UNITED STATES DEPARTMENT OF COMMERCE
OPEN MEETING OF THE
ADVISORY COMMITTEE ON PUBLIC INTEREST
OBLIGATIONS of DIGITAL TELEVISION BROADCASTERS
Monday, March 2, 1998
University of Southern California
Annenberg School for Communication
3200 Watt Way
Los Angeles, California 90089-0281
Morning Session
Go to the transcript of the afternoon session
4 (9:08 a.m.)
5 WELCOME
6 GEOFFREY COWAN, DEAN
7 ANNENBERG SCHOOL FOR COMMUNICATION, USC
8 DEAN COWAN: Good morning. I'm Geoffrey
9 Cowan. I'm the Dean of the Annenberg School for
10 Communication. And on behalf of USC and the
11 Annenberg School, I want to welcome this extremely
12 distinguished group to your first meeting outside of
13 Washington.
14 For 25 years I've been teaching and
15 practicing law and writing about the communication
16 field. And, in my view, the work of this group and
17 the issues that it's considering is the single most
18 important issue that the American government has had
19 to deal with with regard to telecommunications policy
20 in a quarter of a century. So I wish you the best of
21 luck in your deliberations and I'm very, very pleased
22 to have you here. I am looking forward to today's
23 events.
24 Les, thank you.
25 CO-CHAIR MOONVES: Thank you, Jeff.
3
1 As one of the few resident members of Los
2 Angeles, I'd like to welcome the Commission to our
3 fair city. We are proud to host the first meeting
4 outside. And a special thank you to Jeff Cowan and
5 Carolyn Naifeh and the rest of Dean Cowan's staff for
6 their hospitality.
7 Jeff has been after me to come here with
8 this Commission since day one, and the timing
9 couldn't have been better. And all the arrangements
10 have been terrific. And we thank you very much for
11 providing us this great platform.
12 There are four members who will be unable
13 to attend the meeting: Peggy Charren, Barry Diller,
14 Newton Minow, and Richard Masur, who will be joining
15 us this afternoon.
16 Just as a matter of interest, the meeting
17 will be broadcast live over the Internet, thanks to
18 the Annenberg School. In addition, the National
19 Association of Broadcasters will be filming this
20 meeting.
21 A couple other housekeeping things. I'd
22 like to turn the meeting over for one short moment to
23 Harold Crump, who has been involved in what we think
24 is a fairly interesting study on digital television,
25 which he'd like to talk about and something that we
4
1 would like to give to all the membership for your
2 perusal.
3 So, Harold.
4 MR. CRUMP: First of all, I want you to
5 know I'm going to drop a few numbers on you. Don't
6 worry about not being able to keep up with them at
7 the moment. We will have in the mail to you later
8 this week the complete rundown on what I have here.
9 As you know, I work for Hubbard
10 Broadcasting, Incorporated, which is headquartered in
11 Minneapolis, St. Paul. We have 10 television
12 stations to radio stations. Each year we have a
13 management meeting in the month of January. And as
14 would be of great interest to us this year, we
15 commissioned some research by the Frank Magid
16 organization, a nationally recognized group, to look
17 at consumer attitudes and opinions toward digital
18 television.
19 And, as I say, there are a lot of numbers,
20 a lot of graphs in here which you'll have the
21 opportunity to look over, and then at future meetings
22 we can discuss at greater length. But the conclusion
23 that they come to in all of this is that it's going
24 to be a pretty tough sale when it comes to the public
25 buying new sets to have digital, particularly from an
5
1 HDTV standpoint.
2 Jim, when I look at you down there, we all
3 know too that all of these people who were researched
4 across the country had not seen it. So you have to
5 take that into consideration.
6 In addition to that, we also developed some
7 information out of the Consumer Electronics Show
8 which took place, as you know, in Las Vegas in early
9 January. We will share that information with you as
10 well. What that one boils down to is that one of the
11 larger manufacturers, Thompson, made a presentation
12 there. And they gave projections as to what they
13 expect the sales of the total industry to be in
14 digital sets for the first four years, starting in
15 1999. And the total projection for those four years,
16 total, is 3,575,000 sets.
17 To give that some perspective, in a normal
18 year, 1998, '97, 96, when we think about the number
19 of total analog sets that are regularly sold, it
20 normally runs about 24 million per year. So that, I
21 think, you will find of interest.
22 And then we are going to add into that
23 another sheet that comes, again, out of the Consumer
24 Electronics Show that simply has more basic
25 information in it about HDTV, what's going on with
6
1 the digital set manufacturers. And, as I say, this
2 will all be shared with you so that you will have the
3 detail of it before the next meeting.
4 Thank you.
5 CO-CHAIR MOONVES: Once again, a caution.
6 On paper, at least, we have not supposed to have
7 begun our deliberations, so this is one piece of
8 research that I think is of interest to all of us.
9 But, once again, it is one piece of research. Norm
10 will be talking about something later on. I have the
11 same cautionary measure on that.
12 This morning we have two extraordinary
13 panels that I think will be of great help to us. And
14 then this afternoon we will begin our formal
15 deliberation or our informal deliberation, because
16 time is starting to run out. And, on that very
17 subject, let me turn it over to my Co-Chairman, Dr.
18 Ornstein, to talk about time and other issues.
19 CO-CHAIR ORNSTEIN: It appears that we will
20 be getting our extension from the White House. I'm
21 not exactly sure of the dates, probably October 1.
22 Although, what I heard was they hope we would
23 expedite our process, and that would be the outside
24 date of which we could issue some recommendations.
25 But, as we'll discuss some this afternoon,
7
1 the simple process of putting a report together and
2 writing a report and circulating it among the rest of
3 us, means that basically if we don't get started
4 probably by next month with getting the process
5 underway, we would have some difficulty getting it
6 all done by October. So we're going to have to pick
7 up our efforts in terms of moving towards whatever
8 consensus or recommendations we can make.
9 Let me remind you about the next two
10 meeting dates. We checked around with everybody's
11 schedule to see if it was possible to change the next
12 date, and it turned out it simply was not possible.
13 We could not find another date where there was even
14 close to a consensus or a majority of people who
15 could make it, so the next meeting will be April 14th
16 in Washington.
17 And the following meeting will be in
18 Minneapolis on June the 8th. Harold Crump has some
19 information about that. We might have a brief
20 discussion of it later on, although we've got time
21 for that, but very likely it will be at the Marquette
22 Hotel in beautiful downtown Minneapolis.
23 MR. CRUMP: True, true.
24 CO-CHAIR ORNSTEIN: And, I think, actually,
25 Les, we can probably wait for the discussion of what
8
1 we're going to be this afternoon until that time, so
2 we can move on and get our panel underway.
3 CO-CHAIR MOONVES: Good. Absolutely.
4 Let me now turn it over to our moderator of
5 our panel on independent programming and access in
6 the digital age, Jim Yee, Executive Director,
7 Independent Television Services.
8 Jim.
9 MR. YEE: Thank you, Les, and thank you,
10 Norman.
11 Before I begin, I need to also be time
12 conscious because a number of our guest panelists
13 have other commitments here in the city as well as
14 elsewhere in the state, so what I will be doing is to
15 be introducing the four panelists. And then after
16 the presentation there will be hopefully a very --
17 I'm quite sure it will be -- stimulating Q&A with
18 members of the Commission with their remarks. So I
19 will try to keep -- I asked the guest panelists to
20 speak up to maybe five to seven minutes. And if I
21 have to, I will wave my hand just to help democracy
22 move along.
23 This morning's presentation is titled very
24 broadly, "Independent Program and Access in the
25 Digital Age." And as part of our charge, obviously
9
1 of this Commission, is to help shape public policy.
2 And one of the concerns and one of the ongoing
3 concerns of any commission is to hear from as diverse
4 points of view and members and people who have been
5 working in this broad arena of affecting programming
6 commercially and noncommercially.
7 And I'm very happy to echo the comments of
8 our host, that we are outside Washington to be in the
9 thick of it, so to speak, at least to get I think
10 what can be a broad horizon of perspectives from this
11 morning's guest panel about programming, independent
12 programming; how those issues, such as the public,
13 are not normally, shall we say, driven by commercial
14 motivation but one by needs and creative needs as
15 well as community needs, get it to be addressed; and
16 how can that be, shall we say, replicated, if not
17 more so, in this new age that's coming before us.
18 So, again, I'm glad we're going to have
19 this opportunity. And, also, may I remind our guest
20 panelists that your comments and your supplemental
21 comments will also be on the record, if time does not
22 permit otherwise to engage you more extensively.
23 The order of the presentations will be as
24 such: Kelley Carpenter, Jerry Isenberg, Marian Rees
25 and Herbert Chao Gunther.
10
1 Allow me to quickly do their bios. And if
2 I am short, I apologize. But, again, I want to allow
3 you as much time to engage us and to share your
4 thoughts as freely and as extensively as possible.
5 Kelley Carpenter is a communications
6 specialist whose expertise encompasses both
7 television and magazine. She is now serving on the
8 Board of Directors of the Southern California Indian
9 Center, a nonprofit center which serves one of the
10 nation's largest Indian populations. She began her
11 television career working in "Jeopardy!" both in
12 terms of coordinator and a representative involving
13 talent and representing the program in all facets of
14 its production.
15 She also has worked in and directed public
16 relations for Sony Picture Television in their first
17 cable venture for a number of years. And she is also
18 a noted artist, as well, where her work is seen
19 throughout the country.
20 Obviously she will be speaking, obviously
21 in her representation on the Board of the Southern
22 California Indian Center and their issues and
23 comments about the representation issues around
24 Native American programming, I believe.
25 So let me then go on to Jerry Isenberg.
11
1 I'm going to do all your bios all at once, and if I
2 speak fast it's only because of time.
3 Jerry Isenberg is also a noted veteran and
4 an accomplished producer and programmer working in
5 this business for a number of years. He comes armed,
6 obviously, with an academic background, but he's
7 obviously taken that before he reached the Annenberg
8 School to be working in all facets of production.
9 He's formed a number of companies including the Jozak
10 Company back in the '70s, and then in the '80s he
11 formed I&C Productions, all of which have generated a
12 number of impressive movies and films for television.
13 He's one of the most active producers. He
14 comes well regarded in this town, obviously. And I'm
15 quite sure his comments will be indeed provocative,
16 if not, to say the least.
17 Most recently, and I think at his present
18 point in the reincarnation of a life in this business
19 of reincarnation, he's now, I believe, a full-time
20 member of the faculty at USC here in Cinema-
21 Television as a full professor and as well as their
22 Executive Director of Electronic Media Programming.
23 And I think his vantage point of both working in the
24 field and having the opportunity to think about where
25 we're going, again, would be most welcome.
12
1 Marian Rees, another noted veteran in this
2 business of entertainment and programming. She has
3 worked a number of years in making what I think was
4 some of the most interesting and some of the most
5 thoughtful programming for television. She's
6 produced well over -- forgive me if the numbers are
7 off -- but, many, about a couple of dozen or three
8 dozen of well-noted programs. And she has been an
9 Emmy award winner. They include "Love Is Never
10 Silent, "Decoration Day, "A Son's Promise." And
11 she's most recently involved in a collaboration with
12 some public television money in developing a new set
13 of drama initiatives, which would be most sorely and
14 most welcome for public television.
15 She also has a recent strong record in
16 promoting and advocating to enrich the quality and
17 ethical content of programming in television. She is
18 the Co-Chair of the National Council for Film and
19 Television. She's held the post of president of
20 Women in Film for two consecutive terms. She's been
21 the vice president of the Academy of Television Arts
22 and Science. She's served on various notably boards
23 such as the American Film Institute, Women in Film,
24 the Humanitas Children's Award, and the Center for
25 Population Options and the Producers' Guild of
13
1 America. And she's currently serving on the Steering
2 Committee for the Caucus of Producers, Writers and
3 Directors.
4 Lastly, from Northern California, on the
5 wet side of our state, is Mr. Herb Chao Gunther.
6 He's the Executive Director and President of the
7 Public Media Center. He has extensive experience in
8 the design, implementation, evaluation of marketing
9 as it affects the nonprofit sector in shaping public
10 policy, media campaigns and advocacy that will, in
11 some ways, in one way or another, shape, I think,
12 domestic and international policy around the whole
13 issue of civic empowerment.
14 Many of his clients include: The
15 California Wellness Foundation, Planned Parenthood,
16 Self-help for the Elderly, Catholic Charities, the
17 Department of Labor. He's aware there has been an
18 issue, I would say, that PMC's been there to try to
19 shape, to involve and -- most importantly -- to
20 inform the public to make what I think are very
21 important decisions in our lives. I think his
22 comments today would certainly add to that list of
23 things we need to be concerned about in this era of
24 the new digital television.
25 So, again, my apologizes if my descriptions
14
1 of you are indeed short but, for the record, all of
2 this will be entered for our deliberation.
3 Let's begin with you, Kelley.
4 KELLEY L. CARPENTER, BOARD OF DIRECTORS
5 SOUTHERN CALIFORNIA INDIAN CENTER
6 MS. CARPENTER: Good morning. Thank you
7 for the kind reading of that bio. But I would like
8 to say that rather than working in "Jeopardy!" it was
9 on the show "Jeopardy!", although sometimes it felt
10 like the other.
11 And thank you again for the opportunity to
12 speak to you this morning and address community
13 concerns regarding major broadcast networks. In the
14 interest of time, I have put my comments in a very
15 succinct format and will be reading them to you, and
16 welcome any questions if there should be time for
17 them. So let me begin.
18 While working on the show "Jeopardy!", I
19 witnessed firsthand the immense influence that
20 American television broadcasters have on national and
21 international viewers. Technological developments
22 will only serve to expand the strongest arm of the
23 world's media. They will allow broadcast networks to
24 inspire, educate and galvanize the viewing
25 population, as well as create programming that serves
15
1 and unites individual communities.
2 I have the privilege of working with
3 community development professionals from a variety of
4 nonprofit and grass-roots organizations, all engaged
5 in projects designed to be of benefit. A common
6 concern I hear among these professionals is their
7 lack of access to major broadcast networks. Unless a
8 story arose that was suitable for immediate news
9 coverage, these professionals found quite regularly
10 that their phone calls weren't returned when they
11 tried to submit programming ideas. Although several
12 of these people had worked successfully with
13 community service departments at some of the
14 networks, for the most part they couldn't obtain the
15 coverage on stories that would have appealed to large
16 segments of the population.
17 When faced with closed doors at major
18 networks, these community spokespersons continue down
19 the television food chain until they reach local
20 cable access channels that will consider their
21 suggestions. While some coverage is certainly better
22 than no coverage, these spokespersons are nonetheless
23 frustrated in their attempts to reach large numbers
24 of viewers in their communities.
25 To address this challenge of community
16
1 access to programming, I'd like to suggest the
2 formation of community development panels within
3 networks, which would use and establish not-for-
4 profit criteria to accept, evaluate and produce story
5 ideas submitted by local community organizations.
6 The panels would solicit submissions on a regular
7 basis to offer these groups viable outlets for their
8 ideas, as well as offer viewers the types of human
9 interest stories that promote pride in their
10 communities.
11 Once organizations and service groups learn
12 that broadcasters are initiating this type of
13 programming, they could focus on submitting ideas
14 that could educate and inspire children, motivate
15 elders, eliminate cultural barriers and provide
16 viewers with information that they might not seek out
17 in any other media.
18 The stories could take the form of weekly
19 documentaries compiled into an hour of programming.
20 The key to their success, from a community
21 perspective, ladies and gentlemen, would be the time
22 slots in which they are aired. Airing community
23 stories at 2:00 or 3:00 a.m. doesn't really serve
24 these vital organization because the viewers who can
25 be inspired by or act on the information presented
17
1 are either working the night shift or they're
2 sleeping in preparation for work or school.
3 So perhaps broadcasters who air two hours
4 of daily local news broadcast could limit this news
5 coverage just one day a week, to begin, and air one
6 hour of well produced, compelling community
7 programming and one hour of local news. Advertisers
8 could support the production costs by sponsoring
9 segments within the community hour. If aired during
10 this time, during weekdays, the programming could
11 reach the viewers that would most benefit by it,
12 including children and teenagers.
13 Local news departments at the major
14 networks are to be applauded for their trend toward
15 inclusion of upbeat segments at the end of their
16 broadcast. And I might say that L.A. local networks
17 are very strong in this regard. When expanded into
18 documentaries, these segments could have an even
19 greater positive effect, providing a counterpoint to
20 the negative news stories that sometimes dishearten,
21 depress and distress viewers, especially in the case
22 of the community's youth and elderly.
23 The second issue I would like to request
24 that broadcasters address with a community
25 perspective is the issue of employment.
18
1 Broadcast networks bring the world into
2 viewers' homes every day. It follows that these
3 broadcasters are particularly poised to demonstrate
4 that the world can work together under one roof to
5 create successful programming.
6 At a recent awards dinner sponsored by
7 First Americans in the Arts, the Board of Trustees
8 presented Beth Sullivan, creator of "Dr. Quinn,
9 Medicine Woman" with an honorary award for her show's
10 accurate portray of American Indian life. In her
11 gracious acceptance speech, she commented that
12 although her staff practiced due diligence with
13 regards to historical research, she looked forward to
14 the day that American Indians could tell their own
15 stories through the television media as writers and
16 producers.
17 Taken in a larger context, her comments can
18 be applied to talented members of the community from
19 all backgrounds. In preparation for my testimony
20 this morning, I spoke to American Indian, Latino,
21 African-American and Asian-American students and
22 community members who still believe that there's a
23 glass ceiling where they're concerned with regards to
24 landing high-paying creative, production and
25 executive jobs at major broadcast networks. They are
19
1 encouraged by the cultural variety of on-air talent
2 which serves their particular demographics, but
3 wonder if those hiring choices extend to all
4 departments.
5 These students still believe -- and this is
6 their opinion -- that internships at broadcast
7 networks may lead to entry-level or technical
8 positions, but question if they'll open doors in a
9 hiring system that they consider to be based on "who
10 you know."
11 So in conclusion I'd like to add that jobs
12 at broadcast networks are highly coveted, no matter
13 who you are or what your background may be. The
14 advent of new technologies will create an even
15 greater number of jobs to fill as well as a greater
16 potential for diverse programming that will require
17 multicultural voices and talents.
18 If broadcast networks are incorporating
19 hiring policies that draw from a broad, multicultural
20 talent pool, communities would like to know about it.
21 This is yet another area in which broadcasters can
22 exhibit enlightened leadership in an increasingly
23 culturally diverse nation.
24 Thank you, Kelley.
25 MR. YEE: Jerry.
20
1 GERALD I. ISENBERG, CHAIRMAN
2 CAUCUS OF PRODUCERS, WRITERS AND DIRECTORS
3 MR. ISENBERG: Mr. Co-Chairmen,
4 distinguished members of the Commission, it's my
5 pleasure to appear before you today to discuss the
6 television creative community's concerns regarding
7 access and diversity of voices on free television as
8 we move into the digital age.
9 While I'm currently a Professor at the USC
10 School of Cinema-Television, it is as Chairman of the
11 Caucus of Producers, Writers and Directors that I
12 appear before you. The Caucus is an organization of
13 nearly 200 professionals in the television industry
14 elected to membership because of their creative
15 achievements. The primary mission of the Caucus is
16 to protect the creative rights of its members and to
17 work for a creative and financial environment that
18 supports our doing our best work.
19 It is my sad duty to report that the
20 environment for independent creative people in free
21 television has never been worse. Without
22 exaggeration, we are in the final stages of the
23 extermination of the independent creator in
24 television. In what has amounted to a business
25 version of "ethnic cleansing," the proud tradition of
21
1 creators working independently to produce
2 television's finest programming is being
3 systematically destroyed.
4 Twenty years ago, three networks controlled
5 95 percent of the prime-time audience. But the
6 product was, for the most part, produced by seven
7 nonaffiliated major studios; four mid-sized
8 independently-owned companies: Lorimar, Spelling,
9 MTM and Tandem; and a host of even smaller
10 entrepreneurial or talent-owned companies.
11 From "The Waltons" to "Family," from "All
12 in the Family" to the "Mary Tyler Moore Show"; from
13 movies such as "The Autobiography of Miss Jane
14 Pittman" to "The Missiles of October," these and
15 other independently-created and produced
16 entertainment were the hallmark of our medium.
17 Today we are blessed with an enormous
18 diversity of broadcast and cable services, yet we are
19 suffering from a systematic concentration of
20 production distribution activities into the hands of
21 those same people who are the exhibitors. At this
22 moment, approximately 90 percent of the prime-time
23 programming aired by the six national networks is
24 owned by those same six companies. That's
25 ABC/Disney, Fox, NBC/GE, CBS, Warner Brothers,
22
1 Viacom/Paramount or Sony or Universal -- Barry
2 Diller's company. They're the same.
3 These major corporations own and control
4 virtually every major cable service that produces
5 original series or movies. They produce for
6 themselves. They produce for each other. They
7 compete between themselves, yet act to exclude
8 everyone else. They dictate the conditions of access
9 for outsiders. They are a veritable American cartel.
10 So what? You might ask. What does the
11 demise of independent voices have to do with the
12 quality of television shows? Who really loses from
13 lack of diversity?
14 Let me tell you three short stories to
15 answer those questions. Two took place years ago and
16 could not happen today. The other is taking place
17 today and could not have happened 10 years ago.
18 In 1987 my company, Phoenix Entertainment,
19 developed a four-hour miniseries for ABC to star
20 Oprah Winfrey, "The Women of Brewster Place." When
21 it came time to decide whether to order the project,
22 ABC executives were deeply concerned that a
23 miniseries about seven poor African-American women
24 could not attract a sufficient audience. They
25 ordered the project as a three-hour one-night movie,
23
1 despite the calamitous effect the cuts would have on
2 the project.
3 My company discovered a way to afford to
4 shoot the fourth hour using our own money, based on
5 foreign values we believed existed. ABC was
6 incredulous: How could we do this? More to the
7 point, they were very unhappy with us because, of
8 course, ABC then had to reconsider based on the
9 opportunity to view the longer film.
10 After viewing the final film, ABC chose to
11 air the complete version to terrific reviews and
12 ratings that won the week for them and nearly won
13 them the season. We believed in our film. We had
14 the entrepreneurial abilities. We were willing to
15 risk our money. And the viewers won.
16 Ten years earlier, my company was the
17 producer of a two-hour movie for NBC on the life of
18 James Dean, written by Bill Bast, that focused on
19 Bill's relationship with Dean. At the last moment,
20 after the picture was ordered, someone at NBC had
21 second thoughts about some scenes which, while
22 acceptable to standards and practices, might not fit
23 the audience's "vision" of Dean. They ordered us to
24 make wholesale changes that would have emasculated
25 the movie and the truth of Bill Bast's life. We
24
1 refused. NBC threatened cancellation of the order.
2 We held firm and threatened legal action. Facing no
3 choice, they relented. And at the final screening
4 those same executives admitted they were wrong.
5 The picture stands today as maybe the
6 finest biography of one of America's true screen
7 icons. Without our ownership and independence, the
8 project would have been trashed. Again, the viewers
9 won.
10 Finally, today's story. NBC has recently
11 informed certain agents that they are preparing to
12 produce a series of movies for television which have
13 certain economic givens. All the main creative
14 talent will be offered Guild minimums or drastically
15 reduced fees and all the films will be produced and
16 owned by NBC itself. But last September, claiming
17 low ratings, NBC canceled the night of movies, most
18 of them produced by non-NBC entities using top-level
19 talent. Now NBC believes that lower-level talent
20 working for less can produce those ratings. Why?
21 NBC owns and controls all aspects of those programs.
22 Today the audience loses.
23 There are hundreds if not thousands of
24 similar stories. I'm sure the Co-Chair can
25 personally attest to how Lorimar saved the "The
25
1 Waltons" from cancellation in its first year by
2 appealing directly to the public when the network had
3 lost faith.
4 So I hope it is becoming clear. Who
5 suffers from the lack of diversity and concentration
6 of production in the hands of the
7 production/distribution cartel? It is the American
8 viewing public.
9 Finally the question arises: So what can
10 be done about this condition? And let me preface
11 this by noting that in the matter of independent
12 access, our interests and those of the networks,
13 including the network of the Co-Chair, Les Moonves,
14 seem to be in direct conflict.
15 In part, the demise of the independent
16 comedy series supplier can be traced to their
17 inability to compete with the vast wealth and powers
18 of the major companies in attracting the writing
19 and/or acting talent that is in favor with the
20 networks.
21 However, additionally and importantly,
22 independents lack the additional abilities of
23 controlling blockbuster film packages or current
24 on-air series, which act as an inducement to network
25 programmers to "give considerations" at order time,
26
1 scheduling or renewal time.
2 The historic path for independents gaining
3 access in the dramatic series business is through the
4 television movie segment of programming, the
5 "backdoor" entry into the series business. "The
6 Women of Brewster Place" actually received an order
7 for episodes based on that movie's success. But the
8 even more powerful story is how the Co-Chair's own
9 ex-company produced independently a movie called "The
10 Homecoming," which became "The Waltons" and which
11 launched Lorimar as a competitive series supplier.
12 The demise of the independent movie maker
13 is not based on large-scale economics. Historically,
14 the independents have always been more efficient
15 producers, more flexible and entrepreneurial business
16 people. The demise is based simply in the
17 broadcasters' desires to own the product and their
18 abilities to enforce it.
19 The solution? Short of a negotiated
20 settlement or the action of courts in an unfair
21 competition action, the only solution is to
22 re-mandate access through some form of government
23 intervention. Certainly requiring networks to
24 reserve a preponderance of television movies for
25 nonbroadcast or cable owners is practical and without
27
1 major economic consequences to the health of the
2 majors. Additionally, some smaller allowances for
3 series producers must be enacted to help break the
4 stranglehold of the majors.
5 Is this an optimal or even an attractive
6 solution? Not for all of us who believe in free
7 competition. Yet it is in the public interest to
8 have diversity of voices and independent access. And
9 the marketplace has clearly failed to protect both
10 public interests.
11 What we ask of you as you consider the
12 responsibilities of broadcasters, who have been
13 granted additional bandwidth for digital
14 transmission, is to demand diversity of production
15 voices, demand access for creators to do their work
16 in an environment that supports creativity.
17 Thank you.
18 MR. YEE: Thank you.
19 Marian.
20 MARIAN REES, STEERING COMMITTEE OF
21 THE CAUCUS FOR PRODUCERS, WRITERS AND DIRECTORS
22 MS. REES: Co-Chairman Mr. Moonves and Dr.
23 Ornstein and the members present of the Advisory
24 Committee on Public Obligations of Digital Television
25 Broadcasters -- mercifully known as the Gore
28
1 Commission -- my fellow panelists, colleagues and
2 guests, good morning.
3 It is a privilege and a responsibility to
4 share with you in the awesome task you have to
5 soberly consider the enormity of the exploding
6 horizon of digital TV and its perceived impact on the
7 industry we live in and work in together.
8 For us to contribute by way of informing,
9 enlightening and/or guiding your deliberations toward
10 formulating your final report in October 1998, it is
11 a daunting challenge.
12 The only way for me to gain any confidence
13 in why I'm here and/or how I can meaningfully
14 contribute, I must contain my remarks to that which I
15 know only by virtue of my lifelong experience in the
16 television industry.
17 To begin my remarks, it seemed first to
18 talk about the producer, more specifically, the
19 independent producer; even more accurately, as I am
20 defined, an entrepreneurial independent producer.
21 There is a continual speculation about how to define
22 or recognize a producer beyond the title, as in the
23 recent movie "Wag the Dog." The most pejorative
24 image of a producer was brilliantly portrayed by
25 Dustin Hoffman.
29
1 What and who are the independent producers?
2 We like to think the producer is integral to an
3 industry whose core product is crafted out of ideas,
4 ideas that in and of themselves lie dormant until an
5 impassioned producer breathes life into it, protects
6 and gathers about him or her all the resources to
7 realize and deliver it for broadcast. We are a
8 fiercely independent, highly competitive and
9 intensely passionate group.
10 We come from a wide range of diversity, of
11 backgrounds and geographical locations. How did a
12 youngster growing up in a small Iowa town, who first
13 wanted to be a missionary; then shifted her goal to
14 working at the United Nations, a goal she pursued all
15 the way to New York after college at Iowa University,
16 find herself across the continent in a temporary job
17 as a receptionist at NBC to earn her bus fare home,
18 and these years later and thirty-some films produced,
19 find herself sitting before this august body? It's
20 been a wondrous journey.
21 In many ways, television and I grew up
22 together. From receptionist to a producer is a
23 tribute to television itself that one person's vision
24 can be supported and found to be viable in an
25 intensely profit-driven industry. Independent
30
1 producers like Grant Tinker, Norman Lear, Marsy
2 Carsey, Tom Werner, Steve Bochko, Bonny Dore, Jerrys
3 Isenberg and Abrams, Suzanne DePasse, Dorothea
4 Petrie, my partner Anne Hopkins -- all are legend.
5 The roster is growing with the influx of a generation
6 of producers who take the opportunities we have
7 pioneered for granted. And they should.
8 The role of the independent producer is
9 unique. Those of us who have assumed the financial
10 risk of our programming, unattached to a studio or a
11 network as employees, are not as maverick as it may
12 seem. Rather, that independence gave us the ability
13 to move about freely in the marketplace, to find the
14 right home for our idea that could, would assure its
15 integrity.
16 For me, who chose to mortgage her home, her
17 car and insurance to start her own company, to strive
18 for excellence was possible through the balanced
19 environment regulated by the financial interest rules
20 and regulations. An entrepreneurial woman producer
21 was unthinkable before the 1970s, when the Equal
22 Opportunities Act was passed into law. The door of
23 opportunity for us women was opened. A decade later,
24 my risk was minimized by a direct access to a
25 regulated marketplace.
31
1 Let me describe an experience which I hope
2 will illustrate the necessity for freedom of access.
3 "Love Is Never Silent" is now legend as the film that
4 would never get made at the network which broadcast
5 many of my movies through the years.
6 A story of a family: A deaf couple with a
7 hearing daughter. It was inherently a difficult
8 sale. But my commitment to cast actors who were deaf
9 in principal, in the starring roles, was
10 insurmountable. I became inflexibly determined to
11 put a public face to the diversity issue and to
12 defrock the veiled ignorance, the myth that "to be
13 deaf was to be dumb."
14 For prime-time television it was considered
15 a taboo -- fearing that the audience would not watch
16 and advertisers would shun any such film. In this
17 case Hallmark joined in unflappable support of the
18 project, accepting my stance on casting. Despite the
19 significant support from Hallmark, the network held
20 firm in their resistance, stubbornly refusing to
21 approve Phyllis Frelick and equally talented Ed
22 Waterstreet, both gifted deaf actors, to be cast in
23 the leads. The edict came back: Unless we cast
24 Joanne Woodward and Paul Newman in the roles, the
25 movie would never get made.
32
1 Now a side comment, which I said to the
2 executive, consider that I could call Joanne and Mr.
3 Newman and invite them to appear in the movie, did
4 the network realize that in a two-hour movie neither
5 of these gifted actors would speak one word? There
6 was a long pause on the phone.
7 Well, we held firm. And with Hallmark's
8 blessing, I took the film to another network, where
9 it aired to high rating, critically acclaimed and
10 winning the Emmy for the Best Movie of the Year.
11 It is important to note that had I been an
12 employee of the network this movie simply would have
13 never been made. As an independent owning the film,
14 I was free to move the film and have access to
15 another market.
16 Throughout my career I have consistently
17 favored and benefitted from an entertainment
18 marketplace that assured the creative process as much
19 flexibility and access as possible. I fear the
20 concentration of ownership we are now experiencing,
21 which has already diminished the fragile nature of
22 the independent producing community. I fear that
23 concentration will be passed on into the digital
24 future, where the broadcasters will have as many as
25 six channels instead of the current one.
33
1 I humbly suggest to this Commission that,
2 as you develop your report on the public policy in
3 the expanded world of digital TV, you will address
4 the value and needs of the true independent
5 production community. I believe that it is important
6 from a public policy standpoint to establish some
7 content-neutral regulatory mechanism to allow that
8 community to gain access to the digital television
9 airwaves during prime time.
10 The challenges to the digital world is to
11 cherish, nurture and provide access to those
12 producers, especially those that are burgeoning all
13 over the country in our colleges and universities,
14 already absorbed and comfortable in the tumultuous
15 world of communications technology. Those aspiring
16 producers will be the ones to flourish in the digital
17 future only if -- and I am here on suggest two things
18 -- one, secure the opportunity to provide more
19 programming that will reach different and diverse
20 viewers; and, two, assure the creative community that
21 you want substantial ideas that help people
22 understand what's happening in their lives, that
23 those ideas have access.
24 These public policy deliberations on the
25 obligations of digital broadcasting, to quote Vice
34
1 President Gore, may be the last chance to assure that
2 the public interest be served.
3 Hopefully wise men and women like
4 yourselves who help shape public policy will
5 formulate First Amendment-sensitive government
6 policies that will balance the explosion of
7 opportunities for the broadcasters by a significant
8 commitment to the public interest. I do believe that
9 such a commitment would ensure the independent
10 spectrum the vital prime-time access to the digital
11 spectrum.
12 In Vice President Gore's closing remarks to
13 this Commission at its inaugural meeting he stated, I
14 quote, "Beyond free enterprise, we must also
15 acknowledge that broadcasting is not a right, but a
16 privilege, one that confers great responsibilities,"
17 close quote.
18 I can assure you that a vigorous
19 independent production community would stand ready to
20 share those great responsibilities if given the
21 opportunity, if provided the access.
22 Thank you.
23 MR. YEE: Thank you, Marian.
24 Mr. Gunther.
25 MR. GUNTHER: I think when Jim first
35
1 invited me to come to address the Gore Commission, I
2 thought it had something to do with violence on
3 television. Unhappily, I found out it was simply
4 named after the Vice President.
5 I don't come here representing the
6 independent production community. I think I'm here
7 for several reasons. Gigi, from Media Access
8 Project, will remember the Public Media Center. It's
9 the organization that has its name on the landmark
10 case that established the Fairness Doctrine. It was
11 a court decision, Public Media Center versus KATY,
12 that first established the practical definition of
13 the Fairness Doctrine as applied to providing balance
14 on television spots of a political nature.
15 You're in California. You probably are not
16 aware that there is something going on here that is
17 analogous to what you have been asked to address as a
18 Commission, which is this transition in technology.
19 We have in California underway, unbeknownst to most
20 of the citizenry, a comparable transition in
21 technology in the deregulation of electricity, a
22 massive shift in the paradigm around which
23 electricity is produced and distributed. It's
24 happening first in California and slowly it will
25 trickle across the rest of the country. And it is a
36
1 massive shift in that paradigm. It is not unlike
2 what you all are looking at in terms of the
3 introduction of digital technology to television,
4 broadcast television.
5 It would be worth looking at the experience
6 in California very briefly. A hundred million
7 dollars has been spent by the utilities trying to get
8 people excited about the transition to a deregulated
9 marketplace -- a hundred million dollars -- which has
10 resulted in 29,000 people in California out of a
11 potential 11 million ratebase expressing an interest
12 in changing their electric providers.
13 There has been a rather dramatic reaction
14 from the public as they've learned the cost of
15 deregulation. Forty-five cents of every dollar they
16 pay their utilities for the next five years is being
17 diverted to pay off the three incumbent monopoly
18 utilities for their stranded nuclear assets. People
19 weren't aware that this was happening. When they saw
20 it on their bills beginning in January, the folks in
21 Sacramento began to hear about it.
22 You need to be aware of that process
23 because there is a comparable surprise the public is
24 going to express when they find that there has been
25 this tremendous transfer of public assets into the
37
1 hands of people who really haven't demonstrated
2 anything that would leave the public with a lot of
3 confidence, that you know or you deserve an
4 opportunity to program the public resources that are
5 being put into your hands, or to meet the public
6 interest obligations that historically you have a
7 dramatic poor track record in achieving.
8 In California we have the initiative
9 process. And already there is an initiative being
10 qualified for the November ballot, and polls
11 currently indicate that 80 percent of Californians
12 who are likely to vote will pass an initiative that
13 will essentially undermine deregulation as the
14 legislators have defined it and take away the
15 wholesale give-away to the incumbent monopoly
16 utilities.
17 Now if we had a national initiative or
18 referendum, I suggest that likewise, if the public
19 were to find out the terms of this transfer of public
20 assets and how little we're getting, that that
21 initiative would have probably a vast majority of
22 opposition as well.
23 The entire process of this Commission is
24 interesting. I would have preferred a process where
25 we heard the ideas from you as to what you, in fact,
38
1 proposed to do with this gift from the public,
2 instead of us coming before you to recite the
3 problems of trusting you to do what's best; of
4 trusting you to meet the public interest obligations
5 that you have, by and large, failed to meet -- the
6 history of modern broadcasting.
7 Obviously the issues are much broader, much
8 wider than how the independent film production
9 community has been affected. Entire communities have
10 been left out. Entire ideas, ideologies have gone
11 unrepresented in what has been essentially a dominant
12 commercial paradigm, television as a sales tool in
13 that alone.
14 I think you can trace most of the social
15 pathologies in our cultural probably to the dominance
16 of a technology that has been used for nothing else
17 than to sell things with very little room for
18 anything else. Those of you who have resisted that
19 process should be proud that you've resisted. Those
20 of you who have been part of that process, I
21 certainly think this is the time to examine your
22 commitment to what your role as public trustees need
23 to be.
24 As I said, look at the deregulation
25 experience in California. It had very little public
39
1 participation. It is, by definition, an illegitimate
2 political process: Very little public width, very
3 little depth and very little width in terms of public
4 participation.
5 And I certainly hope the public has an
6 opportunity to learn about from you your news
7 operations, where any comment, any news story
8 coverage of digital television and this gift of
9 public resources to the principal economic interests
10 that have dominated this market has gone, by and
11 large, unreported. There has been very little public
12 information.
13 And despite your best efforts to involve
14 the community in these hearings and to have
15 individuals like ourselves on this panel come and
16 talk to you, the fact is most of America has no idea
17 that this is going on. They will wake up one morning
18 to find out that you have amassed even more
19 resources. And given the rather poor track record of
20 the past, I don't think you're going to have happy
21 campers then.
22 As I said, if there were a national
23 referendum, this would not pass.
24 You know I think it was Senator Dole who,
25 in fact, used the term "corporate welfare" as calling
40
1 the give-away here. And interesting because Mr. Dole
2 obviously, as one of the Republican tribal leaders,
3 is enamored of a market paradigm and would like to
4 see the marketplace work with real competition of
5 interest. And I think I would concur with former
6 Senator Dole.
7 You know it really is incumbent on the
8 industry to set and achieve higher standards of
9 public access, diversity of viewpoints, all the
10 things that even sound funny for me to mention,
11 because it feels like it's an alien language to use.
12 I think the dominance of commercial purposes,
13 television, as I said, has got to be an underlying
14 cause for the deterioration of democratic values in
15 our society.
16 The fact that we have such poor voter
17 turnout, the fact that you all have been asked to
18 look at the role of money in politics and how
19 television can speak to that problem begs the
20 question of the role of television itself in having
21 distorted our Constitution, our culture -- our
22 political culture certainly -- and flattened
23 everything into a commercial marketplace where there
24 is little room for anything else, including higher
25 purposes.
41
1 I think we would look to you for a
2 restatement, a reformulation of a public interest
3 standard. I hope the Gore Commission certainly tells
4 us why the commercial broadcast industry deserves
5 this gift from the public and how you plan on being
6 accountable to the American people in terms of what
7 you do with this gift of the spectrum; and that you
8 define some process by which the public can actually
9 signal its participation and its unhappiness with
10 your failure to do anything more creative and more
11 responsive than you've done in the past.
12 I think that a higher standard, something
13 that goes beyond the use of commercial television
14 entirely for the purposes of buying and selling would
15 be a good place to start.
16 The kinds of models that you ought to look
17 at, I mean probably the best example, most compelling
18 example of the pernicious influence of commercial
19 television on other access opportunities, beginning
20 with public television, is how commercial public
21 television has become. There isn't a public
22 broadcaster that doesn't talk in terms of audience,
23 doesn't talk in terms of ratings for their programs
24 when, in fact, in the enabling legislation for public
25 broadcasting we very specifically said that public
42
1 broadcasting was going to be exempt from the
2 pressures of finding an audience, exempt from the
3 pressures that commercial television imposes upon
4 itself.
5 And public broadcasting is a thin mirror
6 these days of commercial television. And certainly
7 to the extent that you all as a Commission can
8 address the shortcomings of public broadcasting as
9 sort of a pale imitation of commercial television, we
10 might then see public broadcasting as a genuine
11 alternative as well.
12 With that, let me end my comments.
13 MR. YEE: Thank you, Herb.
14 I don't know where to begin. We have heard
15 quite a range of commentary of both history concerns
16 and challenge. And I can only speak for myself as a
17 member of this Commission, that coming out to meet
18 with the public, in this case here in Los Angeles, in
19 California, affords us an opportunity to be reminded
20 as well as to engage ourselves more broadly, and I
21 think we will endeavor to do that.
22 CO-CHAIR MOONVES: Jim, I would like to
23 make a comment, if I may.
24 First of all, Mr. Gunther, I've never been
25 compared to Jeffrey Dahmer or Charles Manson before
43
1 as much as I have today, so thank you very much for
2 making every broadcaster the most despicable,
3 disreputable human being on the face of the planet.
4 MR. GUNTHER: It wasn't meant personally.
5 CO-CHAIR MOONVES: You know what, there is
6 more to broadcasting than how you present it.
7 I have to address the two people on my
8 right who are close friends and colleagues and both
9 people whom I have worked with very closely on a
10 number of projects. Ms. Rees and I won an Emmy award
11 together.
12 I think this panel, and I was not aware
13 that this panel, called Independent Programming and
14 Access in the Digital Age, should have been properly
15 titled, "Let's bash the networks." I feel it is
16 necessary, since no one was added to this panel on
17 the part of the broadcasters or producers, who may
18 have had a more satisfactory experience as a producer
19 with a broadcast, so I feel it's incumbent upon me to
20 sort of remove my role as Co-Chairman of this
21 Commission and make some statements to this panel
22 about what exists today in the television industry.
23 The industry has evolved to a very
24 different place than it was before. Granted, the
25 independent production companies: the MTMs, the
44
1 Lorimars, the Tandems have disappeared. They are
2 gone. Once upon a time I was president of a company
3 called Lorimar. Subsequent to that, the economics of
4 the system have changed.
5 Granted, as Mr. Isenberg said, the
6 concentration of the power of what is on the
7 commercial broadcast systems today is in the major
8 companies. However, the independent producer has not
9 lost his power. Instead, he is being paid millions
10 and millions and millions of dollars by the studios
11 to become exclusive to that particular studio.
12 David Kelley who creates a show like
13 "Chicago Hope" or "Ally McBeal" or "The Practice" is
14 paid by Twentieth Century Fox many million dollars of
15 dollars to be at that studio. Has he lost his
16 independence? I would say no.
17 The people who created "Seinfeld" are part
18 of Castle Rock which is part of Warner Brothers.
19 Have they lost their creative ability? I would say,
20 once again, no. They are still independent. The
21 economic system has changed.
22 I think the speeches that Mr. Isenberg and
23 Ms. Rees made would have been more appropriate, and I
24 think some of them may have been pulled out of the
25 files when we were dealing with the changes in the
45
1 financial interest rules, which enabled the networks
2 to own their own product. Yes, there are very ugly
3 stories, and we've lived them. But the ugly stories
4 to which both these people referred existed 30 years
5 ago, as well, with network interference, with network
6 problems. And they will continue on many years from
7 now.
8 So I would argue that the independent
9 producer has not disappeared. In fact, he has had to
10 change where he gets his money and what happens
11 within the system, because now he's being paid a
12 guaranty in front by the studio, which means whether
13 or not he succeeds or not he will be paid a sizable
14 sum of money. And I think you will deal with the
15 fact that if you analyze the number of producers in
16 the world today on commercial television, you'll find
17 the economics for them are greatly increased.
18 So having said that, I will turn it back to
19 you, sir.
20 MR. YEE: Thank you.
21 I'm trying to figure out what the next
22 steps are because we have some time to engage in
23 questions and answer and commentary, as Les has done.
24 I'd like to open this up to the members of the
25 Commission to perhaps respond, inquire to our four
46
1 guest panelists, because I know time is of an issue.
2 I'm sure the content of your remarks will indeed come
3 back in our deliberations, most surely. But because
4 of time, I wish to open up the Q&A to the members of
5 this Commission as well.
6 Karen.
7 MS. PELTZ STRAUSS: Thank you for coming
8 here today. First of all, I want to thank you for
9 "Love Is Never Silent." I'm with the National
10 Association of the Deaf, and we appreciate the use of
11 deaf actors.
12 But, beyond that, you mentioned the need
13 for a content-neutral regulatory mechanism to enable
14 independent producers to have access to the networks.
15 Although Ms. Carpenter did talk about one
16 means of accomplishing this, for example, one hour of
17 community programming each week, I'd like to know if
18 any of the rest of you have any concrete proposals
19 for how you would achieve this. Specifically, how
20 you would make room within the existing commercial
21 paradigm, as you call it, for this independent
22 programming.
23 MR. GUNTHER: Yes. We had an experiment.
24 Unfortunately, it never reached its potential. It
25 was called local access time. We had three hours
47
1 which all local television stations were to program
2 for local community purposes, news programming, which
3 unfortunately became the catalyst for the independent
4 syndication market.
5 It wasn't the concept when the FCC went
6 with the rulemaking procedure of creating local
7 access time, three hours every night, with the
8 restriction that it not be network programming, that
9 it not be, that it be anything other than "Jeopardy!"
10 or game shows, which is what those three hours
11 became, not children's programming, not news
12 programming.
13 There isn't one major market where
14 successfully during those three hours in the brief
15 period when local access time had its opportunity
16 that any market, any commercial television station in
17 any market delivered on the potential of local access
18 time. It certainly is an appropriate moment to
19 revitalize that concept. And perhaps with the
20 lessons learned from the past, making sure that
21 syndicated programming doesn't then fill the
22 definition of what's to go in local access time.
23 MR. ISENBERG: I'm Jerry Isenberg. We
24 suggested that specific forms of program, which were
25 television movies, for example, that a specific
48
1 set-aside of some percentage for nonowned producers
2 is a simple solution.
3 I think the comment the Chair offered, that
4 we may have dusted off some speeches from the
5 financial interest states is somewhat specious. And,
6 I'm sorry, I don't like it. That's not what we're
7 suggesting, we go back to that complex and wide a
8 band.
9 We understand that the economic
10 circumstances have changed, but the complete
11 surrender to owned, the merged together of the
12 producing elements in the broadcast elements into one
13 combined, vertical entity, which was unthinkable,
14 basically institutionalizes creativity into business
15 plans. And you can go back to 2,000 years ago and
16 you will find that the greatest creativities, the
17 great brilliance of art was designed independently.
18 It was created independently. It did not come out of
19 a business plan. It did not fit the model of CBS'
20 need for ratings. And that's what's lost.
21 CO-CHAIR MOONVES: But some of the were
22 paid by the Court, weren't they?
23 MR. ISENBERG: The money.
24 CO-CHAIR MOONVES: They were under
25 contract?
49
1 MR. ISENBERG: Yes, they were.
2 MS. PELTZ STRAUSS: Just one quick
3 follow-up question. You talk about a specific
4 set-aside. Is that basically what you're asking our
5 Commission to do and do you have any proposed
6 percentages?
7 MR. ISENBERG: I would rather not offer a
8 proposed percentage, because that's -- I mean the
9 percentage I'd like to offer is a hundred percent.
10 That's a great one, and we'll go down from there.
11 I think it varies. I think the television
12 movie business, which is where I want to focus
13 because it's an historic entry point in the dramatic
14 series business. There's no real economic need for
15 the broadcasters to own television movies. They
16 could literally cut their license fees and let
17 independents do it, and economically it doesn't mean
18 anything to them. It's nice. It makes them a little
19 bit more money.
20 When you get into the series business,
21 you're beginning to get into macroeconomics that are
22 different. And I think the percentage of set-aside
23 in the series business would be somewhat less.
24 It's interesting to note that all news and
25 public information is network owned. All the
50
1 networks have a policy that in prime time all their
2 news shows or all their information shows are network
3 owned. There is no -- zero -- place in broadcasting
4 for someone other than the network news department to
5 develop a news show.
6 MR. YEE: Thank you.
7 In this order I have: Jose Ruiz, Norman
8 and Charles and then Paul.
9 MR. RUIZ: First I'd like to thank the
10 panelists for taking time out of their day to come
11 and share with us their expertise.
12 We spent a lot of time on the technology
13 and the capacity of the technology. And now I think
14 we're moving more into a content issue. And I've
15 heard things like community development committees,
16 employment, independent access, diversity of
17 production services. I've heard about programming
18 like "The Waltons," "Love Is Never Silent," "Children
19 of a Lessor God."
20 You as producers in producing that type of
21 programming, which is programming to me that shows
22 the human side, the American experience side of us,
23 what are the difficulties and could it have been
24 casted to be a Native American family, an Asian
25 family, a Latino family, in one case, an
51
1 African-American family, why don't we see more
2 programming on the human experience, the American
3 experience that deals with other groups?
4 MS. REES: I'm going to risk to answer that
5 question, but I first have to respond to Les and to
6 all of you.
7 I think the purpose that brought me here
8 today was not to carp about the past, Les. I mean
9 it's really the future that is your concern. And I
10 won't be producing for digital TV, I'm quite sure.
11 I'm hoping to get to Santa Barbara with Jerry. But I
12 am always compelled by the idea. And if I were to
13 say anything, this is not a self-serving appearance
14 that I make before you today, it is not, it would be
15 to hopefully urge you to keep in your deliberations a
16 mindset of that future, and that there is a ground
17 swell of very diverse and talented and eager young
18 people who want access. And I think that's what
19 we're talking about.
20 I think it's very difficult to answer you
21 directly, Jose, in the current -- except for you. I
22 have to come back and congratulate you for the Ann
23 Margaret series. It's a real wonderful step outside
24 of the status quo, Les. I really, really do,
25 sincerely. But there are the constraints of the
52
1 commercialization of television as a sales tool.
2 And I can't give a lecture on the dynamics
3 of a very intricate system of cost per minute or cost
4 per second, as it's coming down to. I do understand
5 that dynamic. I do know that I've been challenged
6 every time. Well, I don't think that idea will
7 garner an audience.
8 How can we deliberate that in that six-band
9 spectrum that there will be, through your
10 deliberations, an embrace of the idea that ideas are
11 the product, but they are consumed. And I feel
12 strongly that that focused, concentrated sense on the
13 bottom line, it is a profit industry -- I understand
14 that -- but it seems imperative that in the face of
15 our growing diversity and its intense eagerness to
16 participate in a multicultural nation that's the
17 future.
18 It's been denied right now because, in many
19 respects -- my opinion, I am not an authority, I
20 experience it through the desire that I want to do a
21 story. I tried very desperately to sell the Carl
22 Gorman story. And for those of you who have read any
23 of the newspapers, Carl Gorman recently passed. An
24 extraordinary leader in the Native American
25 community. An extraordinary man. A dedicated hero,
53
1 soft-spoken, an artist. Nobody wanted to hear that
2 story. Nobody wanted to be interested in that story.
3 I went everywhere.
4 And until recently, I mean Latino stories
5 have been very difficult. You know that. But they
6 do buy. They are consumers. Somebody has to lift
7 the level of expectation of television. And I don't
8 know how you will pass your deliberations on, but if
9 there's any way in the spectrum, which I kind of
10 think of as the rainbow in the sky -- I mean look at
11 the hues that can be there. We don't want it black
12 and white. That's not a rainbow. But even a band,
13 one spectrum, almost like a Sundance, where those who
14 have ideas and can find ways to do them that don't
15 cost $40 million, let them have access.
16 I just keep coming back to that: Provide
17 the opportunity. There are Asians, Latinos -- there
18 are Americans coming out of our educational systems
19 that are ready to tell their story from their point
20 of view, from their perspective and from their voice.
21 It is essential to me that our future be protected
22 from this narrowing of ideas to a perceived audience,
23 to a perceived profitability.
24 There's room for it all. Just protect some
25 room.
54
1 MR. YEE: Do you wish to respond?
2 MS. CARPENTER: Yes, I'd like to respond to
3 that.
4 I'd like to say that I think this panel,
5 this Committee is very exciting and that you're
6 listening, at least, to the genuine hunger for access
7 by community members and by multiculturally talented
8 writers, producers, et cetera.
9 And to answer the question of stories for
10 different groups and why we don't see more of them, I
11 think with a number of factors over the past several
12 years, a lot of cultural pride is emerging in the
13 different varied communities. And people that might
14 have felt discouraged in the past are now realizing
15 they do have a voice, and they will become more
16 insistent, and they will not give up and they will
17 knock on more doors for hiring, for producing, et
18 cetera.
19 And the wonderful thing about this
20 insistence is that you're now providing the access to
21 it. So it's almost a great synchronicity, I think.
22 And I think that you have that responsibility, and I
23 think you're taking it seriously. So I think you
24 will see more stories because the pride is there and
25 the access will be there, and those two combined --
55
1 obviously I have a positive viewpoint on this -- but
2 I think it will be successful. I don't think it will
3 happen over night because things take longer in
4 development, as you know. But I think in a couple of
5 years it will become more standard fare, and I think
6 access is the first key.
7 CO-CHAIR ORNSTEIN: I want to thank you all
8 for coming and for your passion. I must tell you I'm
9 a little disappointed in the panel overall. I had
10 expected we would have some other things discussed.
11 Our mandate is in significant part to look
12 at what makes the digital age different from the
13 analog age, an age in which we're going to see a
14 veritable explosion of outlets for broadcasters and
15 different ways of approaching things.
16 And I had expected we would have some
17 discussion of what plans were being made or, if there
18 were any, for filling all of these different outlets
19 and not just to focus on the notion that because we
20 have this new grant of spectrum that we should use
21 our leverage to kind of bludgeon people to move from
22 an oligopolistic setting to something more.
23 Let me frame a question then in the
24 following way. We're moving into an era where we are
25 going to have very possibly, we don't know exactly,
56
1 but we're going to see broadcasters -- and remember
2 that the networks here, we consider only because they
3 own stations. Our focus is not networks; it's
4 stations -- but where stations are going to have the
5 capacity at times to put on six or eight different
6 programs at the same time or channels at the same
7 time, transmitting data, sometimes transmitting
8 broadcasts. It's also, of course, in an era where
9 there will be an explosion of other outlets of
10 programming.
11 So presumably the whole marketplace is
12 going to change in some fashion. The demand for
13 programming, for something to fill those channels and
14 to attract viewers is going to be different and much
15 greater. Isn't it likely under those circumstances
16 that a small set of outlets, which after all was
17 three networks, now it's four or five or six, and
18 we're seeing some of the greatest creativity emerging
19 on some of those other networks, UPN or even Fox in
20 some cases, where they're having outlets for programs
21 like "Ally McBeal" or that new UPN show -- what's
22 the --
23 CO-CHAIR MOONVES: "Dawson's Creek."
24 CO-CHAIR ORNSTEIN: -- "Dawson's Creek,"
25 that certainly have some very positive elements to
57
1 them; that when you move to a situation where at
2 least at different times of the day where there's now
3 one stream of programming, there may be five or six,
4 it's going to be impossible for a small group of
5 oligopolists to basically maintain a stranglehold on
6 what's going on. And the demand and, in fact, the
7 leverage of those who come up with creativity and
8 programs and options will be much greater. And the
9 opportunity to fill niches will be greater as well.
10 MR. ISENBERG: Let me say, number one, as
11 regards stations in the major marketplaces, virtually
12 all the VHF stations are owned by networks. That is
13 the way networks get formed, by owning the stations
14 in their own major cities. The government has
15 basically allowed them to expand the coverage, so
16 CBS, NBC, ABC/Disney have expanded their ownership.
17 Secondly, as regards plans of kinds of
18 programming in the digital age, I think everybody, at
19 least in my School of Cinema-Television, we talk
20 about it a lot. We talk about lots of interactive
21 forms. And I think there's going to be a great
22 blossoming in the forms of programming through the
23 digital age. I don't think you have to worry about
24 it. It's coming. The creativeness of our
25 communities will give it to you.
58
1 As far as the naive assumption that
2 sixplexing the spectrum is going to bring out a vast
3 expansion of opportunities for independents, if you
4 went back 15 years and you looked at cable and you
5 said, "We're about to go from a three-network economy
6 to a fifty-network economy. Wow. It's going to be
7 great for independents"; it didn't happen. So I
8 don't see any reason we should assume it's going to
9 happen when you sixplex it. Most of the major cable
10 services are owned by the same companies.
11 The dream of cable is that we will get out
12 of broadcast system which destroys programming to
13 minorities. I mean my history over 30 years in this
14 industry is when you walk into a network and you
15 propose something that is specific to an ethnic
16 section, the programmer will turn, "Yeah, but how do
17 we cross over?"
18 It was that problem with "The Women of
19 Brewster Place." There's a million stories like
20 this. And that is the nature of the broadcast
21 medium. In theory, cable gets past that because
22 you're going to get into Black Entertainment
23 Television, blah-blah-blah.
24 But still the issue has always been: If
25 the public is deserving of excellence, does
59
1 excellence come from large corporations or can and is
2 -- yes, to some extent, it does, by the way. It
3 isn't that large corporations can't produce
4 excellence. They do. I mean there's too much good
5 television right now, especially in the dramatic
6 form. And the dramatic form is because of the power
7 of the Dick Wolfs and the Steve Bochkos who, frankly,
8 no network with a brain will mess with. But that's
9 great for the established, $10 million player. It
10 isn't an answer to excellence throughout.
11 MR. BENTON: So it sounds like you should
12 be testifying in front of the Antitrust Division and
13 not us.
14 MR. ISENBERG: In all probability, that's
15 going to end up there if we could get enough people
16 who not afraid of being blackballed together. You
17 know the problem of putting antitrust case together
18 in this industry is, if you put your name on it, you
19 probably are out of the industry. So we need a whole
20 bunch of people at my age and independents to do
21 this.
22 MR. YEE: If I could --
23 CO-CHAIR MOONVES: Just consider yourself
24 out of the industry already.
25 (Laughter.)
60
1 MR. ISENBERG: At least as a dependency.
2 I've dropped the co-dependency issue. There was no
3 co-dependency.
4 MR. YEE: In the remaining time of my
5 moderation, I need to move this along.
6 Herb, 20 seconds, then I need to get to the
7 other Commission members.
8 MR. GUNTHER: Yes. My rather mild
9 observations should not be taken as anything other
10 than just rather mild observations. I think my
11 critique of the failure of the broadcast industry to
12 meet the public interest standards from before
13 certainly leaves one with no sense of optimism, that
14 in the digital age we're going to see a higher
15 standard met.
16 And certainly this is not intended to do
17 network bashing. And I'm rather puzzled and
18 concerned that what is, in fact, sitting right next
19 to you, Mr. Benton -- the Benton Foundation certainly
20 provides a much more articulate and specific critique
21 of the broadcast industry and has over the last 25
22 years. And Mr. Benton on the panel, I'm sure you
23 respect his views and respect his perspective. But I
24 certainly have not said anything other than what the
25 Benton Foundation itself has tried to raise, the
61
1 issues it's tried to raise about this.
2 The fact is regulation has benefitted the
3 regulated. It has not benefitted communities. And
4 the conversation here about independent production
5 and public access, public access is about creating in
6 your imagination some new ways that the public can
7 use a technology for some of the loftier purposes
8 that have to do with the survival of the democratic
9 values in our society besides entertainment,
10 distraction and trivia. And my thesis is simply that
11 you should be telling us what your plans are.
12 And as for the Fairness Doctrine, which we
13 know no longer is in force, certainly my view
14 expressed today here, the views of the panel itself,
15 this Commission represents, by and large, the
16 dominant view of the industry. I mean hardly to
17 consider me other than a voice in the wilderness when
18 it comes to raising some of these issues. I'm simply
19 saying that the legitimacy of this process turns on
20 broader public awareness of the process,
21 participation.
22 And if the public were part of this
23 process, you will find that they do not understand
24 the concept of regulation benefitting the regulated,
25 a gift of, what, 20 to $50 billion worth of spectrum
62
1 to a small group of very powerful economic interests.
2 Put yourself in the shoes of the public, what is
3 going on with this transfer of public resources.
4 It's like giving away all of our national parks to a
5 few developers. You'd be concerned, too.
6 These are not wild-eyed, ideologically-
7 tainted concerns, but simply good old American values
8 here. You know, we're not getting the good deal.
9 And you guys should be telling us what you're giving
10 us for this exchange because, the fact is, we're not
11 getting much.
12 MR. YEE: In this order: Charles, Paul,
13 Karen and, lastly, Gigi.
14 CO-CHAIR ORNSTEIN: I'm not sure how much
15 time we're going to have to complete this, Jim.
16 MR. YEE: I know. I'm just -- okay.
17 MR. BENTON: Thanks for those comments,
18 Herb.
19 I want to address the issues of structure
20 and money, because two years ago the new regulatory
21 framework of the Telecommunications Act brought
22 telephones, cable and broadcasting into one
23 regulatory framework. The reason for this was more
24 competition, in theory, and to try to deal in a
25 structural way with the concentration of control in
63
1 these three mega-industries.
2 I think the last years have shown that we
3 have not only not created much more competition, but
4 the concentration of control seems to be growing.
5 And so my first question, and then I'll make my
6 second point and then stop, is: Had you thought
7 about alternative structures? Channel 4 in England
8 is often cited as one great and very successful
9 public/private combination model that we might be
10 thinking about here in this country. There are
11 certainly other models.
12 But the structural issue of access for
13 independence is then combined with the second point,
14 which is money. I have spent my entire career,
15 outside of our foundation work, in the area of
16 educational media. And I find it absolutely
17 appalling that this great country is spending
18 approximately $5 million in new instructional
19 television programming per year. It is outrageous.
20 In contrast with England which has a $50 million
21 budget. A country that's one-fourth our size.
22 We're spending no money. There's no money
23 available. So when we're trying to move from the
24 paradigm of television for selling because delivering
25 audiences to advertisers is what commercial
64
1 television is about, and that will not fundamentally
2 change. But the panel has an opportunity to rectify
3 at least in a small way the balance between the
4 commercially-dominated system and the noncommercial
5 interests that are represented now very weakly and
6 feebly by public television in this country, that is,
7 in comparison to commercial television.
8 So the money, the issue of money. How do
9 we get money to support independent creative
10 production of information, education and cultural
11 programming, including more and better programming
12 for children? Where does the money come from? That
13 is the central -- so I think there's a structural
14 issue and there's a money issue. And unless we deal
15 with the structural issues and the money issues we're
16 not going to make progress, we'll just be making
17 speeches. And hopefully, as we move from getting
18 testimony and getting down to business, to try to
19 create something, we can deal with these
20 fundamentals. And I'd love to have your reactions
21 and advice on the structural challenges before us and
22 the money challenges before us.
23 MR. GUNTHER: Well, the parameters for this
24 have already been set, I mean, unfortunately.
25 Otherwise we'd be talking about license fees. We'd
65
1 be talking about bidding on the spectrum. We'd be
2 actually getting the market value for the transfer of
3 assets. And obviously the revenue from that could be
4 dedicated to the purposes that you just mentioned.
5 But, in fact, those assumptions have already been
6 addressed in the reform. We're not getting licenses,
7 license fees. We're not getting a bid on the
8 auctions or, rather, we're not auctioning off the
9 spectrum.
10 So the traditional mechanisms have already
11 been given up, and so it becomes a voluntary thing.
12 And we're going to appeal to the social
13 responsibility of those who are going to benefit
14 massively from this new arrangement and from this
15 give-away, to ask them entirely on a voluntary basis,
16 as good citizens, to put something back in the system
17 on the dubious wisdom that it benefits all of us to
18 have a strong vital democracy sustained by a
19 broadcasting system that nurtures those values and
20 gives communities an opportunity to hear themselves,
21 to hear the diversity and above and beyond
22 entertainment programming as well.
23 MR. YEE: I must exercise the role of
24 moderator here due to time, but also I think the
25 commentary I will look for from Paul, Lois and Gigi
66
1 will continue after our break. But because of time,
2 and I know two of you have some severe time
3 constraints, but also ourselves, I'd just like to say
4 thank you.
5 I think we've been reminded by the
6 challenge provoked by history and hopefully by the
7 challenge of our future. So I must say thank you.
8 Any additional comments and thoughts you have, any
9 communication with you, also can be welcomed at a
10 later time. So I will bring this to a close.
11 Before I do, to the Co-Chairs, I also want
12 to thank Jose Luiz, Frank Blythe, Gigi Sohn and
13 Michael Gardner from NAPI who helped in assembling
14 this distinguished panel. So from me back to the
15 Co-Chairs.
16 CO-CHAIR MOONVES: Thank you to the panel.
17 PANEL MEMBERS: Thank you.
18 (Brief recess taken from 10:38 a.m. to 10:52
19 a.m.)
20 CO-CHAIR ORNSTEIN: Why don't we get
21 underway with our next panel.
22 I wanted to mention one thing to you, to
23 the members of the panel. In your packets you have a
24 paper which was submitted to us by the Aspen
25 Institute Working Group on Digital Broadcasting and
67
1 the Public Interest.
2 The Aspen Institute's Communications in
3 Society Program, under Charlie Firestone, who is
4 actually here today with his deputy, Amy Garmer, has
5 set up a working group just consisting of a range of
6 people from the industry and elsewhere and all across
7 the spectrum to periodically get together and do a
8 little work that may help us in our deliberations.
9 And they prepared what is basically a
10 framework paper offering some models of public
11 interest obligations with pros and cons. A brief
12 paper that Angela Campbell of the Georgetown
13 University Law Center put together that I hope we'll
14 use, at least in part, to structure some of our
15 afternoon sessions as we start this afternoon to get
16 into where we might go ultimately with this. So,
17 keep that in mind.
18 And let me turn to Cass Sunstein to
19 moderate this panel on political broadcasting.
20 MR. SUNSTEIN: It's a pleasure to introduce
21 this very distinguished panel, very distinguished and
22 very balanced panel.
23 I will just introduce the three panelists
24 very briefly, in the order in which they will speak.
25 Tracy Westen is a Professor at both USC and
68
1 UCLA, specializing in communications. He specializes
2 in communications law and policy. And he has also
3 worked for both the FCC and the FTC.
4 Cameron DeVore is a very distinguished
5 advocate for advertising companies and others before
6 the Supreme Court and other tribunals who will be
7 presenting a legal argument -- our first legal
8 argument, I think, in a while -- on behalf of the
9 National Association of Broadcasters.
10 The third speaker will be Paul Taylor from
11 whom we've heard before, a well-known journalist who
12 worked for the Washington Post and the founder and
13 director of The Free TV for Straight Talk Coalition.
14 Thank you. And we'll begin with Tracy
15 Westen.
16 TRACY A. WESTEN, PRESIDENT
17 CENTER FOR GOVERNMENTAL STUDIES
18 MR. WESTEN: Thank you.
19 I want to start by thanking you for the
20 time you're spending on this issue.
21 This process may seem, at times, to you, to
22 be a thankless one; all controversy and no rewards.
23 And on top of that I understand you have to
24 pay your own way out here. So what I wanted to say
25 is I think you're addressing an extraordinarily
69
1 important issue and you're to be congratulated for
2 that.
3 I'll try to keep my comments brief to leave
4 time for discussion. But I want to make a few
5 preliminary observations.
6 First, I think the advent of digital
7 television gives us more. It gives us more channels,
8 more capacity, more flexibility. But more than that,
9 it gives us, I think, the chance to rethink its role
10 in American Democracy. And I think that's, perhaps,
11 its most important contribution.
12 Secondly, although I personally believe
13 that some free broadcast time for political
14 candidates is absolutely essential, I think it would
15 be bad policy and impractical as well to hand it out
16 willy-nilly to all candidates or to hand it out with
17 no concern for formatting, cost burdens on licensees,
18 or the risk of boring the public to death.
19 Finally, although I believe the FCC has the
20 legal power to mandate free time under its current
21 jurisdiction -- and under the First Amendment -- I
22 think there are clear advantages to a broadcast-
23 industry-adopted solutions, including greater
24 flexibility, the ability to experiment with more
25 interesting program formats, variety between the
70
1 states, variety among different elections. So I'll
2 come back to this point.
3 But to the extent the broadcast industry is
4 able to devise an innovative, creative solution, I
5 think it would be to everyone's benefit. In short, I
6 think the issues here are quite difficult and not
7 easily subject to an ideological litmus test.
8 I think what we need is a mix of
9 practicality and vision. And, as I look at the
10 composition of this panel, I think it's ideally
11 suited to that task. You represent a very broad
12 range of public and private interests and you're
13 confronting very difficult and important problems.
14 And if this group can't do it, it's hard to imagine
15 who can. So I applaud your dedication to this
16 effort. And I wish you well.
17 I'd like to make seven brief points.
18 First, I believe that some free broadcast time for
19 political candidates is absolutely essential if we're
20 to improve the integrity of our elections.
21 And I think this for two reasons: First,
22 we need to improve the information the public has in
23 the electoral context so they can make intelligent
24 decisions, which are the foundation of our democracy.
25 Secondly, I think we need to make it
71
1 possible for all candidates to participate in
2 elections, to present their ideas and not only to
3 present their ideas if they have access to
4 considerable wealth, which seems to be the developing
5 pattern.
6 James Madison once said, "A popular
7 government without popular information or the means
8 of acquiring it is but a prologue to a farce or a
9 tragedy or perhaps both."
10 Madison and Jefferson understood the vital
11 connection between democracy and information. They
12 knew that placing actual political power into the
13 hands of ordinary citizens -- a very radical
14 experiment in governance -- would be doomed unless
15 citizens had access to the information on which to
16 base an intelligent vote.
17 Recent polls have shown that those
18 Americans who know the least about government are the
19 most likely to be mistrustful of it and that levels
20 of mistrust and cynicism have increased sharply in
21 the last decade, paradoxically, although television
22 is the most powerful and effective means -- to use
23 Madison's word, "means" -- of delivering information
24 ever invented.
25 And although most people cite it as their
72
1 principal or only source of information, public
2 ignorance about candidates and governance seems to be
3 high and even increasing. Television's ability to
4 inform the electorate has been unrealized, in part,
5 because its costs are growing beyond the reach of
6 many candidates and because the price candidates pay
7 to raise that money, in my view, is distorting the
8 political system.
9 In 1956, for example, the amount of money
10 spent by all federal, state and local candidates for
11 office in the United States was about 155 million.
12 Twenty years later, in 1976, total candidate spending
13 had increased 250 percent, to about 540 million. In
14 the last 20 years, however, from 1976 to '96, that
15 amount has shot up 2,600 percent to the sum in 1996
16 of 4.2 billion.
17 In California, by analogy, in the last 40
18 years, campaign spending for legislative office has
19 gone up 5,000 percent. That's a 250-percent increase
20 every two-year election cycle for the past 40 years.
21 In short, television has an extraordinary
22 capacity to inform the voters, but many candidates
23 simply lack the money to purchase it or, in their
24 efforts to acquire it, create the appearance of
25 impartiality in their actual votes.
73
1 The second point is that even though free
2 time would significantly ease campaign finance
3 pressures, I think it's important even in its own
4 right without considering campaign finance reform.
5 Neither this Commission nor the FCC has the mandate
6 or the power to solve campaign finance problems --
7 it's extraordinarily difficult as we've seen from
8 events in the Senate in the last week -- even though
9 free broadcast time, in my view, would certainly
10 help. But free broadcast time would address a number
11 of other important issues as well.
12 It would help challengers compete. It
13 would give them some access to present their ideas to
14 the public. And, currently, many challengers lack
15 the fundraising power of incumbents.
16 It would enhance the overall dialogue in
17 the campaign. It would help voters understand the
18 issues. It would provide balance for candidates who
19 might get swamped by very personally wealthy
20 candidates, a phenomenon we've seen many times in
21 California. And, in fact, Senator Feinstein dropped
22 out of the race for governor in part because she did
23 not want to take on a wealthier millionaire, is
24 basically what it amounted to.
25 Free time would create a minimum level
74
1 playing field, a level floor, so that all have an
2 opportunity to present their ideas. And it would
3 also allow -- I think, if we do it creatively -- to
4 create the opportunity for some innovative formats.
5 And I'll talk more about that in a minute. So this
6 Commission does not have to wait for campaign finance
7 reforms to make a major contribution to an informed
8 electorate.
9 Third, free time, I think, should include
10 format restrictions. It should not be a simple blank
11 check. And these format restrictions should be
12 carefully thought out, I think, with the creative
13 energy and thought of the broadcast industry to
14 encourage a better, more improved debate.
15 Simply giving candidates free time to
16 engage in more 30-second negative ads won't
17 substantially improve public information and I don't
18 think will have the support of the public.
19 TV news coverage, good as it can be, is
20 probably by itself insufficient, because candidates
21 need some opportunity to present their own views in
22 their own words. So, in my view, candidates should
23 be given specific, limited quantities of time. And I
24 would suggest both short spots as well as longer
25 opportunities -- two minutes, maybe 15 minutes or
75
1 even 30 minutes for presidential candidates -- so
2 that they have the opportunity to address significant
3 issues.
4 I would also consider format restrictions
5 such as the following: Requiring candidates to
6 appear in at least 75 percent of their time, which
7 the research shows that if candidates appear in their
8 own ads there tends to be considerable less negative
9 advertising and negative attacks.
10 One alternative format might be, for
11 example, showing a person on the street asking a
12 question for 30 seconds, and then for 45 seconds each
13 of two candidates rebut. So you have a little two-
14 minute package that is, in essence, a mini debate.
15 Perhaps running all the spots in a day or
16 even one week on a particular topic, such as
17 education, considering "roadblocks" so spots appear
18 at the same time across the dial.
19 I'm not arguing any one of those. But I'm
20 simply saying there's an opportunity here for
21 experimentation and creativity in ways that will
22 engage the audiences interest.
23 The fourth point is that I think
24 discussions of free time should not be limited to the
25 Beltway. In other words, they should apply to
76
1 candidates at all levels, if possible, not just
2 president, but congressional and state candidates and
3 even local candidates where applicable. And I think
4 that's the important qualification.
5 Obviously we have to prevent broadcasters
6 from being swamped by requests for free time. But
7 let me suggest a way of possibly doing that. For
8 president, for example, we might set aside, for each
9 of the two major party candidates in the general
10 election, up to two and a half hours for them to
11 control.
12 Of that two and a half hours, there might
13 be two half-hour programs, leaving an hour and a half
14 for, let's say, two-minute spots.
15 So what that would create is, for each of
16 the presidential candidates, two half-hour
17 opportunities to address issues in depth to the
18 entire nation. And then they would be given in the
19 60 days before the election 45 two-minute spots.
20 For U.S. Senate and Congress, the national
21 political parties might be given a grant of about two
22 hours of time on each broadcast station per state.
23 And let them divide up the time as they see fit.
24 They have a number of congressional candidates, a
25 number of senatorial candidates. Some will be in
77
1 safe seats; some will not be controversial; some will
2 be very important, hot races. This gives a ceiling
3 on the time but allows them to divide it up as they
4 see fit.
5 For state and local candidates, again, the
6 same concept. Give the state political parties two
7 hours to divide up as they see fit. And what this
8 would amount to, for instance, state and local party,
9 is about two minutes a day for the 60 days before the
10 election. For U.S. Senate and Congress, again, two
11 minutes a day for the 60 days before the election.
12 In total, although it sounds like a lot, it
13 would give candidates at the federal, state and local
14 levels a total of 13 minutes a day for the 60 days
15 before the election which, in my view, is a
16 controllable, but a reasonable amount of time.
17 The fifth point involves digital and analog
18 TV. In my view -- and, obviously, you'll be
19 discussing this one -- I think the fee broadcast time
20 in limited amounts should be given on both digital
21 and analog television for the principal reason that
22 if we relegate it or confine it only to digital
23 television, then it will create certainly for many
24 years to come a kind of ghetto in which a very small
25 number of people -- and, presumably, the people who
78
1 have the money to buy digital television sets -- will
2 be the only observers.
3 At the same time the advent of the digital
4 spectrum might create interesting opportunities to
5 give local and state candidates, who otherwise would
6 not be able to afford the time, some access
7 particularly in urban areas on subchannels or regular
8 definition television channels.
9 The high definition signal allows a
10 broadcaster or licensee to carve up that spectrum in
11 different ways, perhaps generating more than one
12 channel, two, three, based on compression
13 technologies. And there may be ways of giving
14 candidates access to that newly-created spectrum in
15 ways it would be not be unduly burdensome on
16 licensees and at the same time give them an option.
17 The sixth point is that in my view
18 reasonable amounts of free time and reasonable format
19 restrictions will not violate the broadcast
20 licensee's First Amendment interests.
21 The Supreme Court has said in both Red Lion
22 and CBS versus FCC that requiring broadcaster to
23 share their channels with others, particularly
24 candidates for office, does not violate the First
25 Amendment. And I don't mean to get into a technical
79
1 First Amendment discussion, but let me draw one
2 analogy.
3 This room is an interference-based medium.
4 We cannot all talk at once -- well, we can but, if we
5 do, nobody will be able to understand anything. So
6 there have to be rules to decide who speaks even in
7 this particular forum.
8 And Mr. Yee, when he started the discussion
9 earlier, said something very interesting. He said,
10 "I'm going to raise my hand after five or seven
11 minutes so that democracy can move along." Very
12 interesting and accurate observation. In other
13 words, he was threatening to censor panelists if they
14 spoke too long in order to preserve democracy in this
15 particular forum.
16 If I appear in front of the United States
17 Supreme Court, and I'm told I only have a half an
18 hour to present my argument, I can't say, "Well, I
19 need at least three hours to present my argument.
20 And you're violating my First Amendment rights. And
21 if you don't give me three hours, I'm going to sue
22 you." Obviously, I'd lose that argument. We have to
23 have time restrictions or channel-sharing
24 restrictions in any interference-based medium such as
25 speech and such as broadcasting.
80
1 For the FCC, for example, to say, "We will
2 give a license to a broadcast station for seven
3 years, minus one day. And for that one day we will
4 turn on, let's say, government or public interest
5 transmitters and let all political candidates use
6 them on a first-come, first-serve, content-neutral
7 basis," would that violate the First Amendment rights
8 of the licensees? Would the licensees say, "I have a
9 First Amendment right to get that last day"? I
10 think, clearly, not.
11 In an interference-based medium, the
12 government can adopt rules, just as the Chair has, to
13 share the time. And it does not violate the First
14 Amendment rights of broadcasters operating in an
15 interference-based medium to be asked to share that
16 time.
17 So I think asking licensees to provide a
18 small amount of time, 13 minutes a day for the two
19 months before the election, is a reasonable form of
20 channel sharing because it also enhances the First
21 Amendment speech rights of the candidates and the
22 access of audiences to their views.
23 My last point is that we should try to
24 minimize, wherever possible, the costs and burdens on
25 the broadcast industry. And I'd like to suggest some
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1 ways in which that might be considered. Obviously,
2 costs of free time could be offset against free
3 spectrum. That's one model that's been presented to
4 you. But I think there are other ways of reducing
5 costs on licensees.
6 First, lowest unit rate might be repealed
7 for candidates who receive free time. In other
8 words, if they want to buy any time beyond their free
9 time, they should pay full market rates.
10 315, equal time obligations could be
11 suspended in elections in which candidates are
12 receiving free time, thereby minimizing
13 administrative and legal burdens on licensees.
14 Tax deductions, I think, could be
15 considered for the costs of free time offered, at
16 market rate.
17 Must-carry rules on cable television for
18 digital signals might be considered, in part, as an
19 offset. In other words, cable systems ought to be
20 required to carry digital signals as well and that be
21 deemed as part of the overall package.
22 For state and local candidates for whom
23 prime time or even television time is inefficient,
24 since their districts are small and only include a
25 portion of a broadcast licensee's coverage we might
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1 think of creative alternatives such as, for example,
2 giving them the opportunity to broadcast their
3 messages at 3:00 a.m. in the morning, but also asking
4 broadcasters to promote the existence of those
5 programs to voters who have VCRs and are willing to
6 set them ahead of time to pick up that message.
7 In addition, the broadcast industry might
8 devise alternative schemes and test them in different
9 states. For some reason public policy seems to shy
10 away from what scientists like, which is
11 experimentation. And I'd be interested in seeing
12 different formats tried in different states on an
13 experimental basis to find out what works, what
14 engages the audience.
15 In conclusion, I think I would say only
16 that, obviously, free time solutions are politically
17 quite difficult. They're controversial. But, again,
18 to quote James Madison, he said, "Knowledge will
19 forever govern ignorance. And the people who mean to
20 be their own governors must arm themselves with the
21 power which knowledge gives."
22 Together -- and I think, together this
23 Commission and the American public has the power
24 significantly to advance the interests of electoral
25 democracy if we exercise the creativity and the
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1 willpower to do it. I think what is at stake here
2 fundamentally is the continuation of a democratic
3 form of government based on information.
4 For better or worse, many of you in the
5 broadcast industry have, through your time and talent
6 and entrepreneurial efforts, created an
7 extraordinarily powerful medium which, we may not
8 have anticipated at the time, but now has a
9 substantial impact on the conduct of American
10 government.
11 So, I think, together, the challenge is:
12 Can we figure out a way to improve this system of
13 government and, at the same time, keep the burdens on
14 the broadcast industry minimal.
15 Thank you.
16 MR. SUNSTEIN: Thank you very much, Tracy,
17 for that. And also for keeping, so tightly, within
18 your 15 minutes in accordance with the substance of
19 your legal argument.
20 We will now hear from Cameron DeVore.
21 P. CAMERON DeVORE, SENIOR PARTNER
22 DAVIS WRIGHT TREMAINE LLP
23 MR. DeVORE: Thanks, Cass.
24 I must say I got derailed listening to
25 Tracy. I had this image of my speaking up to Chief
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1 Justice Rehnquist in the Court and suggesting that,
2 really, even though the time was up, that my
3 fundamental rights required that I have an
4 opportunity to continue my argument to the Court.
5 I think I would not like to be the one to
6 try that on the Chief Justice who, like Mussolini,
7 likes to make the trains run on time during oral
8 argument. But it's an intriguing idea.
9 Well, here we are I think nose-to-nose with
10 the question of and I think the intractable
11 constitutional issue of whether the free air time
12 proposal will pass muster under the First Amendment.
13 The last time I debated this with some of you was
14 last March in the Annenberg Forum in Washington,
15 D.C., March 11. Lots has changed since then. At
16 that point Senator McCain was the keynoter.
17 Certainly free air time was a fundamental and
18 critical part of McCain-Feingold.
19 Since that time that has dropped from
20 McCain-Feingold. And, of course, McCain-Feingold, at
21 least for this term of Congress and regrettably for
22 perhaps longer disappeared from Congress' scope.
23 And I suppose we're now left with a
24 consideration of free air time, to some extent, as a
25 kind of a vestige or a remaining isolated proposal
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1 out of that package.
2 President Clinton, I noticed -- I was at a
3 meeting out of the country, or out of the continental
4 part of the United States early in the week -- I
5 noticed a statement that apparently he made I guess
6 on Thursday asking again the FCC to act to adopt free
7 air time, as he put it, to renew our democracy.
8 Of course, your Committee will in due
9 course decide what the public interest duties of
10 broadcasters are in this digital era. That's your
11 job. And it's a great one and one that we are all
12 watching with great interest.
13 But focusing on free air time, which is our
14 job in this segment of your deliberations, I think,
15 as the last vestige of campaign finance reform, now
16 not in the hands of the elected congress, but in the
17 hands of the appointed Commission, the FCC. And if I
18 read the Commissioners properly in their public
19 statements, I guess if it were adopted it would be by
20 a three-to-two vote of that Commission.
21 I guess you all have to decide how many
22 public-policy angels can rest on the head of the
23 free-air-time pin. But I suppose, as a part of that
24 process, you're going to have to consider the
25 constitutionality of the effort.
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1 When Paul and Walter Cronkite and others
2 embarked on their crusade with the networks to cajole
3 and leverage voluntary time for federal candidates, I
4 think their efforts enjoyed wide support, not just in
5 the Beltway, but nationally and among broadcasters.
6 And some of what they got from the networks and the
7 broadcasters was perhaps grudging, but they got a
8 fair amount. And I think that the consciousness,
9 certainly, of the broadcasters were raised to really
10 focus on their structure of providing time for
11 candidates and how it was done.
12 But I think we now have to, as I say, get
13 down to the constitutional fundamentals. I filed a
14 paper with you all last week, which I think is
15 somewhere in your materials, expressing my views on
16 behalf of NAB and adding my voice I think to the, I
17 believe, constitutionally impeccable analyses of
18 Professor Rodney Smolla, whose paper has also been
19 filed with you by the Media Institute, and Lillian
20 BeVier of the American Economics Institute. I've
21 attached that to my paper.
22 I think Lillian, who many of you know, has
23 provided the absolute text analyzing this. It is a
24 public policy changing analysis, which I commit to
25 your careful review.
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1 I also have at least a secondhand
2 endorsement, at least, of the Governing First
3 Amendment Principles by Professor Burt Neuborne at
4 NYU.
5 That spectrum of First Amendment scholars
6 ranging on other issues, at least from the liberal to
7 the libertarian, all concur that the central meaning
8 of the First Amendment is offended by the free air
9 time proposal. I think the long search for a
10 constitutionally-respectable rationale for the
11 concept has failed. And I hope that the Committee
12 will reach that conclusion after its deliberations.
13 In fact, it's really been surprising to me
14 that free air time has enjoyed as long a run as it
15 has without much apparent constitutional concern by
16 its sponsors.
17 The times that I've discussed this during
18 the year, both in Washington, D.C. in March and after
19 that, I think that the arguments have been viewed --
20 to use Tracy's word -- as a "technicality," as sort
21 of an annoying technicality, and brushed aside.
22 I think seeking counter authorities, the
23 most often cited is Red Lion or FCC v. CBS. And Red
24 Lion is supposed to heal all constitutional wounds.
25 And then the public trustee, public ownership trope
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1 is used as well. Broadcasters, in effect, are sort
2 of virtual trespassers on the public way. And
3 nothing can stand in the way of wise regulatory
4 mandates to the broadcasters.
5 In fact, given their status as sort of
6 squatters on the public way, to use Professor
7 BeVier's words, "They should not look a gift horse in
8 the mouth. Look what they got. And we're not asking
9 much of them."
10 I think those arguments really don't work.
11 And my paper I leave with you, but let me summarize
12 it in a couple of critical ways.
13 What's happening here? What we have is, if
14 free air time is adopted by the FCC, or any other
15 governmental body, or the Congress, it's a mandate to
16 broadcasters to publish and broadcast federally
17 selected and defined core political speech. That's
18 whether or not you accept Tracy's notion that a great
19 deal of regulation should go on as to how it's put
20 together, how many minutes, what you get, who can
21 appear on the camera and who not. Each one of those
22 things is a First Amendment hot button. But in any
23 event, let's assume it's just a bald mandate that
24 there be free air time.
25 It runs afoul of the two very central First
89
1 Amendment concepts about which there really can be no
2 debate. Either one of which would require what us
3 constitutional types call a "strict scrutiny review,"
4 meaning that you have to have not just a compelling
5 interest -- and you can always debate that -- but a
6 meaning it has to be the least restrictive way of
7 dealing with the great goals that you purport to deal
8 with. That's where this all flounders, regardless of
9 which constitutional test is applied.
10 The first of these great constitutional
11 issues is that the First Amendment really prevents
12 and provides a wall against government compelling
13 journalists, the media, to print, broadcast certain
14 things, for them to require that this be done.
15 The big case is, of course, a print case,
16 Tornello, the Miami Herald case. And that said the
17 state of Florida could not permissibly pass a statute
18 requiring replies by people who'd been "pinked" in
19 the pages of the Miami Herald or any other newspaper
20 in Florida. It was by Justice Berger. It was a
21 unanimous Court. It's a principle that really has
22 established, in the hierarchy of protection of the
23 media, the highest bright line of strict scrutiny to
24 the print media.
25 The Hurley case, Justice Souter's opinion
90
1 of four -- now almost four years ago -- three and a
2 half years ago. There was a parade in Boston where a
3 gay group wanted to be included in this
4 Irish-American parade, and they were denied the right
5 to do so.
6 Justice Souter for the Court, again for a
7 unanimous Court, held that if you organized the
8 parade, you call the tune and select the marchers.
9 That wall of editorial freedom is virtually
10 absolute. And if there is not a Red Lion excuse for
11 not applying it to the broadcast media, it applies to
12 the broadcast media as well -- and will.
13 The second problem is one of government
14 requiring content to be broadcast or whatever. And
15 here this isn't just a print issue. When government
16 selects content, then we have the same strict
17 scrutiny issue. This isn't just a matter of meddling
18 with editorial freedom. It's a matter of
19 impermissible government preference for a kind of
20 speech based on its content.
21 There's a lot of cases here. The Turner
22 cases are really -- Turner 1, from 1994 and Turner 2,
23 from last year, deal with this, I think, in great
24 detail about what the limits are. FCC versus League
25 of Women Voters, Consolidated Edison, Pacific Gas &
91
1 Electric, Texas v. Johnson, Flag Burning, that stuff
2 is -- -- for the lawyers in the group -- that is
3 contained in the analysis that I have.
4 Now the key challenge for supporters of
5 free air time is how to escape from the strict
6 scrutiny trap which their mandate -- this kind of
7 mandate -- would inevitably fail. There are four
8 ways that that is tried.
9 One is to say, "Well, this isn't really
10 content regulation. This is, after all, it may be --
11 it's certainly viewpoint neutral. We're not saying
12 that only Democrats or only Republicans" -- and I
13 missed this in Tracy's comments -- "only Ross Perot's
14 party would have some time in this concept." This is
15 just saying candidates, whatever their ilk, however
16 they're defined.
17 Professor BeVier, I think, deals
18 marvelously in her piece about how you cannot escape
19 from the fact that this is content regulation. I
20 commit that to you. But certainly even if you avoid
21 all the detail of what Tracy was talking about and
22 really get into the nitty-gritty of how this time is
23 to be used and by whom and whose faces and all of
24 that come on, it cannot avoid being considered
25 regulation of content.
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1 And even if intermediate scrutiny applied
2 -- in other words, even if you dropped off the train
3 and you didn't apply the fullest strict scrutiny,
4 you'd drop back to something called -- and this is --
5 I'm sorry to do this to you, but somebody needs to do
6 it -- you drop back to something called "intermediate
7 scrutiny," the so-called O'Brien test, the draft-
8 card-burning case test. Even under intermediate
9 scrutiny, this concept would not pass muster.
10 You certainly would have substantial
11 reasons. Cleaning up the swamp of America's campaign
12 system is certainly a high and valuable goal. But,
13 in order to meet the second part of the test, there
14 has to be direct and material advancement of that by
15 this. In other words, you're going to have to prove
16 that this concept is going to do all that nice stuff
17 that you assume that it will. And, most importantly,
18 you're going to have to prove that there are not
19 other ways of achieving this which do not have the
20 same impact on speech. And there are lots of those.
21 I mean there are those that would provide
22 federal funding of candidates. There could -- and
23 this is all under Buckley v. Valeo -- there could be
24 further limitations on campaign contributions. There
25 are lots of ways. Soft money, I think, could be
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1 wiped off the slate in spite of what Senator
2 McConnell may think.
3 And I think that there are lots of
4 alternatives that simply would not impinge on speech.
5 And the Constitution requires you've got to do that
6 stuff first before you can get into content
7 regulation.
8 Now the nature of broadcasting is another
9 out, another way to escape from this. Herein of CBS
10 versus FCC and Red Lion.