closed captioning. It's real-time live captioning that we're talking about here. I've had different experiences over the years and different problems with captioning, 166 especially during emergencies, and I just wanted to let you know about a report that I have here in Minnesota, especially greater Minnesota. Recently during the storms that we had, the tornados that we had -- and we had a person here who was from that area in St. Peter. During that time -- really my goal here is -- the big picture is the public, the airways there are open to the public but not always to deaf people, just to let you know that. A lot of times we're left out. Yeah, we do have some contact here, some assistance, and we do have some technology here, but really, it's not being used, and it's very important that we let you know that this is a very important issue because deaf people are having a hard time accessing that, during emergencies especially. I encourage that TV stations have real-time captioning on their programs during emergencies. Do you have any questions for me? MS. STRAUSS: I'm from the National Association of the Deaf, and there is 167 an FCC proceeding right now that's going on to require real-time captioning of emergencies. And actually, I would also support that in the NAB voluntary code, that we encourage broadcasters to have real-time captioning, which is basically simultaneous captioning. Although there are, right now, are other laws in effect or other regulations in effect to caption emergencies, there are quite a few holes in those laws. CHAIRMAN ORNSTEIN: Is that going to be made easier, Karen, with digital technology, or is it the same? MS. STRAUSS: I think it's the same. I think it's going to probably be made easier with speech recognition technology. I don't think digital technology will change anything, but speech recognition, hopefully, will because that will bring down the cost considerably over real-time captioning. MS. CHARREN: Can I ask Karen a question? For now when stations aren't captioning live, do they hold up boards with warnings on them, oh, your house is about to get knocked down? 168 MS. STRAUSS: Different stations do different things. Some stations have crawls, emergency crawls. The problem is that when the stations cut to live programming, more often than not, there's not live captioning. MS. CHARREN: I understand that there isn't live captioning, which is one kind of technology that they have to put in place, but it seems pretty easy to hold up some kind of a board, I mean something. MR. CASHMAN: (Through interpreter.) I want to add something to that. Really, holding up a board would not work. The FCC, its critical work called -- it's really essential for something to be shown, like a person, a weather person who is on the air would interrupt, would have these interruptions to explain what's going on. You've seen that on television. Really, what needs to be happening is captioning going along the bottom, called a crawl, and it's not the same. Let's suppose that there's hail or something like that, it would say "large hail", and it would be 169 captioned across the bottom. So if a man was talking, hail, very large hail, size of a softball, that would be different. That would be different. It's not called captioning. If that's essential information, it needs to be shown. And also, the crawl, as it's called, will say, you know, there has been a tornado touchdown, and that's it. When a weather person is talking and saying the situation is really serious and that something is happening, please take cover immediately, that's not captioned. That's not shown. So that's a lot of different information coming across. MS. STRAUSS: In the recent tornados that just occurred, that was exactly the problem that occurred. The crawl was giving information that the tornado was occurring, but the newscaster was giving information minute-by-minute information about where to go and which community was being hit. MS. CHARREN: And that wasn't in the crawl? MS. STRAUSS: That was not captioned and not in the crawl. 170 MR. CRUMP: If I might interrupt here, since I'm a hometown guy and I hear what you're saying, and I'm most interested in it. One of the good situations I believe has occurred, and I'd like to hear your comments on it, is the fact that several of the stations now display, when the weathercaster is talking, a time line as to where the storm is going and the exact minute that it will arrive so that you have, going out in front of these storms, exactly where they're going and the people that need to take cover at that point. Have you noticed this, and how did you feel about that? Was that a good improvement? MR. CASHMAN: (Through interpreter.) No, really that's not good enough. There has to be a greater improvement than that. Really, there has to be a better way than that. Really, for deaf people, they're not happy with that. They're not happy with the system. It's not working, and I just feel like that's the most honest, direct answer I can give you. Another situation through WCCO Radio, my boss is hearing, he told me -- he informed me 171 that it was a hard of hearing woman -- two women in St. Peter, who tried to -- they were trying to hold their door during the tornado. They didn't know what was going on. They didn't know what was happening or what kind of storm it was. They didn't know. They had no idea. So maybe there needs to be something that says something about that, like the tornado has been seen. They need to describe in more detail about what's going on, and it was left out. MS. STRAUSS: I have one last comment. First of all, I did not plant this person here. And secondly -- although it's worked out very well -- but secondly, I just want to say that this is actually a significant concern of the deaf community and that I've worked on deaf issues now for about 15 years, and I would say that this is probably number one. I hadn't raised it because I've raised just generally closed captioning throughout every conversation, and also because the SEC is hopefully going to handle it, but I would just 172 love to have this committee address it. We're talking about life and death. I mean, this is something that when the SEC opened up its proceedings, received hundreds, if not thousands of letters from people around the country who have said, please, we do not get the information. Please, we are dying. Stories of hurricanes, tornados, earthquakes, people just completely uninformed about emergencies that are occurring, and this is probably number one on the issues of the agenda of deaf people. MR. LA CAMERA: Karen, do you have any information or knowledge at all about the capacity of captioning to provide -- MS. STRAUSS: Well, that's a really good question. One of the two things that came out of this proceeding is the fact that remote captioning is now being used on a much more wide-scale basis than it had in the past. So whereas before there were only three or so main caption centers, as you know now, there are hundreds around the country, and there's one in particular, Caption Colorado, that uses exclusively remote captioning. They 173 use stenographers and transcribers or real-time captioners that can operate in their homes, have pagers and be on call so that when an emergency occurs, the costs are incredibly low. I think they're around $120 per hour to real-time caption. They're available quickly. They are skilled workers. And like anything else, we create a requirement. You will have more people become skilled at a particular area. So I don't think that the supply is a problem here. I think it's just a requirement that's the problem. MR. SUNSTEIN: Karen, could you send some language for the code on this? MS. STRAUSS: Sure. MR. SUNSTEIN: Maybe we can talk about it. It will be in -- MS. STRAUSS: I have more than enough in my office. MS. CHARREN: Can you describe for me, if there is a difference, the difference between a crawl and a caption? MS. STRAUSS: Well, really, the point is that we want real-time captioning, 174 live captioning on the spot as it occurs, spontaneous captioning. MS. CHARREN: Is a crawl -- MS. STRAUSS: A crawl could be live, but it isn't always. MS. CHARREN: It could be the way the caption hits the screen. MS. STRAUSS: It doesn't have to be through closed captioning. Closed captioning you have to have special equipment. If it's live and if it's open, that's fine. In fact, it's even better. MS. CHARREN: It's goods for me. MS. STRAUSS: There are a lot of people who don't have their caption decoders turned on. MS. CHARREN: I'm saying that crawl is good for me, and I can hear. MS. STRAUSS: Right, would benefit from open captioning. And in an emergency, it's not like it has to be aesthetically pleasing. You want information. MR. DUHAMEL: Well, there's a delay, though, on live captioning. MS. STRAUSS: Well, there may be 175 a few-second delay, but it's still going to be a lot faster. MR. DUHAMEL: In Colorado, you got to dial them up, get them transferred. MS. STRAUSS: There is going to a period of time where you have to make the hookup, but once you make that hookup, it's simultaneous. It's done now for -- like I said, it's done for emergencies, and a few years ago -- or actually, this year it was done for the flooding in California, last year as well, and what was good was that because it can be done remotely, even if there are multiple emergencies in a given area, such as occurred in California, they can reach out to other parts of the country where the emergency is not occurring and get the real-time captioners to do it. CHAIRMAN ORNSTEIN: A couple of things we should remember here. Definitely we need to build this in. I recall that we had testimony from this emergency task force, which is already ahead of the curve on some of these areas, but we need to keep that in mind when we make our 176 recommendations, which is to reserve what is a tiny portion of this ban for what will -- what is going to be the state-of-the-art, which can be, in fact, oriented to households, and they are very much on top of the question of making sure that for people who are hearing impaired or sight impaired, they have ways of reaching people to let them know that a tornado may hit their house. So it may very well be -- we can't count on it. I think we need to build in as much as we can now, but a few years down the read, the technology will, in fact, help to enhance this. And already, I wish Rob Glaser were here because I'm sure he knows the state of the art of voice recognition software, and my guess is that by the time we actually get digital programming out there in any kind of a widespread way, that much of what we're talking about in terms of what Colorado is doing or otherwise that involves individuals sitting and transcribing will be superfluous, that for $49.95, we'll be able to get software. MS. STRAUSS: And just have a 177 skilled or an articulate person reading in the information. From what I've been told, it's not here yet. We're not at that point. CHAIRMAN ORNSTEIN: It's moving rapidly. MS. CHARREN: And this is like public radio, the service public radio provided in, I think it was Alaska, where there was no connection in rural areas for emergencies in public radio. This isn't for the deaf, but public radio was the way you learned what was happening that you needed to know. And life and death is different from entertainment. CHAIRMAN ORNSTEIN: This is the essence of serving the community, obviously, of making sure that it works. MR. CLIFT: Yes, hi. My name is Steven Clift, and I have a handout. And just quickly, by way of background, my name is Steven Clift, an independent consultant, I guess, here in Minnesota. For three years I coordinated the State of Minnesota's government on-line project. I do a lot of public speaking on internet democracy around the world, and I have a lot of interest in how we leverage 178 additional broadcasting as, basically, what I consider the one-way internet. What ones and zeros do we send out do we want to have in everyone's homes, and they're set for digital TV. What I've handed out -- and there are copies on the table for those in the audience -- is just a good concept that I call community information syndication. Stepping -- earlier this morning I was listening on real audio, so listening to you via the internet, and I heard you mention local and what sort of learning from public access and some of the different -- the things we've done in the past. Well, video is very expensive to produce, but because these are just ones and zeros, perhaps we think about what web pages, what images, what small audio files, perhaps what video files might we want to send out in a community and how might, within a community, there be some aggregation. There will be, obviously, lots of commercial aggregation. But stemming back to my government on-line experience, I looked at a screen for three 179 years and thought, how in the heck can we serve the citizens? Well, really, it's through television and telephone after three years of looking at the web. And so part of it is you think about government information, and whether it be police reports or crime watch warnings or community information like neighborhood picnic information or information about how to become involved in a global group. There's a lot -- there's a lot of stuff out there that if you can add geography as an indicator, if you streamed it out, with a set-top box and served by Teletext in Europe, you would be able to make available, really in a very tailored way, bits and pieces of information just as soon as you watch the sports, and they'd say look here to see the stat card on that football player. You'd be able to make it more possible for other types of community information to be available. And so one of the key concepts is the idea of internet studio. Obviously, you have to aggregate the stuff in some way. The other issue is how might it be 180 accessible. Well, digital broadcasting would be a key one-way vehicle. Really, the most important information that you would want everyone to have by virtue of existing for the people who really only have the one-way connection to the net. That's really, really important. Another area would be just on-line distribution as well as multi-tech access, figuring out how to use that information via telephone and fax back and the like. And just quickly to conclude, on the second page, I have community digital broadcasting where I basically suggest that perhaps it's one of the most fundamentally democratic opportunities, one discussion is election information. Does it have to be just video? Would you be able to make the last leap of the election, short nonpartisan constituents about candidates and information how to contact candidates for more information. If every set-top box had it, that's access. Not that people are going to necessarily use it all the time, but it can be out there. It's possible. The big question is, with this convergence 181 of this intermediating force, who aggregates? Obviously, public television, public broadcasters, public access, they all could play a role, and should play a role. And the other question is what -- you know, how do you fund aggregation. Also, whose airways is it on? Is it just on the public television's bands. Could it be on some of the bands with some of the commercial broadcasters; all issues to consider. So thanks for being in Minnesota. You've got a great view here. You can see my house. So thanks for coming to Minnesota, and if you have any questions, feel free to ask me. CHAIRMAN ORNSTEIN: Thank you very much. Okay. If that's what we have for public comment for now, let's adjourn for lunch. We'll reconvene at 1:45. (Whereupon, a recess was taken.) STATE OF MINNESOTA ) ) ss COUNTY OF ANOKA ) Be it known that I took the foregoing meeting; That I was then and there a notary public in and for the County of Anoka, State of Minnesota; That the foregoing transcript is a true and correct transcript of my original stenographic notes in said matter; That I am not related to nor an employee of any of the parties hereto, nor a relative nor employee of any attorney or counsel employed by the parties hereto, nor interested in the outcome of the action; WITNESS MY HAND AND SEAL THIS 10TH OF JUNE, 1998. _________________________ BARBARA J. STROIA, RPR Notary Public