AT 9:38 A.M.

Afternoon Session
[Click to view the morning session]

Reported by:

                   CHAIRMAN ORNSTEIN:  Why don't we
    get started?  We still have a lot that I hope
    we can move through.
         When we ended, we had not quite completed
    our discussion of this set of issues on
    education, and I think we will focus, in

    particular, on the recommendations that deal
    very directly and explicitly with this area
    rather than some of the others, which we will
    get to that in another context.
         But it seems to me we need to do two
    things before we're done with this area.  We
    need to reach a consensus, if we can, on how we
    define educational programming.  And really,
    there are some differences here.
         I think what Gigi has suggested, which was
    in that description in the public broadcasting
    proposal is, in fact, a broader definition of
    educational programming than what some others
    have suggested.  So we need to nail that down.
                   MS. CHARREN:  I think in that
    Gigi's definition, we should consider a broader
    definition of public interest programming, and
    that Robert's definition is really educational
    programming, which Charles enlarged on today,
    that that's educational and the other is public
    interest.  So we're not using the word
    education in terms of programming.
                   CHAIRMAN ORNSTEIN:  Absolutely.
    The question remains, though, whether -- I
    think what Gigi was suggesting is that she

    prefer to keep a broader definition for what
    would be the responsibilities for this
    dedicated channel.  We at least need to settle
    among ourselves whether we want to make that
         The continuum is one that is specifically
    instructional programming all the way over to
    what would be in the public interest.  We have
    been talking about something in-between, and
    probably we could take that definition and
    excise a couple of elements of it, or we could
    use it, develop a new definition or use the one
    that Charles is suggesting which is on
    learning, including lifelong learning.
                   MS. CHARREN:  That whole thing,
    all those things that were included from
    Robert's channel, which it's almost a way of
    talking about the delivery systems for the
    education instead of what the definition of the
    education is, and I think that's better,
    because I mean it's -- a particular school
    can't get itself together on what education
    means in that set of classrooms.
                   CHAIRMAN ORNSTEIN:  That
    certainly makes sense.  I agree with that, and

    then we really do need to have some brief
    discussions of which we may need to delegate
    further in terms of conclusion.
         There is a mechanical problem here.  I
    don't think we want to recommend that there be
    a separate dedicated channel for every public
    television station in an area where there are
    two, three or four or more and there's overlap,
    and we do need to have at least some
    consideration of what we would recommend in
    terms of how you pick one.  I don't have any
    answers to that.  Maybe people have some
    suggestions.  If not, we may need to designate
    a couple of people and simply take that
    responsibility and think it through to make it
    work accurately.
         But clearly, I mean just to pick one
    example, if we have a -- in the Washington
    metropolitan area, there are actually three now
    which are widely accessible.  There's one set
    in Annapolis, which is Channel 22 in the cable
    universe, and then there's a Channel 26, which
    is the greater Washington area public
    television, and there's the Howard University
    Public Channel, which is 32.  So we need to

    find some mechanism to choose, probably one
    from among the three, that would bear that
    responsibility.  I don't know quite how to do
    that, but if anybody has any ideas.
                   MS. SOHN:  I guess why do you
    have to pick one?  Why couldn't there be
    possibly opportunity for a sharing
                   CHAIRMAN ORNSTEIN:  Certainly a
    sharing arrangement.  I don't think you
    necessarily have to pick one station, but
    there's going to be -- I think what we want is,
    in each area, one dedicated channel, and the
    question is, what mechanism do you devise or
    can you device a mechanism to decide who will
    operate it.  Of course, it doesn't have to be
    done -- you don't have to have an all or
    nothing or a zero-sum game here.
                   MR. BENTON:  Just a thought.  If
    you went along with this FCC notion, which I
    think is an interesting idea, you could not
    only write guidelines for the stations in, say
    the New York area cooperative, which New York
    maybe more complicated, but beginning or
    ending, but also including other major public

    institutions like libraries and schools as a
    part of the consortium.
         The suggestion I made earlier this morning
    about the various acts, I gave you a paper on
    this.  The Library of Services and Technology
    Act, one could think down the road is another
    funding possibility of a local broadcasting
    services, which the criteria would be exactly
    what was done when the Library Services
    Technology Act.  Money was only awarded to
    multi-institutional proposals.  So you have to
    come in with a multi-institutional proposal,
    was the basic idea that was the use of
    networking in computer technology for sharing
    resources and libraries.  That was the
    fundamental idea of the act.
         And one can look upon this in an analogous
    way at the community level, is getting the
    nonprofit organizations that logically would
    ban together to define need and then work
    through the programming expression of that need
    through noncommercial television.  So this is
    very complicated, and maybe this could be put
    back to the subcommittee.
                   CHAIRMAN ORNSTEIN:  I suppose

    the easiest way to deal with this is if we all
    agree that this mechanism, that the public
    television stations would submit a plan showing
    what they would do with this channel, which
    includes, you know, sensitivity to local needs,
    working with local entities and the right to
    the FCC.
                   MR. DUHAMEL:  All the local
                   CHAIRMAN ORNSTEIN:  It might be
    that any of the stations in an area could
    either submit separate plans or they could work
    together and submit and then the FCC can choose
    from among rival plans or reject them all and
    arrive at a wider range.
                   MR. CRUZ:  Norm, on the issue of
    the overlap situation, there is a lot of
    research going on now internally within public
    broadcasting; PBS, CPB and acts and so forth in
    reference to that particular issue for other
    kinds of things, but I think there may be
    wording in some of the solutions that they're
    working on for their own problems that might
    have applicability to a second channel
    recommendation in an overlap market.

                   CHAIRMAN ORNSTEIN:  Maybe
    there's something out there you can get back to
    us and we can work with it.
                   MR. DECHERD:  Pardon me, we're
    talking about a licensing process.  There's
    currently a licensing process.  It seems to me
    we can, in effect, hand this off to the FCC to
    devise the rule that you just described.  It's
    not as if this is a permanent allocation which
    is never going to be reviewed again and the
    winner takes all, if you will.  I think it's
    the same licensing process for the spectrum.
                   MS. SOHN:  Robert, let me ask
    you, now that the comparative hearings are
    basically dead in the water, how -- let's say
    WHUR, all the three stations, MPT and that big
    one, WETA, all apply for the same extra
    spectrum.  How would you propose the FCC choose
    among them given that the comparative hearings
    are no longer viable.
                   MR. DECHERD:  Well, they have a
    process, I believe, still in place for
    competing applications for newly-allocated
    channels, yes?  It doesn't happen very often,
    but basically, you're recreating some sort of

    internal review mechanism, and all we're saying
    is there's only one per geographic area so the
    outcome is the country has one large system
    with no duplication of licensees within any
    part of it, and it's up to them to determine
    how to do it.
                   MR. CRUZ:  That's why I
    indicated that there is a lot of work already
    being done in terms of research regarding that
    particular concept.
                   MS. SOHN:  That's an important
                   MR. CRUZ:   They haven't been
    researching it for this particular issue, but
    they certainly have a lot of background
    information on determinations of --
                   CHAIRMAN ORNSTEIN:  We can leave
    an awful lot up to the FCC.
                   MS. CHARREN:  They still have
    their stations.  We're not going to get rid of
    three stations.
                   CHAIRMAN ORNSTEIN:  They're
    going to keep their stations.
                   MS. CHARREN:  Right.
                   CHAIRMAN ORNSTEIN:  Let me just

    sum up here in terms of where --
                   MS. WHITE:  I think James has a
    concern for one of the recommendations.
                   MR. BENTON:  Norm, there is a
    DS-2 proposal that's going to be at the PBS
    annual meeting next week.  The 27 second-market
    stations all together.
                   MR. YEE:  In the third point
    about the trust fund.
                   MS. CHARREN:  Would you read it
    because I can't find it.
                   MR. YEE:  Thank you.  The
    recommendations by this committee, the third
    point, the trust fund be invested by public
    broadcasting, which I assume to be CPB for
    clarity, a percentage go to an alternative
    system of independent producers and
         When we talk about percentages, it gets a
    little shaky here.  I just feel like I was
    recommended for a discussion or further
    research, a baseline number to work from rather
    than just a flat percentage.
         My history with public broadcasting has
    proven to be they put you in a niche, that

    niche doesn't get any bigger.
                   CHAIRMAN ORNSTEIN:  If I'm not
    mistaken, that relates to our discussion about
    how we were going to set aside a share for
    bidding by other entities.
                   MS. CHARREN:  That's a better
                   MR. YEE:  Yeah, just for
                   CHAIRMAN ORNSTEIN:  We were
    talking in the range of 15 or 20 percent.
                   MS. CHARREN:  I think other
    entities is better than programmers.
                   CHAIRMAN ORNSTEIN:  Yeah, we'll
    work out appropriate language.
         But in any event, we're basically -- we
    are in agreement about the set-aside of one
    layer of spectrum, 6 megahertz that would be
    the equivalent of what is now one analog
    channel dedicated to educational programming,
    which will define appropriately funded in our
    recommendation by dedicated revenues from any
    other auction of the analog spectrum, a
    mechanism set up through the FCC, both to
    handle overlapping stations and to create a

    mechanism where, in effect, public broadcasting
    stations have the first bids to go forward to
    present a plan to make this work appropriately
    to show --
                   MR. BENTON:  Working in
    conjunction with community groups.
                   CHAIRMAN ORNSTEIN:  Working in
    conjunction with community groups and to show
    how it would be distinct from their existing
    public broadcasting station and focused on
    education, and the plans would either be
    accepted or rejected, and if they're rejected,
    then it would be open for bidding by other
    entities in the local community.
         That pretty much covers the larger range
    of things.
                   MR. CRUZ:  All that's separate
    from the trust fund.
                   CHAIRMAN ORNSTEIN:  Separate
    from any recommendation for a trust fund for
    existing public broadcasting entities.
                   MR. BENTON:  Do you want a
    motion on that?
                   CHAIRMAN ORNSTEIN:  I don't
    think we need to vote on anything at this

                   CHAIRMAN MOONVES:  Just writing
    them up.
                   CHAIRMAN ORNSTEIN:  Writing them
    up.  Eventually we will either, you know,
    presumably have to make a formal ratification
    of specifics.  It makes sense not to move to
    votes on it at this point.
         I would suggest the following plan for the
    rest of the afternoon.  If you look at the
    recommendation, the outline that I pulled
    together, there are -- we discussed the first
    two areas.
                   MR. RUIZ:  Are we done with
                   CHAIRMAN ORNSTEIN:  The
    education one?  I think so.
                   MR. RUIZ:  Do you accept written
                   CHAIRMAN ORNSTEIN:  Oh,
    absolutely.  We haven't finalized anything
    other than we have an understanding about the
    thrust of what we're going to do, and clearly,
    these other areas and it includes the
    sensitivity to those left out in the process.

    We'll try to incorporate language, and we are,
    of course, open to -- in the next few weeks,
    we're presuming to have a lot of give and take
    in these and other areas.
                   MS. SOHN:  Norm, could I just
    bring attention to this memo that I had
    originally sent to Frank in regard to our
    subcommittee deliberations?
         I'm not advocating anything here, but just
    when we do get more towards what educational
    program, to define it, I thought these would be
    instructive.  I just want to make sure people
    saw it, May 28th.
                   MR. BENTON:  The ironic twist
    here is that in the education world, what is
    defined as an education program is really an
    instructional programming, and what is defined
    as instructional programming is really
    educational programming.
                   CHAIRMAN ORNSTEIN:  We will try
    and work on appropriate definitions, not
    required to use their definition of
    instructional or educational.
                   MR. RUIZ:  I wanted to go back
    to what Jim was saying, and I will write you

    about that in the history.
         If amounts or percentages are not written
    in, history says nothing will happen.  It's
    only happened when Congress mandated by a
    figure.  When Congress has just suggested it
    and left it up to CPB, it has not happened.
                   CHAIRMAN ORNSTEIN:  I think the
    reality is that, in some areas, we will have an
    easy time coming to a consensus on numbers.  I
    think we can come to a consensus on the one
    James was talking about.  In other areas, it
    may be more difficult, but we'll do what we
         I would suggest the following.  I,
    basically, put out five areas that I thought
    core of what we need.  We have a sixth area
    that we really need to discuss, and that is the
    question of the minimum standards that James
    has brought up, and Gigi has also addressed
    this issue.  I'd like to leave that one to the
    end because it's very important.  We clearly
    will have some differences of opinion on that,
    as we will some of the others.
         But I'd like to clear out as much as the
    underbrush as we can in these other areas first

    and see how far we can get, and we'll be sure
    to reserve some time for that before we're
         The third area is one that we have raised
    a couple of times in the public, and it's been
    raised otherwise in some of the communications
    from people, and it really is based on the
         We've had, of course, a lot of discussion,
    and there has been far more discussion in the
    public arena about the way in which the digital
    spectrum was transferred to broadcasters.
         The law itself leaves a lot of leeway for
    broadcasters to use digital as they sit fit.
    But clearly, within the rhetoric, there was
    some distinction made between the possibility
    of a one-for-one exchange where, in effect,
    what would happen is that broadcasters would
    have digital spectrum lent to them for a period
    of time while they made a transition to the
    digital age, and then, as we have been
    discussing with regard to public television,
    give back the analog spectrum and use the
    digital to send out one comparable signal,
    except it would be a much higher quality high

    definition program, and that is distinct from
    two other possibilities here, none of which are
    mutually exclusive.
         One is that a good portion of this digital
    space would end up being used for ancillary and
    supplementary services.  That means things that
    have explicit separate payments attached to
    them.  That might be pay per view or paging
    services or the like.
         In the Act, Congress, as we know,
    explicitly set up a funding mechanism fees to
    be attached.  The FCC is supposed to attach
    fees, and frankly, none of us have any idea
    what those fees will amount to.  If there's a
    consensus, it is that they're not going to be
    some huge sum of money.
         The third possibility is that broadcasters
    will use all or some of the time that they have
    on the digital age to transmit more than one
    signal, which might be free over-the-air
    programming but still commercially derived, and
    that might mean two, three, four, five or more,
    and I don't think any of us knows what the
    state of compression technology will be several
    years down the road.  It could be a much larger

         It is very reasonable, it seems to me, to
    say that if, in the end, we have a one-for-one
    exchange, given that broadcasters are going to
    be paying a very sizable sum of money to make
    this transition for equipment, towers and the
    like, and what consumers end up with after this
    transition is a channel that involves a much
    higher-quality picture, that that's going to be
    a good deal for the public.  But that if,
    indeed, what we see for a number of hours a day
    or generally is a lot of separate channels,
    each with its extreme of revenues, that then
    it's worthwhile revisiting.  Whether that which
    may turn out to be a substantial revenue
    windfall for broadcasters compared to what
    exists now will require something else in terms
    of the public interest.
         If we make that distinction, then we have
    at least one proposal that was put on the
    table, and that is that if broadcasters, say,
    go beyond two channels, that the fourth channel
    be reserved for the public interest.
                   MS. CHARREN:  Where's the
    third?  The fourth?

                   CHAIRMAN ORNSTEIN:  If they go
    beyond two.  If they go to three, then the
    fourth one is the tollgate, in effect.  So if
    they want to go to three, then they're going to
    have to turn the fourth one over.  They can't
    do three exclusively.  There would have to be a
    fourth one.
         We can certainly have some debate over
    where the trigger mechanism comes, but we need
    first to determine whether we have a consensus
    that having some kind of a trigger where you'd
    have channel space reserved for the public
    interest and, presumably, some commitment to
    program it and not just to leave it as we have
    with cable with putting empty space.
         Or in this case you could have an option
    if a broadcaster wanted to pay somebody else to
    carry that particular channel forward in the
    public interest.
                   MS. CHARREN:  When you say pay
    somebody else, do you mean pay that money into
    a trust fund or to pay somebody else.
                   CHAIRMAN ORNSTEIN:  Pay somebody
                   MS. CHARREN:  Like who?

                   CHAIRMAN ORNSTEIN:  What I would
    suggest here, and this is simply me, would be
    that if you -- you may very well have a
    situation where a broadcaster wants to go to
    five or six channels but doesn't want to use
    the person power at the station or the
    resources of the station to program an extra
    channel, would prefer to take what might be
    some share of the revenues from the additional
    channels -- this is all presuming a new revenue
    stream coming in -- to either have a public
    broadcaster or some other entity program it to
    serve the public interest.
         In this case, that means all of the things
    that we're talking about in terms of the public
    interest.  And you know, here it seems to me we
    have a way of making a distinction that I would
    hope could satisfy a number of different
    interests.  It's really suggesting that if,
    indeed, in an era we can't foresee it does turn
    out to be one where there can be a very
    substantial windfall here using a large number
    of channels, there's an easy way to try and
    make sure that you can strike a balance, and if
    it doesn't, then it doesn't.

                   MS. CHARREN:  I'm still not sure
    I understand the choice of the alternate, you
    know, who's going to do the programming if you
    give it away.  If you decide you're not going
    to play, you're going to pay somebody else to
    do it.
                   CHAIRMAN ORNSTEIN:  Then you
    contract with somebody else, whether it's the
    local public television station, local
                   MS. CHARREN:  And you, the
    broadcaster, can decide who you're going to
    contract with?
                   CHAIRMAN ORNSTEIN:  We need to
    discuss that.  I don't have a problem with it.
                   MS. CHARREN:  I think I do.  I
    think I do.  At least the broadcaster is
    working under a set of something established by
    the FCC.  It's an entity that is part of a
    structure.  If that broadcaster can just pick
    who is going to do, in effect, his or her
    public interest broadcasting, that separates
    that out from under a kind of mechanism.
                   CHAIRMAN MOONVES:  But it would
    be another broadcaster.

                   MS. SOHN:  That's an important
                   MS. CHARREN:  That doesn't say
                   CHAIRMAN MOONVES:  As opposed to
                   MS. CHARREN:  I have visions of
    it being an American Enterprise Institute.  I'm
                   CHAIRMAN ORNSTEIN:  Let Robert
                   MR. DECHERD:  I believe it is
    correct to say that there is nothing in the
    Telecommunications Act and nothing contemplated
    which will obviate broadcaster responsibility.
    We are going to be licensed to 6 megahertz.
         Today we have all sorts of people doing
    programming for us.  We're making those very
    choices today, but we are the licensees.  We
    are held accountable for the spectrum allocated
    to us.  This isn't a discussion that's out of
    this committee's hands.
                   MS. SOHN:  Well, I have to
    respectfully disagree because, Robert,
    because -- and this is a problem that comes up

    with local marketing agreements where you have
    licensees that lease out -- well, it's radio
    and television -- lease out 24 hours a day,
    sometimes to another local broadcaster, but
    sometimes to somebody who is not licensed by
    the government, and my concern is, for
    instance, we've had somebody who had to have
    their license revoked for doing phony contests
    or phony programs or not doing enough political
    broadcasting and being able to lease out that
    station or lease out that channel and do that
         So I would be more comfortable with a
    recommendation that makes clear that only other
    licensees would be permitted to do that, and I
    really think -- I mean, this is -- Robert, you
    disagree with me -- I think the notion that the
    licensee is leased out 24 hours a day to
    another licensee, the program still has
    editorial control, I think that's just a
    fiction, and you and I can disagree on that,
    but --
                   CHAIRMAN ORNSTEIN:  Let me raise
    just a question about that, and that is
    especially if you want to meet your concerns

    about a local orientation, if you can only
    lease out to another licensee, which means
    another broadcaster in your market or in your
    area and the other licensees don't want to do
    it, then what are you going to do?
         I mean, I'd much rather leave some
    flexibility here for somebody else, which might
    be a university or another entity, always
    assuming that the responsibilities included in
    the subcontract, as they do to the broadcaster,
    or you're going to find an easy way to get out
    of all this by saying, I'm not going to do it,
    they're not going to do it, nobody will do it.
                   MS. SOHN:  They need to make
    crystal clear that the licensee has -- you
    know, must have, at all times, have editorial
    control over what's on that channel.
                   MS. CHARREN:  Why couldn't that
    be money?  Pay or play.  Pay.
                   CHAIRMAN ORNSTEIN:  Let's come
    back to that.
                   MR. GOODMON:  My suggestion
    about this is that we have minimum public
    interest requirements for a station.  We're
    going to have one 24-hour station.  One of our

    stations is going to run 24 hours, that
    channel, and that's going to be high definition
    part of the time and standard definition.
    There's going to be all sort of a mixture there
    of how we do it.
         And my suggestion is we have minimum
    public interest requirements for the station,
    and if we run two channels 12 hours a day, then
    we have the same public interest requirements
    scale.  I mean, this is just another station.
    It's on the air for a shorter period of time,
    but I haven't --
         There are two notions.  One is that we
    have a channel that we want public interest
    programming on and everybody going to watch
    it.  I think our public interest programming
    ought to be as part of our total programming
    effort on all of our channels.
         And two, the notion that we can somehow
    pay somebody else or pay money to somebody
    instead of fulfilling our public service
    obligations, or this is not --
                   CHAIRMAN ORNSTEIN:  That's a
    separate discussion.
                   MR. GOODMON:  I know but --

                   CHAIRMAN ORNSTEIN:  This is not
    in lieu of your public interest obligations.
    This is an additional set-aside if you
                   MR. GOODMON:  You still have the
    public interest obligations that you have, and
    we have to have set aside another channel?
                   CHAIRMAN ORNSTEIN:  If you move
    to three or more.
                   MR. DUHAMEL:  Why does it have
    to be done commercial?  I don't understand,
    because we already have a noncommercial
    system.  I mean, if you could sell public
    service time, what's against selling it?  You
    got to pay the bill to somebody.  Why would you
    want -- it's onerous.
         Now, there isn't -- public affairs is not
    a big revenue maker, but why, if we can sell
    it, what's the problem?
                   MR. CRUMP:  Well, let's remember
    here that with the public service -- excuse me,
    PBS stations we have today, there's this
    sponsorship that we have where we suddenly see
    the advertiser's name, they put money in.  I
    mean, in actuality, it's already taking place.

    It's being sold, and some of the best public
    service programs that I have ever seen have
    been those which have been sponsored
    commercially because they provided the
    wherewithal where you could go in and really do
    a first-class job.
         Is there a hang-up?  I know some people
    have it.  Is there a hang-up here between
    public service that is coming to you as a
    nonsponsored entity as opposed to a commercial
    entity?  I would think that quality would be
    the main decision making portion of this.
                   MR. RUIZ:  I'm somewhat confused
    because we're leaving an analog station for the
    public broadcaster.  The public broadcaster is
    currently financially strapped to fill what
    they have, and now we're creating another
    entity that's an access point.  Where is the
    programming going to come from?
         And then again, if you're going to limit,
    if you're going to take the entrepreneurial
    spirit to be able to put on or sell or raise
    the money for their piece so that you lift the
    quality in homes of getting viewership, what
    are we creating?  To me, it sounds like a

    ghetto.  A bunch of stuff is going to get
    dumped into, and no one is going to care about
    it, and if we want to stay away from the state
    that cable did in the access channels, it
    doesn't seem that we're approaching this in the
    right way.
                   CHAIRMAN ORNSTEIN:  Well, I
    would hope that it would not be the same as
    cable where it's just space set aside.  What
    we're suggesting here is this has to be robust
         It is, in effect, a payment for moving to
    a stream of channels, each of which would have
    a separate commercial revenue.  The idea here
    is that if, indeed, the digital age is going to
    represent some terrific new broadening money-
    making opportunities for broadcasters beyond
    the same kind of revenue stream that would come
    in if you move from one-to-one, that we devise
    a mechanism for providing more in the public
    interest.  That's the goal here.
                   CHAIRMAN MOONVES:  Norm, does
    anybody care whether anybody watches these
    shows?  If you have, in a market, six stations,
    let's say each station multiplexes and you get

    four channels and one of -- this is our public
    interest station, nobody is going to watch that
    station.  Nobody is going to watch it.
                   MS. CHARREN:  Nobody is not the
    right word.  Somebody is going to watch it.
    The question is --
                   CHAIRMAN MOONVES:  No, no, no.
    Peggy, what I'm saying is if our goal is really
    to get -- to help the local marketplace and
    really do programming that really helps your
    community, if you designate a channel, this is
    the channel for the people who want to see
    things that do good for their community.
                   MS. CHARREN:  No, this is a
    channel that wants to see things that the other
    channels don't make possible for you to look
    at.  Think of it that way.
                   MR. RUIZ:  It may not be,
    though.  The other broadcaster, it may be PBS
    repeating "Sesame Street" in the afternoon.
    Who knows?
                   MR. SUNSTEIN:  How much of a
    disincentive do we create with this to go
    beyond two channels?
                   MR. LA CAMERA:  Tremendous.

                   MR. SUNSTEIN:  That's important
    factual --
                   MS. CHARREN:  I agree with that.
                   MR. LA CAMERA:  If you take what
    could be a likely scenario, and that is you
    have your principal 24-hour channel, as Jim
    suggested.  It would enhance obligations.  Your
    second channel may very well be a regional news
    service, 24-hour news service, as currently
    populates cable, transferring that activity
    over onto one of these different channels.  The
    third channel maybe give back to your network,
    maybe have a 24-hour or 12-hour or 6-hour soap
    channel, one of the things ABC is speculating
         And now you got to come out and program a
    noncommercial public interest channel?  It's
    impossible.  There's no fodder for it.  There's
    no programming for it.  You talk about robust.
    I can't imagine where it's going to come from
    when your second and third channels already are
    marginal, at best, and are commercial
    initiatives, but there's no guarantee that
    they're going to work.
                   CHAIRMAN ORNSTEIN:  Well, but if

    there's a disincentive, obviously, that
    disincentive is going to be based on weighing
    the commercial viability if moving to three or
    more channels.
         If there is not great commercial viability
    to doing so, and if you're doing it just to do
    it, I don't see any reason to encourage it,
    frankly.  Maybe not any reason to discourage
    it.  If, on the other hand, there is
    substantial revenue to be made by moving beyond
    three channels, there is every rationale in
    this case for requiring something back in the
    public interest.  That is a shakier rationale
    if you're talking about a one-for-one
         Now, if you don't want to do it by setting
    up a channel and programming it, I'm more than
    happy to consider just paying money and make it
    a fee for moving beyond those areas.  I thought
    it would be far more acceptable to actually,
    not only set aside the channel space, since
    there will be sufficient channel space, but to
    try and build an incentive to do something more
    here, but the other way to go but it is --
                   MR. LA CAMERA:  What possibly is

    the mechanism to produce noncommercial public
    service programming in that quantity?  There's
    no model for it.  Public broadcasting, which is
    a multi-, multi-multi-million dollar --
                   CHAIRMAN ORNSTEIN:  The
    alternative here is, rather than simply try and
    use it directly to produce that kind of
    programming, and if you have some money, you
    can take even things like what are now being
    done on cable for nothing, basically, just
    sticking a camera in the room where the city
    council is and making it work a little bit
    better, or to do some of the things that Jose
    Ruiz was talking about in terms of reaching out
    into these other communities.
         But if you don't want to do that, then you
    can take some share of the revenues coming
    beyond the two channels once -- since you're
    going -- presumably we're going to be talking
    about a situation in which there is a very
    substantial new revenue base and simply putting
    that into the pot to pay for the public
                   MS. CHARREN:  I second that.
                   MR. RUIZ:  The goal is to better

    serve the communities through this multichannel
    market.  Why can't we change our thinking for a
    moment here and say, if the station goes two
    channels, an additional hour of public affairs
    programming be included; if it goes three,
    another hour; if it goes four, additional
    hours, so that we're not ghettoizing it, but
    we're actually putting it into the mainframe of
    the system.  And these programs are to serve
    that local community.
                   MR. CRUMP:  As is Norm with me,
    I'm confused.  I thought -- I thought that we
    had said previously that the situation already
    exists where if a broadcaster was taking
    additional channels and there was going to be a
    revenue stream from it, they were going to have
    to pay a fee to the government.
                   MR. LA CAMERA:  Fees, not
    advertising.  Now I'm confused again for a
                   MR. RUIZ:  Does that accomplish
                   MS. SOHN:  I just want to
    address a couple of things.  First of all, on
    the ghettoization, I guess I don't think it's

    that bad of an idea for people to know where
    they can get the kind of programming that
    serves their communities.  I'm not really
    wedded to the notion that, you know, every --
    this is where I disagree with Jim -- that every
    multi-cash stream has to have its public
    interest program.  I think there's actually
    some benefit to knowing where it is and when
    you can get it, number one.
         Number two, on who watches, I really think
    that can't be the measure because the
    demographics you look at are certainly not the
    demographics that public broadcast stations get
    or that, you know, you want to throw in local
                   MR. DUHAMEL:  The public
    broadcasting is subsidized.  The commercial --
                   CHAIRMAN MOONVES:  We're talking
    about people with money.
                   MS. SOHN:  You're not going to
    get the same demographics, but people watch
    C-Span and they watch it like crazy.  It
    wouldn't make you happy, but it's certainly
    enough to make an impact.  It makes an impact
    on people, and I think this channel can make an

    impact on communities.  So that's who watches.
         As far as the viability of noncommercial
    programs, I think I'd like to hear from Jim
    about how much noncommercial programming is out
    there that nobody ever sees because there's no
    place for it, and whether -- and whether your
    producers would just love to give Paul
    La Camera hours and hours worth of programming,
    good programming, to put on his channel.
                   CHAIRMAN MOONVES:  Didn't we do
    this panel a couple months ago?
                   MS. SOHN:  I wanted give you
    ample opportunity to be jealous.  I just want
    to finish my thoughts.
         Also on the problem of noncommercial, I
    think my notion of noncommercial certainly
    would not exclude sponsorship like
    multicorporate sponsorship, so there could be
    some right to be made that way.
         The other point is that one of the reasons
    that I changed the notion of the trust fund
    funding, some could go to commercial
    broadcasters and some could go to noncommercial
    is to address this very thing.
         So I think there are ways that you can

    economically fund the public interest, and I
    don't think -- I wonder if you can maybe talk
    to that, Jim.
                   MR. YEE:  Well, it's not
    astrophysics either.  I think you can.
         My concern is about can we capitalize in
    terms of actually money for production because
    independent producers, commercial and
    noncommercial people are -- they have the
    incentive, a place to have their programs seen,
    vis-a-vis, public interest or community
    programs, they'll do it.
         I think the problem I have is the funding
    and then creating a whole different niche of
    thinking and of packaging.  People come to it.
    They may traverse across it, but they maybe
    come back to it, and like I said in my earlier
    remarks, regarding a period where they can
    experiment and play around with this and not
    just have it locked out or locked in.  That's
    my concern.
         I think from the producing side, whether
    your network or working in public television,
    producers are the most adaptive creatures on
    earth.  If they smell money and opportunity,

    they'll go for it, and I think there's a lot of
    people who like -- (inaudible) -- in a way in
    an informed community.  The question is cash
    and where.
                   CHAIRMAN ORNSTEIN:  Let me
    suggest the following.  It seems to me that we
    have a number of alternatives here in terms of
    dealing with multiplexing, and assume that what
    we're talking about is the kind of world that
    Paul was suggesting, which is, in a lot of
    cases, it's going to be somebody running their
    normal channel, and then a second channel might
    be an all sports channel, and a third one might
    be an all news channel and a fourth one might
    be an all soaps channel.
         One alternative for us is to require the
    same public interest obligations for all
    channels when they're on, and as Jim has
    suggested, you know, you amortize, depending on
    how many hours they're on the air.
         We have to ask ourselves the question of
    whether, if you're running an all sports
    channel, requiring the same obligations in
    terms of hours of children's programming or
    public affairs programming, is going to be a

    good way to go here.
         Now, a second alternative is to basically
    try and come up with a quantified, completely
    different set of obligations which gets us into
    a moras that I think we could not get out of.
         A third is to try to provide some
    flexibility here and obviously do it in a way
    which least discourages experimentation.
         Now, there are two ways to go then.  One
    way is to have a dedicated channel and either
    have it run by the broadcaster or have him pay
    somebody else.  A second way might be to offer
    the following options to broadcasters if they
    want to move to multiple channels; either pay
    some fee to enable you to do this, and then
    you'll just have the one channel which has the
    public interest obligations and all others you
    can do with as you wish and make that fee some
    share of the revenues of the third channels and
    beyond so that if you're not going to make any
    money, or if you're going to make only small
    sums of money, you're not going to have to pay
    very much, some percentage, and if you make a
    lot of money, then you'll pay more.  Or, you
    can run a public interest channel with a

    commitment to programming it in a robust way.
         Now, maybe that's the way to best ensure
    flexibility and also make sure that you capture
    what you want to capture here.
                   MR. CRUMP:  Let's go back to
    your thought of taking various channels that
    would be programmed in different ways and
    requiring that we have public interest
    programming put on them.  I am somewhat
    intrigued by that because what we always worry
    about is getting an audience, and the next
    thing we worry about is having a different
         And what you have here if, indeed, you
    have taken what I would term niche programming
    channels and you have an opportunity suddenly
    to put some type of appropriate educational
    public service, whatever it is, programming in
    with that, you have the ability, if it's done
    right, using what Jim is talking about, which
    is the creative ability of other producers,
    perhaps what we got here, to try to grab an
    audience that you've never had before.
         As another specific example, suppose we
    take something as bad as sports, it's going to

    be sports all the time, so who would do it?
    Who watches a lot of sports?  Children do.
    Kids, teenagers we're talking about.  Suddenly
    we have an opportunity, perhaps, here to
    capture them if you do an innovative
    educational program or an innovative
    educational program from the standpoint of
    politics, getting the vote, this sort of
         So to me, that's an interesting
                   MS. CHARREN:  That's one of the
                   MR. SUNSTEIN:  Can I say
    something?  Which is that I think a general
    concern is that if broadcasters are moving to
    multiplex, it's because there's a market demand
    for that, and that is, you know, a potentially
    fantastic thing for consumers, they get all
    these options, and what we want to do is make
    sure we don't have any regulatory burdens which
    would discourage that, you know, very good use
    of the new technology.
         So the trick is to build in sufficient
    flexibility that it doesn't discourage the use

    of the multiplex technology, while at the same
    time, doing some good, and the two horns of the
    dilemma are doing no good and creating a
         I think a way to do that would be to have,
    Norm, what you're saying, which is flexibility,
    but maybe even a little more flexibility; money
    or niche or maybe something like code plus,
    where a third way of meeting it would be to go
    beyond what's in the code or what's in any
    minimum standards.
                   CHAIRMAN ORNSTEIN:  And
    certainly, another alternative would be to have
    some kind of progressive rate structure so that
    if the revenues are not very substantial, you
    pay a smaller percentage than if you're doing
    very, very well.
         Maybe what we ought to do is consider
    building in a menu here of things.  We have a
    choice for broadcasters.
                   MR. LA CAMERA:  It's important
    to remember here, again, as you think of these
    accelerator additional channels as --
    (inaudible) -- programming as some form in the
    future, that's our emerging cable channel

    today.  There are single-revenue stream
    channels.  The revenue comes from advertising.
    We don't enjoy the advantage of subscription
    fees as cable does as well.
         So as you're looking at your third channel
    and developing a third channel, it better be a
    surefire idea because not only are you
    absorbing the development cost of that third
    channel, now with that you're absorbing the
    development and start-up cost of the fourth
    public interest channel as well.  That is going
    to significantly discourage any form of
    experimentation and use of that third channel
    within the industry.  It has to.
                   MS. SOHN:  But Paul, my concern
    is what happens when we start getting like
    20 to 1 compression where you can have 10, 15,
    20 different video and other streams?  I mean,
    should you think at that point even there
    shouldn't be a public interest channel?
         I can understand the nearer term, and part
    of our recommendations could include a
    phase-in, and I definitely think should include
    a phase-in to permit experimentation, but how
    about when the digital compression technology

    gets to such an extent that you can have 10 and
    15 different services?  Doesn't the public
    deserve something back at that point?
                   MR. LA CAMERA:  No, I don't
    disagree.  On the other hand, it's going to
    contribute to the fragmentation and erosion of
    the digital television that we deal with
         And secondly, again, unless you change the
    model, we're looking at a single revenue stream
    to support that growth for the other
                   CHAIRMAN MOONVES:  Let me jump
    in on what Paul said.  And you're absolutely
    right.  I mean, when you're talking about
    multiplexing, there should be a give-back of
    some point.
         But for a panel, for a commission that's
    looking ahead, the single-revenue stream
    broadcaster is becoming less and less a force
    in the marketplace where the only people that
    are starting to make money are the cable
    channels and the networks who own their own
    stations.  In other words, it's a dual revenue
    source, right?

         This year we're looking at a universe
    where, believe it or not, three of the four
    networks probably will lose money.
                   MS. SOHN:  Really?
                   CHAIRMAN MOONVES:  Now, as a
    network.  As a network.  Can I finish, please?
    It is necessary for us to use, basically, the
    network as the assist man for our stations.
    It's the second revenue stream that is making
    us the money, which is why, once again, we're
    getting into more content, more ownership on
    the part of that because we're looking for an
    additional revenue stream.  While CBS is going
    to lose money this year, USA network -- Barry
    Diller, are you listening -- supposedly is
    going to make $250 million dollars because they
    have a dual-revenue source.
         So Paul's point, which is well-taken, as
    we look towards adding a third, a fourth, a
    fifth channel that only has one revenue stream,
    it's not a very good business.
         So that has to be, as we look ahead,
    figure it into the equation of what is the
    payback?  What is the payback on the menu that
    you're talking about, Norm, which is not a bad

    idea, but we're heading away from the single-
    revenue stream.
                   MR. RUIZ:  In respects to Gigi's
    question about independent producing, it's a
    tremendous empowerment if you were to come to
    me, and I'm the independent producer, and say,
    look, I want to do something on Sunday night
    from 7:00 to 8:00.  I want it to be local, I
    want it to be well-produced.  I can access you
    that time if you can come to me with a really
    good idea and a way to finance it.  That's
    empowerment and incentive for me, and I would
    rather be on a mainland channel that I'm going
    to get a good lead-in and I'm going to get
    promotion, and we're working together to bring
    that rating, because you don't want to lose
    that hour and not have anybody watch it and to
    be cast off somewhere that I have no way of
    promoting it, I have to raise my own financing,
    I have no way of telling the people who do fund
    it if anybody is going to watch it.  That's a
    real tough gig.
                   CHAIRMAN ORNSTEIN:  Let me go
    back to one of the things that Cass said.  We
    want to do what serves the public.  I think

    Congress doesn't believe that if what we end up
    moving towards is all broadcasters multiplexing
    most of the time, or even all the time, would
    serve the public, and there's a reason, and a
    good reason for that.
         One good reason for that is that what
    broadcasters have represented is not the same
    thing as cable except done in a different way.
    They are the public square.
         Now, that audience is eroding, to some
    degree, although one hopes it has stabilized,
    but to provide an encouragement to further
    divide that audience up in terms of the public
    interest, if it's divided up by a bunch of
    broadcaster channels or joining a bunch of
    cable channels, joining a bunch of satellite
    channels, it's still going to create less and
    less of a public square.
         Now, Congress did not, when it passed the
    Telecommunications Act, affirmatively and
    explicitly discourage this kind of
    multiplexing, but those who crafted the act had
    made it abundantly clear, starting with Billy
    Tozan and moving on, as soon as some people in
    the industry suggested that what they probably

    do is multiplex all the time, that that was
    simply not acceptable to them, and that the
    expectation was that this would be largely, if
    not exclusively, one signal.
         There is -- I believe, basically, if we
    don't come up with some kind of formula to
    create a public interest payback for multiple
    channels, that the alternative is likely to be
    a whole lot worse down the road.  It would be a
    more onerous burden, and the trick here is to
    do it in a way that preserves that public
    square and public interest without discouraging
         Now surely, we ought to be able to find a
    mechanism to be able to do that, and surely, we
    ought to be able to do that in a way that
    doesn't create an enormous penalty if you're
    putting out a bunch of channels that don't make
    any money.  But I have a hard time believing
    that broadcasters are going to put out a bunch
    of channels that don't make a lot of money for
    a great length of time.
         Maybe there is a phase-in mechanism or
    there's a trigger mechanism that requires a
    certain amount of revenue coming in, and it is

    one revenue steam, and in this case what we're
    talking about is a separate commercial driven
    revenue stream for each of these channels.
         Now, maybe that won't add up to more than
    what you would get from one channel.  Maybe
    you're going to divide it up in that fashion.
    I doubt that's going to happen, and we don't
    want to penalize, in that case, but we ought to
    be able to come up with a formula that meets
    what seems to be a common goal here; that if,
    indeed, as Les suggested, we end up with a very
    large number of channels, that there should be
    some payback, and it's a different formula than
    if it's a one-for-one exchange.
         And throughout the discussion of the
    Telecommunications Act, by almost every actor
    involved here, the rationale for not auctioning
    off this spectrum was, basically, this is a
    loan in return for a one-for-one exchange.  So
    it is clearly within our purview to try and
    consider what we do otherwise.
         If you want to come up with a better
    formula for doing this, fine, but I think if we
    resist doing anything here, were are not
    fulfilling our responsibilities.

                   MR. CRUZ:  Norm, it's been about
    six months since we last heard from someone
    who -- I forget who the panelist was -- who
    indicated that they had some trends already
    indicated as to what possibly the broadcast
    community of America would be doing with
         Has that gotten any better in terms of
    refinement?  Do we know the programming
                   CHAIRMAN ORNSTEIN:  I don't
    think, Frank, that we are going to know until
    we actually get out there and people test it in
    the marketplace.
                   MR. CRUZ:  Well, let me ask is
    it possible that CBS or ABC could do what MSNBC
    is doing, only instead of doing via cable, do
    it with one of their other channels --
    editorial comments aside?  But I mean, is it
                   CHAIRMAN MOONVES:  When you talk
    about multiplexing, you're talking about it on
    the local levels.  CBS is not going to have six
    stations, you know.  Paul will have six
    stations, he hopes.

                   MR. CRUZ:  But there could be
    commonality with a lot of --
                   MR. LA CAMERA:  What Norm said
    was right, and there's a school, and hopefully
    the majority of broadcasters are in this
    school, that high definition television is the
    most exciting option for us, is going to help
    reenergize our business, reengage the viewer,
    and that will not be multiplexing.  There will
    be other day parts outside of prime and weekend
    sports that maybe there will be some
    multiplexing, but in what numbers, no one
                   CHAIRMAN MOONVES:  The only
    thing I have trouble with, Norm -- not the only
    thing -- but when we're doing this menu, there
    are so many question marks about, you know, to
    use words like share of revenue and I don't --
    you know, I don't know how we figure out an
    appropriate menu with pricing, with hours,
    with -- when there are so many question marks
    still to be answered; whether, you know, we're
    going to be an hour a night starting in
    November.  Five years from now, we very well
    could be multiplexing all our stations.  I

    don't know.  I don't think anybody does.
                   MS. CHARREN:  We could write
    something that deals with that.  That's what
    business plans do all the time.  Nobody really
    knows anything about the future.
                   CHAIRMAN ORNSTEIN:  And we don't
    have to get specific in a lot of these in terms
    of a percentage, and clearly, I think it's
    absolutely appropriate to have some significant
    phase-in period, both to allow for
    experimentation and to be fair.
                   MR. CRUZ:  In a simplistic way,
    we're writing a road map how to get to New York
    from Los Angeles and basically saying, look,
    you can fly, you can walk, you can drive, you
    can take a bike, you can go around the Panama
    Canal or whatever have you, but you're given a
    myriad of options.
                   CHAIRMAN MOONVES:  Yes, but you
    know where those two cities are located.
                   MR. CRUZ:  That's true, and I
    know a direct line gets you there.
                   CHAIRMAN ORNSTEIN:  Well, given
    the earthquakes --
                   CHAIRMAN MOONVES:  I don't think

    we do know where these stations are located.
                   CHAIRMAN ORNSTEIN:  Given
    natural disasters in California, that's not a
    certainty either.
         But you know, when I talked about a share
    of revenues, I think the idea here is that what
    I would suggest is revenues for the third,
    fourth and subsequent channels so that we're
    not talking about cutting into that single
    stream of revenue if there's a high definition
    channel, but you're talking about what larger
    sums might come in down the road.  And again,
    you can have a lot of flexibility there to make
    sure it doesn't kick in until you're getting
    substantial revenues.
                   MR. GOODMON:  On our list, on
    our shopping list, I would like to suggest that
    there be a minimum requirement for HDT.  We
    could not have adopted a more confusing
    system.  We got 18 formats.  We can broadcast
    in those.  Cable is going to change it to
    something else, and then all the TV sets change
    it to something else.
         Is it unreasonable to suggest that every
    station should do a small percentage -- some

    percentage of its programming in high
                   CHAIRMAN MOONVES:  That's a
    whole separate subject.
                   MS. SOHN:  Don't go there.
                   CHAIRMAN MOONVES:  We could have
    a whole other commission on that one.
                   MR. LA CAMERA:  Now you're
    dictating to the networks.
                   CHAIRMAN MOONVES:  Exactly, and
    all the networks right now are in the middle of
    fighting amongst themselves about what to do,
    as well you know.
                   MR. SUNSTEIN:  I think the
    committee has delegated to Norm the
    responsibility to cross out 3-B, his good first
    effort, and to come up with some version
    acceptable to the various concern -- that
    addresses our various concerns on the model of
    the menu idea, and then we can look at it and
    see what we think.
                   MS. SOHN:  I just want to say
    that, Luis, I was very intrigued by your notion
    of if you multiplex and you're looking at these
    other areas, if you could develop that somehow

    as part of the menu, I think it's an
    interesting --
                   MR. RUIZ:  Any suggestions I
    would be --
                   MR. MINOW:  One historic thing.
    FM was a nothing until the '60s.  In the '60s
    the FCC said you can no longer duplicate on FM
    exactly what you're doing on AM.  You have to
    have half the programs stricken.
         FM today is the dominant oral media.  AM
    stations are not.  You don't know, is what I'm
    saying.  These things develop, and that's why
    the broadest flexibility, Norm, is what's sure.
                   CHAIRMAN MOONVES:  Absolutely,
    Newt.  We don't know.
                   MS. CHARREN:  Can we sort of
    suggest -- we have ideas for possibilities of
    what can make them work better.  When we said
    that a TV set has to have a click for UHF
    stations, we weren't sure the effect that would
    have on UHF, but the fact that nobody knows
    where their bloody signals are coming from.
                   MR. MINOW:  When the UHF
    started -- when cable started, UHF people
    fought it every inch of the way.  I used to say

    it's the best thing that's going to save your
    life.  So nobody knows is what I'm saying.
                   CHAIRMAN ORNSTEIN:  The most
    significant thing we can do to start with is,
    first of all, agree on the principle that if
    there is multiplexing beyond two or three, that
    it is a very different take in terms of what
    gets given back to the public than if that does
    not occur.  And if we can all accept that
    principle, then I am confident that we can come
    up with a menu that is sufficiently flexible,
    that since it's only a recommendation that goes
    out to entities that would have to implement it
    anyhow, that we can live with it.  What's most
    important is we accept that basic principle.
                   MR. DUHAMEL:  Norm, I don't
    think I accept the principle because,
    basically, we're talking about an exchange for
    6 megahertz for 6 megahertz.  We're spending
    billions of dollars to go into it, and there's
    no -- there's no new audience out there.  We're
    taking our existing audience and
    fractionalizing it.
         So to say that there's something else out
    there, I can't agree with that.

                   CHAIRMAN ORNSTEIN:  We thank you
    for a dissenting voice.
                   MR. CRUZ:  Norm, our
    subcommittee, Lois Jean White's, came up with
    the recommendations that also appears that
    Barry Diller's recommendations, and that is
    creating financial incentive for commercial
    broadcasters to do additional educational
    programming in a multiplex channeled era.
         Incentives, it could be any tax credits or
    tax breaks or whatever encourage you to do it.
    Give them a break in that sense.  So that might
    be part of your menu is what I'm saying.
                   MS. SOHN:  Could I just amend
    Cass's -- Karen wants to cross out the VB.  I
    would put VB as one of the menu items.  Is that
                   MR. SUNSTEIN:  Why not?
                   MR. BENTON:  Absolutely.  I
    think --
                   MR. SUNSTEIN:  Especially your
    insight on Congress, history of the act here,
    means we really need to do this, but it's very
    complicated, and I think you're taking the
    lead -- because we got another whack at this --

    you're taking the lead on articulating what
    this menu is.  I would have complete
    confidence, once the principle has been
    accepted, which I think virtually all of us,
    with maybe one dissenting voice do accept.
                   CHAIRMAN ORNSTEIN:  I will
    certainly work closely with our co-chair.
                   CHAIRMAN MOONVES:  We're not
    accepting anything until we see it written
    down.  We'll make that statement right now.
                   MS. SOHN:  You're sounding like
    a lawyer.
                   CHAIRMAN MOONVES:  I've been
    deposed enough times.  We'll see how much low
    fat is on the menu.
                   CHAIRMAN ORNSTEIN:  All right.
    Let's turn to the easy one, which is political
    discourse.  We'll probably have no more than
    five minutes on this, and then we can move
         It is -- just so we can make this work,
    it's 3 o'clock.  I think -- well, we'll see how
    we get here, but we may have to put an
    arbitrary stop to our discussion so we can
    cover the other areas.  I don't think we can do

    everything as fully as we would like.  We need
    to get a general sense of things.
                   CHAIRMAN MOONVES:  What time is
    the public --
                   CHAIRMAN ORNSTEIN:  I think we
    can probably safely go until 5:00, maybe 5:15
    is what we're suggesting.  We have until 5:30
    altogether, so we'll try and divide up the time
    appropriately so we can at least have some
    robust discussion of all the areas that we need
    to consider.
         There are -- I put three things down here,
    and these are my basic ideas to try and do what
    we can to reach a broader consensus here.  That
    broader consensus, it seems to me, is basically
    going to have to stay away from the notion of
    explicitly mandating a carving out time from
    broadcasters out of their hides for the purpose
    of political discourse, and we have to look for
    other mechanisms.
         I do think -- I at least would endorse,
    and I think we've see in some of the comments
    that others have made as a goal so that we can
    do this in the spirit of cooperation with the
    industry, the flat statement that the president

    of the NAB made, Andy Fritz, just a few weeks
    ago, that he would support broadcasters
    providing two hours of free time for federal
    candidates, if they would agree not to purchase
    any additional time.
                   MR. GOODMON:  That's not what he
                   MR. LA CAMERA:  It was an
    off-the-cuff remark which he immediately
    repudiated.  It was a bad joke.
                   CHAIRMAN ORNSTEIN:  Well, the
    reporters who did the interview said there was
    nothing joking about it, and he was very
                   MR. MINOW:  It was in a
    transcript.  He said it in so many words.  I
    would take him up on it.
                   MR. GOODMON:  But his point --
                   MR. LA CAMERA:  He subsequently,
    immediately, he refuted it.
                   CHAIRMAN ORNSTEIN:  So he
    doesn't mean what he says?
                   MR. LA CAMERA:  He didn't mean
                   MR. GOODMON:  No, I think he

    meant that if candidates are given free
    programming time, it will not affect their spot
    time.  They want to buy spots, and they're
    going to buy them, and that's what he was
    saying.  Just because they get free program
    time, they still want to make their spot buys.
    I think that's what he was saying.
                   CHAIRMAN ORNSTEIN:  And we can
    get out the transcripts and read it.
                   MR. MINOW:  He's right about
    that.  I agree with him about that.  That's why
    I think there should be no buying or selling
    time, and there should be a certain amount of
    time, public service time, and no buying or
    selling time.  He's right about that.
                   CHAIRMAN ORNSTEIN:  Maybe we can
    get a --
                   MR. MINOW:  He's quoting it to
                   CHAIRMAN ORNSTEIN:  I think,
    under the circumstances, given what Paul has
    said, maybe what we should do here, at least to
    start with, is to get a communication from
    Mr. Fritz indicating whether he stands by what
    he said or whether he has, in fact, repudiated

                   MR. BENTON:  Norm, just in
    broadcast --
                   CHAIRMAN MOONVES:  If you are
    attempting to get a consensus here, I don't
    think the way you phrased that is an
    appropriate way to get the broadcasters
    together with you on this issue.
                   MR. LA CAMERA:  If you want to
    discuss this, that's fine.  I don't think it's
    an official NAB position.
                   MR. BENTON:  Anyway, in this
    article that was passed out at the last
    meeting, April 6th broadcasting cable, it says,
    "Fritz insisted any free time mandate would
    merely provide more time for negative attack
    ads."   Quotes. "I will make a deal tomorrow
    with the Congress of the United States."
    Quotes.  "That says the following: We will give
    you two hours of broadcast time to run your
    campaign, federal candidates only.  However,
    you will not be able to buy any additional
    time."  Unquote.  It's right there, black and
    white.  There it is.
                   MR. LA CAMERA:  From my

    understanding --
                   CHAIRMAN ORNSTEIN:  Did he, in
    fact, as Paul said, repudiate this?  Is this an
    NAB position?
                   MR. JACK GOODMAN:  It is not an
    official NAB position.  I think you have to
    look at it as a package, and I think, as you
    will note from the letter I sent you, the
    restriction on the ability to buy time is
    clearly unconstitutional.  So I think you
    should view it as a rhetorical rather than a
    serious proposal.
                   MR. LA CAMERA:  If you want to
    discuss --
                   MR. MINOW:  Well, wait a
    minute.  For the record, I disagree totally
    with that view on constitutionality, totally.
                   MR. JACK GOODMAN:  The Sixth
    Circuit said exactly the opposite.
                   MR. MINOW:  That's because of
    the way the law is phrased now.  If Congress
    changed the law to say you couldn't buy time,
    that would be constitutional.
                   MS. SOHN:  If they could get a
    compelling government interest?

                   MR. MINOW:  Yes.
                   MS. SOHN:  What would that
    interest be?
                   MR. MINOW:  That the cost of
    campaigning today is destroying the democratic
                   MR. JACK GOODMAN:  Well, it was
    rejected in Crews and rejected in Buckley, that
    very argument.
                   MR. MINOW:  You know, that's a
    difference of opinion.  That's all that is.
    Everybody is entitled to his own opinions, but
    not to his own facts.
                   CHAIRMAN ORNSTEIN:  Well, I was
    just trying to take what the president of NAB
    had explicitly said.  I guess it's not an
    official position and he's repudiated it, so we
    can move beyond that.  I do think as a goal, it
    would be a reasonable one.
         But beyond that, I'd suggest two very
    simple things; one which Cass had written into
    the code is an attempt to try and bring some
    candidates into discourse while providing a
    tremendous amount of freedom for broadcasters,
    and that is, basically, that in the 30 days

    before an election, every broadcaster would
    commit to providing five minutes a night of
    candidate-centered discourse.
         Broadcasters would choose the races and
    the candidates which deserve interest and would
    be encouraged to experiment with formats.  It
    needn't be a five-minute block of time.  It
    should meet the commercial needs of
    broadcasters.  It should be at least a
    three-minute block.  It might come in the news,
    it might come at other times.  We've extended
    the definition of the evening hours back to
    5 o'clock to 11:35.
         I believe, basically, that this could
    probably be done for those who wanted to
    without loss of a second commercial time, if
    you wanted to do it that way, that it would be
    a fairly modest commitment, but done in this
    fashion, it would send a powerful signal to the
    public, and it would provide a tremendous
    opportunity for some candidates who get no time
    to have an opportunity to get messages across.
         And what we've also suggested is that to
    prevent a situation where you offer time to
    candidates and the powerful one says, I don't

    want it, to prevent his opponent from getting
    any message across, that any equal time
    provisions be waived here, that there be a
    commitment to fairness, obviously.  So it's not
    used by a broadcaster to simply promote one
    particular point of view.
                   MR. GOODMON:  Is this federal
                   CHAIRMAN ORNSTEIN:  I'd leave it
    up to broadcasters to determine, during that
    30-day period, which candidates they felt
    deserved attention, and that doesn't have to be
                   MS. STRAUSS:  Would the
    broadcasters be allowed to accumulate minutes;
    for example, 50 minutes on one night and that
    would take up --
                   CHAIRMAN ORNSTEIN:  No, I think
    what you want to do here is to try to move into
    a pattern here where every night you get some
    time devoted to candidate-centered discourse.
                   MR. YEE:  Five minutes?
                   CHAIRMAN ORNSTEIN:  At all
    times.  This is not instead of the kinds of
    activities that stations normally engage in in

    covering elections.  It's not in lieu of
    debates.  It's not in lieu of news coverage.
    This is a distinct commitment, but it's one
    that I think you could make into a win-win
    situation, and you'd get a lot of creativity
    using this process.
                   MR. LA CAMERA:  I think that's
    part of the biggest way to attract flexibility
    and creativity.
                   MS. SOHN:  Norm, I'm concerned
    when you say equal time and rules waived in
    return for fairness.  Now, only Congress can
    waive the equal time law.  So that's sort of an
    important thing to understand.  And there
    are -- on the other hand, there are ways of
    doing this that don't -- that would fall within
    the exemptions to the equal time.
                   CHAIRMAN ORNSTEIN:  Yes, and
    along the way, until Congress made an
    exception, there are lots of ways in which you
    can handle this, but it seems to me the best
    way to handle it, ultimately, is if
    broadcasters are given the kind of
         You know, one of the problems with

    debates, as we have learned, is that you will
    find many candidates, particularly incumbents,
    who don't want a debate, and if they don't want
    to debate, then you can't give that time to the
    opposing candidates.
         So the idea here is to try and provide
    opportunities for broader discourse, but also
    for candidates who, otherwise, in important
    races, wouldn't have an opportunity to get a
    message across.
                   MS. SOHN:  I just wanted to make
    the point that this may be a hybrid
    recommendation-- (inaudible).
                   CHAIRMAN MOONVES:  Are you
    willing to tie this to your first sentence in
                   MR. CRUZ:  I would recommend
                   CHAIRMAN ORNSTEIN:  Sure, but it
    also seems to me that the best way for
    something like this to happen is for
    broadcasters to do it on their own initiative.
         I would prefer not to mandate anything.
    I'd prefer not to force things on
    broadcasters.  It seems to me that this is the

    sort of thing --
                   CHAIRMAN MOONVES:  What did you
                   CHAIRMAN ORNSTEIN:  I would
    prefer --
                   CHAIRMAN MOONVES:  I just wanted
    to make sure I heard you correctly.
                   CHAIRMAN ORNSTEIN:  I think, for
    most of us, the preference is always to have it
    occur in a fashion that works through the
    industry rather than mandated by a government,
    so that's not a first resort, and there are
    ways of doing it here, either by action -- as
    we're seeing now, with things like the
    Minnesota Compact, there are lots of places
    where broadcasters, themselves, are stepping
    forward and looking for these kinds of creative
    ways to improve political discourse.
         Another way is to build it explicitly into
    a code and hope that it gets carried out
    voluntarily in the Code of Conduct.
         The last resort would be to make it a
    mandate as a part of a congressional action.
    The only part of a congressional action that I
    would suggest here would be a way to facilitate

    broadcasters moving to this kind of action as
    Gigi suggested by -- for this purpose waiving
    equal time provisions.
                   CHAIRMAN MOONVES:  I'm not
    trying to act dumb, but you say a commitment by
    broadcasters.  Now, you're saying that is now a
    voluntarily commitment?
                   CHAIRMAN ORNSTEIN:  Yes.
                   CHAIRMAN MOONVES:  A voluntarily
    commitment on the part of broadcasters.  I was
    saying that if you wanted to be stronger on
    broadcasters, you know, once again, we had
    brought up the idea that broadcasters should be
    part of the solution, but part of a larger
    solution, which is why I was trying to combine
    C with, you know --
                   CHAIRMAN ORNSTEIN:  If your
    judgment would be that the best way to do this
    is to incorporate this into a comprehensive
    congressional campaign reform that would
    include a congressional mandate --
                   CHAIRMAN MOONVES:  I think it
    should certainly be discussed anyway.
                   CHAIRMAN ORNSTEIN:  I don't have
    a problem with calling on broadcasters to do

    what they want to do now with this as a model
    and then incorporate it into that
                   MR. DUHAMEL:  Would you be
    willing to exchange the most unit rate for five
    minutes a night.
                   CHAIRMAN ORNSTEIN:  As you'll
    see, the third suggestion is something much
    broader than that, which is, basically, the
    following; that this committee believes that
    there ought to be a comprehensive campaign
    reform and that campaign reform should not
    simply be on the shoulder of broadcasters.
         But in the context of campaign reform, it
    would be appropriate to move to an exchange of
    lowest unit rate in return for some formula of
    free time.
         To suggest that we repeal lowest unit rate
    and move to a market rate system and, in
    return, what you get is five minutes a night
    for 30 nights, I don't think would be widely
    acceptable, Bill.
         But given that, the NAB has said, I think
    most recently just a few weeks ago, that the
    lowest unit rate costs about 30 percent of the

    revenues that would otherwise come in, that we
    know that it presents a bureaucratic and legal
    burden often, that some formula that would
    replace it that moves more to a market system.
    Removing those reporting requirements, the
    headaches of trying to figure out what the
    lowest unit rate is at every different point in
    time and, you know, the easiest formula, it
    seems to me, which is one that has been
    suggested some years ago by the industry is, in
    return for repeal of lowest unit rate.
         Only those broadcasters who are selling
    time at market rates would provide, for every
    two minutes of pay time, one minute of free
    time that gets divided, presumably, among the
    parties, the same kind of formula we now use
    for presidential campaigns.
         And then you're going to have -- you're
    not going to solve the problem of campaign
    costs here.  One hopes that Congress would do
    that in other ways, but you are going to open
    up opportunities for candidates who otherwise
    wouldn't have a voice in this process of
    providing more flexibility.  So it's a small

                   MS. CHARREN:  Does that take
    into account what a gift the repeal of that
    rate is?  Does the public get enough back with
    that -- I mean, I think that's a tremendous
    carrot in terms of political discourse.
                   CHAIRMAN MOONVES:  What was?
                   MS. CHARREN:  The repeal of the
    lowest unit.
                   CHAIRMAN MOONVES:  The lowest
    unit rate is not the great windfall that people
    believe it is since it is not used really as
    much as people think it is.  It's only applied
    in certain situations, and I know that may not
    have been the intent of the rule way back when
    but, in fact, it is not.  It's not --
                   MS. CHARREN:  Who just said that
    it's not?
                   CHAIRMAN MOONVES:  Norm did.
    The two-for-one does not come out equal at the
    end of the day.
                   CHAIRMAN ORNSTEIN:  If you go
    back to that same interview on broadcast cable,
    which is just a few weeks ago, Fritz said it
    costs 30 percent of revenue.  Does this guy say
    anything that isn't going to be repudiated

                   CHAIRMAN MOONVES:  Norm, that's
    my name.
                   MS. CHARREN:  I just think it
    sounds to me like if I were a broadcaster,
    that's a very good thing, and if I'm going to
    get away with not doing that, I want to be
    required to give something big back to the
    political --
                   MR. DUHAMEL:  I thought five
    minutes a night is pretty much.
                   MS. CHARREN:  That's separate.
                   MR. DUHAMEL:  It doesn't have to
    be separate.
                   MR. CRUMP:  I'm not sure I'm
    understanding what you're saying.
                   MS. CHARREN:  I just want to
    make sure that here we talk about to repeal the
    lowest unit rate, and I want to make sure that
    what we get for that is worth it.
                   MR. CRUMP:  Well, then I'll make
    a proposition back to you then.  Let's keep the
    lowest unit rate just as it is now and do away
    with this free programming.  Do away with the
    free programming.  We'll keep the lowest unit

    rate that we got right now.  Are you against
    that, Bill?
                   MR. CRUZ:  Somebody's got to pay
                   MR. DUHAMEL:  I'd be agreeable
    to that.  I'd keep the lowest unit rate.
                   MR. LA CAMERA:  I'd like to see
    us make some steps forward here.
                   MR. CRUMP:  My point is we're
    talking about what we're going to get back.
    See, we're in a situation that's not the best.
    We don't like it, but it's not so bad that it's
    the end of the world, so we're not going to
    want to give a tremendous amount of something
    else in order to get that back.  That's my
    whole point of this.
                   CHAIRMAN ORNSTEIN:  Let me be
    very frank here.  I'm trying to come up with a
    recommendation that is not one that just says
    we ought to take a whole lot more out of the
    hide of broadcasters because we're moving to
    the digital age, that it will be more widely
    acceptable.  That suggests a move to some kind
    of an exchange.
         When we started this process, we heard an

    awful lot individually from some of you, from
    many other broadcasters, publicly in our first
    few meetings, about what a pain the lowest unit
    rate was.  As soon as we talk about an
    exchange, we get some saying, oh, it's not that
    bad.  It's really not that much at all.
         Well, I'm going to take the industry at
    its word here that it is an administrative
    burden and that it costs significant sums of
    revenue and suggest that rather than try and
    reach dissensus by saying, all right, we just
    recommend we take more out of your hide, we
    suggest a trade-off here.  It is not a perfect
    trade-off.  It is not a trade-off that solves
    the problems of spending in campaigns.  It's an
    attempt to get at some other problems in the
    system and to move us past an impasse.
                   MR. SUNSTEIN:  Can I suggest
    that whether it's a good deal depends on how
    much free time, and if it's two seconds of free
    time in return for repeal, that may be a pretty
    good deal.  If it's five hours, then it would
    be a bad deal.
         So it's hard to know whether this is a
    good deal or bad deal without knowing.  I mean,

    if we wrote in -- one way to do it would be to
    say to a mutually agreeable exchange, something
    like that.
                   CHAIRMAN ORNSTEIN:  Well, again,
    let me get back.
                   CHAIRMAN MOONVES:  Norman, I
    have to take exception to what you said.  The
    person that's used lowest unit rate more than
    anybody at the table is you.  I haven't heard
    the broadcasters around here saying what a bad
    deal it and how horrible it has been to live
    with that, and I've been at every meeting, to
    the best of my knowledge, and I don't recall
    more than one time hearing about how bad lowest
    unit rate.  We have said from day one, lowest
    unit rate isn't all that it's cracked up to be.
    And please don't quote Eddie Fritz to me
    again.  This is what the fact is, that lowest
    unit rate is not all that it's cracked up to
         So we're not talking out of both sides of
    our mouth, and it's unfair to characterize it
    that way.
                   MR. DUHAMEL:  The other thing
    is, 30 days times five minutes a day, doesn't

    that come out to 150 minutes, which is two and
    a half hours.  One of your proposals is two
    hours.  Here we're talking about two and a half
                   MR. GOODMON:  Yeah, I think the
    question is, do we believe that qualified
    candidates should have some sort of advantaged
    right as a generic issue.
         I think what we've been saying is that the
    lowest unit rate, the way it is now done and
    the way the rule is written, doesn't work.  It
    works different ways and different stations,
    let me put it that way.
         And so I think the first question is do we
    believe that candidates should have an
    advantaged right, and if we do, let's figure
    out one we can all understand and make sense.
    If we don't, we don't.
         I mean, just saying lowest unit rate
    doesn't get us to the crux of the matter, which
    is do -- lowest unit rate is just federal
                   MS. SOHN:  Everybody.
                   MR. GOODMON:  Every qualified?
                   MS. SOHN:  Yes.

                   MR. GOODMON:  I went back to
    look at that.  Is it every --
                   MS. SOHN:  Yes, it's everybody.
    I'll get it for you in my handy, dandy book
                   MR. GOODMON:  But it seems to me
    that's a vested issue that candidates have an
    advantaged right, and if they should, okay, how
    should we figure it.  What I've been saying is
    we can't figure out how to apply it.
                   MR. MINOW:  Well, let's address
    that issue.  I, for one, do not think there
    should be an advantaged right.  I think it was
    a lot of hutzpah for Congress to pass a law
    saying that they should buy time cheaper than
    anybody else.  Why should we go along with
    that?  What's fair about that, that Congress
    could write a law doing a favor for itself and
    other politicians and not for other people?
                   MR. LA CAMERA:  You want to pass
    a law now that they can have free time.
                   MR. MINOW:  The people who have
    free time.
                   MR. LA CAMERA:  Hutzpah.
                   MR. MINOW:  The people who have

    free time in this country are broadcasters.
    They're the ones who have free time.  They get
    a free license for eight years to use the time
    as they wish.  They're the ones that get free
    time, not anybody else.  The free time belongs
    to the broadcasters, not to anyone else.
                   CHAIRMAN ORNSTEIN:  A large
    number of candidates would prefer this system
    as we have it now.  Most of the incumbents
    prefer the status quo to any kind of a change,
    as we know.  The fact is, if we repeal the
    lowest unit rate and move a market rate system,
    some candidates are going to end up paying
         An advantaged rate isn't necessarily going
    to solve -- however we work it out, even if
    it's on a better formula.  What this proposal
    suggests is not an advantaged rate for an
    individual candidate.  It's not exchange of
    repealable lowest unit rate so a candidate gets
    a bonus.  That's the last thing you want to do
    directly because then it means the rich get
    richer and the poor get nothing; in fact, they
    get a worse situation.
         The idea here is not that you can move

    back to a market system, which is what is fair,
    I think, under these circumstances, but then
    you have an exchange in return for what I hope
    would be a formula that would be comparable.
    And as I say, the NAB, which see seem not to
    accept what they've said before very directly,
    had suggested a two-for-one exchange.  One
    minute of free time for two minutes of paid
    time, not to go to the candidate, but to be
    split among the parties to distribute to
                   MR. GOODMON:  I misunderstood it
    was going to the parties.
                   CHAIRMAN ORNSTEIN:  So this is a
    simple suggestion, and it basically would be if
    Leslie Moonves were running for the senate in
    North Carolina.
                   MS. CHARREN:  Oh, my God.
                   CHAIRMAN ORNSTEIN:  And bought a
    vacation home there and changed his accent --
    got to change the accent.
                   CHAIRMAN MOONVES:  And the
                   CHAIRMAN ORNSTEIN:  If Leslie
    Moonves were running against Jessie Helms for

    the senate and went to Jim Goodmon's station
    and purchased 10 minutes of time, at market
    rates, then Jim Goodmon's station would agree
    to provide five comparable minutes during the
    campaign to be split -- forgetting third
    parties for the moment -- two and a half
    minutes each to the North Carolina Democratic
    Republican Party, which could use it for
    whatever candidates it wished, including
    challengers who otherwise would have no access.
                   MR. GOODMON:  He doesn't get an
    advantaged rate?
                   CHAIRMAN ORNSTEIN:  He does not
    get an advantaged rate.  He pays market rates,
    in fact.  You don't have to go through the
    headache of figuring out what the lowest unit
    rate is or dealing with the lawsuits or
    reporting requirements.  You just have to
    provide additional time.
         Now, it seems to me that maybe the
    two-for-one is not the appropriate number, but
    there ought to be a way of making that a
    win-win where even if it's not as onerous as
    some has said it is, you remove that burden.
    You move, which we ought to be doing in a

    digital age, to a market system even more than
    we have now.  And in return, but as part of the
    package of comprehensive reform.  Let's face
    it, ladies and gentlemen, Congress, if we make
    this work effectively, isn't going to want to
    do it.  So this is not going to happen
    overnight, but what I've been searching for is
    a formula that can unite all of us and make
    broadcasters look like they're looking for a
    formula to improve this system and not look
    like they're against every change, and any time
    something is brought up, there's another excuse
    for not doing it.  That's the goal here.  Now,
    if this is not the best way to go, come up with
    something better.
                   MR. RUIZ:  This is a proposal
    that would be acceptable to Les but probably
    not to Jessie who's in power.
                   CHAIRMAN ORNSTEIN:  Well, we'll
    see if it's acceptable to Les.
                   CHAIRMAN MOONVES:  Not me, as
    the candidate.
                   MR. RUIZ:  As the candidate.
                   CHAIRMAN ORNSTEIN:  But this
    much I will tell you, Jose Luis, that if we

    came up with a proposal of this sort and made
    the recommendation with the backing of
    broadcasters, it would be a very significant
    additional impetus on Congress, whether they
    liked it or not, to move towards some kind of
    comprehensive reform that included a broadcast
    component and probably making it one that
    wouldn't be so terribly onerous.
                   MR. RUIZ:  Sure make a powerful
    state -- (inaudible).
                   CHAIRMAN ORNSTEIN:  It would be
    a very powerful incentive, in fact, to reform
    state parties, which is not a bad way to go
                   MR. BENTON:  Norman, Paul Tare
    is sitting back over here, and I'd sure like to
    get his quick reactions to the discussions so
                   CHAIRMAN ORNSTEIN:  Charles, I
    would rather -- I don't want to set the
    precedent when we're talking among ourselves of
    opening up any proposals.  We already opened up
    a Pandora's Box.
                   MR. BENTON:  I hear you.  Thank

                   MR. LA CAMERA:  Norm, let me ask
    you about a couple of things, one is item B.
    Do you have a comfort level that is -- a
    certain agreement on that item.
                   CHAIRMAN ORNSTEIN:  Yeah, I
    think we need to talk a little bit more about
    how we would implement it, but yes, and I
    assume there's no great disagreement other than
    from Bill.
                   MR. DUHAMEL:  The thing that
    bothers me, though, is we talk about free time
    in B, and then, all of the sudden, Bingo, we're
    talking about free time in C again.  How many
    times are we doing free time?
                   MR. SUNSTEIN:  B was not, at
    least in its code version, this was not free
    air time.  The station could give free time,
    could have a mini debate, could have candidate
    interviews.  It needn't be a revenue loss in
    the sense of free air time.
                   MR. DUHAMEL:  Well, it's provide
    five minutes a night.
                   MR. SUNSTEIN:  Not for free.
    It's program. .
                   CHAIRMAN ORNSTEIN:  You can take

    five minutes out of your newscast and devote it
    to this 30-day period.
                   MR. DUHAMEL:  Who's going to pay
    for it, the furniture stores?
                   MS. CHARREN:  The same way the
    news is paid for.
                   CHAIRMAN ORNSTEIN:  Who pays for
    your broadcasts that says there's a hurricane?
    Do you require that every element of your
    newscast that isn't a commercial be paid for?
                   MR. DUHAMEL:  Yeah, but we're
    talking about we're giving five minutes of free
    political time.
                   MR. BENTON:  Wait, remember the
    little fracas we got into this morning?  I said
    39 percent is on crime, violent crime.
                   MR. DUHAMEL:  I disagree with
    the numbers.
                   CHAIRMAN ORNSTEIN:  Let's leave
    this for awhile, for later on.
                   MR. DUHAMEL:  Aren't we doing
    twice on political free time?
                   MR. LA CAMERA:  The strength of
    item B is the flexibility and creativity that
    you cited before.  The station could take that

    five minutes, and it could be a three-minute
    component of the few minutes of free political
                   CHAIRMAN ORNSTEIN:  Sure, but
    you don't have to.  You can do whatever you
                   MR. LA CAMERA:  You want to
    mandate it in addition to this?
                   CHAIRMAN MOONVES:  This is
    purely voluntary, this five minutes, but
                   MR. LA CAMERA:  But the key word
    here is flexibility.  That's what makes it so
    attractive.  It could be free political time,
    it could be mini debates, it could be candidate
    profiles over and above your normal --
                   CHAIRMAN ORNSTEIN:  You might
    very well have a station that decided that what
    it would do each night is offer a minute to
    each of five candidates to get a message
    across.  Another station might decide not to do
    that at all.
                   MR. LA CAMERA:  That's what I'm
    saying, and that's what makes it attractive to
    broadcasters.  There's as a flexibility

                   MS. CHARREN:  And it's what
    makes it interesting to the public.
                   MR. LA CAMERA:  I love it.  I
    love it.  I'm supporting this.  Please.
                   MS. CHARREN:  I know you are.
                   MR. LA CAMERA:  Where I'm having
    problems is why this doesn't cover, as Bill's
    suggesting, item C as well.  We're moving from
    here, the flexibility, the creativity, now into
    a mandatory.
                   CHAIRMAN ORNSTEIN:  I basically
    believe, Paul, that this is a significant step,
    but it's not a sufficient step.
                   MR. CRUMP:  I just want to make
    certain that I am understanding this
         In other words, what you're saying here is
    when we talk about candidate-centered
    discourse, you're saying in no way is the
    broadcaster committing himself to give free
    political time to specific candidates.
                   MR. SUNSTEIN:  Correct.
                   MR. CRUMP:  Because to me, what
    makes it so important is, as a broadcaster,

    what I think we should be doing is trying to
    increase the public knowledge of what the
    issues are and try to drive them into the
    voting poll on voting day.  That what's more
    important than putting a candidate or any
    series of candidates on free, but I want to
    make certain that I'm --
                   MR. SUNSTEIN:  That's right.
    That's very important.
                   MR. CRUMP:  This, to me, is not
    free political time.  It could be, but that's
    if you choose it.
                   CHAIRMAN MOONVES:  If you ain't
    got a minute, does that count on your local
                   CHAIRMAN ORNSTEIN:  Yes.
                   CHAIRMAN MOONVES:  Even covered
    as a news event, so and so appeared today at
    the PAL and made the following speech.
                   CHAIRMAN ORNSTEIN:  If it's a
    broadcast report that says here's what happened
    with a couple of five-second sound bytes, no,
    but if it is taking an excerpt of a minute or
    two from the speech in the same way that the
    news hour with Jim Lehr, for example, takes

    longer excerpts from some speeches, yes, that's
    candidate-centered discourse.  Absolutely.
                   MS. SOHN:  And Norm, except for
    the fact that the broadcaster gets to choose
    what races they would cover, they would have no
    editorial control over what the candidate says.
                   CHAIRMAN ORNSTEIN:  Well, it's
    up to the broadcaster.  If the broadcaster
    wants to do, say interviews, that its news
    people would do with the candidates, you bring
    in Senatorial Candidate Umvez and your anchor
    interviews him for a minute or for two and a
    half minutes, say, and then does another
    interview with his opponent.
                   MS. CHARREN:  Or doesn't.
                   CHAIRMAN ORNSTEIN:  That's
    perfectly fine.  Or if you want to find some
    other format, or if you believe that a race is
    significantly important that, throughout the
    course of that 30 days you want to cover it
    several times, including interviews, mini
    debate and minutes of time for the candidates
    to get their own messages across, fine.
         The idea here is you provide almost a
    limitless flexibility in terms of what the

    broadcaster itself does with that time, except
    that it is a commitment of five minutes a night
    for 30 nights and it is candidate-centered.
    It's not the same kind of coverage of
                   MR. BENTON:  And in fairness,
                   CHAIRMAN ORNSTEIN:  There's an
    attempt to make it fair, but you also want to
    provide flexibility so that you can't have --
    one candidate held hostage to another that
    doesn't want to get across at all.
                   MS. STRAUSS:  Is there a
    requirement for balanced viewpoints?  Is that
    how you're defining fairness, the equal time
                   CHAIRMAN ORNSTEIN:  What I want
    to do here, Karen, is to, as much as we can,
    provide flexibility but avoid, as much as we
    can, a situation which could happen where a
    broadcaster basically decides that it is going
    to devote all five minutes for all 30 nights to
    promoting one candidate and saying I'm not
    going to let people --
                   MS. STRAUSS:  How do you avoid

    that?  What kind of language do you use to
    avoid that?
                   CHAIRMAN ORNSTEIN:  I think,
    frankly, that what's going to happen in the
    marketplace is that anybody who tried to do
    that would be brought short and other stations
    would likely make it up.
                   MR. SUNSTEIN:  If this is a code
    revision, the code already has an independent
    requirement of balance.  So if this is a code
    provision -- when we discuss a code provision,
    by the way, it seems agreeable and
    understandable.  I think what's balling us up
    is that B and C look like they're doing the
    same thing, and they look overlapping, but now
    I think we're clarifying that B is what people
    seem pretty clearly to like, and C seems the
    controversial one.
                   MS. CHARREN:  B is like people
    saying nice things about children's television
    in the code.  It could be mishandled.  That's
    why we're going to do something else too.
                   CHAIRMAN ORNSTEIN:  The larger
    balance -- and let's face it, five minutes a
    night, what we're trying to do here is to

    strike a balance where it's not a tremendously
    onerous burden, and the flexibility helps to
    provide that, and it can satisfy larger goals
    of discourse.
         I think if we are aiming, as clearly our
    mandate is, to deal with the broader issues, we
    can't deal with the question effectively and
    practically of cutting the cost of campaigns.
    That has to be done as a part of a
    comprehensive package if it's done at all.
         There are other goals in campaign reform
    which broadcasting can play a part; broadening
    the discourse to a wider range of candidates,
    improving the roll of parties and so on,
    creating more opportunities for challengers.
    That's what C, as well, tries to get at.
         And again, let me reiterate that I think B
    would be a tremendous step forward that ought
    to be agreeable to virtually everybody.  And
    yeah, but it is not sufficient, given the
    larger universe in which we reside.  We need
    some other creative way of trying to avoid a
    mandate while also creating a unity.  And it
    just strikes me that an exchange of lowest unit
    rate in return for some two-to-one or another

    kind of formula ought to be, ultimately,
    acceptable, especially since it can only be
    done in the context of an overall reform and
    done by Congress.
         And if that's not acceptable, then we're
    going to have a problem, obviously, coming to
    an agreement, and we'll have to find some other
                   MS. CHARREN:  Is there anything
    we can do that doesn't have to go through
                   CHAIRMAN ORNSTEIN:  The
    practical reality is -- is there anything we
    can do that doesn't have to go through
         If we decide, which is also an attempt, by
    the way, to reach a consensus here that goes
    for many of our earlier discussions, that we
    should not be making a lot of recommendations
    that are narrowly targeted at broadcasters, but
    rather, try and put this into the context of an
    overall reform, which is something that
    received a lot of very positive response from
    many, including both of us, early on.  Then
    we're talking about congressional action.

         Of course, in theory, there could be
    unilateral action by others, and that's, I
    think, outside of our purview.  But the
    practical reality is if we're going to reach a
    consensus here -- and our power as a committee
    will come from cutting across all of our lines
    for, if not all, at least overwhelming majority
    of us, that it's going to be have to be done in
    that context.
                   MR. BENTON:  Talk a little more
    about the two-for-one.  It seems to me to make
    a lot of sense.  Can you give us the history of
    this and why we should support that as a part
    of this?
                   CHAIRMAN ORNSTEIN:  Let me say
    this, first of all.  I agree with Newt.
         Congress is trying to find a way to cut
    costs, and that's where the legislative
    requirement for lowest unit rate came in, and
    the idea, of course, in part was it wasn't just
    cutting costs.
         Let's face it.  In the history of this
    process, candidates often have struggled to get
    time, and when you come in as a candidate, you
    have to compete with other entities which buy

    time year round and are -- and for whom
    broadcasters naturally, as business people,
    develop strong relationships.  And the idea
    that you're going to take a valued, permanent,
    enduring customer and say, sorry, you get
    bumped for this person who may or may not win
    and who, in any event, will be there for a few
    months and then is gone for years, is never
    going to be an attractive proposition.
         And, of course, when candidates come in,
    they can't say, as other entities can, well, I
    want time here, but if you can't give it to me
    until next month in that spot, fine, because
    they need it now and in a particular place.
         So the notion that they be given at least
    the same rate, the favored rate that was given
    to other entities and they be given some
    guarantee of being able to get time when they
    needed it made some sense.
         The practical reality is that it is not
    working very well, and it is not working for
    anybody very well.  The nature of time buying
    is such that candidates don't get what they
    want, everybody is confused, there's constant
    disgruntlement, there are lawsuits filed all

    the time saying you're not really giving me
    lowest unit rate.  You have to report that
    you're providing the rate, and the rate is not
    one number.  It's a different number for every
    different spot that you're buying.  When you
    buy time on block across a range of times, then
    it's different as well.
         It's foolish, as we move to a digital age,
    not to try to move towards a market system
    here, but then there has to be, in a practical
    reality, some kind of a exchange.  What's the
    best kind of exchange?  The best kind of
    exchange, especially if we think of this as
    involving, you know, whatever it is; 25, 30
    percent cost, even adding in -- or then adding
    in the headings involved is an exchange of
         And the best way to make this work, let's
    face it, free time provisions that require
    every station to provide a lot of time,
    including stations that now don't have a lot of
    political candidates because their markets just
    don't make it feasible is a foolish thing to
         Requiring stations that are not very rich

    and aren't getting a lot of revenue to come in
    to pay the same revenue out or the same costs
    as stations that are getting a large amount
    doesn't make any sense.
         What you can do in a very easy fashion is
    basically to say for those stations that reap
    the benefits of being able to charge market
    rates because they're getting a significant
    amount of time being purchased, they're the
    ones who will then give back in a fairly simple
    way with an exchange of some time only if
    you're -- if you're not getting a lot of time
    bought, you don't have to give anything back.
         So it seems to me it's a very fairly
    simple way to try and defray the headaches of
    the costs while also providing some great
    opportunities here to create a more level
    playing field and strengthen entities that we
    want strengthened, recognizing this has to be
    done by Congress, and it is an uphill battle.
         A part of what we can do here, I think, is
    to create a set of forces who are not often on
    the same side and where it's easy to demonize
    one group as being villains here, greedy, they
    just want to keep making large sums of money

    and put them on the side of the angels without
    having to pay an awful lot in the process.
         So that's the goal here, and frankly, I'm
    a little baffled at the kind of visceral
    negative reaction.
                   MR. CRUMP:  I always thought we
    were the angels.
                   CHAIRMAN ORNSTEIN:  I didn't
    characterize you as angels.
                   MR. LA CAMERA:  Norm, let me ask
    you a little bit about the logic of the
    two-for-one model, and I think this is the
    first time you referred to the two-for-one
         If we accept the lowest unit rate that the
    station now is selling those political spots at
    two-thirds their value, a candidate comes in
    and buys three spots but pays for two at
    two-thirds.  The two-for-one rate, now we go to
    100 percent market rate.  The candidate comes
    in and want three spots, pays for two again and
    gets the third one free.
                   CHAIRMAN ORNSTEIN:  No.  You're
    not giving the time to the candidate, Paul.
    Let me go back to the analogy that I used.

                   MR. LA CAMERA:  You're giving it
    to the party.
                   CHAIRMAN ORNSTEIN:  And you're
    not giving it to just one party.
         Paul La Camera buys 10 minutes of time,
    okay.  The station in which he has purchased
    that 10 minutes of time now provides five
    minutes of additional time, but it doesn't go
    to Candidate La Camera, and it don't go to
    Candidate La Camera's party in toto.  Half of
    it, if there's no third party involved, goes to
    La Camera's party, and the other half goes to
    the other party.
                   MR. LA CAMERA:  But if I'm a
    challenger and not the choice party, I have now
    paid a market rate.  I got 10 minutes of time,
    and previously, I would have got 15 minutes of
    time for that figure.
                   CHAIRMAN ORNSTEIN:  Yes.
                   MR. LA CAMERA:  And now it goes
    to the party, which could rechannel that money
    to the incumbent.  And this is going to further
    the interests of channels?
                   MS. CHARREN:  Yes, because it's
    going to keep you from advertising.

                   CHAIRMAN ORNSTEIN:  What's going
    to happen is --
                   MR. LA CAMERA:  The idealism of
    all this escapes me.
                   CHAIRMAN ORNSTEIN:  What's going
    to happen in many cases is the incumbent will
    buy 10 minutes of time, and then the
    challenger, if this is a viable race, will be
    able to have his party provide two and a half
    minutes of time so that he can at least get on
    the air to offer a response, and indeed, if
    that party decides that this is the race that
    really matters, then there will be additional
    time accruing to the party from other
    candidates and channel it in that fashion.
                   MR. GOODMON:  This is supposed
    to be a general election.  This won't work in
    the primary.
                   CHAIRMAN ORNSTEIN:  Yes.
                   MR. LA CAMERA:  It has to be
    general election.
                   MR. GOODMON:  It couldn't work
    in the primary.
                   MR. LA CAMERA:  Because it would
    always favor the incumbent.

                   MR. GOODMON:  What do you do if
    you got three republicans?  Who is the party
    going to spend the money on?
                   CHAIRMAN ORNSTEIN:  Well, at
    least one could argue one way in which you
    could deal with a primary where an individual
    is coming in and trying to buy the nomination
    by basically spending a huge amount on
    advertising, is now that candidate will have to
    pay retail.  And if the party, as an entity,
    doesn't want that particular candidate, you got
    an opportunity to give the party a little more
         But I'm perfectly happy to make the
    recommendation for general elections and not
    for primaries, which I think is an easier sell
                   MS. STRAUSS:  Norm, are you
    assuming a two-party system?
                   CHAIRMAN ORNSTEIN:  No, the
    formula that makes the most sense here is the
    same formula that's used for public funds for
    presidential campaigns.  It's been accepted by
    the Supreme Court.  That's part of the Buckley
    decision as constitutional, and basically,

    there's -- we work with an estate.  There's a
    formula which provides a proportion of funds to
    a third party that qualifies by getting over a
    threshold.  That's the easy way to do it.
                   MR. CRUZ:  Norm, the five-minute
    one with the revision of the code there, the
    one that Cass proposed I think is most
    appealing to me if it is really tied to, I
    would think, some kind of true campaign reform
    from Congress, or that they make sure that
    there's something there in that context.  I
    mean, that would be my perspective on it.
                   CHAIRMAN ORNSTEIN:  Well, I
    think what we should probably leave this issue
    now given our time frame, and what I would ask
    is that we have at least close to a consensus
    on one part of this.
                   MR. DUHAMEL:  I don't think we
    do.  We don't -- what do the broadcasters get
    here other than we're giving two and a half
    hours in free political time 30 days before the
    election?  I don't understand the give-back.
    There is none, is there?
                   MS. STRAUSS:  We're supposed --
    that's the whole idea.

                   MR. DUHAMEL:  That's why I
    didn't agree to that either.
                   MS. STRAUSS:  It doesn't sound
    like you're losing very much.
                   MR. DUHAMEL:  Close to two and a
    half hours that we can't sell.
                   CHAIRMAN ORNSTEIN:  We may just
    have to agree to disagree with you on this,
    Bill.  Let's move beyond that.  I would just
    ask you all to consider either some variation
    of that third area or some new proposal so that
    we can keep our broader goal of reaching a
    consensus in this contentious area.
                   MR. LA CAMERA:  That's the
    two-for-one within general election?
                   CHAIRMAN ORNSTEIN:  Yeah.  We'll
    interact on this in the next few weeks and see
    if we can come to an agreement and we're -- we
    have a broad range of support for something
    there, or close to it.
         Let's turn to -- we have two other areas
    to discuss here.  One is one in which we've
    certainly had some disagreements before, but
    that is the larger question of whether we want
    to get into, even in terms of recommending just

    a simple consideration by these entities down
    the road, that in the digital age where the
    watch word is flexibility, a whole new model of
    public interest obligations.
         Now, that's beyond the question of
    multiplexing, but really, the issue of whether,
    in an age where we're going to have
    proliferation of different kinds of
    broadcasters, we'll probably have an expansion
    of some religious channels and shopping
    channels, where some stations are going to be
    much less interested in and probably much less
    appropriate in terms of some of these core
    public interest obligations.
         Whether we ought to consider, or at least
    ask these other entities to consider some of
    the various models that we had presented to us
    by that Aspen Group, including, most obviously,
    a pay or play model.  That's one which provides
    a choice for broadcasters, basically, and that
    choice is you go along with an existing
    framework, or you can pay, and in exchange,
    possibly get a more expedited license renewal
    because you wouldn't have these obligations
    with the money dedicated to the public

         Now, I know that we have some who disagree
    with that notion, but we ought to at least put
    it out on the table and have a further
    discussion of if.
                   MS. SOHN:  Well, Norm, are we
    not even going to consider making that --
    recommending that the FCC do that at all, or
    are we just -- what you're considering here is
    just sort of a broad request that the relevant,
    you know, regulatory political agencies, you
    know, will look at a new public interest model,
    and one of those things should be a pay or play
    option, or is it not at all?
                   CHAIRMAN ORNSTEIN:  Well, what I
    wanted to do here, to start with, was to put
    out on the table where we might be able to,
    once again, to achieve a larger consensus.  It
    might be a consensus that involves one or two
    who strongly disagree but everybody else goes
    along, or maybe all of us agree, and I just
    want to explore where that is and if that is,
    in terms of very explicit recommendation for
    the FCC to act in this fashion, fine, but if it
    isn't, whether we could do nothing or whether

    we can fall somewhere in between.
                   MR. MINOW:  Has everyone had a
    chance to read Jim Goodmon's paper?
                   MR. GOODMON:  That's coming
                   CHAIRMAN ORNSTEIN:  I thought we
    would go through these and then talk about the
    minimum standard, which itself is even more
    controversial in some ways.
                   MS. CHARREN:  I'd like to say
    that I like this, and I like this as a
                   MR. BENTON:  Norm, I do too.
    The one thing that could be added to this
    5 A to B is the notion of some ongoing
    independent mechanism.  I mean, in Europe 30
    years ago, there was the Hutchins Freedom of
    the Press thing which was more narrowly
    focused, but this group is a good, you know,
    mix of -- a complicated mix of interests and
    experience, and to have some -- we have the
    public interest and obligations of
    broadcasters, but there needs to be a look at
    the performance versus the standards and the
    obligations.  There needs to be an ongoing

    review of this.
         We don't have a lot of the answers about
    multiplexing and digital television.  You were
    asking about theoretical questions about we
    don't have the programming and we don't see the
    revenue streams, and that experience is all
    ahead of us.
         So there needs to be -- apart from the
    FCC, there needs to be kind of an independent
    citizen broadcaster public interest mechanism
    to continue to look at this issue, because this
    is a very important issue.  We all know how
    important broadcasting is in our society, and
    there needs to be an ongoing mechanism to keep
    looking and making reports, maybe an annual or
    biannual report to Congress and the President,
    some -- it could be part of a public
    interest --
                   CHAIRMAN ORNSTEIN:  I think we
    need to consider the recommendation that we're
    not the last word here, and obviously, a few
    years down the road when the world of
    telecommunications has changed in ways none of
    us can predict, that somebody else come back
    and revisit these issues.

         But we face a great difficulty here,
    obviously, trying to take the existing world of
    public interest obligations and move them to a
    digital age itself is a difficult intellectual
    challenge, given that we're going to have,
    potentially, every broadcaster doing something
    differently than what he or she is doing now
    and each doing it differently from the other.
         Where I came down on this one is,
    basically, I looked at and thought about
    whether or not it makes sense to take a
    religious programmer, a broadcaster who is
    running religious programming all the time, and
    say you will have the same obligations in
    children's television, in public affairs
    programming as other broadcasters, and whether
    that will serve the public interest very well
    when you have an entity that doesn't have much
    of an interest in doing it and probably isn't
    going to do it very well.
                   MR. GOODMON:  I just don't --
    why?  I mean the religious broadcaster can do
    public service announcements, they can do
    public affairs programming.  I don't know why
    you think they can't do that.  There are people

    that watch those stations all the time and
    should be served by that station.  I don't -- I
    don't know why you think they're different.
                   CHAIRMAN ORNSTEIN:  I think that
    there are some entities that are better suited,
    given their audiences, to some areas and not to
    others, and if I can find a way to better serve
    the public more broadly, rather than expect
    from both the 400 nonmembers of the NAB and
    others that have a different focus, that they
    will be creative and do these kinds of things.
    If there's a way of getting, instead, a payment
    in return and then be dedicated to creating
    better programming or improving the mix in an
    area, it strikes me as, if you're going to
    leave that option open -- and it's just an
    option -- that I would prefer it.
         Now, obviously, this is related to your
    suggestion for minimum standards, and we will
    segue into that, but --
                   MS. CHARREN:  When you say trade
    obligations with other broadcasters, C, I
    understand C very well, and I love D.  What is
    trade obligations with other broadcasters?
                   CHAIRMAN MOONVES:  The problem

    is we don't know what we're paying for yet.
    You know, we don't know what the obligations
    are that are going to be set forth.  So we're
    talking about, in principle, can you buy your
    way out of whatever obligations there are.
                   MS. CHARREN:  Yes, and I
    understand that trades, in terms of, for
    example, that trust fund for educational
                   CHAIRMAN MOONVES:  Peggy, if the
    FCC hasn't done the three-hour rule, let's say
    this commission set the three-hour rule and I
    wanted to get out of it, I could go pay Norm's
    station to put the three-hour kids programming
    on so I wouldn't have to do it.  That's what
    the question is.
                   MS. CHARREN:  Yeah, but could
    you is the question?
                   CHAIRMAN MOONVES:  That's what
    we're asking.  Should you be allowed to?
                   MS. CHARREN:  Right, that one
    aspect of the public interest in this area is
    choices.  You know, we don't want -- say this
    was now instead of in the digital age.  We
    don't want necessarily -- or do we -- just one

    station doing public interest and everybody
    else is saying, the hell with this, we'll
    figure out how much it costs to get out from
    under it.
                   CHAIRMAN ORNSTEIN:  But what you
    might be able to do here -- and the model in
    terms of trade would be much more the kind of
    model that's now being used frequently in
    environmental matters, pollution-wise, and here
    the idea is it might not necessarily involve a
         You might very well have a situation where
    you have a station that is really strong on
    public affairs and doesn't have much of an
    interest in doing children's programming or an
    audience for it, and another station that has
    the opposite, and if you can, certainly
    consistent with maintaining the balance in a
    local market, have at least some ability to
    create a mix of public interest programming for
    each station that fits its own needs and that
    would cover the bases that you wanted to, it
    would be preferable.  Now, we can't devise a
    model that would explicitly do that.
                   MS. CHARREN:  I have only a

    content-sensitive kind of concern about that,
    in that since we can't define easily what
    public service is in terms of content, we can
    do it in terms of structure; news,
    documentaries, that it can mean one public --
    just like you would want one publisher in
    publishing, that the more you get away from the
    diversity of sources -- this is just a
    caveat -- you get to -- one publisher of the
    public interest in the commercial world, say,
    and I don't know why, but I feel a little
    differently about this trust fund for
    education.  I guess it's because I'm so worried
    that there isn't going to be any money for
    programming for the software in this digital
    world, that I love D, any fees collected.  I
    can see that going to that first -- that trust
    fund, that first trust fund, and then I have
    confidence in the structure for how that trust
    fund is going to work.
         And I guess I don't have confidence, at
    the minute, in how the other station is going
    to handle all this in the same way that I
    wouldn't want one publisher to do all the
    children's books.  It's a bit of a caveat is

                   CHAIRMAN ORNSTEIN:  What we
    have, in effect, to bring Jim's model in here
    as well, is really, it seems to me, three
    options to consider here, to enhance the public
    interest appropriately, more so in some cases
    for some of us, perhaps more than others.
         One is to set fairly robust minimum
    requirements and make them explicit as Jim has
    done, and then you hold each broadcaster to
    those requirements, and we will have some
    discussion, and some would think that that's an
    anthema because it's a requirement, and others
    who think that it's not so good because you're
    going to have one size fits all in some ways
    for everybody, and others who believe that
    that's -- you're going to then have everybody
    involved and they'll find ways to make it
         A second is to have some kind of, in
    effect, market-oriented model, which is what
    pay or play or pollution rights trading is,
    which is to let the stations both trade among
    themselves for payout of obligations and then
    smooth out the process appropriately by making

    it apply.
         And the third is basically neither of the
    above, and to let an entirely voluntary
    process, along with a couple of explicit
    quantitative recommendations or mandates,
    whether it be closed captioning or reasonable
    access or three hours of children's programming
         We have to, I think in our
    recommendations, go in one of those three
    directions, and we've at least got the market
    model on the table.  Maybe it's inappropriate.
    Yes, Rob?
                   MR. GLASER:  Just one thing I
    was going to say about the market model, and
    normally, I'm a bid fan of flexibility.  I
    think that the environmental metaphor has a
    little bit of a flaw here in that for
    environmental externalities, it's easier to
    understand what the costs are, let's say, of
    cleanup or the pollution or toxin than some of
    these things where I think it could be
    immensely difficult to come up with economic
    equivalence on all the issues.
         Is the economic equivalence the cost of

    providing the service, say captioning for the
    sake of argument, or is the economic
    equivalence the perceived loss to that
    community as having captioning available by
    measuring -- just to extend that metaphor -- to
    a number of hard of hearing people in that
    community, and I think it's immensely
         So the challenge I would see with that is
    just is a pragmatic one, is that if you do it
    for very many things, you'd have an incredibly
    hard job of pricing fairly.
         So I would say that that needs to be
    against pay or play for very many things.
    There may be a few things where it's easily
    quantifiable in a trade-off kind of way.
                   MR. MINOW:  Norm, I think Rob is
    right.  I think the analogy to the pollution
    and environment may appeal to the economists,
    but that's about it.  You're dealing here with
    a social force of broadcasting which is a very
    different phenomenon.
         Because I have to go soon, I just want to
    say I read Jim's paper with great admiration
    because I think the only justification for

    giving free broadcast licenses is public
    service.  Otherwise, why do you have must
    carry?  Why do you have three licenses?  Why
    not treat them just like you auction off
    everything else.  It's only public service, and
    unless we have some minimum standard of public
    service, we've got a charade here about the
    whole concept of serving the public interest.
                   CHAIRMAN ORNSTEIN:  Why don't we
    turn to Jim's proposal in that case?  We have
    three alternatives on the table now.  We've put
    one out there.  We haven't had a lot of
    discussion, we've had a little, but I think it
    may be wise -- it's 4 o'clock.
         I'll tell you what, why don't we at least
    raise this now for 10 minutes, and then we'll
    take our public comments, and then we'll have a
    more robust discussion of it and any other
    areas that the group thinks ought to be raised
    in terms of what do we put into our four
                   MR. GOODMON:  Here's the idea.
    The goal for this is no make the free market
    people really upset with me and to make Gigi
    really upset with me.

         What is some reasonable middle ground here
    in terms of saying broadcasters do have public
    responsibilities, and what is a reasonable
    minimum level?  And I tried to do it -- A, B, C
    and E are really the important things in here.
    The other items we can --
                   CHAIRMAN MOONVES:  A, B, C and
                   MR. GOODMON:  A, B, C ad E, is
    that we got to figure out what the problems are
    in our community.  I sued the word ascertain,
    and a lot of people don't like that, and you
    can think of some other name for it if you want
    to, and I have suggested that it be a formal
    process.  But I've suggested that we've got to
    ascertain the problems, and as a result of that
    ascertainment, we do a minimum number of public
    service announcements and a minimum amount of
    public affairs programming.
         And then E, we report on that in the
    public file and on the air, and we're off.
    This is localism.
                   CHAIRMAN MOONVES:  Can we cross
    out B and F?
                   MR. GOODMON:  That's part of

    what we're doing, but it's not -- you know,
    there are lots of different ways to do it, but
    I just added those others things, like must
    carry, but the key notion here is we do have
    minimal obligations, and it's to figure out
    what's going on in our communities and do
    public service spots and public affairs
    programming, and there's no news requirement,
    there's no -- all of the stuff, this is a very
    minimal and straightforward acknowledgment
    that, in return for our license, we have an
    obligation to serve the public.
         And now, for those that want to do more
    than this, we have a voluntary code.  The extra
    stuff is in the code, but everybody that has a
    license does this, whether they are a home
    shopping station or the big CBS affiliate.  The
    concept is still to have an obligation to the
    local community, and they do it through public
    affair spots and public affairs programming,
    and that -- my logic, I'm amazed at my own
    logic, and I'm kidding.
         I do not consider this a radical notion.
    I'm not going to let my friends on either side
    of the aisle say this is -- you have betrayed

    broadcasters or you haven't done enough.
         I mean, we need to talk about this.  We
    have public service obligations, public
    interest obligations, and what are they?  And
    I've just suggested what they should be, and I
    think we need to talk about that, PSAs and
    public affairs programming.  And I suggested,
    to get around the points that were made -- by
    the way, I think that NAB report was terrific,
    and it showed that broadcasters do a lot, and I
    think we do do a lot and are doing a good job.
         I put in here because of the -- what was
    said about that NAB report, some sort of notion
    about the day parts, broad sort of day parts,
    some of the public affairs spots in prime, some
    of the programming in prime.
         But more importantly, there is the
    obligation that we report this quarterly so
    that the NAB or anybody else can put all the
    stations in the country together under a
    definition that we all understand, and we got
    almost an instant report in terms of how we're
    doing.  I mean, I'm very supportive of the NAB
    doing that annual report, and I think this is a
    good way to do it.

         Now, there's some -- into how we can do a
    better job with political time, I got two or
    three ideas about that, and that's another
    issue.  What I just mentioned is sort of the
    key here in terms of we should have
    obligations, and that's what I think they are,
    and everybody has got them, and let's roll.
                   CHAIRMAN ORNSTEIN:  These are
                   MR. GOODMON:  These would be --
    I don't know.  FCC is what I'm suggesting.
                   MS. CHARREN:  I notice you say
    that news programs -- (inaudible).  Do you mean
    the children's television for three hours
    because that's also --
                   MR. GOODMON:  Right.  I didn't
    say anything about children's.
                   MS. CHARREN:  Just three hours
    that's already mandated by law.
                   MR. GOODMON:  Yes.  What I meant
    was that this is a public affairs programming
    effort, not news segments, and --
                   MS. CHARREN:  Not the already
    mandated by law segment?
                   MR. GOODMON:  Yes, it had

    nothing to do with that.
                   MS. CHARREN:  Okay.
                   MS. SOHN:  Norm, if you think
    it's appropriate, I would actually -- I'm not
    upset with Jim, but of course, I don't really
    think Jim's proposal goes far enough, and I
    wanted to people to take out -- I'm not upset.
    I could never be upset with you.  I never get
         The certification form that I put together
    laboriously, I might add, which sort of lists
    the areas where I'd like to see us set minimums
    basically based on what the good broadcasters
    around this table do.
         My goal is not to make good broadcasters
    do more, but it's to raise the bar so those
    broadcasters that don't do anything or close to
    nothing do something.
         So what I would like to do, at some point
    when you think it's appropriate, Norm and Les,
    is to maybe ask the broadcasters how much each
    week of this kind of programming you provide,
    and let's fill in the blank and let's make
    that --
                   MR. DUHAMEL:  Do you know how

    long it would take to fill this thing out every
                   MS. SOHN:  I'm not asking you to
    fill it our every week.  It's a quarterly
                   MR. DUHAMEL:  This is more
    onerous than anything we ever had in 50 years.
                   MS. SOHN:  It's a
    certification.  Do you do it, yes or no?
                   MR. DUHAMEL:  I'm telling you,
    this is more onerous than anything we've ever
                   MS. SOHN:  All right.  Then you
    can work with me, Bill, and we can make it less
                   CHAIRMAN MOONVES:  Gigi's form?
                   MR. DUHAMEL:  Gigi's form with
    all this stuff.
                   MS. SOHN:  Well, it's 35
    questions.  I respectfully disagree, but that's
    really not -- the form is not the point right
    now, okay, and I'm glad to make the form less
    onerous, and you can give me suggestions on how
    to do that.
         What I'd like to do, at some point, is

    fill in the blanks.
                   MR. DUHAMEL:  I don't think the
    form is needed.  Nobody has demonstrated this.
                   MS. SOHN:  Concentrate on -- I'm
    talking about mandatory minimums.  Let's get
    away from the form.
                   MR. DUHAMEL:  The mandatory
    minimums are not necessary.  They have not been
    demonstrated.  I don't recall anything in all
    the months we've been meeting that it's been
                   MS. SOHN:  You disagree with Jim
    and me is what you're saying?
                   MR. DUHAMEL:  I disagree with
                   MS. SOHN:  But you also disagree
    with Jim because he thinks there should be some
    mandatory minimums, right?
                   MR. GOODMON:  I'm not in this
                   MS. SOHN:  Okay.  I'm just
    suggesting a different way to look at the
    discussion of minimum obligations.
                   MR. DUHAMEL:  I don't think your
    certification is necessary.

                   MS. SOHN:  Okay.  But that's a
    different issue.  Public disclosure, we talked
    about that, okay.  I've been working on this
    with Barry Diller's people to try to come up
    with an adequate way to make it simple for the
    public to know.
         Remember, this is not just about what you
    give back to broadcasters, okay.  This is more
    about what we're supposed to be doing for the
    public, and I've sat here for eight hours today
    listening to what we have to give back to
    broadcasters.  Let's talk about what we're
    giving to the public, and this is about
    disclosure, but I don't want to talk about
    disclosure now.  I want to talk about the
    minimums because that's what we're talking
    about.  That's what I would like to do.
         I'll leave it up to Norm and Les to decide
    how they want to proceed.
                   MR. GOODMON:  There are a couple
    of things here.  One is one is a real concern
    that if we quantify minimums, that's just the
    beginning; it's two hours now, and then it's
    four, and then it's six, and then it's eight.
         Were you asking me about whether the FCC

    or Congress should do this and that, that if
    Congress does it, it won't be changed.
                   CHAIRMAN ORNSTEIN:  No, it was
    simply an informational question.
                   MR. GOODMON:  Well, it's been
    suggested that if Congress does this, we're not
    subject to the change anytime there's a new
    commission.  That's all I wanted.
                   CHAIRMAN ORNSTEIN:  No, I think
    the first question we have to deal with, and
    obviously we want to hear from broadcasters,
    the other broadcasters here, is what kind of
    receptivity there is to the concept of a
    required set of minimum standards, and if there
    is receptivity to it, then we move to two
    questions; which elements, how quantified, and
    who does it?
         But I think we ought to start with that
    first question, and of course, in some ways it
    is -- Jim has made it a complement to a code.
    One option is to include it in a code and make
    it, in some ways, voluntary, but basically
    saying, if you want to be given a seal of
    approval, then you have to meet minimum
    standards.  We could make it more explicit in

    the code itself.  A second option is to do it
    through the FCC, and a third would be to make
    it statutory.
         But I think there is a fundamental
    question here, and my guess is that you find an
    awful lot of people generally in the
    nonbroadcast community who would be perfectly
    happy with a set of minimum standards, although
    there might be some questions about what would
    be included, but there was a conspicuous
    silence from other broadcasters other than Bill
    who has indicated a vociferous disapproval.
         So Harold, Paul, Robert, what's your
    reaction to this?
                   MR. LA CAMERA:  To Jim's
                   CHAIRMAN ORNSTEIN:  Yes.
                   MS. CHARREN:  To Jim's
                   CHAIRMAN ORNSTEIN:  To Jim's
                   MR. LA CAMERA:  Robert, you
    haven't said anything in a while.
                   MR. DECHERD:  Is it the hand-

                   MR. LA CAMERA:  Well, I thought
    exhausted myself in my welcome.
                   MR. DECHERD:  Norm, I'm in the
    same place I think I've been consistently, and
    see, as a consistent theme in Cass' analysis of
    all this, in that we don't need more
    regulations.  We don't need mandates.  It will
    be fiercely resisted, and therefore, make our
    recommendations less meaningful.  So why go
    off?  I'm not for this.
                   MR. LA CAMERA:  If you leap
    ahead to the end product -- and that's maybe
    where this is all gone awry -- and that's in
    the relicensing process.  And perhaps some
    formality needs to be brought back to that
    process through that era, Bush deregulation or
    whatever.  It's come now with a postcard in
    eight years, and unfortunately, a lot has been
    left by the wayside as we made the transition
    to that.
         So I mean, I'm not opposed at all to
    reengage in the broadcasters as to what their
    responsibilities are, they're reporting that.
    I would be much more conscientious about it to
    realize again that that precious license is

    dependent upon that.  It's a great gift that
    we're given.
         I don't know -- I mean, I would have
    difficulty returning to the era going as far as
    what Jim is suggesting.  On the other hand, as
    I said in the brief memo that I sent where you
    were trying to get some consensus thought from
    the various members, quarterly reports which I
    think do tend to be a ready document of what
    stations do, all the public service
    announcements, are all in the political
    process, and other aspects, I don't have
    problems with, provided eventually they lead up
    to a licensing process.
         But Robert said something very key, and
    this is, with all respect to what Jim has
    suggested, would be fiercely opposed within the
    industry by broadcasters.  I don't know what
    would be served by that.  I think it goes so
    far as being challenged very significantly in
                   MR. GLASER:  Just for somebody
    who doesn't have the large respects on
    broadcasting, back when the renewal process had
    more teeth, did the renewal considerations go

    beyond the scope of what Jim was talking
    about?  In other words, is what Jim is talking
    about beyond what renewal used to be like or
    less than what renewal used to be like?
                   MR. DUHAMEL:  Jim is beyond it.
                   MS. SOHN:  Do you have the memo
    you gave?
                   MR. GOODMON:  We used to have
    programmed time requirements, we used to have
    zillions of requirements.
                   MR. DUHAMEL:  But the FCC never
    required a specific number of PSAs, they didn't
    require an amount of public affairs
    programming, but they talked in general about
    guidelines, but they never required any
    specific amount.  In fact, if you go back, that
    was that NAB.
                   MR. GOODMON:  For a certain
    amounts of nonentertainment.
                   MR. GLASER:  To understand,
    Jim's proposal was more specific than the old
                   MR. DUHAMEL:  Yes.
                   MR. GLASER:  But it was sort of

                   MR. DUHAMEL:  The political time
    was never a requirement.
                   MR. GLASER:  Sure.  I'm just
    trying to make sure the historical comparisons,
    for those who are broadcasting, where it
    appeared there was more commercial --
                   CHAIRMAN MOONVES:  The
    broadcasting industry was very different then
    as well.
                   MR. GLASER:  Of course.
                   CHAIRMAN MOONVES:  The
    programming is very different today than it was
    20 years ago.
                   MR. GLASER:  But I was just
    trying to ascertain whether the concept in the
    previous era of accountability is subject to --
    tied to license renewal, what the scope of it
    was, and it sounds like it was more
    case-by-case in the sense there wasn't more
    mathematical requirements in these areas, but
    these were the kinds of issues that were under
                   CHAIRMAN ORNSTEIN:  So it's
    clear, at least, that we could not get a
    consensus here around the mandates.

                   MR. CRUMP:  As I have sat here
    today listening to all of this, thinking about
    it before we got here -- and I confess I'm
    possibly on a totally different level from all
    we've heard -- and that is that I have no
    quarrel with setting realistic minimums to a
    degree with public service programming, to do
    PSAs, et cetera, but the reason I do not have a
    problem with that is because I would like to
    see them set voluntarily in something like the
    code itself again where it would be
    administered by the broadcasters themselves.
         I personally would like to see a code that
    has some teeth in it where the broadcasters,
    the NAB, has the ability to speak sharply to
    the people who do not live up to the
    expectation for what they have promised to do,
    and I think when we get a license, we are
    assuming, certainly, the obligation to operate
    in the public interest, and therefore, public
    interest is public service.  But I think it
    should be on a voluntary basis, and it should
    be minimums there, and then what you're trying
    to do is establish a plateau and give people a
    target to shoot at and get them to go beyond

         We do have a lot more stations today than
    we had in the old days, we've got a lot more
    broadcasters than we had in the old days, and
    some of them are fairly new into the business,
    and for that reason, I think it's good to
    remind those who have been here a long time,
    like myself, and to tell those who are
    newcomers what should be expected of them, what
    we, as professional broadcasters who have been
    in it a long time who are proud of what we do,
    who are proud of what we have accomplished,
    that we want to continue this, we want to
    strive to do better at all times, and give them
    goals to shoot at that we expect of ourselves.
                   MS. CHARREN:  Can I bring up the
    idea that in the old days, if we're comparing
    old and new days, it was a license renewal
    process that happened -- was it once every five
    years -- three years.
                   MS. SOHN:  Three years, then
                   MS. CHARREN:  Three years, then
    five years.  And now it's an extraordinarily
    long time for the FCC to look at, you know, in

    this new era.
                   MR. GOODMON:  It's mailing a
    postcard every eight years.
                   MR. DECHERD:  I'm sorry, it is
    not a postcard every eight years.  A tremendous
    amount of works goes into that.
                   MS. CHARREN:  Regardless of what
    it is --
                   MR. DUHAMEL:  The children's
    deal --
                   MS. CHARREN:  Children is
                   MR. DUHAMEL:  Well, that's in
    the license renewal.
                   MS. CHARREN:  Yeah, but that's
    what's in the license renewal.  That only took
    30 years, and we don't have that much time.
                   MR. LA CAMERA:  We don't
    submit -- and again, it was hardly romantic,
    what we were doing, but we don't submit, in
    terms of program performance, what we need in
    those days.
                   CHAIRMAN ORNSTEIN:  Assuming
    that we're not going to get a broad agreement
    on recommending that the FCC or Congress set

    the minimum standard, what do you --
                   MR. GOODMON:  From who?
                   CHAIRMAN ORNSTEIN:  A broad
                   MR. GOODMON:  From the whole
                   CHAIRMAN ORNSTEIN:  We clearly
    have some significant dissent.
                   MR. GLASER:  This is sort of my
    kind of a thing I always come back to, is in a
    digital area, in a cable satellite
    infratructured world, to address these
    questions where we say simply because
    broadcasters have licensed spectrum, they have
    these set of obligations, and to not look at
    the delivery experience from the consumer
    standpoint is myopic, and it seems to me,
    particularly if we end up moving in Harold's
    direction and having whatever we do be a
    voluntary code, there's no reason why that code
    shouldn't span anybody delivering audio --
    digital-audio visual stimulus to consumers.
                   CHAIRMAN ORNSTEIN:  We did, in
    fact, come to that agreement.
                   MR. GLASER:  But it seems to me

    that, in that context, that the broadcasters
    here would stack up in the general case -- and
    there are cable exceptions to this and there
    are satellite exceptions to this and there are
    internet broadcaster exceptions to this -- but
    the broadcasters are far better at
    interrogating public interest obligations into
    their programming than any of these other
         So it would seem to me if there were a
    Code of Conduct, maybe voluntary, if it has to
    be self-approval, if there were some teeth that
    applied in a universal way, that you all ought
    to be in favor of that insofar as it reinforces
    the direct focus that you provide to serving
    your consumers, and it highlights that,
    vis-a-vis, what these other methods of
    broadcasting don't do or don't yet do.
                   CHAIRMAN ORNSTEIN:  I agree with
    that, but before we turn to our period of
    public comment -- and then we'll come back for
    a larger discussion -- let's, just to see where
    everybody is, if Robert and Paul could respond,
    and Les maybe as well, as to what Harold

         What would your reaction be, or what do
    you think others' reaction would be to taking
    our code, which we had general statements in
    these areas, and building in some explicit
    minimum standards but make the recommendation
    be a part of the code rather than mandated by
    the government?  Is that still --
                   MR. DECHERD:  Norm, honestly,
    I'd have to go look at the numbers.  I've never
    seen these numbers before this morning, and it
    would be way out of sensibilities on me to sign
    up for anything.  We may do quadruple this
    number on any one of our television stations,
    but when you get into time periods -- and these
    are valuable assets -- and to me, the challenge
    with the discussion today and in our recent
    committee meeting is we're going back in the
    direction of where we started out last fall,
    which is this notion of extracting concessions
    and economic commitments in the broadcasting
    industry at a time when the broadcasting
    industry is in the most competitive environment
    in the history of communications, increasingly
    so every day.
         It is not a world where there are three

    networks who divine how the future is going to
    unfold, and as Harold just mentioned a minute
    ago, every day there are new players in our
    business who have virtually no experience with
    any of the matters we're talking about.
         I cannot imagine Tom Hicks having this
    discussion and making any sense of it
    whatsoever except to go back to his place and
    say, hey guys, we're against all this stuff.
         So I mean, we've got to find a way to take
    what exists, which are good, important public
    interest concepts and use the code as a
    vehicle, use voluntarily compliance, use
    initiative in public and political time and all
    of these arenas and try to take the best
    broadcast, the best models, put them to work,
    try to rally support among all the people who
    are ultimately going to decide this, which we
    all have said today is not this commission, but
    it's the President, it's the Congress, it's the
    FCC, it's a lot of people who have very strong
    feelings about all these matters.
         And I'd just urge us to try to focus on
    something that is truly meaningful in that
    discussion for a long time, not six months or

    nine months, and there are many very good ideas
    in this.
         So within the code, could we address Jim's
    points?  Yes.  Should we do it by describing
    the number of PSAs during the day parts?  I'd
    have to know a lot more, and I'm not sure what
    the value added is, if you will, of going
    through that process within this group as
    opposed to focusing on what I've tried to
    advocate, which is let's have something of such
    clarity and persuasiveness that, no matter
    where you stand on these issues, say, you know,
    this matters.  And that's what you put in the
    hands of John McKane and Tom Hicks and the most
    radical public interest advocates.  None of
    them are at this table.  These are very
    reasonable colleagues of ours, been in this
    arena for a long.
         So I know it sounds like the generalist
    Poly Anna bit, but I think that's what's going
    to work personally.
                   MR. BENTON:  I'd like to ask Rob
    a question because you have been very
    consistent in your minimum standards and
    certainly governmental rules many times.

    Again, very, very consistent about that.
         Why hasn't the NAB been more of a leader
    on this?  Let me just finish.  Why have they
    had a code with language (inaudible) NTIA at
    the last meeting in the middle of April which
    Cass talks about very generally this morning.
         It's very frustrating because without
    articulating some goals and how broadcasters
    measure up to those goals, it's all talk.  I
    mean, it's all just good will.  It's trust us,
    we'll do the right thing.  And that, as Peggy,
    in her -- very articulately -- in her comments
    this morning said about children's television,
    until there were some teeth put into it,
    nothing happened.  Nothing continued to
         So there is a deep sense of cynicism in
    the public and rest of the community, which
    I've been involved in for a long time, about
    broadcasters taking these public service
    obligations seriously, and especially through
    the NAB and its general positions and
    statements on this.  I mean, it is very
    distressing and very disturbing and a lot of --
    I mean, look, we are of good will in this

    group, and we have had some wonderful
    conversations, but at the end of the day, I'm
    really disturbed by the status of the code and
    its relevance to today compared to what I heard
    last night talking about some broadcasters
    about how meaningful the code used to be.  The
    code was a very meaningful instrument 20 years
    ago, but it's not now.  It's a sham.
                   MR. CRUMP:  It was taken away
    from us.
                   MR. BENTON:  Wait, wait.  But
    the courts took away the advertising part of
    it, not the program.
                   MR. CRUMP:  They took the whole
    code away.
                   CHAIRMAN ORNSTEIN:  For a
    variety of reasons, including some other
    litigation that, in effect, through consent
    decrees and other ways, there is no code at the
    moment.  There is a statement of principles out
    of it.
         So for whatever set of reasons, which we
    needn't get into now, we clearly have a
    consensus to move towards a code.  What I've
    been trying to determine in the last few

    minutes is can we bridge the gap between what
    Jim has proposed and what clearly the
    opposition is, making it a government mandate,
    see if we can find some formula in the code.
    Clearly, the numbers you can't accept
    without -- but the larger question is whether
    we can -- whether we build in a minimum
    standard into a code or not.
                   MR. BENTON:  Can the code be
    meaningful?  That's the central question.
                   MR. CRUMP:  I'd like to answer
    Robert.  The proposal I put forth, because I've
    just read yours for the first time, so when it
    comes to numbers, I'm not tying myself to the
    numbers that Jim put in, but I don't disagree
    with them either.  I'm like you.  I don't
    know.  I got to go back and look at this
    thing.  I'm just telling you --
                   CHAIRMAN ORNSTEIN:  I meant in a
    general question, not on specifics, but maybe
    that's not workable either.
                   MR. DECHERD:  I think what -- my
    opinion is what's workable is it's a very
    strong code, a number of statements in the code
    that tie all of the very constructive things

    we've discussed together, and if that includes
    some reference to minimum standards, even if
    they're nonquantitative, that may well be fine,
    but we need to work our way through that.
         I think other things that have been said
    are amenable to everybody here and to
    broadcasters.  The quarterly report is one
    thing, but as, obviously, we saw Bill's and
    Gigi's suggestion how to go another step, every
    step we go in matters like that, or when we get
    to political time, is going to raise the fear
    on the side of broadcasters.
         And I'd like to come back to your
    question, Charles, but that this is just
    incrementalism, that no different than we had a
    ratings agreement with the White House, and
    then we're going to get into phase two within
    six months.  That is part -- I mean, there's
    sort of a mutual cynicism about all this, and I
    think it is not within our ability, as a
    commission, to either overcome that or
    eliminate it.  We need to recognize that's part
    of this process.
         And while I am not the person qualified to
    speak to imply the antipathy towards the NAB

    exists, I would say -- I mean amongst the
    public interest community -- and it's been very
    evident in all of our meetings, it's very
    evident now.  Today I must have heard that
    five, six, seven times at least.  They are
    pulled, at least, six to ten different
    directions by their own internal
    constituencies, and those are not the same
    constituencies.  The networks and independents
    and so forth are all pushing on them, and they
    have a reasonably difficult time, in my
    estimation, finding equilibrium between them,
    and it results in a very tough public stance.
         But I think we're better off, in this
    report, trying to anticipate how decisions are
    going to be made in the future rather than
    vilifying the NAB or whatever has preceded
         The decisions about all these matters, I
    believe, are going to be made by different
    groups in the broadcast industry than has been
    traditionally the case.  We're seeing it right
    now in the discussions between the networks and
    the affiliates.  It's not the elected affiliate
    groups who are making the deals, if you will;

    it's through broadcasters who didn't exist
    until the Telecommunications Act deregulated
    the industry.
         And the new players, the new networks, I
    mean, here we are kind of focused on Leslie who
    is the only pure broadcaster among networks.
    Imagine the responses from the Dizzy, it's in a
    dozen different businesses, or a Fox or UPN.
    These are the people that are going to be
    players, and we've got to create expectations
    for all of those people, not try to go defeat
    the NAB in some pre1998 wrestling match.  I
    mean, it's passed.  This is a different set of
    issues largely created because there is going
    to be this digital capacity, and as we said how
    many dozen times, nobody knows where this comes
         So for my part, I'd just as soon say we
    appreciate the work the NAB has done.  Let's
    judge them on how they perform in this new
    environment rather than, again, try to change
    the relationship.
                   MS. SOHN:  I've got one point,
    and I want to pick up on what Paul was talking
    about, license renewal, because that's really

    important and we're just sort of skipping over
         I'm still not satisfied -- and this is the
    second meeting in a row I've asked this
    question -- about how do we ensure that those
    broadcasters that do nothing do something?  And
    the code just ain't going to cut it.
         We heard this morning how you cannot
    tie -- if you starts to tie enforcement to a
    code, then you run into antitrust problems.  So
    that question still has not been answered, and
    if people have a creative way of answering that
    question, I really want to hear it.
         The second thing is Paul talked about
    license renewal, and that folds into my notion
    of accountability, and I wanted to sort of
    propose a possible alternative to the idea of
    mandated minimums, and that is similar to
    what's been done in the past.  That is
    guidelines, programming guidelines, and if you
    meet -- and if you meet those guidelines, the
    FCC automatically renews your license.  If you
    don't, they look at it.  They have to look at
    it and give it a harder look and then decide
    whether or not you meet those guidelines.  It's

    similar to the Children's Television Act.  So
    why not do something like that with public
    interest programming?
         So it's not a mandatory minimum, you don't
    have to do it, but if you don't do it, the FCC
    will look harder at your renewal application.
    They may grant it, they may decide to open it
    up for comparative applications, something like
    that, sort of a more middle ground.
                   CHAIRMAN ORNSTEIN:  Any reaction
    to that?  And then we'll break.
                   MR. DECHERD:  This will stir the
    pot, but I'm going to go back to the first
    meeting we had.  If I broadcast in HDTV, the
    day the loan ceases, nothing is different about
    the amount of spectrum I'm using or the kind of
    programming I'm putting on the air.  So why
    should I be subject to additional public
    interest requirements or regulations simply
    because there's this digital thing out there
    and we all met?
         Now, if we go beyond that, there are
    important questions here about what happens if
    we multiplex, how do public interest
    obligations apply in that context.  I think

    we're headed in the direction of addressing
    those things, but you know, to say, as a
    proposition, that we need to go step up all of
    these oversight functions is -- that's not what
    we're here to do.
                   MR. GLASER:  I'd be willing to
    tie any new things we did into multiplexing, in
    part because of -- (inaudible) -- in part,
    because it's incredibly likely that most
    broadcasters will multiplex substantial periods
    of the time.  And therefore, this is tied to a
    new broadening of access.  And then there's a
    third point, which is I think we have an
    opportunity, because commissions like this
    don't come along that often, to broaden what
    we're doing -- repeating my oft-repeated
    point -- so what we're talking about is a
    regime that's digitally appropriate across
    digital broadcasters, whether they use spectrum
    or other networks.  And it's that third point
    that I think is reinforcement here.  The more
    we do that's broad in nature, codes -- not just
    to NAB, but codes to NTBA, codes that span the
    set of organizational response of broadcasters,
    I think the more we'll be serving the intended

    purpose of this commission for the opportunity
    this commission provides us.
                   MS. SOHN:  And Robert, I don't
    think -- I think you're using the wrong
    terminology, from my perspective, when you say
    additional public interest obligations because
    my guess is that any processing guidelines that
    we might come up with, you're already doing,
    okay.  Again, I'm trying to -- I'm trying to
    raise the bar for those that do nothing.
         So I think to characterize it as
    additional -- for some broadcasters, yeah, it
    would be additional because they're not doing
    anything.  But for folks like you and Harold
    and Jim and Paul and Bill, it wouldn't be
                   CHAIRMAN ORNSTEIN:  I want to
    move, as we have to, to our another period of
    public comment, and then we will come back and
    try and wrap up, will include the following.  I
    think we need an extension of this discussion,
    a little bit more of play it out and see if --
    where we have areas where we're just not going
    to come to an agreement, see where we can move
    beyond that, and also, begin to talk a little

    bit about our logistics.
         So let's take public comments now, and as
    we did this morning, please come to the
    microphone if you have anything to say and
    identify yourselves.
                   MS. WILKEN:  I'm Debra Wilken on
    behalf of the Salvation Army, and on behalf of
    our supporters and volunteer people we serve,
    we really do appreciate your efforts.
         It was October of 1987, and all the
    planning in the world wouldn't have prepared us
    for the absolutely unexpected.  Our Minnesota
    Twins were in the World Series.  All the
    television and public service stations
    previously secured for our Coats for Kids Drive
    was eagerly eaten up by advertisers.  With two
    days left for the outerwear collection, 19,000
    children still waited for coats for winter.
    The additional press releases weren't working.
    We stapled baggies onto press release papers
    and typed the lines that said, these children
    will be wearing this for winter.  A second
    release was issued with all of the facts.  The
    lead stating, Twins hot, but Minnesota children
    are still cold.  Within 36 hours, 27,000 coats

    were collected because of CCO sponsorship of
    our drive.
         This response was one of the countless
    examples of the Salvation Army's experience as
    a result of a significant impact our broadcast
    media has made in this area.
         I received a phone call, can you send that
    magic bus down to help me, said the voice on
    the other end.  My children's baby books are
    floating around seven feet of sludge in the
    basement, and I can't get out of my wheelchair
    to find them.  The caller was a victim of the
    catastrophic flooding in Montevideo, Minnesota
    last year.  The magic bus that she referred to
    was a coach bus filled with cleanup teams sent
    by Care 11 Television to assist the Salvation
         The unprecedented critical relief
    operation became so important that the mayor
    declared that residents would not be allowed
    back into their homes until the Salvation Army
    teams cleaned and inspected the homes.
         Twin Cities media and surrounding areas
    felt and quickened the pulse of the communities
    through their coverage of the devastation, but

    went further and gave viewers the opportunity
    to work on the front lines of flood-sieged
         Phone banks were set up at stations, and
    calls came in from all areas of the country to
    volunteer.  A marine from Hawaii took leave and
    jumped four military planes to participate.  A
    woman in Phoenix took three weeks' vacation and
    drove a Greyhound Bus for 46 hours to meet the
    Operation We Care Bus at the studio.  The
    Salvation Army set up 40 additional phones line
    in the warehouse to handle all the calls.
    Phone lines jammed.  An additional 75 phones
    were added.  We finally had a total of 170
    phones in our warehouse after the studio lines
    were full, and the ringing remained constant,
    almost 24 hours a day for five days.
         Three bus loads of students from
    Robbinsdale, Minnesota followed the Operation
    We Care Bus to Granite Falls.  One of the
    teachers reported that the activity was the
    finest learning experience that her children
    will ever have.  So successful was the
    partnership with the media and the relief
    operation that it was replicated in other

    disaster-affected areas throughout Minnesota
    and North Dakota communities, as intensive
    recovery activities were needed.  It's now
    being used as a national model for the
    Salvation Army Emergency Disaster Services.
         Indicative of the commitment by the
    television broadcast community, a plan was
    implemented as a first-ever simulcast telethon
    to raise disaster relief funds.  For this
    collaborative effort, communities --
    commitments were secured from the usually
    competitive counterparts to broadcast to all
    metro areas by television stations on May
         So staggering were the results that a
    special -- not-for-profit disaster relief
    agencies were established to distribute more
    than one million raised.
         As a result of the support given by the
    local broadcast media to the Salvation Army
    flooded out communities, the Salvation Army
    volunteer base increased from 3,766 volunteers
    to more than 26,014.
         National and local corporations stepped up
    to the plate to be involved in replicating

    efforts that they saw in media partnerships,
    including 3M, Northwest Airlines, Sun Country
    Airlines, Norwest Bank, St. Paul Companies and
    Cargill.  Local restaurants and supermarkets
    again provided hundreds, and eventually
    thousands, of meals for volunteers and victims
    at Salvation Army relief centers for several
         This happened, too, with the partnership
    we had for Hurricane Andrew.  Just in this area
    alone, more than $1.8 million dollars went to
    the television station at WCCO from viewers
    when they joined a partnership with Pillsbury
    and Salvation Army for relief funds.
         Thousands of people have been impacted as
    a result of our media collaboration.  Awareness
    of the work and scope of the Salvation Army has
    never been stronger.
         The partnership with the Twin Cities media
    is one of the most significant milestones the
    Salvation Army has had in this area since the
    general service given by the donut girls in
    World War I.
         Last spring's pledge is just one example
    of extraordinary action from communities

    throughout the nation prompted by the media.
    The importance of the role played by our media
    partners cannot be measured, and I know there
    are thousands of people who are endlessly
    grateful for all that they were offered.  Thank
    you for your help.
                   CHAIRMAN ORNSTEIN:  Thank you
    very much.  I had a question.  Les, that first
    station, WCCO, what affiliate is that, CBS?
                   CHAIRMAN MOONVES:  Owned and
                   MS. CHARREN:  They are one of
    the very special stations in the country.  They
    once aired a public broadcasting program on
    children's television hosted by Bill Moyers
    without commercials.  They did an introduction
    to it and aired it from beginning to end for
    one hour.
                   CHAIRMAN MOONVES:  And they did
    it voluntary.
                   MS. CHARREN:  Yes, they did,
    because they thought it was so important.
    There are a lot of people like that in the
    broadcast industry.  I think it was Jim Rupp.
    I can't believe I remembered that?.

                   CHAIRMAN ORNSTEIN:  Not to
    mention Dave Moore, best local anchor ever.
    Enough of that.  Yes?
                   MS. MACK:  Hi, I'm Dian Mack,
    executive director of Minnesota Food Bank
    Network, and I'd like to thank you for the
    opportunity to provide a few brief comments on
    the public service activities of broadcasters
    in the State of Minnesota, and specifically,
    here in the Twin Cities.
         I've been the executive director of the
    Minnesota Food Bank Network for nearly 12
    years, and the Minnesota Food Bank Network is a
    nonprofit organization whose members distribute
    food to individuals and families in need
    throughout Minnesota and North Dakota and
    Western Wisconsin.
         During this past 12 years, television and
    radio stations have always been responsive to
    requests by charities for public service
    announcements, but I've noticed that, in recent
    years, there's been increasing efforts on the
    part of broadcasters to integrate charities on
    a more purposeful and regular basis.
         Charities are seen as an important part of

    the health of Minnesota communities, and
    broadcasters are continually looking for ways,
    not only to report on, but to support the
    communities they serve and the charities that
    serve them as well.
         During the previously-mentioned floods of
    1997, I also had the dubious distinction of
    being president of Minnesota -- (inaudible) --
    Informations Act of the disaster.  It was the
    first time in the organization's history that
    we had to respond to a level 5 disaster and
    that's on a level 1 being the least, 5 being
    the worst disaster.
         Television broadcasters called together
    all the local charities with which they already
    had relationship to a meeting to discuss how
    they might utilize their collective reach to
    help us help all the individuals in the
    communities affected by the disaster.  But
    beyond the flood telethon that was previously
    mentioned was born out of that meeting.  I'd
    say fierce competitors in the field of
    broadcasting and in the arena of nonprofitable
    charitable fund-raising came together to tell a
    simple, but important, story during the

    telethon, and in doing so, we were not only
    able to educate the public about how and when
    to help during times of disasters, but we also
    raised nearly a million dollars which was
    distributed to flood survivors through
    nonprofit charitable agencies working in the
    flood-affected areas.
         The bad news is that Minnesota has already
    seen far too many weather-related disasters
    this year, but the good news is the information
    dispensed by the media last year about the
    disaster survivors has generated even more
    appropriate responses by the general public
    during these recent disasters.
         We're truly thankful for the caring and
    thoughtful broadcasters in the Twin Cities.
    They not only take the time to learn about the
    nonprofit community, but help us to better
    understand how we can use broadcasting to get
    our messages out to the communities we all
    serve.  Working together has made us all more
    informed and more effective.
         Thanks for being here today.
                   CHAIRMAN ORNSTEIN:  Thank you.
    Models for the rest of the country, Harold

    leading the way.
                   MR. CRUMP:  Harold doesn't know
    any of these people.
                   CHAIRMAN ORNSTEIN:  Let's
    return.  We have some scheduling and other
    things we needs to get to, but I think we ought
    to go as far as we can to continue this
    discussion to see at least where we are in
    terms of the meeting of the minds, and we're
    not going to come to a meeting of the minds
    obviously in this area.  We may have to try to
    work it out in another fashion or come back to
    it again.
         I have to say, Jim, that it strikes me, at
    least, that -- fairly clearly that we will not
    have a consensus in the group as a whole,
    certainly not among the broadcast
    representatives, to recommend a set of minimum
    standards as a mandatory requirement.  That
    seems crystal clear to me.
         What is not clear is whether we should
    move towards building in or how, the building
    in a set of minimum standards into a code, and
    one that doesn't -- that may or may not include
    some specific quantitative requirements, or it

    might not.  But that strikes me as where we are
    on that issue, at least.
                   MS. SOHN:  What are the
    guidelines?  We only heard from Robert on the
    processing guidelines.
                   CHAIRMAN ORNSTEIN:  We'll come
    to that.  Do you disagree with that, Jim, or do
    you want to come back to it?
                   MR. GOODMON:  I handed this to
    everybody today.  I think we're together on
    increased reporting requirements.  I think
    there are whole lots of things we're together
    on here.  I'm not giving up.  I want to keep
    talking about it.
                   CHAIRMAN ORNSTEIN:  One thing I
    would like Gigi to do is, with regard to the
    reporting requirements, and I haven't seen -- I
    know you were working with Barry Diller's
    people to try to come up with a broader
    recommendation.  I would ask you to consult
    with our broadcasters and representatives so we
    can come up with a set of requirements for
    reporting public interest activities that is
    reasonable and feasible, not terribly onerous
    for the larger group because it seems to me

    that getting on the public record what people
    are doing is a very important part of this
    process, the voluntary process of moving
                   MS. SOHN:  Basically, my
    certification is, really, is quite simple.  You
    just say how many hours a week or whatever
    amount of week of something you do, you know,
    of a particular kind of programming, say that
    you've, yes or no, you've complied with your
    policy of doing that, and just list a half
    dozen -- or it doesn't have to be each
    program -- you could change that -- aired that
    addresses, you know, this particular issue and
    how it doesn't.  It's nowhere near as onerous
    as the program logs, which were extremely
                   MS. CHARREN:  May I suggest that
    what might help that kind of a document is some
    idea of the production that this doesn't imply
    that everybody is obligated to do all of this.
    When I saw the requirement for religious
    programming, I got a little nervous, she says
                   MS. SOHN:  Well, these

    categories track the 1960 scheme.
                   MS. CHARREN:  I know they do,
    but there's an implication when you see it in
    hard copy like that, that if you don't do it,
    you're going to get hung up.
                   CHAIRMAN ORNSTEIN:  I think we
    agree that there should be a reporting
    requirement of public interest activities.  I
    want to be sure that, if we don't have
    unanimity, we at least have a reasonable
    consensus that's done in a way that's
                   MR. CRUMP:  Norm, if I might
    make an observation.  As I sit here and think
    about it and listen to what's been said, you
    know, I believe what's happening is, to some
    degree, the broadcasters sitting around this
    table thinking back to the old days, and we're
    remembering the good things that we did.  We're
    remembering the outstanding things that some
    stations did in public service, just almost
    beyond belief.  And others who are not
    broadcasters are remembering some of those, but
    you're remembering the bad things.  We're
    remembering the good; you're remembering the

         The observation that Robert made about the
    fact that perhaps what we should do is put the
    past behind us and go on from there, obviously,
    the opinions that we have are all based upon
    personal experience.  And sometimes the most
    difficult decisions we have to make are those
    where we say, gee, okay, I'm going to put this
    past behind me, I'm going to change my ways, or
    I'm going to change the way I feel about this
    person and then go forward.
         But it seems to me that if we're going to
    try to reach a consensus, listening to this
    over and over for months now, that's really
    what each one of us, as an individual, I
    believe, has got to try to do, that we're
    working in a new ball game.
         Now, the one thing I would say to all of
    you who are not broadcasters to please
    remember, keep it in your mind, in the back of
    your mind, anyway, at all times, and that is
    that, as we have discussed what has occurred in
    the way of less regulation that has occurred
    for the broadcaster over the years, that we are
    very proud of this, and we all feel that the

    reason we got the less regulation was because
    we had done a pretty damn good job all the way
         And put yourselves in our shoes.  If,
    indeed, this is the case, which we believe it
    is, surely they wouldn't have rewarded us if we
    had done badly.  Then you can understand why we
    feel as strongly as we do about trying to add
    reregulation back onto us just because we're
    taking 6 megahertz and exchanging it for 6 more
    megahertz and having to put millions of dollars
    into this new system that we hope is going to
    work, do well, be good for the American
    public.  But it's still a gamble, and we're
    happy to do so, we want to do so, but none of
    this stuff is a lay-down hand as to how good
    the business is going to be.
                   MS. SOHN:  Were you responding
    to the idea that the public should have more
                   MR. CRUMP:  I'm responding to
    everything that's gone around and around, and
    we're having a lot of varying views, and I
    think based upon our own past experiences, and
    I'm just saying, as I think about this

    suddenly, we've got two sets of experiences;
    those of us that remember the good, and those
    of us that remember the bad, and we've got to
    put that behind us, both of us, to come to an
    agreement here and go forward.
                   MS. CHARREN:  I don't want what
    I said to be perceived as having related to,
    for instance, Robert's proposal on how I feel
    about what we've talked about all day, but I
    think it's important to keep in mind -- the
    spirit of what you said I agreed with.  We're
    all sitting here because we think we can do
    something that's going to make a difference.
    That's why we all said yes to something that
    was using up a lot of time, and at least in my
    case, a lot of money, and because we think that
    we're going to make something happen that's
    going to help the public interest, help the
    democratic community and something we could be
    proud of or we wouldn't have committed to do
         On the other hand, it's important for --
    just to personalize it, I am not a
    broadcaster.  The only reason I'm sitting here
    is because of an experience with 30 years of

    dealing with some broadcasters who really
    understood the public interest obligation that
    came with the license and some that didn't, and
    we all agree that some don't, and that there
    are various ways to deal with that, and all of
    them don't involve legislation, for example.  I
    didn't think mine did, my issue.  I thought the
    FCC could deal with that.  In fact, I thought
    the broadcasters could.
         When I started out, Harold, I said I going
    to take two years to make this happen.  I was
    just going to tell all the broadcasters how
    important it was to provide choices and
    diversity for children, and I thought all these
    good people would then say, gee, there's a
    market out there for that, and they'd go do
    it.  A little naive.  And I learned over time,
    what required action and what didn't.
         I don't think everything we're talking
    about requires legislation, but I think that I
    learned that some things do require more than
    just an exhortation that the good guy's going
    to pay attention to, that I am still operating
    on the idea that some stuff has to get back to
    the public.  With my early efforts, it was in

    the law.  In return for a license, you got to
    serve the public.
         It's a broader set of issues now, but I
    think that we have to be careful that we don't
    just come up with sort of soft proposals that
    cross our fingers that things are going to
    happen.  I'm not saying that the things we've
    been discussing are that, but I think we have
    to be careful not to be so sensitive to the
    fact that these are all people, after all, and
    ultimately, they will do the right thing.  My
    experience is that a lot of them don't do the
    right thing for the public, present company
    very much excepted.
                   CHAIRMAN ORNSTEIN:  I think we
    have to consider several larger issues here
    that we bandied about for several months.
         We're moving into a very difficult and
    uncertain world, and I think Robert is
    absolutely right; we have to look ahead, but we
    have to consider several things as we look
    ahead.  This is going to be a world where we
    don't know what's going to happen in terms of
    revenue, where broadcasters will be relative to
    others, none of us do, and we do face very

    substantial costs as you move ahead, and I
    think you have to be very sensitive to that.
         There will be some blurring of the lines
    between broadcasters and other entities, and we
    have to be sensitive to the notion that
    broadcasters are special.  They're special
    because they provide the public square that
    others don't, and we want to find ways to
    enhance and preserve that.
         At the same time, as we talk about where
    the power lies looking into the future, the
    power is not going to lie as much with
    broadcasters who started as people and
    communities who began operations within those
    communities who were rooted in those
    communities, who started as pioneers believing
    that what they were doing is not just entering
    a business which is -- could have been the same
    as a widget business, but one that had a very
    special character.
         But it is the nature of the marketplace
    now that we are moving to include an awful lot
    of entities where this is a decision of how you
    set your capital out there, and if it turns out
    you can get a better return on your capital by

    investing in widgets or investing in
    semiconductors as opposed to investing in
    broadcast stations, then you may just go ahead
    and do that, including a lot of entities that
    have no local anchor and no intrinsic belief
    that this is a special business that requires a
    public interest obligation.
         Now, I don't know how we come down
    striking the balance here.  Clearly, what
    you're hearing from some of the others here is
    a fear that, in part, because we already have a
    lot of entities that don't do very much, and we
    know that within the industry there is disdain
    for many of them that haven't done what they
    should be doing, but clearly, that disdain has
    not translated into a kind of peer pressure
    that's changed that process.  And I think what
    broadcasters will hear from some of the others
    around the table is a kind of frustration that,
    in part, because there has been this great
    division of a reaction to protect those among
    you who don't do what you do, which creates a
    sense of bafflement among many, and I don't
    know how we bridge that, except, clearly, the
    best way to do this is by having the industry

    itself do it, if we can manage to make that
         At the same time, I want to try and make
    sure that we don't do anything that creates an
    even less level playing field, that means that
    burdens are placed on broadcasters that aren't
    placed on others that will make it much more
    difficult to achieve what we all ought to be
    achieving, and that's, obviously, part of what
    we're trying to do here, is try to figure out
    how we can make those things happen consistent
    with a process that is not going to happen at
    this point, which is a lot more regulation and
    that we, I think, generally agree would be the
    least best way in which to go.
         Now, as we turn to this discussion,
    clearly, we have to work through whether we
    believe that basically -- we all agree that
    code, in creating that sense within the
    industry of a set of standards is a good step
    to take.
         Obviously, if it's just a bunch of words
    that everybody ignores, that's not going to
    achieve the purpose that any of us want.  And
    obviously, we don't want -- we want to make

    this a voluntary effort.  That's why I think we
    need to have at least some discussion -- more
    discussion of how we do that and whether
    building in some kind of minimum standards.
    And probably, I think, quantification is not
    going to be a very good approach to take,
    simply because of the uncertainties of the
    digital age, that we may want to find another
    way to go about doing that.
                   MS. CHARREN:  When you do that,
    can you also focus so that somebody gives me a
    list of the enforcement mechanisms and the pros
    and cons.
                   CHAIRMAN ORNSTEIN:  Yes, and of
    course, we had some discussion earlier of what
    enforcement, consistent with the law and
    otherwise, we can have.
         And my own judgment would be if the
    industry moves towards, not only creating a
    minimum, but basically saying that you have to
    achieve that minimum to get a seal of approval,
    and that we will point to those who go beyond
    that and say, boy, you're good guys and, you
    know, make it very clear that for those who
    don't, that there will be an awful lot of

    criticism leveled at them, and indeed, it may
    hurt them in the bottom line down the road,
    that's a preferable way to go, and it may, in
    fact, be a workable way to go, and certainly
    better than any kind of direct federal burden.
         Now, I think we're very close to coming to
    an agreement on how we do that.  The question
    now is, basically, whether that is a good route
    to go in which to add a minimum standard and
    whether that's going to be acceptable more
    broadly.  And on that, I, frankly, believe we
    need to rely on our members who are
    broadcasters to try and come up with something
    that, obviously, we're all going to have to
    look at to judge.  But if it isn't going to
    work with you, then it probably isn't going to
    work with the rest of us.  So I would urge you
    to try and do that.
         We do need to discuss whether, in fact, we
    need a sharper stick or a weapon to move
    forward, which is, in a way, what Gigi is
    suggesting, and we need to go further on that
    in terms of discussion.  I don't know if we can
    reach an agreement on that tonight.  We,
    obviously, don't have an agreement at this

    point on whether the minimum standard is going
    to be acceptable, and I leave it to Jim to try
    to persuade his colleagues as to how far to go
    on this as well, but it will be my judgment
    that --
                   MR. GOODMON:  Are we really on
    this everybody has got to agree with everything
    before it's in the report.
                   CHAIRMAN ORNSTEIN:  No.  And
    certainly, we clearly already have areas where
    we know there will be at least one member who
    takes sharp disagreement.  I think having one
    or two members or three or four members who
    don't agree with a particular provision is
    perfectly all right.
         What I believe we do not want to get into,
    if we can avoid it, is a situation where a more
    substantial block of people, and in particular,
    a group of people who represent either the
    broadcasting side of the spectrum or a very
    substantial block on the other side basically
    say, no, this doesn't work.
         If we can get an agreement that cuts
    across those lines but has one or two or three
    people who just don't agree, you're never going

    to find a group of 22 people who will agree on
    every job.  That's fine.  But it seems to me
    our goal here is if we can manage to avoid
    having a sharp line drawn in the dust where
    this is basically a majority report and a
    minority report.  That may be something that we
    end up with.
         I think, and hope, we demonstrated today
    with a lot of strong viewpoints represented,
    and maybe, as Robert said, it's a little
    Poly Anna-ish, but I think it's there, there is
    a real opportunity to come to a broad agreement
    that may not include everybody on everything
    but it will include a broad agreement.  If we
    do that, I believe we will have very
    substantial residents out there and a whole
    hosts of communities because the fact is there
    are questions here that nobody has answered,
    and there is a driving need to have them
    answered and responded to.  And if somebody
    comes forward representing the broad interests
    that is basically not driven by a partisan
    motive or any other kind of ideological motive
    with some reasonable suggestions that can move
    the ball forward, there will be people in

    Congress and people in the White House and
    people in the industry who will literally jump
    on board.  So we have a great opportunity to do
    that, and it is going to require, obviously,
    from all of us, some more considerable
    flexibility, which most of us, I think, have
    shown up to this point.  But now we're getting
    close to the point in time where we are all
    going to have to demonstrate a little bit more.
                   MS. STRAUSS:  Norm, I just want
    to follow up on that and just say that if we
    look at our mandate again -- and I talked about
    this in California -- we were asked to
    determine obligations.  We were not asked to
    determine voluntary measures, and if we don't
    do it, somebody else is going to do it.  If
    it's not going to be us, it's either going to
    be Congress or it's going to be the FCC, and I
    think we passed up a golden opportunity to not
    set forth a set of recommendations, whether
    they're minimum standards or minimum
    obligations, or whatever you want to call them,
    at this time.
         And I think we would have failed if we
    just put forth soft, voluntary measures that

    may or may not be followed by members or
    nonmembers of the NAB.  I don't think that we
    will have fulfilled our mandate.  And it seemed
    like we were getting someplace today, so I was
    sorely disappointed when, towards the end of
    the day, some of the broadcasters suggested
    that, in fact, there was no interest in having
    some submit to minimum standards.
                   CHAIRMAN ORNSTEIN:  Karen, let's
    be clear here.  What we're talking about now
    is, more than anything else, it's a code, and
    that's one component of what we're doing.
                   MS. STRAUSS:  If it's only one
    component, that's fine, but it's not clear to
    me whether the statements made are limited.
                   CHAIRMAN ORNSTEIN:  I believe we
    have very close to a consensus on a pretty
    far-reaching and very significant educational
    proposal.  There is clearly a consensus in
    terms of many of the issues involving closed
    captioning and many of those other issues that
    we discussed, and I think we haven't had any
    dissent in terms of moving that particular ball
         We have an agreement that there ought to

    be some way of recapturing for the public
    something in return if there is substantial
    multiplexing that involves a lot of revenue
         We are moving towards what I hope will be
    a set of recommendations on the political
    discourse area that I hope we'll move that ball
                   MS. STRAUSS:  Are you saying
    these are voluntary or mandatory?
                   CHAIRMAN ORNSTEIN:  Well it's a
    mixture of things, but you know, obligations
    can be internally derived, as well as
    externally forced, and if we can come up with a
    set of obligations that are generally
    internally derived but work, that's fine as far
    as I'm concerned.
         It, obviously, isn't fine if you come up
    with a lot of language and it doesn't mean
    anything, but when we have our mandate for
    obligations, that does not mean that our
    mandate is either limited to or necessarily has
    to focus on government-imposed obligations.  We
    need to find a best way to get to it.
                   MR. BENTON:  Norm, in this sense

    it would help me enormously, and Robert, before
    Robert leaves here.
                   MR. DECHERD:  Airplane.  I'm not
    mad at anybody.
                   MR. BENTON:  No, no.  But it
    would help me enormously, in line with what
    Norman just said, Robert, and others as well --
    don't mean to be sending you off -- but you're
    the guy who made the proposal on which we've
    largely based our discussion today.
         If we can have some formal written
    indication from the NAB about its attitude
    towards this code, not committing to any
    specifics at this point, but committing to a
    serious reexamination of the code and its
    application to its members, this would help.
    This would move me along the trail of getting
    off the regulation number because there is a
    big gap here on the part of a lot of us.  And I
    need some documentation from the NAB saying,
    look, on this code business, with digital, we
    are serious about having a serious look at
    this, and we're serious about the application
    to our members, and we are interested in
    minimum standards which we would then

    promulgate, not force upon our membership, but
    say these are the minimum standards we expect
    you NAB members to live up to.  I think that's
    the least of it.
         I think we ought to get something like
    that in writing.  If we can something like that
    in writing, then I'm going to feel a lot
                   CHAIRMAN ORNSTEIN:  Let me
    interrupt you.  One thing before you all leave,
    we don't know exactly whether this will work,
    but we are supposed to come up for a report on
    October 1.  If we can all reserve, as best you
    can, October 1 on your calendars and not make
    any ironclad commitments, it's quite possible
    we'll have some kind of presentation to the
    Vice President, just to keep that in mind.  It
    may not happen that day.
                   MR. CRUMP:  What are we going to
    do with the subcommittees that are supposed to
    meet.  What are we going to get set up.
                   MS. CHARREN:  What
                   MR. CRUMP:  How about the
    subcommittee on the NAB code or the new code.

                   CHAIRMAN ORNSTEIN:  Well, we had
    this working group that Cass is chair, ask him
    to find time.  He's going to do some drafting.
    And I would hope you would conclude this
    discussion, maybe even broaden it to include
    some of your members who are not in the
    subgroup, of the minimum standard.
         (Inaudible).  My guess is that there's
    probably not going to be a great willingness to
    commit to anything at this point.
                   MR. BENTON:  Is there even a
    code committee?  Is there a structure?  Who do
    we talk to.
                   CHAIRMAN ORNSTEIN:  We will
    have, I think, some expression of that.
         And otherwise, what we are going to do
    here is we've got a couple of subgroups who are
    going to move forward to try to fit language
    in, individuals who will do so.
         We will see, as we canvass members and
    talk among ourselves over the next three weeks
    or so whether we can move this forward without
    another meeting, and in about three weeks or
    so, we'll let you know that we are, indeed,
    meeting on August 10th.  I'll let you know in

    about three weeks.
         Thank you all very much.
                   (Whereupon, the meeting
                   concluded at approximately
                   5:20 p.m.)
                  *  *  *

                   ) ss

          Be it known that I took the foregoing

          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;
JUNE, 1998.

                        BARBARA J. STROIA, RPR
                        Notary Public