TRANSCRIPT OF PROCEEDINGS
TAKEN ON JUNE 8, 1998
AT 9:38 A.M.
Afternoon Session
[Click to view the morning session]
Reported by:
BARBARA J. STROIA, RPR
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
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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
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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
focus.
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
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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
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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
arrangement?
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
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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
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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
entities.
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.
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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
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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
point.
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
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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
programmers.
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
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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
phrase.
MR. YEE: Yeah, just for
clarity.
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
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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
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point.
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
this?
CHAIRMAN ORNSTEIN: The
education one? I think so.
MR. RUIZ: Do you accept written
comments.
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.
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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
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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
can.
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
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and see how far we can get, and we'll be sure
to reserve some time for that before we're
done.
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
following.
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
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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
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number.
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?
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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
else.
MS. CHARREN: Like who?
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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.
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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
university.
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.
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MS. SOHN: That's an important
distinction.
MS. CHARREN: That doesn't say
that.
CHAIRMAN MOONVES: As opposed to
what.
MS. CHARREN: I have visions of
it being an American Enterprise Institute. I'm
kidding.
CHAIRMAN ORNSTEIN: Let Robert
speak.
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
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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
program.
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
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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
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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 --
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CHAIRMAN ORNSTEIN: This is not
in lieu of your public interest obligations.
This is an additional set-aside if you
multiplex.
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.
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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
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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
programming.
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
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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.
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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
on.
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
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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
exchange.
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
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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
interest.
MS. CHARREN: I second that.
MR. RUIZ: The goal is to better
213
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
while.
MR. RUIZ: Does that accomplish
it?
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
214
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
access.
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
215
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
216
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,
217
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
218
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
219
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
audience.
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
220
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
thing.
So to me, that's an interesting
possibility.
MS. CHARREN: That's one of the
options.
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
221
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
disincentive.
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
222
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
223
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
today.
And secondly, again, unless you change the
model, we're looking at a single revenue stream
to support that growth for the other
technologies.
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?
224
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
225
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
226
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
227
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
experimentation.
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
228
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.
229
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
multiplexing.
Has that gotten any better in terms of
refinement? Do we know the programming
possibilities?
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
possible?
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.
230
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
knows.
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
231
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
232
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
233
percentage of its programming in high
definition?
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
234
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
235
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.
236
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
okay?
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 --
237
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
along.
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
238
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
239
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
meant.
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
explicit.
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
that.
MR. GOODMON: No, I think he
240
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
Congress.
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
241
it.
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
242
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?
243
MR. MINOW: Yes.
MS. SOHN: What would that
interest be?
MR. MINOW: That the cost of
campaigning today is destroying the democratic
process.
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
244
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
245
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
candidates?
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
federal.
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
246
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
flexibility.
You know, one of the problems with
247
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
C?
MR. CRUZ: I would recommend
that.
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
248
sort of thing --
CHAIRMAN MOONVES: What did you
say?
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
249
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
250
what they want to do now with this as a model
and then incorporate it into that
recommendation.
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
251
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
piece.
252
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
253
here?
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
254
rate that we got right now. Are you against
that, Bill?
MR. CRUZ: Somebody's got to pay
it.
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
255
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,
256
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
be.
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
257
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
hours.
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
candidates?
MS. SOHN: Everybody.
MR. GOODMON: Every qualified?
MS. SOHN: Yes.
258
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
here.
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
259
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
more.
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
260
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
others.
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
religion.
CHAIRMAN ORNSTEIN: If Leslie
Moonves were running against Jessie Helms for
261
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
262
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
263
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
either.
MR. BENTON: Norman, Paul Tare
is sitting back over here, and I'd sure like to
get his quick reactions to the discussions so
far.
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
you.
264
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
265
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
266
five minutes, and it could be a three-minute
component of the few minutes of free political
time.
CHAIRMAN ORNSTEIN: Sure, but
you don't have to. You can do whatever you
want.
MR. LA CAMERA: You want to
mandate it in addition to this?
CHAIRMAN MOONVES: This is
purely voluntary, this five minutes, but
recommended.
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
267
component.
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
correctly.
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,
268
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
news.
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
269
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
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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
newscasting.
MR. BENTON: And in fairness,
nonpartisan.
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
requirements.
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
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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
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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
273
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
formula.
MS. CHARREN: Is there anything
we can do that doesn't have to go through
Congress.
CHAIRMAN ORNSTEIN: The
practical reality is -- is there anything we
can do that doesn't have to go through
Congress.
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.
274
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
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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
276
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
time.
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
do.
Requiring stations that are not very rich
277
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
278
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
model.
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.
279
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.
280
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.
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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
clout.
But I'm perfectly happy to make the
recommendation for general elections and not
for primaries, which I think is an easier sell
anyhow.
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,
282
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.
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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
284
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
285
interest.
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
286
we can fall somewhere in between.
MR. MINOW: Has everyone had a
chance to read Jim Goodmon's paper?
MR. GOODMON: That's coming
next.
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
recommendation.
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
287
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.
288
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
289
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
290
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
television.
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
291
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
payment.
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
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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
293
all.
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
work.
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
294
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
suffice.
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
295
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
difficult.
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
296
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
recommendations.
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.
297
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
E?
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
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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
299
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.
300
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
statutories?
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
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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
upset.
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
302
long it would take to fill this thing out every
week?
MS. SOHN: I'm not asking you to
fill it our every week. It's a quarterly
report.
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
had.
MS. SOHN: All right. Then you
can work with me, Bill, and we can make it less
onerous.
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
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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
demonstrated.
MS. SOHN: You disagree with Jim
and me is what you're saying?
MR. DUHAMEL: I disagree with
you.
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
discussion.
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.
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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
305
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
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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
proposal?
CHAIRMAN ORNSTEIN: Yes.
MS. CHARREN: To Jim's
proposal?
CHAIRMAN ORNSTEIN: To Jim's
proposal.
MR. LA CAMERA: Robert, you
haven't said anything in a while.
MR. DECHERD: Is it the hand-
off?
307
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
308
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
court.
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
309
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
methodology?
MR. DUHAMEL: Yes.
MR. GLASER: But it was sort of
consistent.
310
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
consideration.
CHAIRMAN ORNSTEIN: So it's
clear, at least, that we could not get a
consensus here around the mandates.
311
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
312
that.
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
five.
MS. CHARREN: Three years, then
five years. And now it's an extraordinarily
long time for the FCC to look at, you know, in
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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
separate.
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
314
the minimum standard, what do you --
MR. GOODMON: From who?
CHAIRMAN ORNSTEIN: A broad
agreement.
MR. GOODMON: From the whole
committee?
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
315
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
pathways.
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
suggested.
316
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
317
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
318
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.
319
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
happen.
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
320
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
321
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
322
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
323
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
this.
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;
324
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
out.
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
325
important and we're just sort of skipping over
it.
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
326
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
327
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
328
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
additional.
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
329
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
330
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
Army.
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
331
went further and gave viewers the opportunity
to work on the front lines of flood-sieged
areas.
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
332
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
17th.
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
333
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
months.
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
334
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
operated.
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?.
335
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
336
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
337
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
338
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
339
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
340
that getting on the public record what people
are doing is a very important part of this
process, the voluntary process of moving
forward.
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
detailed.
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
gently.
MS. SOHN: Well, these
341
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
acceptable.
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
342
bad.
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
343
reason we got the less regulation was because
we had done a pretty damn good job all the way
through.
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
information?
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
344
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
this.
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
345
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
346
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
347
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
348
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
349
itself do it, if we can manage to make that
happen.
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
350
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
351
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
352
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
353
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
354
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
355
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
forward.
We have an agreement that there ought to
356
be some way of recapturing for the public
something in return if there is substantial
multiplexing that involves a lot of revenue
streams.
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
forward.
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
357
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
358
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
better.
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
subcommittees?
MR. CRUMP: How about the
subcommittee on the NAB code or the new code.
359
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
360
about three weeks.
Thank you all very much.
(Whereupon, the meeting
concluded at approximately
5:20 p.m.)
* * *
361
STATE OF MINNESOTA )
) ss
COUNTY OF ANOKA )
Be it known that I took the foregoing
meeting;
That I was then and there a notary public
in and for the County of Anoka, State of Minnesota;
That the foregoing transcript is a true
and correct transcript of my original stenographic
notes in said matter;
That I am not related to nor an employee
of any of the parties hereto, nor a relative nor
employee of any attorney or counsel employed by the
parties hereto, nor interested in the outcome of
the action;
WITNESS MY HAND AND SEAL THIS 10TH OF
JUNE, 1998.
_________________________
BARBARA J. STROIA, RPR
Notary Public