Monday, March 2, 1998

University of Southern California
Annenberg School for Communication
3200 Watt Way
Los Angeles, California 90089-0281

Afternoon Session
Go to the transcript of the morning session

 3                                     (1:34 p.m.)
 4              CO-CHAIR ORNSTEIN:  Why don't we get
 5    started?  We have most of our members here.  We're
 6    moving, at least at this point, maybe not
 7    permanently, but past our phase of hearing testimony
 8    and towards what will be an extended phase of trying
 9    to consider our ideas for what we ought to put in the
10    report and what we ought to recommend and what
11    directions we ought to go in.  And we will spend the
12    afternoon beginning those deliberations.
13              And Les' and my expectation is that the
14    next two sessions we will focus more intensively on
15    those things.  And that will include, I hope this
16    afternoon, some discussion of what our mandate is,
17    some of the logistical issues.
18              And we have a succession of logistical
19    issues that include how we operate under the Open
20    Meetings Act, the Federal Advisory Committee Act, and
21    so on, along with the practical questions of what it
22    will take to actually draft a report and get it ready
23    to be submitted to the Vice President.
24              We have, as I mentioned earlier, informal
25    word at least, that we will get an extension until

 1    October 1, although I am not exactly sure how that
 2    will be worded or what will be there.  But as you'll
 3    see from some of the papers you've got, even in terms
 4    of a timetable, we're going to have to move
 5    expeditiously starting fairly soon to begin to put
 6    our recommendations together if we're going to come
 7    up with any kind of a solid report even by that date. 
 8    So that's a word of warning.
 9              And we all need to be aware of the
10    guidelines for meetings under the Federal Advisory
11    Committee Act during the drafting process when we get
12    to it.  We're going to have to discuss a little bit
13    further along the way whether we want to break up
14    into subcommittees, how we want to take on some of
15    the responsibility for doing drafts.  It's not clear
16    whether we will be able to have somebody, a
17    professional, help us along this process of drafting
18    or editing, although we perhaps will.  Lots of
19    questions to raise.
20              Let me start with a bit of a framework. 
21    Then what I'd like to do is to open it up to some
22    discussion among ourselves and try and get a feel for
23    how much people have thought about where they would
24    like to end up and see if there are points of
25    consensus around which we can start and other points

 1    where we may have to go a little bit further.
 2              We clearly have a couple of mandates here. 
 3    We have a mandate to figure out ways to take existing
 4    public interest obligations in the analog age and
 5    make them work in the digital age.  And that is no
 6    easy task, as we have discussed numerous times,
 7    because we are moving from a fixed, predictable and
 8    static world of one broadcaster, one signal at all
 9    times, to a fluid and unpredictable world where we
10    may end up with broadcasters doing very different
11    things all the time or different things at different
12    times of the day.  And so the simple quantitative
13    approach isn't going to work in the same fashion.
14              At the same time we clearly have a mandate
15    to look at what other public interest obligations or
16    in what form these obligations will apply in a new
17    era with a new grant of spectrum.
18              And without getting into any of the
19    controversial or divisive questions about what was
20    granted, what it's worth, we clearly have a firm
21    mandate -- and it's a mandate that's in the
22    Telecommunications Act; it's a mandate that's in what
23    the FCC has said -- to look at new obligations.
24              Having said that, my own judgment is that
25    we have a tremendous opportunity here, not just to

 1    deal with these questions per se, but to try and come
 2    up with a new way of looking at public interest
 3    obligations, to see if we can develop a model that
 4    applies the watchword that Bob Wright, the president
 5    of NBC, suggested over and over again when he
 6    testified in front of us, "flexibility."
 7              Broadcasters want, need and, I believe,
 8    deserve flexibility in an era where nobody knows how
 9    it's going to work, what the revenue streams will be,
10    how the signals will operate, how consumers will
11    react, how quickly we will phase in these materials. 
12    And it provides us a wonderful opportunity to apply
13    that flexibility more broadly to serve the public
14    interest, as well, and see if we can come up with a
15    win-win situation that serves the public and that
16    serves the needs of broadcasters at the same time.
17              Let me just briefly go through some of the
18    models that might apply here that are in this
19    preliminary working paper that the Aspen Institute
20    working group put together.  And I'll do this very
21    quickly.  You'll see it's fairly straightforward.
22              And recognizing, as well, clearly these are
23    not the only ways to go and that what we can do as an
24    alternative is simply to set out a specific set of
25    obligations and figure out ways of quantifying them

 1    or coming up with something that will work and leave
 2    that there as well.  Now that would be, in effect,
 3    something that is not much different from the first
 4    model, which is taking that current public trustee
 5    model, going through those obligations, what they
 6    are, what they might be, what they should be, what
 7    might be added to them, what might be subtracted from
 8    them, and put them down.
 9              And, of course, we've had some discussion
10    of some obligations that have been dropped, like the
11    ascertainment rules that we might want to bring back,
12    some additional obligations we might want to bring
13    in, others that we might want to refine.
14              We've had some discussion about whether we
15    might want to refine -- we have closed captioning in
16    the law -- we might want to refine the video
17    description rule, just to pick one example.
18              And, obviously, the question of political
19    broadcasting is brought in to bear here, too.
20              It would be the easiest approach for us to
21    take probably, just to go through obligations
22    one-by-one and do some horse trading and do some
23    voting.  I don't think it would solve a lot of the
24    problems.  And, in particular, it's not going to get
25    us to a point where we can apply these static rules

 1    to an evolving and fast-paced changing system.
 2              Another option which was mentioned a few
 3    times this morning is one that was originally
 4    proposed by Henry Geller some years ago and a
 5    variation of which has been presented and pushed by
 6    Billy Tauzin.  In other words, it's come from the
 7    left and the right.
 8              And it basically is that saying that the
 9    model of the obligations that we've had for all
10    these, lo these many years just hasn't worked very
11    well.  It doesn't work very well for a host of
12    reasons.  It's posing a set of bureaucratic
13    obligations on stations that have different
14    resources, different communities, different
15    interests.  And a much better way to do this is
16    simply to assess a fee for broadcasters and take that
17    money and use it in the public interest.
18              What Mr. Tauzin has suggested is getting a
19    fee, relieving broadcasters of their obligations and
20    using it to fund the Public Broadcasting System and,
21    in effect, letting the Public Broadcasting System be
22    the repository for the vast bulk of the obligations
23    that have been out there.  But there are, of course,
24    other ways to go.  The money can be used in a variety
25    of ways.

 1              Now some have suggested that we shouldn't
 2    have that kind of a model and relieve broadcasters of
 3    all obligations.  There are some obligations,
 4    including access for candidates, for example.  It
 5    might include some public service announcements or
 6    other related obligations.  That you can have a model
 7    to allow broadcasters to get out of some of those
 8    obligations but not all.
 9              And then there is a more sophisticated
10    model that would have many more options attached to
11    it, where we might suggest a list of public interest
12    obligations and let broadcasters pay to get out of
13    most of them, pay to get out of some of them, trade
14    among themselves for some of them, or do them in lieu
15    of paying, give options to broadcasters so it's not a
16    tax assessed but rather an option to provide more
17    flexibility.
18              And there are lots of ways in which we can
19    go there, and you can see this paper provides a kind
20    of pollution-rights model or a spectrum check-off
21    model.
22              And we have, if you look at this paper, a
23    grid that looks at the various goals that we want
24    that have been raised in terms of the public
25    interest, localism and community interests, a better

 1    informed electorate, encouraging and providing
 2    opportunities for diversity of viewpoints, dealing
 3    with children and education and the pros and cons of
 4    the different ways of going about this.
 5              I think this is a fairly good overall
 6    assessment of some of the different models we might
 7    apply here, and we ought to be considering them.
 8              Let me suggest my own inclination at the
 9    moment, which leans toward some variation of the
10    fourth one.  And, just as an example, with our
11    discussion of free time, where most of the discussion
12    was on the constitutionality of imposing such
13    requirements on broadcasters.
14              If we were able to work out some kind of
15    flexible model where broadcasters could emphasize the
16    obligations that they felt most comfortable with and
17    not have to do some others, be able to pay in lieu of
18    others; where some CBS stations, for example, could
19    pay in lieu of putting on the children's programming
20    that doesn't particularly fit its interests, and
21    money were available that might be applied to things
22    like education through Public broadcasting, to
23    perhaps setting up a series of state-based or local
24    foundations with heavy broadcaster input, with some
25    money going to provide for locally tailored public

 1    interest needs, and then some being set aside for the
 2    purposes of enhancing political communication, that
 3    would, I think, not have any particular
 4    constitutional questions, ought not to raise the same
 5    hackles for broadcasters and yet could serve multiple
 6    purposes.
 7              Now getting from here to there is not,
 8    obviously, very easy.  But just to start things out,
 9    I'd like to explore that set of options and see if we
10    could come up with a model that would put us into a
11    win-win situation.  And why don't we spend a little
12    time going around and seeing if people have thought
13    about where they'd like to end up more generally.
14              Let's start with Les.
15              CO-CHAIR MOONVES:  Well, there are a lot of
16    issues.  And this may be the most difficult meeting
17    we have, or the beginning of it, only because the
18    formation of what we're going to end up with is going
19    to be a bear to do.
20              Before we get into this, there's also
21    something that, you know, we discussed earlier, which
22    is how do we reach a consensus.  I think in an ideal
23    world we would all like to put our names on a piece
24    of paper that we all can live with, rather than
25    having a dissenting report.  I hope this is possible. 

 1    It may not be.  But that's one of the questions that
 2    has to be answered here, is how do we get everybody
 3    on the same page.
 4              Another question that I have -- and my
 5    statement will be mostly in the form of questions --
 6    are we going to be dealing with the analog world or
 7    just the digital world?  What is our responsibility
 8    and what should we do?
 9              And probably the most important question
10    for me right now, which is something that is very
11    disturbing, that's happened over the last month,
12    which Paul Taylor alluded to, which was the recent
13    events which happened with the President's statement,
14    with the head of the FCC's statement and with various
15    congressional statements going on against the FCC: 
16    Have we been rendered almost -- the battle was going
17    on long before we ever go into it.  Are our
18    recommendations important?
19              Obviously we all know from day one, when
20    the Vice President in his address to us stood on the
21    issue of free time for candidates, and we knew the
22    President stood there as well, this panel, and as
23    much we may want to deny it, one very important part
24    of our mission is that very issue, which I think our
25    panel this morning addressed very well.

 1              Now that the battle lines have been drawn,
 2    are we rendered a lot less important, a lot less
 3    effective than we would have been before?  It's like,
 4    as I said before, the fight is already going on six
 5    months before we even show up in the arena.  And that
 6    is something we should all talk about.  Have the
 7    rules now changed for us from where they were before?
 8              And, finally, and Norm addressed this
 9    somewhat before, do we want to address the
10    constitutional question, or is that something that we
11    should ignore, leave that to the broadcasters and the
12    FCC and Congress to argue later on, when we make our
13    recommendations and go from there.
14              And, once again, how effective will that
15    be?
16              CO-CHAIR ORNSTEIN:  Let me just address a
17    couple of those for a minute.
18              I would hope -- our goal ought to be trying
19    to come to a consensus where we all agree.  And it
20    may be that we can't come to a consensus on every
21    particular.  It may be that we will end up with
22    something where we have a core of agreement, and then
23    we have some areas where individual members or groups
24    want to express some disagreement on the five points,
25    and it may very well be that we'll end up with a

 1    minority report.  I hope we can avoid that.  And I
 2    set as our goal trying to avoid it, because clearly
 3    we have much greater clout the more we can come to an
 4    agreement across very disparate and divergent points
 5    of view.
 6              There's no question that it's a trickier
 7    process now after the President and the FCC have
 8    spoken.  But I would argue that, in fact, our role is
 9    now even more significant and our power is that much
10    greater, because the fact is that what the President
11    and the FCC have done is to set out a position on an
12    issue without any specifics.  And the fundamental
13    reality is they don't know what the specifics are or
14    should be and they are going to end up groping for
15    answers here.
16              If it is possible to come up with answers
17    that are innovative and not obtrusive and that do not
18    involve the kind of imposition that would cause all
19    of the broadcast members of the panel to react
20    negatively, then those recommendations, I think, will
21    have considerable resonance in Congress, with the
22    White House and certainly with the FCC.
23              So I think we actually have an even greater
24    level of responsibility now to try and work things
25    through and do it with all of us in good faith.

 1              What they have done has bearing on us only
 2    insofar as we are sensitive to that issue which we
 3    knew beforehand was going to be a significant part of
 4    our deliberations, but not in terms of pushing us or
 5    requiring us to come to any preset conclusion.
 6              CO-CHAIR MOONVES:  Would anybody else like
 7    to comment on that one issue, the last issue
 8    regarding what the President said, what the FCC and
 9    what Congress has said?
10              Yes, Gigi.
11              MS. SOHN:  I agree with Norm a hundred
12    percent.  Also, that issue is just with regards to
13    the free time.  That's not to minimize that free time
14    is a big part of this, but, -- 
15              CO-CHAIR MOONVES:  No, I know that.
16              MS. SOHN:  -- you know, there's a lot of
17    other -- 
18              CO-CHAIR MOONVES:  I'm aware that is just a
19    free-time issue.  But, as I said, I think that's what
20    their main concern with what this Commission comes
21    out with is, this free time.
22              CO-CHAIR ORNSTEIN:  But remember, Les, the
23    Executive Order -- if that was the context in which
24    the President created this body, the Executive Order
25    gives us a much different mandate, a much larger and

 1    more significant mandate.
 2              MR. LaCAMERA:  But, Norm, does what's
 3    occurred, as Les discussed, does that in some ways
 4    preordain the expectation of what's to come out of
 5    this Committee?
 6              CO-CHAIR ORNSTEIN:  Well, it may preordain
 7    the expectations that some people have, but we're not
 8    governed by the expectations.
 9              MR. LaCAMERA:  "Some people" being the
10    President and the Federal Communications Commission
11    or the Chairman of the -- 
12              CO-CHAIR ORNSTEIN:  We're not governed by
13    their "expectations."
14              From the beginning I think all of us
15    expected we would have to address the free-time issue
16    and not address it by just saying, "Eh, forget that,"
17    but try and come up with something that was
18    constructive and that reached across these lines.
19              If anything, we have a stronger impetus to
20    do so now, and it is not that we've been given orders
21    and, therefore, we have to comply with those orders,
22    because, let me reiterate:  There is nothing in what
23    the President said or what the FCC said that includes
24    any specifics.  And the reason that there are no
25    specifics is because they don't know.

 1              They have a generalized idea of what they
 2    want to see, but nothing beyond that.  And within
 3    that larger continuum, there are many, many different
 4    ways to go, some of which would be clearly
 5    unacceptable to broadcasters, some of which I think
 6    would not be, given our discussion so far.  And we
 7    have lots of freedom and opportunity to range within
 8    that.
 9              MS. SOHN:  Can I just make one point?
10              Congress has the ability to overturn
11    anything that we might recommend that the FCC enacts. 
12    I mean that threat is always there.  I mean you could
13    take that argument to the absurdity and say, "Well,
14    you know, if Congress could overturn whatever we do
15    by legislation, why are we even here?"
16              Right now they've decided not to act.
17              MR. LaCAMERA:  We're not a congressional
18    commission.
19              MS. SOHN:  Right.
20              MR. LaCAMERA:  We were appointed by the
21    executive branch of government.
22              And I think some people, as Les suggested,
23    feel that whatever independence of decisionmaking
24    lays ahead of us -- and, granted, this issue I
25    imagine is going to dominate the discussion in the

 1    meetings ahead -- has been somewhat compromised.
 2              MS. SOHN:  No, I just don't agree.
 3              CO-CHAIR ORNSTEIN:  Yes.
 4              MR. DECHERD:  I'm trying to resist getting
 5    into that discussion at the moment.  But for the
 6    benefit of all of us, I think it would be helpful if
 7    some of us from the broadcast business talked about
 8    how we came to the work of the Commission and how
 9    this sequence of events affects our ability to be
10    effective.
11              When the Commission was formed, the
12    premise, I believe, was that we were going to
13    assemble a group, originally of 15, public-spirited
14    people from the broadcast industry and various public
15    interest backgrounds and others to discuss in a
16    fairly untainted environment what are very complex
17    issues.  I mean there's no right or wrong to
18    virtually any of these questions, except when you
19    apply some constitutional history or history of
20    constitutional law.  And I don't begin to presume
21    that I know much about that that would be helpful
22    here today.
23              But, at the same time, the members of this
24    panel who happen to be from the broadcast industry
25    are not here as official representatives of the

 1    broadcast industry.  We are here as individuals
 2    representing our companies and lending our expertise
 3    to these discussions.
 4              So, first, to look to us to speak for the
 5    industry or to commit the industry is not exactly
 6    consistent with, I think, the way this was formulated
 7    to begin with.  And I have to tell you that, as I've
 8    expressed to Norm and Leslie, I felt greatly
 9    compromised when, in the State of the Union address
10    the President of the United States directly addressed
11    this question; the next morning, in what I think was
12    clearly an orchestrated move, sent a letter to the
13    Chairman of the FCC, putting the pressure on the FCC
14    to act.  And the Chairman of the FCC then says he's
15    going to have a rulemaking.
16              Now for those of you who know the way the
17    FCC works, it is almost preposterous to think that
18    one of us will sit at this table and commit to
19    something which is the subject of a rulemaking at the
20    FCC.
21              If I or my company have something to say
22    about free time for political candidates, it's going
23    to be submitted to the Commission under the rules of
24    the rulemaking proceeding, and I'm not going to
25    commit my company or presume to commit the industry

 1    to anything.
 2              So I think that that sequence of events did
 3    a great disservice to this process.  And I think that
 4    my views are shared, for the most part, by the other
 5    broadcasters here.  We are in a no-win situation as
 6    of that sequence of events.  And I don't think that
 7    that was the basis on which any of us joined this
 8    discourse.  I think it's very unfortunate.
 9              MR. BENTON:  I'm sorry.  I need help in
10    understanding what you just said better, because
11    you're a very important voice -- 
12              MS. SOHN:  We can't hear you.
13              MR. BENTON:  I'm saying I just need to
14    understand better what Bob has said because he's a
15    very important voice on this Commission and this
16    group.
17              We all know that the Administration felt
18    very strongly about this.  Vice President Gore said
19    so upfront in his opening comments.  We know that the
20    President also feels strongly about this.  And he, as
21    you know, in the State of the Union speech, give a
22    laundry list of about 50 points.  I mean this was
23    just one of 50.  So it was lots and lots of points.
24              For him not to say something about campaign
25    finance reform, including this point which he feels

 1    very strongly about, would almost be saying, "Well,
 2    he's ignoring this."
 3              So looking at it from his point of view,
 4    it's not unreasonable for him to get a point like
 5    this out.  It seems to me that whether he said it or
 6    whether he didn't is really irrelevant to what we're
 7    doing here, unless I'm missing a major point.  I
 8    don't see why this -- we know his stance.  We know
 9    what his position was.  Gore said it upfront.  He
10    said it in the State of the Union speech.  I just
11    don't see what difference it makes.
12              Frankly, if he's trying to get a little
13    additional public support for this, that's -- he's
14    using the bully pulpit.  That's what the President is
15    supposed to do.  He's used the bully pulpit to
16    persuade the American public that his views are
17    correct.
18              Now we may disagree with those views or we
19    may agree with them.  But it seems to me that that's
20    just part of the democratic process.  I don't see
21    anything wrong with that.  
22              You know what we do here is depending on
23    what we as informed citizens appointed to a process
24    to advise the FCC or to advise the President and Vice
25    President and the FCC, in other words, the

 1    Administration, on our best judgment as to how to
 2    make progress on these issues confronting us.
 3              So I don't see what the problem is.  Maybe
 4    I'm missing something.  Please explain this to me so
 5    I understand it better.
 6              MR. DECHERD:  Charles, we have no
 7    difference about the President's prerogative in using
 8    the bully pulpit.
 9              MR. BENTON:  Right.
10              MR. DECHERD:  The problem in my mind, and
11    I'll rely on my colleagues to address the same point,
12    is that the following day he sent a very specific
13    letter to the Chairman of the FCC strongly suggesting
14    that the Commission undertake a rulemaking or some
15    proceeding to impose mandated free air time on the
16    broadcast industry.
17              The FCC, which is an appointed body and
18    which has experienced almost complete turnover in the
19    last six months, is of a mind to follow the lead of
20    the President and the Vice President.  They're very
21    explicit in their views about this.  And under the
22    rules of the agency or any federal agency there are
23    very precise steps that are undertaken which indict
24    public and industry comment.  It is the forum wherein
25    those ideas are debated and decided.

 1              And the fact is we can publish a 600-page
 2    report on this as detailed as we could possibly make
 3    it, but it's up to the FCC to decide what rules are
 4    created and what mandates, if any, are imposed upon
 5    the broadcast industry.
 6              So when you put those of us on this
 7    Commission in the position of trying to address this
 8    in a way that does anything other than give ground to
 9    that process, I mean we're not here to speak for the
10    industry, for the NAB, for Television Operators
11    Caucus, for any of the industry groups.  They all
12    have to join that rulemaking now.  And it's just not
13    reasonable to expect that we are going to break
14    formation with an active rulemaking underway.  Why
15    would we do that?  Because everything that we do or
16    say is going to be put to a political purpose.  And
17    it's fine for the bully pulpit to be part of the
18    political process.  It's fine for the Vice President
19    to charge us as he did.  This makes me feel like a
20    political pawn, frankly.
21              And I'd welcome the views of other
22    broadcasters.  I may be the Lone Ranger on this one.
23              MR. BENTON:  One more quick thought, and
24    then others.  There is sure lots to say about this.
25              It is my understanding the FCC was going to

 1    be having a rulemaking on public interest obligations
 2    in general in addition to the free time for
 3    candidates.  So that our process was going to go
 4    along and the FCC process on public interest
 5    obligations in general was going to go along, of
 6    which this is one point.
 7              So I agree maybe tactically someone in the
 8    Administration acted out of sequence and
 9    precipitously on this specific.  But my understanding
10    was the FCC was going to have a general rulemaking on
11    public interest obligations in general.  Maybe I'm
12    wrong about that, but that's was my understanding.
13              MS. PELTZ STRAUSS:  No, that's right. 
14    That's right.  That was their intent.
15              MR. BENTON:  That was my understanding.
16              Okay.  So if that's the case, this is just
17    a specific point within that general framework. 
18    Okay, maybe tactically they made a mistake.  But
19    let's not throw the baby out with the bath water.  If
20    they made a mistake, then let's say, "Well, look,
21    this has not helped the process, but the process must
22    move forward."
23              And, besides, what's the timing of this
24    rulemaking?  Is the timing of the rulemaking between
25    now and October 1st?  I would kind of doubt that.

 1              MS. PELTZ STRAUSS:  That's what I was going
 2    to say.  I mean if -- 
 3              MR. BENTON:  Maybe we could suggest, "Look,
 4    in order to help us do our work, why don't you wait
 5    for us to come up with our conclusions and hold this
 6    rulemaking after October 1st when you have our
 7    report?"
 8              MS. SOHN:  That's what they were planning
 9    on doing, Charles.  They were going to issue -- I
10    don't know what their plans are now because of all
11    hullabaloo.  They were going to issue a rulemaking
12    soon.  But they were not going to come up with a
13    decision until they heard from us.  That's my
14    understanding.
15              CO-CHAIR MOONVES:  To pretend that the
16    rules are not different now I think is ridiculous. 
17    They are different now.  I think that's what Robert
18    is saying.
19              It's no longer the President talking.  It's
20    the President sending a letter to the FCC demanding
21    action from the FCC, which was taken or the beginning
22    of it was taken.  And it basically said that the
23    deliberations of this Commission are now secondary. 
24    The rules are changed.  You can't just say that
25    nothing is different because the FCC was going to do

 1    that anyway.  I think that's a very naive point of
 2    view.
 3              MS. PELTZ STRAUSS:  I think that, though,
 4    we have a mandate.  Our mandate is to develop
 5    recommendations for public interest obligations. 
 6    That has not changed.  And if the Administration has
 7    issued a statement on one of these obligations, we
 8    are now aware of that.  And we take that into
 9    consideration.
10              We can reject it; we can accept it.  Right
11    now there are certainly no guidelines associated with
12    that.  And chances are that even if the FCC issued a
13    proposed rule tomorrow, the way the FCC issues rules,
14    they probably would not specify the guidelines, but
15    would rather make it more in terms of a notice of
16    inquiry which would be open-ended and how do we do
17    this.
18              So I don't see we're in that much of a
19    different position, other than we are aware that the
20    President and the Chairman of the FCC would like to
21    take a certain position on one of these obligations.
22              We now, like I said, have to decide whether
23    or not we want to accept it.  The FCC, we all know,
24    does not move swiftly.  It's highly unlikely that
25    they are going to finish any proposed rule or any

 1    final rule by October.  And it's highly unlikely that
 2    they would even issue the notice of proposed
 3    rulemaking by October.
 4              So I just don't see how we're in that
 5    different a position, other than understanding that
 6    this is one of the agenda items of the
 7    Administration.  And we can take it and we can leave
 8    it.
 9              CO-CHAIR ORNSTEIN:  Richard, and then Bill.
10              MR. MASUR:  Yes.  Just a procedural
11    question, really.
12              Is there anything that takes place in this
13    process whereby any of us have indicated that we are
14    binding our organizations to any action we take
15    individually in this room?
16              I don't believe there is, right?  So I just
17    want to clarify that for myself, because I'm not here
18    on behalf of the Screen Actors Guild.  I was told I
19    was being invited as an individual.  And I have to
20    assume that I am, because I'm not seeking my
21    organization's approval for anything I might do or
22    say or any way in which I would act in here.  So I
23    just want to clarify that for myself.
24              CO-CHAIR ORNSTEIN:  You're right.
25              DR. DUHAMEL:  I'm not a lawyer, but I'll

 1    ask Gigi.
 2              If I were your client, and I was accused of
 3    a crime, and then we go to a public hearing, would
 4    you recommend that I go ahead and talk at a public
 5    hearing, if the subject matter was the crime I was
 6    accused of?
 7              MS. SOHN:  I'm not a criminal lawyer.  I'm
 8    not quite catching your drift.  Ask it to me in a way
 9    that I understand.
10              MR. DECHERD:  Well, basically what I'm
11    saying is, you know, there is a rulemaking and -- 
12              MS. SOHN:  No, there isn't a rulemaking.
13              MR. DECHERD:  Well, it's been proposed.
14              MS. SOHN:  The FCC has not issued a rule. 
15    It has not.  It has only been talked about.  There is
16    no piece of paper right now.  You can't pull it off
17    the Internet.  You can't get it out of anybody's
18    office.  There is not a rulemaking.
19              There has been discussion of having a
20    rulemaking, and that's it.  So your question doesn't
21    apply.
22              MR. DECHERD:  Okay.
23              MS. SOHN:  Look, you know, if we're going
24    to get into technicalities here, we may not recommend
25    free time.  Okay?  You're saying you don't want to

 1    have a discussion, which I find very unfortunate.
 2              CO-CHAIR MOONVES:  Did you say you're not
 3    recommending free time?
 4              MS. SOHN:  What's that?  No, no.  Come on,
 5    Les.
 6         (Laughter.)
 7              MS. SOHN:  Les, don't you know --
 8    seriously.  I mean, we may decide as a body -- there
 9    may be a consensus or a minority opinion that we
10    don't want to do the free time; it's unmanageable,
11    what-have-you.  Okay?
12              But you're saying let's not have a
13    discussion because some folks have been talking about
14    having a rulemaking at the FCC.  I just think this is
15    specious, so I can't respond to it, Bob, because
16    frankly I don't get it.  I don't understand how
17    you're being compromised when there's not even a
18    rulemaking happening yet.  I'm just not -- I don't
19    get it.
20              MR. DECHERD:  "Some folks" happen to be the
21    Chairman of the FCC.  The President and the Chairman.
22              MS. SOHN:  Yes, right.
23              MR. DECHERD:  We're not talking about just
24    a staff member.
25              MS. SOHN:  The Chairman.  And he's got

 1    strong opposition on his own Commission.  I can give
 2    you -- 
 3              MR. DECHERD:  It's three to two.
 4              MS. SOHN:  I can give you the Dingellgrams
 5    of this.  And it ain't a strong three to two.  Okay. 
 6    I can give you the Dingellgrams, the responses to
 7    John Dingell about doing such a rulemaking.  And it
 8    isn't overwhelming.  It is not a sure thing, that
 9    they're going to do this rulemaking.  And there is no
10    such rulemaking today.  And I don't know when there
11    will be one.
12              CO-CHAIR ORNSTEIN:  Jose.
13              MR. RUIZ:  First of all, you know, this is
14    an advisory committee.  When I came on here, I
15    understood that it was an advisory Committee.  And
16    any advisory committees I've ever been on, you
17    present a white paper, but that doesn't mean it's
18    law.
19              I think when we talk about the FCC, we are
20    talking about law.  And as far as who we represent
21    here, I don't know how many of you are paying your
22    own way or your companies are paying your way.  So I
23    think, you know, that's kind of very foggy for me
24    because if your company pays your way and you take
25    time off and they give it to you and they pay you,

 1    then I think they do have some way of thinking, "He
 2    will respond or she will respond in a certain way."
 3              Third, Robert asked for other broadcasters
 4    to share their opinions, if he was the lone wolf. 
 5    And I'd like to hear from some of the other
 6    broadcasters.
 7              MR. DECHERD:  Jose, Lone Ranger.
 8              MR. RUIZ:  Lone Ranger.
 9         (Laughter.)
10              MR. SUNSTEIN:  He's from Texas.
11              MR. LaCAMERA:  I did speak on the issue. 
12    And I think Bill did as well.  And just to respond to
13    what Karen had to say.  and, I agree, there are many
14    obligations presumably we're to look at.  And I feel
15    very strongly about some of them.  And in general
16    terms you know where I stand.
17              I think there needs to be a reaffirmation
18    on the part of the broadcasters to many of this
19    public interest standards, and even an expansion of
20    some of them.  But this issue is agenda item A.  All
21    obligations are not equal, at least the measure that
22    I've received.  This is more equal than the others.
23              And that's what I think raises the concerns
24    among some of us to have -- and again the President
25    has every right to do that in whatever forum that

 1    might be.  And the President has every right to talk
 2    to Les and Norm about his feelings, and the Vice
 3    President.
 4              When it then translates down to the
 5    Chairman of the Federal Communications Commission and
 6    he makes an unequivocal statement about it, it then
 7    has to become a concern to those of us in
 8    broadcasting and those of us as broadcasters who
 9    serve on this panel.
10              MS. PELTZ STRAUSS:  Again, though, I bring
11    up the point that he didn't define how it should be
12    accomplished.  So aren't we still in a position to
13    discuss that and -- see, I guess I also don't see any
14    inconsistency with commenting in a rulemaking.  I
15    don't equate that with the core case.  I think it's
16    very, very different.
17              And I have been on other committees where
18    we have known that a rulemaking would be coming down
19    the pike and nevertheless the members of that
20    committee were able to discuss what their views were. 
21    And then when the rulemaking came about, they were
22    free to take a different view, if they wanted.
23              It's just very, very different.  It's not
24    like revealing a client's confidence.  Maybe you view
25    it differently.  I don't know.  But I don't see them

 1    as being necessarily inconsistent.
 2              But I guess I would ask Paul to respond to
 3    the second half which is:  Okay, the Administration
 4    has made this statement and maybe tactically it was
 5    not very tactful.  Nevertheless, does that mean that
 6    we now cannot discuss it, --
 7              MR. LaCAMERA:  No.
 8              MS. PELTZ STRAUSS:  -- or should we then
 9    take it further and say, understanding their
10    position, what do we want to do with it?
11              MR. LaCAMERA:  No.  I mean not at all. 
12    And, as I said before when I spoke, first, I imagine
13    that this will become the dominant agenda item.  And
14    I think some of us are prepared intellectually and
15    philosophically to deal with it on that level.  But
16    at least we're out on the table, the fact that some
17    of us feel the group as a whole and those of us as
18    individuals have been somewhat compromised by the
19    events of the past month.
20              MR. SUNSTEIN:  Well, let's --
21              MR. CRUMP:  I think you have to realize,
22    and I'm sure it is perhaps difficult for those of you
23    who are not broadcasters, that all our professional
24    lives, we have had to deal with the FCC as our
25    governing body.

 1              And when we know from public announcement
 2    that we are now looking at a five-member FCC that has
 3    three votes on one side and two on the other, and the
 4    three are saying, "This is what we are going to do,
 5    we want to do.  Yes, we're going to have a
 6    rulemaking," but they've already declared where they
 7    stand, and then we here are going to -- we, as
 8    broadcasters, know that at some point we will be
 9    individually and as a whole before them to discuss
10    how we feel about it, that there becomes a great
11    uneasiness, at least for myself and it sounds like
12    for others as well, of really laying out all of our
13    thoughts totally, because when you go into the
14    rulemaking and we discuss what might come and what
15    might go, it's almost like we're playing our hand, I
16    guess is the way I feel about it, before we get
17    there.
18              And this is what causes me, at least, to
19    feel uneasy about the discussion of it and what I
20    would personally have to say in this, because I don't
21    -- as you have pointed out, yes, we can reverse
22    ourselves if we want to.  I don't like to reverse
23    myself, and I don't know many companies that like to
24    reverse themselves after you have made public
25    statements and then here you go and pop back and

 1    forth again.
 2              And this is not what we're -- maybe it's
 3    because we're not accustomed to doing this sort of
 4    thing before the FCC.  We state our case.  We live
 5    with the requirements that are laid down as a result
 6    of the rulemaking.  But it puts us in an uneasy
 7    position at this moment -- it puts me.
 8              CO-CHAIR ORNSTEIN:  Well, let me give you
 9    the couple of options I think we have here.
10              In their statements, Bill Kennard and Susan
11    Ness, when they announced this process going forward,
12    both went out of their way to say that they wanted to
13    wait and hear the recommendations made by this
14    Committee.  So we have a couple of options.
15              We can as a Committee weigh in with
16    something that -- we're representing to the Vice
17    President, but obviously they're going to read it --
18    in a way that will have some impact on those
19    proceedings; or the broadcast members of the
20    Committee, and this is I think what Robert is
21    suggesting, will basically opt out of discussion of
22    this to issue a minority report.
23              And the rest of us will then have to go
24    ahead and make recommendations, in which case we will
25    have great division.  And basically you're going to

 1    end up with a recommendation that probably is going
 2    to end up being much stronger than it would be
 3    otherwise, which better serves your fiduciary
 4    responsibilities as broadcasters.
 5              And I'm baffled at the notion that
 6    basically saying I'm going to take my marbles and not
 7    play this game because they've changed the rules on
 8    me, and end up with a set of recommendations that
 9    they say they're going to be mindful to that will be
10    basically less than your own interests.  It doesn't
11    make a whole lot of sense to me.
12              MR. LaCAMERA:  Norm, I thought I had said
13    just the opposite.
14              CO-CHAIR ORNSTEIN:  No, but that's not what
15    Robert said.
16              MR. DECHERD:  Let me weigh in.  I believe
17    what I said was I really didn't want to go into the
18    specifics of this now because I wanted to give the
19    other members of the panel some perspective on how
20    feel about this turn of events.  I never said, and I
21    don't believe that it is inappropriate for us to
22    discuss this question.
23              What I did say was this is how at least I
24    have reacted to these events.  And it's fine for us
25    to think we're here as individuals, but I spend some

 1    time in Washington.  I know all of you do.  It is
 2    absolutely unrealistic to think that if Leslie
 3    Moonves, as the President of CBS Television Network,
 4    makes a statement at this Commission or signs a
 5    document which is the report of this Commission, that
 6    it will not be reported as the position of the CBS
 7    Television Network or that he will not have to defend
 8    that point of view at this rulemaking.  I'm sorry. 
 9    That's just not way it works.  And I think we all
10    know that.
11              So it's fine that we're here as
12    individuals, but we have to look at this in the real
13    world context.  And that was the spirit in which my
14    comments were made in response to the subject that
15    had been raised.  I didn't say that we shouldn't talk
16    about it.
17              MR. BENTON:  I would just like to pick up
18    on Les' and  on Norm's excellent points.  It does
19    seem to me that if the FCC is not going to conduct
20    this rulemaking until after October 1st -- which,
21    Norm, was I think what you just said was the case --
22    and, number two, if we can talk this through on a
23    sort of a multi-partisan basis, if you will, to come
24    up with the best consensus possible, and give it
25    really some deliberation and some careful and

 1    sensitive thought and listening and come up with a
 2    position that maybe -- actually some new ideas, as
 3    well -- that this could have a very positive impact
 4    on the hearings that will take place after our report
 5    is submitted.  And that would be in everyone's best
 6    interest.  And it's a win-win situation for us all.
 7              What's wrong with that?
 8              MR. DECHERD:  Charles, there's absolutely
 9    nothing wrong with that.  And I think that would be a
10    terrific outcome.
11              And I want to remind all of my fellow
12    members here, our company is a leader in this
13    subject, maybe the leader.
14              MR. BENTON:  You bet.
15              MR. DECHERD:  So I'm not afraid to talk
16    about this.  But unless we are going to go in the
17    direction of general principles which guide future
18    actions of the FCC, the Congress and others, this is
19    a nonstarter.
20              And if we can all be comfortable that doing
21    just what you're describing, which is agreeing on
22    what needs to be done in general and what principles
23    should apply, that's one kind of discussion.  To
24    drill down into specifics, and we need to do this,
25    this, this, this and that, is just not going to work.

 1              MR. GLASER:  Is that because of the
 2    rulemaking phenomenon or --
 3              MR. DECHERD:  Exactly right.  Because if we
 4    sign up for that, it's going to be submitted -- well,
 5    it will be.  We've just said here, we're trying to
 6    influence that proceeding.
 7              If we're talking about enriching the
 8    political debate in this country in preserving
 9    democracy, sign me up.  That's why we are a leader in
10    this respect, but --
11              CO-CHAIR ORNSTEIN:  Robert, if the FCC --
12              MR. DECHERD:  -- but turning -- putting us
13    in the position, as someone holds a document up in
14    front of Paul or Harold or the NAB and says, "Huh-uh. 
15    No, no.  This is what the industry thinks.  See?"  We
16    can't do that.
17              CO-CHAIR ORNSTEIN:  If the FCC withdraws
18    the rulemaking and moves considerably back, does that
19    mean you then would be willing to discuss the
20    specifics and move forward with the report?
21              MR. DECHERD:  Norm, if you can pull that
22    off, you -- I mean --
23              MS. PELTZ STRAUSS:  I don't understand the
24    question.  There is no rulemaking.
25              CO-CHAIR ORNSTEIN:  No.  If they withdraw

 1    from the intent to move to a rulemaking?
 2              MR. DECHERD:  Well, if the Chairman is
 3    going to say that, for the remainder of his tenure,
 4    there will be no rulemaking on the subject and stand
 5    by it, that would be unprecedented in the history of
 6    regulatory agencies --
 7              CO-CHAIR ORNSTEIN:  No.  But if --
 8              MR. LaCAMERA:  No, just between now and the
 9    time that our report is issued.
10              MS. PELTZ STRAUSS:  Right.
11              CO-CHAIR ORNSTEIN:  Yes, in the coming
12    year.
13              MR. DECHERD:  Oh, well, that's six months,
14    a year.  I mean what's the difference?  The
15    rulemaking is going to occur.
16              MS. PELTZ STRAUSS:  But we knew that when
17    we started.  We know that we were going to --
18              MR. DECHERD:  No, we did not.  No, we did
19    not.
20              MS. PELTZ STRAUSS:  That there would be a
21    -- but that there would be a public interest.
22              CO-CHAIR MOONVES:  If we want to come to a
23    consensus of this group, people on this Committee
24    have to realize that certain people have different
25    obligations than other ones.  And if you want to sit

 1    here and worry about your own special interest group,
 2    we're going to get nowhere.
 3              What Robert said is absolutely correct
 4    about my position, and I will stand up for it.  And,
 5    yes, I will take my marbles and go home and say,
 6    "Regarding free time for candidates, I'm out of the
 7    debate.  I'm out of the discussion."  That's not what
 8    I want to do.  That's not what Robert wants to do. 
 9    That's not what Paul wants to do.
10              But we have to stop just thinking about
11    your little piece of the pie or what matters if we're
12    going to try to get a consensus here.  That's not
13    going to work.  It's just not going to work.  We all
14    have to be a little bit more open to what other
15    people's points of view are.  And I know I represent
16    a big corporation.  I'm sorry for that.  I know
17    certain people hate me for that.  That's the way my
18    life is.
19              But I am here not only as Co-Chairman of
20    the Commission, but I am here as the President of the
21    CBS.  And what I say will be represented out to the
22    broadcast world, and that's the facts of life.  I
23    know it would be nice to have a little company of
24    three people and be able to say exactly what I want. 
25    I'm not in that position.

 1              So if we want to get anywhere, I think we
 2    have to start finding a consensus.
 3              CO-CHAIR ORNSTEIN:  Jim.
 4              MR. GOODMON:  Yes.  I thought we were
 5    making progress here a minute ago.  Now let's back up
 6    a second.
 7         (Laughter.)
 8              MR. GOODMON:  We've got these different
 9    models, sort of overall models of how we should do
10    this, my notion of the next step was going to be that
11    there are areas that we need to discuss in terms of
12    the public trustee notion and that we ought to have
13    committees and move ahead and do that.  I never had
14    the notion that what this Committee does means that I
15    agree with this.  I don't -- I'm trying to -- I'm
16    working on this a little bit to see.  I mean I'm the
17    -- President Clinton in his first press conference,
18    his first term -- first press conference, first term,
19    first thing:  Free time.  I said, "Oh, no.  Here we
20    go."
21              So I mean I've known he's in on it.  I mean
22    I care how the President feels.  I care how the Vice
23    President feels.  I care how the NAB feels.  I care
24    how my fellow broadcasters feel.  But I don't -- I
25    mean I still -- I want to talk about my views of what

 1    the public interest obligations of digital
 2    broadcasters ought to be.  And I think everybody at
 3    this table ought to do that.  And didn't we write a
 4    report?  And it's over.  I mean I haven't -- I don't
 5    know what the problem is.
 6              And I'm being supportive now, not -- not
 7    supportive.  I'm saying let's go.  Whatever the areas
 8    are we need to talk about, let's talk about them and
 9    come up with them and vote on them and issue a report
10    and off we go.  And I'm -- the notion of who -- I
11    don't know who I'm -- you know, I'm a citizen.  I
12    don't think a broadcaster is a special class or
13    unusual class of anything.  I mean I'm just a
14    citizen.  We're all here as citizens trying to talk
15    through what should the public interest obligation of
16    broadcasters be.  And let's all express our opinions
17    and let's write a report and let's send it and then
18    go home.  And I want to talk about it.  Don't quit
19    before I get to tell you what I think that should be.
20              CO-CHAIR ORNSTEIN:  Well, I don't quite
21    know where we take this.  I mean it seems to me --
22    yes, Cass.
23              MR. SUNSTEIN:  One thing I have been struck
24    by is the extent of agreement on the aspirations of
25    our system of mass media.  I think we have pretty

 1    much a hundred percent enthusiasm for the educational
 2    and democratic aspirations of the media.  That was
 3    Les' speech.  Rob just talked about that about two
 4    minutes ago.  So if we have agreement on that and can
 5    actually say that, that's something.  That's the
 6    first point.
 7              The second point.  There are two other
 8    options in addition to this Aspen Institute report. 
 9    One is complete deregulation and another voluntary
10    self-regulation, which overlaps with complete
11    deregulation, but a little bit different tone.  I
12    think those should very much be among the options
13    that we talk about, even if we don't -- even if some
14    people don't like this.  Those are two options.  And
15    reasonable people believe in them.
16              I'd guess I'd say that I have sensed, from
17    some of the tenor of the discussion, that the winners
18    so far are voluntary self-regulation and some version
19    of this option 4, which is much more sophisticated
20    than the FCC.  Both the voluntary self-regulation and
21    the pay-or-play idea, are much more sophisticated and
22    creative than anything the FCC has done or anything,
23    pardon me, that the President has suggested in the
24    State of the Union Address.  So I think we could make
25    a big contribution by focusing on something a little

 1    more imaginative than what the broadcasting system
 2    has -- the system of regulation has been about.
 3              So just a suggestion.  Those are the two
 4    things that seem to be able to attract support. 
 5    They're pretty good ideas.  They're pretty new ideas,
 6    in their way.  And maybe we could make some progress
 7    on them.
 8              MR. MASUR:  Just to that, something came up
 9    for me on a pay-or-play, that because I'm the missing
10    person on this Commission I apologize to everybody
11    for my lack of attendance, and maybe you have
12    discussed this more fully or maybe you have gotten
13    testimony on this, that the thing about the
14    pay-or-play that I don't quite understand or that
15    raises some concerns for me is, let's say you had a
16    market with three television stations in it.  And two
17    of them wanted to opt out of providing any children's
18    broadcasting and the third one was willing to accept
19    the children's broadcasting.
20              Is there any kind of -- I mean, first of
21    all, what if all three wanted to opt out of
22    children's broadcasting, then you would have a market
23    with none, which seems like a potential problem; or
24    if two opted out and one decided to do it, don't you
25    have a real narrowing of possibilities in terms of

 1    you have one set of decisionmakers choosing the sum
 2    total of the children's programming that would be
 3    available through broadcast to that market?  And
 4    isn't that a potential problem?
 5              I'm just raising this question and to see
 6    if anybody has addressed that.  I know it's a very
 7    narrow element of this, but maybe it's a way to get a
 8    discussion started.
 9              CO-CHAIR ORNSTEIN:  Well, presumably, the
10    way a good pay-or-play model would work is that as
11    people pay you're going to have resources available. 
12    And those resources can be used to smooth out
13    inconsistencies and difficulties either by having
14    more resources available for public broadcasting to
15    provide good quality programming or resources in a
16    local area for production of programming that might
17    then be brought back to purchase time on stations or
18    to supplement time on other stations.
19              So you'd be able in some ways to have
20    flexibility to tailor to the needs of the local
21    community, some of which might have much more
22    interest in children's programming and others of
23    which might have less interest because of
24    demographics or other reasons.
25              The whole notion here is to try and build

 1    in a flexibility but do it in a way that provides
 2    something to broadcasters as well as something to the
 3    community standards and interests.
 4              MR. GOODMON:  I want to get back to what we
 5    were talking about just a second ago.  Let's say we
 6    get down to the political broadcasting rules and the
 7    majority of this group feels something, that
 8    candidates should be given something.  Now those that
 9    disagree, what is the forum for stating another
10    position?  Isn't that what we're talking about now? 
11    I'm trying to get back to what we were really talking
12    about.  What --
13              CO-CHAIR ORNSTEIN:  That's a part of it.  
14    I --
15              MR. GOODMON:  What is the forum for stating
16    another position about that issue that's available to
17    Committee members?
18              CO-CHAIR ORNSTEIN:  As you mention that,
19    let me just quote a paragraph from a letter that
20    Robert Decherd sent to Les and to me last week.
21         "I'm assuming the final report will include
22                   majority and minority reports.  The 
23         President's" --
24              It's okay if I quote from this letter,
25    Robert?

 1              MR. DECHERD:  Sure.
 2              CO-CHAIR ORNSTEIN:  "The President's State
 3         of the Union reference to free broadcast air
 4                   time for federal candidates was followed up the
 5                   very next day by the FCC's rulemaking
 6                   initiative.  It's obvious that the
 7                   Administration and its regulatory appointees are
 8                   in favor of a federal mandate for free air time.
10                   At the same time the Committee is devoting a
11                   substantial amount of time to discussing
12                   mandated free air time.  Because Belo can't see
13                   any circumstances where we would endorse a
14                   recommendation for federally mandated free
15                   television air time for political advertising,
16                   I'm interested in how we will have the
17                   opportunity to articulate our position."
18              So that's kind of setting out I think in
19    starker terms what you're suggesting.  And I guess
20    there would be two answers to that.
21              The first answer would be that in any area
22    where there is a significant disagreement, of course
23    there will be an opportunity with space in a report
24    for a minority view.  But I would also say that if
25    one wants to come to the conclusion, before we've

 1    started these deliberations, that we will recommend
 2    mandated free air time, I think that is very much a
 3    misreading of the entire deliberations that we've had
 4    or the intention of the vast bulk of us; that what
 5    we've tried to suggest throughout is there are lots
 6    of way to try and accommodate all of our interests as
 7    part of a broader rubric.
 8              So I would hope none of us would start with
 9    a belief that we have a preconceived conclusion and
10    therefore we're not going to be a part of it, because
11    the only way to get that is basically by starting
12    with that judgment, and then you will probably ensure
13    that we will get to that point.
14              Yes.
15              DR. DUHAMEL:  A question.  Now, see, the
16    campaign finance reform has been taken off the table,
17    but do we necessarily have to take it off the table? 
18    Can we discuss anything that we want in the context
19    of saying that's a part of a campaign finance reform
20    and not just coming out and saying, "Well, that's off
21    the table so we're in this little, narrow area"?
22              CO-CHAIR ORNSTEIN:  Campaign finance reform
23    is not off the table.  They will be discussing it and
24    voting on it in the House of Representatives in two
25    weeks.  So it's very much on the table.  But whether

 1    it's on the table in Congress, it has little to do
 2    with our deliberations, just as whatever is on the
 3    agenda of the FCC should have little to do with our
 4    deliberations.
 5              DR. DUHAMEL:  So we could say, though, that
 6    any recommendation we have might be tied to that?
 7              CO-CHAIR ORNSTEIN:  Of course.  Absolutely.
 8              Yes.
 9              MR. GLASER:  I think in reading Robert's
10    letter you raised what I think is a very important
11    question that could maybe get us to be in the most
12    sort of constructive path that I can see, which is
13    given that there are, a number of topics, divergent
14    views when you drill down from sort of the abstract
15    principle to the detailed implementation, I think
16    just have a conversation about whether or not and
17    under what circumstances it's possible to have
18    partial majority/minority splits and a full Committee
19    might be a way to go.  Because it might turn it out
20    that at a set of general principles, which is what
21    Les was talking about, we can reach very strong,
22    meaningful common ground.
23              And then when you get into specific
24    characteristics and implementations for one or a
25    number of areas, and this whole issue of free air

 1    time I'm sure has been at least somewhat polarized by
 2    what the FCC and the President are engaged in, we
 3    might say, "Hey, we have a choice."  We can either
 4    have broad agreements that we all share or we can in
 5    a specific area, if a majority feels that a specific
 6    detailed proposal is meaningful and a minority can't
 7    be comfortable with that, either for substantive
 8    reasons or procedural reasons, that we just say, hey,
 9    that's okay.  And that does not tear the whole fabric
10    apart to say in specific measured areas we will have
11    minority and majority conclusions.
12              And so perhaps I'm being a little bit naive
13    to think that that sort of, you know, a part-of-the-
14    way-with-LBJ," if you will, view, would not be
15    somewhat painful at times, but I think that might get
16    us to where we can have a process where we get
17    through the broad set of recommendations that we
18    hopefully can reach common ground on and then have
19    some more specific recommendations that have
20    meaningful majorities but also meaningful minorities.
21              CO-CHAIR ORNSTEIN:  Well, I think there's
22    ample precedent in reports of this sort for a core
23    which is accepted by everybody and then areas where
24    there are some disagreement.  We might even want to
25    do a variation of that which is to try and reach an

 1    agreement even on a lot of details and then have a
 2    minority report at the end which says,
 3    "Notwithstanding anything else in this report, we
 4    want to make it very clear that we are opposed to
 5    mandated free air time."
 6              Perhaps that would give broadcasters the
 7    flexibility to have a broader discussion and still be
 8    on record to fulfill your fiduciary responsibilities
 9    so that you're right there saying no mandated free
10    air time, and then maybe we can discuss some of the
11    other options that fall short of mandated free air
12    time.  Maybe that's a possibility.
13              Yes, Frank.
14              MR. CRUZ:  One of the reasons I came on
15    this Committee was that I was really interested in
16    seeing how much the public impact might have in the
17    comments they provide us.  And we've heard some good
18    things over the last four months.
19              And the other thing that seems to be sort
20    of forgotten in the considerations here, when we say
21    free political air time, I think we sort of forget
22    the economic impact of what we're talking about on
23    some of the public interest obligations, no matter
24    whether it's free time, whether it's obligated
25    children's programming, or whether it's dedicated

 1    channels or any other comments that we've heard.
 2              And it seems to me that some of those
 3    economic issues are going to be part of our overall
 4    consideration as to what we recommend or don't
 5    recommend, depending on who's for it and who's
 6    against it, whether the industry is or the industry
 7    isn't, or the public is or the public isn't.
 8              I guess I'm sort of in a quandary here now
 9    as to -- and one of the fears I had, too, early on
10    was that the political agenda, the outside influences
11    of the political agenda like free time would sort of
12    override some of our ongoing discussions like the
13    last hour has on free political time.
14              Somewhere along in the process as we
15    deliberate what we should consider, particularly from
16    the public comments as we had, is how much weight do
17    we give to those outside comments we've heard that
18    are sort of nonpolitical in nature, I guess, or don't
19    have as big an impact on the industry as free
20    political time or children's programming, which are
21    the two predominant ones that sort of started this
22    Committee out.
23              Also I guess, again, what's the economic
24    impact of those things and how do we propose those
25    things?  But I think there's some specific ideas that

 1    we heard from the public over the four months that
 2    somehow I'd like to find out if we -- I don't know if
 3    Karen and Anne can put together a sort of a report of
 4    what were the primary recommendations that came out
 5    of that that are food for thought for us to use.  I
 6    know I've read them all.  But that would be one thing
 7    I would recommend that we try to get a handle on, at
 8    least to add to the discussion of what
 9    recommendations, what public interest obligations the
10    public seems to want.
11              I don't recall any of them saying free
12    political time is high on their agenda, and it's
13    coming from other sources.  But that's what I would
14    like to see as we move forward here.  Then maybe some
15    of the subcommittees can deal with those issues a
16    little bit more.
17              MR. LaCAMERA:  Just to follow up because it
18    was a thought I had, and that is if there was a theme
19    that seemed to emerge over these many months, it was
20    the concept of access.
21              And I speak as a single broadcaster.  I
22    don't have group responsibility.  I'm not an owner. 
23    I run one single television station.  But I continue
24    to believe that it's a fair expectation and measure
25    of a television station's performance, the degree of

 1    access it provides, whether that's access to the
 2    public, community interests, special needs,
 3    individuals, independent suppliers, producers or to
 4    political voices.  I mean I don't think that's a
 5    unfair expectation and measure one can look.  And
 6    there I speak in general broad terms.
 7              Let me take this opportunity to also
 8    address a very specific issue that came up, and
 9    that's the so-called pay-or-play.  Of all the
10    concepts I've heard in my 26 years as a broadcaster,
11    it's perhaps the most repugnant.
12              I can't imagine anything shredding what's
13    left of the idealism and responsibility of local
14    broadcasting than that concept.  I also can't think
15    of a precedent short of rich Northerners paying poor
16    Northerners to fight for them in the Civil War.  I
17    would hope that this would not be a direction that we
18    would pursue or, if it is one, I intend to fight to
19    the end to ensure that it's not part of at least the
20    formal recommendations of this group.
21              MR. BENTON:  Well, I'd try to shift the
22    discussion here because it's quarter of 3:00 and time
23    is proceeding.  And we've got our next meeting in
24    mid-April.  And by that time we've really got to get
25    down to business in figuring out how we're going to

 1    divide up the labor to get this report done on time.
 2              It seems to me I hadn't seen this Aspen
 3    paper before now.  We moved our office, and I think
 4    the packet got to an old address.  But I think the
 5    spectrum of this chart at the back is really
 6    wonderful.  The goals, the four goals.  There are
 7    four, for those who don't have this chart, there are
 8    four types or four models which I think it would be
 9    really interesting to discuss in depth today and the
10    four goals, which I think are outstanding and
11    outstanding of a breakdown of the content, localism
12    and community, informed electorate, diversity of
13    viewpoints and children's educational programming. 
14    This pretty much covers everything we've been talking
15    about from a goals' perspective.
16              And so I like the content, the breakdown of
17    the content here very much.  I have not given much
18    thought at all to these four different models: 
19    Public trusteeship, the spectrum, the pay access or
20    pay-or-play, but I'd love to hear the background or
21    the thinking that went into this and how these models
22    were developed, how they relate one to the other. 
23    And perhaps if we can get a full understanding of
24    that today, then between now and April we could be
25    thinking about how we divide up the labor, or maybe

 1    you have some other plans that you wanted to discuss
 2    and share with us now.
 3              But in the end of the day, for us to get
 4    productive we've got to get into smaller groups and
 5    what's the structure of how we divide ourselves up. 
 6    That's the key question, I think.  And if we don't do
 7    that, then we're just going to continue this general
 8    palaver and not get down to work.  So, my suggestion.
 9              CO-CHAIR ORNSTEIN:  Well, I think some of
10    the areas we clearly have to air because they reflect
11    intensely-felt viewpoints, and we have to get them
12    out there.
13              And we'll, I think, within a short while
14    begin to discuss the process that will follow.  I
15    think we are at least agreed that we'll try and work
16    towards a consensus of the core, at least of areas
17    where we can agree.  And it may be from Paul's
18    statement that that consensus is not going to include
19    everybody.
20              I was interested in what you said about
21    that model being repugnant, because in some ways the
22    discussion that we've had in the past of children's
23    television, that Les lead, was a pay-or-play model. 
24    And many broadcasters -- 
25              MR. LaCAMERA:  I'm talking from a local

 1    perspective.
 2              CO-CHAIR ORNSTEIN:  Yes.  Many broadcasters
 3    have --
 4              MR. LaCAMERA:  I'm talking from the
 5    perspective of one local television station.
 6              CO-CHAIR ORNSTEIN:  Okay.
 7              Many broadcasters have thought that
 8    building that flexibility in where some are just not
 9    particularly well suited to doing some areas and
10    letting others do it and then finding ways to smooth
11    it out in the community was anything but repugnant. 
12    So I think there's at least some division in the
13    broadcast community about that.
14              But we've got those --
15              CO-CHAIR MOONVES:  Although Paul brings up
16    a good point.  But, Gigi, the point you made at lunch
17    I think was the significant one.
18              We have to talk about local stations. 
19    That's what this is about.  It's about local
20    stations, about individual markets.
21              MR. GOODMON:  Right.
22              CO-CHAIR MOONVES:  And I think we have to
23    from here on in go from that point of view, you know,
24    and talk about Paul's station in Boston and how that
25    affects him directly, and I think --

 1              CO-CHAIR ORNSTEIN:  Sure.
 2              CO-CHAIR MOONVES:  -- we should attack it
 3    from that point.
 4              CO-CHAIR ORNSTEIN:  Clearly we have these
 5    models.  And I think Cass suggested something that's
 6    very significant.  Indeed, there are other models and
 7    indeed we have had very significant discussion.  And
 8    Paul raised it today with the issue of broadcast
 9    time, about where we can go in a voluntary way.
10              And we have had discussion in the past
11    about recreating a set of standards and, in some
12    ways, putting the onus back on the National
13    Association of Broadcasters in a much more direct and
14    heavy way as a part of this process.  I think we need
15    to have some very serious discussion of that, not as
16    the only way we go, but we may want to adopt more
17    than one model here.
18              And what we may want to do is -- and I hope
19    what we would do this afternoon is to see if there
20    are other models out there, other general approaches
21    that people thought would be worth considering and
22    worth taking, and seeing where we could reach that
23    consensus.
24              I think we're not yet ready to -- until we
25    have a sense of where we have a general agreement and

 1    where we're going to have to specific disagreements,
 2    we're not yet ready to break up into subcommittees. 
 3    Maybe that will evolve a little bit more.  But by the
 4    end of the day we ought to at least be talking about
 5    what we want to do in preparation for the next
 6    meeting and start to work towards where we can find a
 7    consensus.
 8              Yes.
 9              MS. SOHN:  I just wanted to raise an issue
10    with regards to these pay models, the 3 and 4 models. 
11    And the one thing that makes me a little bit
12    uncomfortable, and I think this has just generally
13    been a fundamental misunderstanding about public
14    broadcasting -- this is with all due respect to Frank
15    -- I would be uncomfortable with the pay model that
16    just gives either PBS or the local broadcast stations
17    the money, if we could even do that.  I mean there's
18    a definite jurisdictional question.
19              And I think one of the things we have to
20    keep in mind in our deliberations is:  Can the FCC do
21    some of the things we want them to do.  That's not to
22    say we shouldn't make recommendations to Congress. 
23    But in my mind if all we do is make recommendations
24    to Congress to change laws, then we haven't done
25    anything, because the chance that that's going to

 1    happen are probably nil.
 2              But I just want to express my discomfort
 3    with the notion of just giving public broadcasting --
 4    and I think there's some people on this Committee who
 5    are uncomfortable with the way public broadcasting --
 6    just giving the money to public broadcasting to do
 7    with what they want.
 8              There was a discussion, Bob brought up, I
 9    thought, a good point in the last meeting about
10    paying the public broadcasters to maintain some sort
11    of civic space.  That's something I would have a
12    little less discomfort with, because you're just not
13    throwing the money at them and saying do what you're
14    doing already.
15              And while public broadcasting is a great,
16    you know, great American gift and it does a lot of
17    good things, I think there's a lot of bad things,
18    too, and I wouldn't be comfortable.  So I think we
19    need to think broader, to the extent that we like the
20    pay ideas, need to think more broadly than just
21    giving the money to PBS, which is a network and not
22    local stations, do not own local stations, or to the
23    local stations themselves.
24              CO-CHAIR ORNSTEIN:  I think that we would
25    have a general agreement there.

 1              Let me suggest that part of the reason for
 2    considering these kinds of models -- and that
 3    includes, by the way, what -- and, remember, our
 4    recommendations go to the Vice President.  They will
 5    presumably reach out elsewhere, but we're not making
 6    specific recommendations to anybody else.
 7              We're trying to find ways to see if we can,
 8    without imposing more on broadcasters than will be
 9    acceptable more broadly, to satisfy some of these
10    other larger public interests.  We've talked about
11    making a recommendation that the revenues from the
12    ancillary and secondary uses of the spectrum, fees
13    that will have to be paid anyhow, be channeled back
14    into the public interest.
15              If we can find a way of building a model
16    where broadcasters get more flexibility in terms of
17    what specific obligations they do in return for some
18    fee, and can add those resources in, they don't have
19    to simply go to public broadcasting.  They can go for
20    in part for a broadcast bank.  They can go for local
21    interests to make sure those local interests are
22    served.  And if money gets channeled back to
23    broadcast for free time that way, that's not imposing
24    anything on broadcasters, as long as you've given
25    them flexibility in return for some of these other

 1    purposes.
 2              So my hope would be that we can find some
 3    way of coming up with resources that would, in fact,
 4    offer something in the way of flexibility to
 5    broadcasters in return, and then turn around and make
 6    recommendations about how those resources can be used
 7    to serve a lot of these larger interests that
 8    wouldn't require swallowing bitter pills.
 9              MR. LaCAMERA:  Look, Norm, I mean if you're
10    talking about the ancillary or the additional
11    services, yes, I'm in agreement on that.  I have no
12    difficulty.
13              If you continue to talk about local
14    broadcasters being able to buy their way out of their
15    obligations, I remain very much opposed to that
16    concept philosophically.
17              MR. GOODMON:  Back to the self-regulation
18    model.
19              At the first meeting I gave to everybody a
20    copy of the NAB code that we used to have.  And I'm
21    wondering if could you put together a group, or how
22    would we come up with a recommendation that we need
23    to allow broadcasters to establish a code?  I mean
24    how as a Committee would we do that?  How did
25    somebody bring it up and say, "I think we ought to

 1    have the code?"  Coach. 
 2              CO-CHAIR ORNSTEIN:  I think it's clearly an
 3    idea that many of us share as one that ought to be
 4    pursued, and maybe even to the point of taking that
 5    code and revising it and coming up with a recommended
 6    new code and putting together a subcommittee, as we
 7    move along, to begin that process that represents all
 8    the different interests here.
 9              MR. GOODMON:  So you'll appoint a group
10    then to work on that?
11              DR. DUHAMEL:  Well, except if you're going
12    to have the NAB code, wouldn't you expect the NAB to
13    develop it?
14              MR. GOODMON:  Well, I brought my code.
15              DR. DUHAMEL:  It's just that we develop a
16    code and hand it to them.
17              MR. GOODMON:  Okay.
18              CO-CHAIR ORNSTEIN:  That doesn't mean that
19    they're going to be forced to take whatever we give
20    them as recommendation.
21              MR. GOODMON:  A code, a mechanism under
22    which broadcasters can work together.
23              DR. DUHAMEL:  Well, see, there were some
24    legal questions on the NAB code.  That's why it was
25    disbanded.

 1              CO-CHAIR ORNSTEIN:  We have nothing that
 2    prevents us from making a recommendation that --
 3              DR. DUHAMEL:  There be a new code.
 4              CO-CHAIR ORNSTEIN:  Yes.
 5              -- and making a suggestion that the legal
 6    issues are not serious ones.  I think most of us
 7    would agree that they were overstated.
 8              DR. DUHAMEL:  I don't think they were
 9    overstated.
10              MR. GOODMON:  It was thrown out because
11    they said it was an antitrust, was the problem.
12              CO-CHAIR ORNSTEIN:  Right.
13              MR. GOODMON:  Broadcasters wanted it.  And
14    to this day a number of broadcasters still adhere to
15    it, -- 
16              DR. DUHAMEL:  Yes.
17              MR. GOODMON:  -- but simply on their own
18    personal basis.
19              CO-CHAIR ORNSTEIN:  We might very well be
20    able to make a case, and I suspect we could, that
21    this is not really an antitrust issue any more.  And
22    if that were a recommendation, that clearly
23    broadcasters wanted, then it might be something that
24    lots of members of this Committee would be willing to
25    go along with, seeing flexibility here in many ways,

 1    perhaps.
 2              MR. GOODMON:  Two Senators have proposed
 3    legislation to give us whatever exemption we need in
 4    order to have that.  I just want to see if we can get
 5    to work on that.
 6              DR. DUHAMEL:  Would we make the code or
 7    would the NAB draw up the code?
 8              MR. GOODMON:  We would just suggest that
 9    there's a mechanism for --
10              DR. DUHAMEL:  The vehicle --
11              MR. GOODMON:  That there can be a code.
12              DR. DUHAMEL:  I understood Norm to say or
13    you were saying, somebody was, that we should have a
14    subcommittee and write the code.  I thought, "My
15    god," I mean here we're asking for a voluntary code,
16    and then we're here to say, "Here it is.  Do you guys
17    want it?"  I mean I don't think that's what we want
18    to do.  I mean you can say the mechanism, that we can
19    talk about it, --
20              CO-CHAIR ORNSTEIN:  If all you want to do
21    is say, "Let's have a code.  We don't care what's in
22    the code.  You just do a code," I don't think we'd
23    get very far.
24              DR. DUHAMEL:  We can talk about some
25    principles, --

 1              CO-CHAIR ORNSTEIN:  Yes.
 2              DR. DUHAMEL:  -- but I mean not write the
 3    code.
 4              CO-CHAIR ORNSTEIN:  I'm talking about --
 5    well, what Jim gave us was the code that existed
 6    before.
 7              DR. DUHAMEL:  Right.
 8              CO-CHAIR ORNSTEIN:  To take that code and
 9    to sit and try and figure out how it might be applied
10    to the digital age is something that seems to me
11    perfectly appropriate for us to do and a reasonable
12    thing to do.  And if we can make some suggestions
13    that would be considered by the NAB, what's wrong
14    with that?
15              And it would take us further along the way
16    toward resolving some of these knotty issues, if we
17    can do it in a fashion that suggests not that they be
18    mandated, but rather strongly recommend that the NAB
19    do this through a voluntary code.
20              DR. DUHAMEL:  If they --
21              CO-CHAIR ORNSTEIN:  If you have a problem
22    with that, Bill, then we're not going to get anywhere
23    here.
24              DR. DUHAMEL:  Okay.  But they're free to
25    modify it if it's a voluntary code?

 1              CO-CHAIR ORNSTEIN:  Well, how can we
 2    possibly mandate what the NAB does?
 3              DR. DUHAMEL:  Well, it sounds to me like
 4    we're writing it and handing it to them.
 5              MR. GOODMON:  That's right, but then they
 6    don't have to accept it.  We're just making a
 7    suggestion.
 8              CO-CHAIR ORNSTEIN:  Jose.
 9              MR. RUIZ:  Certainly part of the task here
10    is to come up with something else that makes economic
11    sense.  And Les, at the beginning of the meeting,
12    when he talked about children's programming, talked
13    about something that was losing million dollars of
14    dollars.  Is that from the network?
15              CO-CHAIR MOONVES:  Yes.
16              MR. RUIZ:  How does that trickle down to
17    the locals?
18              CO-CHAIR MOONVES:  It doesn't really except
19    they're -- you know, once again, they are not going
20    to be making any money during that day for it and
21    they're going to be losing money if the ratings are
22    as low as they are.
23              When you get a .5 rating nationally, I mean
24    at a local level, it's going to be pretty disastrous
25    as well, so...

 1              MR. CRUMP:  And it replaces the time that
 2    you could have used for other purposes to generate
 3    income.
 4              CO-CHAIR MOONVES:  Right.
 5              CO-CHAIR ORNSTEIN:  Those local stations
 6    would love to be out of it, too.
 7              CO-CHAIR MOONVES:  And it's there purely to
 8    accede to the FCC's wishes.
 9              MR. RUIZ:  As we go through this process
10    and we get into children's programming, can we depend
11    on you and others to chime in on what is at real risk
12    there economically?
13              CO-CHAIR MOONVES:  Where it's appropriate,
14    certainly.  Where I feel it's confidential, obviously
15    not.  But I have no problem sharing with you a model
16    of how last year CBS got killed in children's
17    programming because of the three hours of FCC
18    regulation.
19              I'm glad Peggy's not here because she'll
20    tell me how to reprogram it and do better, but
21    certainly those things that do affect -- once again,
22    I deal on the network level.  And it's hard to know.
23              I think Paul and these other gentlemen can
24    help more on a local level how the failure of a type
25    of programming or the success of a type of

 1    programming would affect their local stations a lot
 2    better than I could.
 3              MR. RUIZ:  And when you carry a
 4    presidential debate in prime time, say, or six
 5    o'clock on the West Coast, --
 6              CO-CHAIR MOONVES:  Right.
 7              MR. RUIZ:  -- you also lose money on that?
 8              CO-CHAIR MOONVES:  Of course.  It's an hour
 9    or a half-hour where we could be selling advertising
10    time.
11              MR. RUIZ:  Because I think for us to make
12    decisions here that will also be palatable for the
13    commercial broadcaster, we have to be knowledgeable
14    of how it's effective.
15              CO-CHAIR MOONVES:  Right.
16              MR. RUIZ:  And I think sometimes we're
17    working in a real tremendous vacuum.
18              CO-CHAIR MOONVES:  Right.
19              In the last presidential debate -- let me
20    give you a slight example of what happened -- there
21    was five minutes given to each one of the
22    presidential candidates at the end of "Dan Rather's
23    Evening News."  "Dan Rather's Evening News," the
24    ratings are fortunately a little better now, coming
25    in second.  But it literally dropped off 80 percent. 

 1    I mean we did a whole thing announcing at the end of
 2    that.  So when those numbers come down, our
 3    advertising rates come down for that half-hour.  We
 4    will lose money on that five minutes of time.
 5              On a presidential debate, on a State of the
 6    Union, you know, it is money that is lost.  Once
 7    again, don't anybody jump down my throat.  We're
 8    happy to do it.  It's important that we do it.  But
 9    it would be better to run "Chicago Hope" than the
10    State of the Union Address. 
11              MR. RUIZ:  But you also do it because it
12    gives credibility to your news department and --
13              CO-CHAIR MOONVES:  Absolutely.  No.  And it
14    is public service.  And, believe it or not, that is
15    something that significant to us.
16              MR. LaCAMERA:  It's the right thing to do.
17              CO-CHAIR MOONVES:  Yes.
18              CO-CHAIR ORNSTEIN:  We will be having at
19    our next meeting at least a brief presentation that
20    the National Association of Broadcasters will give us
21    based on survey they have been doing of the local
22    stations in terms of what they have done for the
23    public interest.  And I assume they will include some
24    costs associated with them.  So --
25              MR. RUIZ:  Because the cost part to me is

 1    very important, without being very specific to what
 2    network or something like that, but just what is at
 3    play here, how many million, how does it affect?
 4              CO-CHAIR MOONVES:  Well, I thought Tracy
 5    had some very interesting things to say this morning,
 6    where he said, "All right, these are ways that
 7    broadcasters can get some of it back."  You know,
 8    some tax consequences perhaps.  Some other ways that
 9    by giving up time, the economic hit is not as great. 
10    That's what a lot of broadcasters deal with.  They
11    want to do the right thing, but not at the point of
12    losing their business, like any other businessman.
13              MR. CRUMP:  Let's also not forget that all
14    markets are not the same size.  And the smaller the
15    market, the larger the impact that these small
16    amounts of time seemingly makes on them.  And if you
17    stop to consider the fact we have, what, 245 or '50
18    various television markets now.
19              And once you get outside of probably the
20    top 100, every dime that you lose really means
21    something to you.  And it doesn't mean that they are
22    any less willing to do so.  It's just that the
23    smaller the market, the larger the impact.  And
24    that's something we need to keep in the front of our
25    minds as well when we're talking about all these

 1    things we have to do, creating programming, et
 2    cetera, there's some basic costs involved in the
 3    creation of anything that are going to be there
 4    regardless of market size.  And it has great impact
 5    over a huge number of various stations and markets.
 6              MR. RUIZ:  But we do have good
 7    representation here from the medium in small markets.
 8              MR. CRUMP:  Yes.
 9              MR. DECHERD:  Norm?
10              CO-CHAIR ORNSTEIN:  Yes.
11              MR. DECHERD:  I'm not sure this is the time
12    to do this, but I think it would be very useful if
13    soon in this process we literally went one by one
14    through our membership and asked each of us to say
15    what his or her expectation is for the outcome,
16    because I think what's running through all of this is
17    not only the fact that we're in different places in
18    terms of our knowledge and comprehension of issues
19    from both sides of these questions.  This isn't, you
20    know, that Jose doesn't know the network television
21    business any more than it is that I don't know a lot
22    about the public interest organizations represented
23    here and not represented here.
24              I mean there's a huge learning curve that
25    we've all been trying to climb.  But the thread

 1    that's running through all of this is, I think,
 2    probably some fairly significant differences in
 3    political ideology and views towards the role of
 4    government in this business.
 5              And if, for example, we all agreed that
 6    what we wanted to do was express these general
 7    principles we've talked about and leave the detail to
 8    the government, that's going to lead to one kind of
 9    process.
10              On the other hand, if a majority of us
11    believe that we should have very specific
12    recommendations on each and every one of the
13    questions that have been brought before this panel,
14    then I think those ideological differences are going
15    to be a very serious issue for all of us.  I mean
16    Cass in his list of possibilities mentioned
17    deregulation.  Well, the fact is there are some
18    people who could argue very persuasively that
19    deregulating the whole industry is a perfectly valid
20    concept.  That may or may not be helpful, though, to
21    us reaching a consensus about what the real public
22    interest obligations of broadcasters are today and
23    should be as digital becomes reality.
24              Without asking people to commit, I think
25    you and Leslie should consider some way to draw us

 1    out on having heard all this, having come this far. 
 2    Do you want to see a five-page report or a fifty-page
 3    report, and what's in those two documents, depending
 4    on your personal point of view?  Because there is an
 5    individualistic aspect to this that's perfectly
 6    valid.
 7              CO-CHAIR ORNSTEIN:  I had hoped, in fact,
 8    that we would go around the table today and get the
 9    people's sense.  And that makes perfect sense, and
10    let's do it.  And let's start here.
11              MR. RUIZ:  What my expectations are?
12              CO-CHAIR ORNSTEIN:  What are your
13    expectations?  What would you like to see emerge as
14    the final product here?
15              MR. RUIZ:  Well, let me first say what my
16    concerns are in broadcasting.  And certainly I'm
17    representing a minority constituency in the broadcast
18    area, but yet I don't see them as a minority in the
19    population.  They're 10 percent.
20              I think it's questions of service and
21    access.  Given the changes in technologies, can
22    minority communities be better served, have more
23    access to an extremely powerful medium?
24              And I did start in commercial broadcasting
25    with a gentleman by the name of Alton Rule and later

 1    on with Bob Howard at KNBC.  But it was a different
 2    part of commercial broadcasting that I was in, which
 3    was public service.  And I've always been on the
 4    programming side.  I never sold commercials or
 5    advertising.  So then later on I went to the
 6    production side.
 7              But I don't think minorities in this
 8    country are receiving the quality of programming that
 9    they should be.  The fact that on Les' network one of
10    my favorite programs is "Touched by an Angel," but
11    all the kids want to know why there's never any brown
12    angels or why they never visit brown families.  And
13    that's a concern because part of the social problems
14    I think in the Latino community is their own self-
15    esteem.  And I think they get a low self-esteem from
16    what they see on television.  And that contributes to
17    our drop-out rates, our teenage pregnancy rates, our
18    prison rates, and things like that.  If they see
19    themselves more as part of the American experience, I
20    think they will rise to the occasion.
21              CO-CHAIR MOONVES:  Jose, one slight
22    clarification.  This year we added an 18-year-old
23    Latino angel -- 
24              MR. RUIZ:  See, great.
25              CO-CHAIR MOONVES:  -- who has recurred and

 1    was in six or eight episodes.
 2              MR. RUIZ:  There is hope.
 3              CO-CHAIR ORNSTEIN:  Paul.
 4              MR. LaCAMERA:  I apologize if I become
 5    redundant here, but again I have been struck over
 6    this exercise by that common re-emerging theme of
 7    access.  And I still believe that that holds great
 8    worth in a measure of any television station.  And I
 9    think we should spend some time looking at that. 
10    And, again, that access ranges from public access to
11    political voices to community interests, minority
12    interests, special needs and whatever.
13              When I say "political voices," that doesn't
14    necessarily mean free political time, but it could
15    mean the model of the Belo stations, as an example.
16              The secondary issue, and that is with this
17    transition to digital, we're going to be delivering a
18    primary service.  If there are secondary or ancillary
19    services that bring with them additional revenue
20    streams or fees or whatever, I have no difficulty at
21    all seeing a sharing of that.  And if that's the
22    recipient -- or the beneficiary to that is public
23    broadcasting, all the better.
24              And then, as I've said already twice, the
25    third concept of that pay-or-play is something that I

 1    have little if no interest in.
 2              CO-CHAIR ORNSTEIN:  And just to clarify, in
 3    your desire to get access addressed, where do you
 4    want to end up, with a leave it all voluntary or have
 5    a stronger set of a guidelines?  Do you have any
 6    sense of a model that you would find acceptable?
 7              MR. LaCAMERA:  I don't, but I imagine as
 8    the discussion progresses over the coming meetings,
 9    that it will become more formalized in my thinking. 
10    I mean I don't want to go back, as an example, to
11    something that's been raised to what was that
12    sometimes artificial exercise of ascertainment, not
13    that we didn't learn something from that process, but
14    you know you better be learning something all along. 
15    It's the end result.  It's what you're delivering at
16    the end which I think is much more important, and
17    that it often does translate into access.
18              And, as I said, that expectation, whether
19    it's from the Federal Communications Commission or
20    whatever, or that measure is something that I think I
21    could at some point arrive at with a degree of
22    comfort.  And I don't know exactly what form that
23    might take, but I'm sure other people have ideas
24    about that.
25              MS. PELTZ STRAUSS:  I'm going to pick up on

 1    the word "access," but it's a very different -- has a
 2    very different meaning for us.  It's not access to
 3    the airwaves; it's access by the consumers to the
 4    programming.
 5              And, as I've said in earlier meetings, our
 6    primary goal is just being able physically to have
 7    access to whatever programming is provided.  But even
 8    more importantly what concerns me here is the fact
 9    that there will be this array of additional
10    alternative uses, that there will be the possibility
11    that the computer software and sports information and
12    telephone directories and all endless types of
13    information could be used in the digital era.  And
14    the question is what obligations would be imposed on
15    the providers of this information or the licensees to
16    make it successful to people with disabilities.
17              I look at these models.  It's interesting. 
18    You know, I don't know when this was put together,
19    but accessibility issues by people with disabilities
20    was not contemplated in the Aspen Institute report. 
21    There is no way that any of the models except for the
22    public trustee model would work for us.  Obviously
23    paying one station to provide access is not going to
24    work.  So for us the only one that works is the
25    public trustee model.

 1              As to whether I want to be specific or
 2    general, obviously the more specific for my
 3    clientele, the better.  Whether I think we can attain
 4    that, I'm beginning to have more and more doubts.
 5              But ultimately some promise that there are
 6    populations out there that right now don't even have
 7    the fundamentals of access to the programming, some
 8    recognition, at a minimum.  And whatever we can build
 9    on that, hopefully we can build a lot more on that.
10              CO-CHAIR ORNSTEIN:  Robert.
11              MR. GLASER:  Well, in terms of specific
12    public policy issues, I think I look forward to the
13    deliberations of the Committee before forming a firm
14    opinion on what modes of public interest obligation
15    are most appropriate in specific.
16              I have an openness, as Norm has
17    articulated, to looking at whether there are
18    alternate models of trade-offs associated with
19    specific statutory commitments or economic
20    equivalents of commitments.  Because I think that in
21    an environment that's as flexible or that's as
22    dynamic as the digital environment, having something
23    that's not cast in concrete is going to be very
24    important.
25              Having said that, I don't think that we

 1    would be doing the best job we could have if we just
 2    stayed at the level of platitude that everyone can
 3    agree with because if that's all we do, then I think
 4    we will not have leveraged all the expertise that's
 5    in the room here and all the expertise that we have
 6    heard to really come up with something that might be
 7    more substantive, and if being more substantive means
 8    that, as discussed early, we need to have some parts
 9    of the report that are not consensus reports.
10              I think that does our charter full of
11    service than having only sort of fairly watered-down
12    elements.  I guess the only substantive things that I
13    would say is, I guess one thing I contribute or
14    endeavor to contribute is making sure that our
15    technology orientation is not naive with regard to
16    the kinds of things that can happen technologically
17    while avoiding being overly specific, and there's a
18    predicting what things will happen.
19              And then secondarily for me that leads to a
20    second specific conclusion which is that we look at
21    the implications of the public interest obligations
22    that we perceive as relate to traditional
23    broadcasters and compare that with other technologies
24    and other methods of transmitting audiovisual
25    information based on the view that in an all digital

 1    world the melding together of those different media
 2    will even be more confusing and blurred than it is
 3    today.
 4              So any implications or recommendations that
 5    we have that only speak to nominal digital
 6    broadcasters I think will be highly incomplete or
 7    would be rendered highly incomplete relatively
 8    quickly.  So I don't know if that's more tangential
 9    than core on in terms of what, you know, what
10    programs we use for which methods of public interest
11    obligations.  But those are the kinds of things that
12    I want to make sure are in there in addition to what
13    most other people are saying here.
14              MR. SUNSTEIN:  Tentatively four, and right
15    now, four things.
16              First, an emphatic statement of the social
17    role that should be followed by the media without
18    government regulation.  This would be platitudinous
19    but emphatic, heartfelt.  It would include a
20    statement about democracy, like the reference to the
21    State of the Union Address, a statement about
22    education, and a statement about diversity, Jose's
23    point, Paul's point and Karen's point.  And this
24    would be about what ought to be done without any
25    government.

 1              And several of the people in the room have
 2    given speeches that have had the guts of this.  I
 3    think to do that would be a great service.  I should
 4    we think have pretty much have a consensus on that.
 5              Second, I would favor general, but not too
 6    general, suggestions about the appropriate content of
 7    a code for the modern era.  That is something that
 8    would update this, an old NAB code.  And it would be
 9    a way of particularizing some of the platitudes
10    specifying a little bit democracy, education and
11    diversity.
12              Third, and more limited, I would favor in
13    some context either fees or pay or play.  The context
14    would be either involving kids or involving
15    elections.  I'm kind of taken aback by Paul's point
16    because it's clear that he has some knowledge here
17    that I don't.
18              What I'm thinking is in the environmental
19    area a lot of people are very skeptical of both fees
20    and the environmental equivalent of pay or play.  But
21    they work not so bad in the environmental area.
22              Now it may be a bad analogy, but the kind
23    of concern about people buying out of their public
24    interest obligations, in practice it's worked a whole
25    lot better than people expected.  Maybe this is

 1    different.  If not pay or play, then maybe fees. 
 2    That's the third point.
 3              Fourth, I would want us to say, because of
 4    the dynamic nature of the industry, that there should
 5    be limited or no direct mandates.
 6              MR. DECHERD:  I think Cass and I have been
 7    sitting together too much.  With the exception of
 8    your third point, Cass, I think that you outlined a
 9    very responsible approach.  The word "flexibility"
10    has been used here at numerous times, going back
11    going back to Bob Wright's presentation.  I think
12    that's essential to how we address these questions.
13              The voluntary concept has come up
14    particularly with respect to political time, and I
15    think it's a compelling approach and one which we can
16    articulate in a way that will be very useful.
17              Generally, I think as dynamic as this
18    environment is per Rob's point, the less regulation,
19    the more realistic our recommendations are going to
20    be.  My guess is in five or ten years, the changes in
21    these businesses will be so dramatic that much of
22    this will be obviated, because we'll be talking about
23    different sources of information, different channels
24    and pipes to the home, and so forth.
25              And I would hope that whatever we do is

 1    platitudinous would be intended to apply to all of
 2    those players, whomever they may be and however they
 3    may influence citizens in years to come.
 4              What I really think this comes down to,
 5    aside from political ideology and views about
 6    regulation or deregulation, is audiences and funding. 
 7    And I would hope that we'll be very honest with
 8    ourselves about this, because the truth is we can
 9    deliver in a digital model unlimited amounts of
10    information that would satisfy every public interest
11    in the United States.  But what no one knows is how
12    large is the audience.
13              So this is a matter of how people access
14    the audience and how they fund their own operations. 
15    That's a perfectly understandable perspective, but I
16    think we need to be straightforward that that's part
17    of what's at work here, and it should influence
18    whatever report we have.
19              MR. YEE:  I believe there has to be a
20    formal reiteration or certainly a more futuristic
21    affirmation of the democratic compact broadcasters
22    had with the communities.  And those of us, in my
23    case as I work with independent producers, for better
24    or for worse, in making and shipping our programming
25    that they also have similar forms of accountability,

 1    the issue of access, economics, and the public
 2    knowing where to find the program is very important
 3    to us.
 4              I think one thing this Commission should
 5    also recommend at least, you know, if we are going to
 6    be imaginative and innovative that we also recommend
 7    a period of experimentation of prototypes of
 8    hybridization where we can work together.  I think
 9    there are more things in common than not.  I think we
10    have let our conventional thinking and perhaps our
11    history inhibit us a little bit more.
12              And also maybe we're not used to talking
13    publicly amongst ourselves.  But I do think we have
14    to look for ways of allowing things to happen for a
15    period of time and come back to adapt, you know, this
16    commitment in many ways.
17              As someone who works in public
18    broadcasting, and I do not represent the public
19    television stations in any way, to my relief, is I do
20    believe that they will, indeed, welcome an
21    opportunity.  But they also will welcome an
22    opportunity to work with the other stations as well
23    and civic groups.
24              To expect them to take it on, I think it is
25    both premature.  It needs a lot of work.  There needs

 1    to be a lot of, shall we say, real deep thinking in
 2    that regard.  I welcome that possibility.  But I
 3    think, again, it needs to be more of a clear thinking
 4    of engagement and reality, both by economics more
 5    than anything else, economics and, again, the
 6    changeover of audience.
 7              MR. CRUMP:  Well, having been to several
 8    meetings listening to what has already been said at
 9    this point around here, I've got to tell you, to me
10    what I'm doing is I'm having ascertainment on a grand
11    scale.  That's exactly what is occurring here.
12              I believe what we've got in this Committee
13    is the opportunity for mutual education because,
14    again speaking for myself, I have been fascinated to
15    hear what those of you who are not broadcasters have
16    to say because you're the guys that I know, but I
17    haven't known personally in the years preceding this,
18    you're the ones who are talking, who are working, who
19    are lobbying in Washington and who are going to have
20    some sort of an effect.  And you have had in the past
21    an effect on our business.
22              I think also, then, it presents the
23    broadcasters here on this Committee with a tremendous
24    opportunity to tell you about how we operate, just as
25    Jose was asking earlier some specific questions about

 1    what happened in local stations.  We have the ability
 2    then to include you in on things that we think that
 3    everyone knows simply because we deal with it every
 4    day and yet there's no reason you should know the
 5    problems that we face or where we find our little
 6    triumphs as we go along.
 7              I think it's also very important as we
 8    deliberate to make certain that everyone understands
 9    not only the potential that we have with the advances
10    that we're making and the transition into digital
11    television, but also to let everyone know what our
12    potential problems are and what our very real
13    problems are with this.
14              And, as a result of all of that, I would
15    hope as the Committee continues to deliberate that
16    then what we're going to do is create an atmosphere
17    that will hopefully help for a better transition into
18    this new digital television world and that the result
19    then will be better not only for the broadcaster, but
20    much better for the public.  Because if we have a
21    frank exchange of ideas, whether we agree with each
22    other or not, I'm sort of like Paul or how I'm
23    reading you, Paul, into this.  I'm not trying to put
24    words in your mouth.  But that sometimes I find that
25    I disagree with someone rather vehemently.  And then

 1    when I think it over, I begin to see that, you know,
 2    there is some truth in what they had to say, and
 3    maybe there's some way of wiggling a little bit,
 4    moving a little bit about here.  And we come up with
 5    an answer that is better than it would have been had
 6    either one of us arrived at the answer by ourselves
 7    without any conversation.
 8              MR. BENTON:  I spent a mixed life in
 9    business and nonprofit and public service, and yet
10    I've had very little exposure to broadcasters
11    directly.  And being on this Committee, it's been a
12    wonderful opportunity.  So to do it, I'm very
13    impressed.
14              I wish you were truly were representative
15    of everyone out there, but I think you are an
16    extraordinary group of broadcasters.  Broadcasting is
17    so enormously important in our society.  And I, while
18    I disagree with some of the points in the first panel
19    this morning, he pointed out by having turned over
20    broadcasting largely to selling, it is true.  It is
21    the engine that drives the consumer society.  And I
22    have spent much of my life in various ways trying to
23    promote broadcasting for education, for information
24    and for cultural purposes and uses.
25              And I see in the goals here that have been

 1    reiterated by the Aspen group and that we talked
 2    about a lot in our Committee, these four goals as
 3    being really terrific.  The localism and community
 4    idea which the broadcaster -- the local broadcasters
 5    have uniquely in their power to serve better than the
 6    notion of the ascertainment procedure of bringing
 7    this back in a stronger way so that it would not be a
 8    threat to the NAB but, in fact, could be very useful
 9    at its best in reconnecting or strengthening the ties
10    between local broadcasters and the community needs
11    that they are in theory meant to serve.
12              The informed electorate point is a critical
13    point, and we've gotten sort of hung up on this free
14    time for candidates as with so many other things, in
15    improving informed electorate, not the least of which
16    is improving the news, which has been trivialized and
17    commercialized, overcommercialized.  So there's a lot
18    of things to talk about in the broadcasting
19    contribution to an informed electorate.
20              The children education programming is one
21    of my favorites specifically because it's where I
22    have spent much of my life.  And, as I said this
23    morning, the central problem here in our country is
24    money on this front, especially on the educational
25    side.  We are so far behind the rest of the world in

 1    mobilizing the powers of this great medium for
 2    teaching and learning and getting this into the
 3    teaching and learning mainstream, quite apart from
 4    general education, which is the PBS pitch.  But PBS
 5    itself has largely turned its back on broadcasting in
 6    the educational mainstream.  And the diversity of
 7    viewpoints.  Lots of people have talked about this.
 8              I think the central challenge and what I
 9    hope comes out of this Committee is some new ideas
10    about structure and about money, because I think we
11    need -- and that's why I'm interested in really
12    digging into these different regulatory models and
13    learning more about them because there's got to be
14    some combination of government and private sector
15    working together on this.
16              The idea that the government's got all the
17    answers, of course, they don't.  And the idea that,
18    you know, let's shut it off and turn it over to the
19    NAB and let them figure it out?  No, I'm totally
20    opposed to that.  So I mean there's got to be some
21    mix of government and private sector relations here.
22              And incentives.  The more we can do
23    incentives and have it voluntary, I think maybe the
24    final point -- and then I'll stop, because we'll all
25    wind up giving long speeches and we use up the rest

 1    of the day, and we can't do that -- is that I know
 2    we're going to make our report to be done hopefully
 3    on time, on October 1st.
 4              But a body like this Commission -- and
 5    we're making our report before digital television
 6    really starts, for God's sake.  That's where I really
 7    think Jim's idea about an ongoing experimentation and
 8    learning by doing, not just theorizing about things.
 9              There ought to be an ongoing group that
10    advises whatever administration is there, Republican
11    or Democratic, Democratic or Republican, on not just
12    the public service obligations but looking at these
13    obligations in a flexible way.  Speaking of
14    flexibility.  And looking at their performance so
15    that we get some report on their performance of how
16    broadcasters are, in fact, meeting their public
17    service obligations and responsibilities.
18              They do have a public asset.  The air waves
19    do belong to the public.  There is a quid pro quo,
20    and there ought to be an ongoing mechanism for
21    looking at that.
22              This is not something that's going to come
23    today and go away, and we're going to make our report
24    and it's all over.  No.  We're a small speck and we
25    need to look upon what we do in a larger continuum.

 1              MS. WHITE:  Let me preface my statements by
 2    saying I would certainly hope that this Committee
 3    could reach a consensus on its recommendations or its
 4    report for public interest obligation for digital TV. 
 5    I think the report or the paper would be a much
 6    stronger one for our having done so.
 7              I'm particularly interested in the
 8    children's educational programming, and I would hope
 9    that the transition from analog to digital TV would
10    be an equitable one.
11              I also had some concerns, and I had a
12    question for Mr. Gunther this morning, who was one of
13    our panelist, and I wasn't able to ask it publicly. 
14    But I did corner him as he went out of the room.  And
15    Les and Norm, you would be interested in knowing -- I
16    think he alluded to the fact that most of us were
17    industry heads.  And I did inform him that I was not
18    an industry big wheel, but the President of a
19    National PTA representing just 6.5 million members.
20              The concern that I had was his charge to
21    this Committee to define a process whereby the public
22    could signal its participation in or its unhappiness
23    with programming.  And I thought that was a good one.
24              I asked him if he had any suggested
25    formats, and I gave him two examples.  I said, "Do

 1    you mean like reporting weekly or letter write-ins?"
 2              And he came back to me with my own answers
 3    or my own suggestions and he said, "Yes, I mean
 4    reporting weekly or letter write-ins."  I think that
 5    this is something that we could probably suggest or
 6    define, a process by which the public could enter its
 7    suggestions and its signals and what-have-you.
 8              DR. DUHAMEL:  I'm awed.  I've got thousands
 9    of things, and so little time to do it.  Let me just
10    go over three points, although Lois brought up a few
11    more.
12              First of all, I think that we really need
13    to be looking at general principles, because if you
14    go back to when the original Communications Act came
15    out in the '30s before I was born, you know the
16    topics, the things they were faced with then have no
17    relation to where we are today.
18              And, you know, if you try to get so
19    specific, you know, it's even like Karen with the
20    role of the hard of hearing, the handicapped, you
21    know, the perception of those in the '30s compared
22    with where we are today is decidedly different.
23              And you need flexibility.  You need to have
24    an evolutionary format and not have a bunch of rigid
25    rules.  And that's why we get back to trying to come

 1    up with some general principles that can evolve and
 2    things that maybe were important.  Say, when I was a
 3    kid, polio was vital.  It's gone.  You know, that's
 4    what I'm trying to say on that area. 
 5              The second area that concerns me, and I
 6    alluded to it in the initial meeting, is the whole
 7    question of the economic costs, the cost of
 8    conversion.  This is not a give-away.  You know, all
 9    we're really talking about is giving the broadcasters
10    an opportunity to spend billions of dollars.
11              As I said at the beginning and I stand by
12    it, the cost of this will -- the conversion is 50
13    percent of the value of our company.  And we're not
14    alone.  We're not unique.  You can go out through the
15    Dakotas and Montana and Idaho and Wyoming and find
16    all those broadcasters are in the same boat.  But we
17    have to do it for competitive reasons because the
18    cable is going to do it.  The satellites are going to
19    do it.  And we don't have any choice.  But, you know,
20    I don't know where the -- I couldn't get in there
21    this morning either with his gift and his give-away. 
22    He irritated the crap out of me.
23              But the other concern that I have is the
24    annual implementation costs.  You know, as we get
25    into this, we can talk about only 13 minutes a day. 

 1    That 13 minutes a day, if we're talking about the
 2    model of the free political, that drives 13 minutes
 3    of advertising time out that I don't have to sell.  I
 4    have to have time to sell.  I'm not like a newspaper,
 5    I can add extra sections to get more space to sell. 
 6    And so 13 minutes a day might not sound like a hell
 7    of a lot, but it's significant in the small markets.
 8              And finally, the question that I'm still
 9    bothered by and it really has only been alluded to a
10    couple times here, but what does the public really
11    want?  Now I mean I'm in contact.  I read every
12    letter that comes to the station.  And you know, I'm
13    not getting any great letter-writing campaigns. 
14    Occasionally I see organized letter-writing
15    campaigns.
16              I happen to be Catholic and the local
17    bishop roasted me from the pulpit over "Nothing
18    Sacred."  And I got a letter-writing campaign.  But
19    that was obviously a letter-writing campaign because
20    I wasn't getting -- I was only getting it from one
21    diocese.  I wasn't getting it from the other dioceses
22    that we broadcast in.
23              But nobody seems to be concerned.  You
24    know, as Les got into it, when we talk about when
25    they gave the candidates for president, the last five

 1    minutes, 80 percent of the audience disappeared.
 2              Now to me the people are voting.  The
 3    people are saying we don't want to hear this.  Now we
 4    can talk about implementing, coming up with some
 5    ideas, and that's why I think we get into some broad
 6    guidelines because I think I can sit down with our
 7    news director and talk about some of these things and
 8    maybe we can develop something that we can do.
 9              We've had debates, political debates for
10    candidates for federal and the governor since 1968. 
11    The biggest problem I always have is I have to
12    personally talk the incumbent into doing it.  Three-
13    fourths of the time I can do it.  But most of the
14    time -- well, I mean the incumbent is the one I
15    always have to get.  But the thing is these aren't
16    big rating getters.  The only way that we really do
17    it is we -- we act like there's going to be a fight
18    and somebody's going to punch somebody in the nose
19    and people tune in to see blood.
20              But, you know, I agree that the electorate
21    needs to be informed, but doing this is not just
22    mandating so many minutes, because the public isn't
23    going to go there.  They have cable.  They have other
24    places to go, and they'll watch an old movie.  And, I
25    mean, we get back to what does the public want?  And

 1    the public votes every day by their viewing.
 2              And if they aren't watching, they're saying
 3    we don't give a damn what you guys are doing.  We're
 4    going to go see what we want to do.  And I don't hear
 5    this.  Where's the public on this?  What's the public
 6    want?  Because I think the public is voting.  We
 7    dismiss ratings.  The ratings are vital.  The ratings
 8    tell us where the public is.  And then -- I guess
 9    that's about it.  Lois brought up a couple things
10    that I kind of agreed with. But, anyway, that's it.
11              MR. CRUZ:  I knew when I took on this
12    assignment back in October that it was going to be a
13    daunting task that we were facing as members of this
14    Commission.  I mean, I did then, and I still do now. 
15    However, I sense that, given the nature of what we
16    were taking on, that there was nevertheless a
17    possibility that we could begin to collectively, as a
18    group, see a lot of the potential changes that are
19    coming down the road.  And that, as things have
20    existed in the analog world, that it will change in
21    the digital era.
22              As rapidly as the technology is changing,
23    almost like a mutating virus, I think it behooves us,
24    whatever our end product is, is to make sure that we
25    have flexible models.  We can no longer, I don't

 1    think in my estimation, see public interest
 2    obligations in the same sense that we did in the old
 3    analog world.
 4              And I think we should -- we will do
 5    ourselves and the rest of the country, what it's the
 6    FCC, Congress, the President or the Vice President or
 7    whomever, I think we will do them a great service if
 8    they hear from us creative, flexible, outstanding
 9    solutions that we have thought out and have proposed. 
10    Whether they're accepted or not is immaterial.
11              But I think we need to do that creative,
12    difficult process as it is.  I have worn two hats in
13    my life, quite a few of them, but one on a commercial
14    side as well as one now on the public broadcasting
15    side.
16              The public broadcasting side really sees
17    enormous potential in terms of the possibilities with
18    digital.  We meet our obligations and then some when
19    it comes to democracy, when it comes to political
20    debates, when it comes to education, especially as it
21    pertains to children and cultural democracy and
22    public affairs.  We are well poised there.
23              The reason I raise it sometimes is during
24    the course of our conversations here is because there
25    are some members on both sides of the aisle and on

 1    both houses who seriously have pushed the idea of the
 2    deregulation of this industry.  It may very well be,
 3    some say, that the time has come that the commercial
 4    industry should really be deregulated.  And it is
 5    posed by members of Congress who say, perhaps,
 6    allowing you to deregulate that some of those
 7    obligations could be taken on possibly, perhaps by
 8    public broadcasting, but also by other entities.
 9              So I raise that one periodically, and I
10    know it's been a recurring theme with me because I've
11    worn both hats, the commercial and the public
12    broadcasting.  And I see those opportunities.  I wish
13    we would remain flexible at the tail end, not
14    necessarily to mandate them, but certainly to come up
15    with some creative solutions as we go through in that
16    process.
17              Thank you.
18              CO-CHAIR ORNSTEIN:  Okay, Frank.
19              MR. BLYTHE:  Somebody talked about general
20    principles going back to 1934 when licenses began to
21    be issued to broadcasters.  Licenses were a privilege
22    to broadcasters, in return for which they would
23    operate in the public interest, convenience and
24    necessity.  That's pretty flexible right there.  And
25    that's the way it's been for the last 65, 63 years.

 1              And now we're taking a look at what does
 2    this public interest of broadcasters entail?  For me,
 3    I would hope that we would come out of this, this
 4    report that maybe redefines public interest for
 5    public broadcasters or broadcasters, digital
 6    broadcasters.
 7              But also in defining it, I think we also
 8    need to because of -- even though we've talked about
 9    flexibility and openness here and leaving a lot of
10    what might be perceived as gaps in whatever
11    recommendations that we come out with, I think there
12    needs to be some determination, though, of some
13    values placed on what's being done here.
14              In return for digital channels,
15    broadcasters again are being asked to provide even
16    more services in the public interest, if that's
17    possible.  And we've seen a lot of material showing
18    what broadcasters are currently doing here.  And I'll
19    be looking forward to the report at the next meeting
20    to see what that entails.
21              But I think there's two things that I'm
22    looking for.  One is determining the quantity of
23    public interest obligations that we need to list as
24    far as our report and then having some accountability
25    tied to it.

 1              How do we account for those, or how do the
 2    broadcasters account for those in some way?  There
 3    was that attempt in the '70s and the '80s with the
 4    ascertainment report that I heard somebody else
 5    allude to earlier that, when I was working in
 6    broadcasting at the time, seemed to be a pretty fair
 7    assessment of what broadcasters needed to find out
 8    what was going on in their communities.
 9              When it went out the window, at least the
10    station I was working with, so did a lot of public
11    interest obligations go out the window.  And I don't
12    know if that's true across the board or not, probably
13    not.  But that's one example of accountability that
14    went with it also.
15              So I think the two areas that I would like
16    to see written into our report here are determining
17    some quantity that needs to be provided to the public
18    and determining some of the accountability and how
19    that is provided and how broadcasters do it.
20              MR. GOODMON:  Well, let's see.  I may
21    repeat what I said just a second ago here quickly. 
22    My interest is in the future of the free over-the-air
23    broadcasting system, which I think has really served
24    this country well.  The bedrock of that is localism,
25    our ability to serve the local community.  That's why

 1    we have it.  That's why I have all these stations is
 2    because they're supposed to serve the local
 3    communities.
 4              What I want to see come out of here is a
 5    report that affirms the public interest, public
 6    trustee notion because I think that has served us
 7    well, and I think we need to discuss what those
 8    issues are.
 9              Now my own notion is that is not
10    regulation.  The concept that we are given these
11    licenses to operate in return for the public
12    trusteeship to me is eminently reasonable.  I mean, I
13    can't argue -- I don't know how you argue with that. 
14    I don't know how you argue with that.  I think all
15    we're supposed to talk about is what should these
16    obligations be.  I think they should be minimum.
17              As a matter of fact, the ones that I think
18    we should have I don't know a station's not already
19    doing it.  But I do think we should have minimum
20    standards.  And then I think the industry should be
21    allowed to have a voluntary code to work on these
22    things for the stations that want to.
23              So I am -- I know I think -- well, the one
24    thing is going on is the -- you know, "regulation" is
25    a bad word.  And everybody wants to deregulate and no

 1    regulations and unnecessary regulations.  I don't
 2    think that these public interest standards are
 3    regulation or unnecessary regulation.  I think it's a
 4    deal.  I think it's a compact that we make with the
 5    citizens in return for getting the license.
 6              Now I think a concern is it's sort of like
 7    the income tax.  Once you say, well, okay let's
 8    quantify these and let's do these, then the next
 9    thing you know it's not two hours, it's four hours,
10    then it's eight hours, and then it's ten.  I mean, I
11    sense that part of the concern is that if we do this,
12    it's starting something that could really be bad for
13    us.
14              But I think that we're talking about the
15    right thing.  I think that this digital that we've
16    got and what's going on is the best thing that ever
17    happened to broadcasting.  It can be the best for the
18    citizens of the United States, and I'm very positive
19    about it.
20              I just want -- you want to go over my list? 
21    I won't go over my list.  But there are eight or ten
22    areas that I think we should talk about in terms of
23    our minimum public interest responsibilities and move
24    on with that.  I agree with Paul.  I'm insulted you
25    think I would want to sell my children's obligations. 

 1    I didn't mean anything like that.  But the notion
 2    that stations can't -- that the stations won't
 3    fulfill their public obligations, I don't think will
 4    work.
 5              And stacking it up on other stations and
 6    all that, I'm with the public trustee model, and
 7    let's talk about them and issue the report.  Thank
 8    you very much.
 9              MS. SOHN:  Now I want to do the ultimate
10    ego, and to give you an idea of where I'm at, I'm
11    going to quote myself from Today's Broadcasting and
12    Cable where I'm responding to a new NAB study, which
13    you'll see the results of next month, which shows a
14    lot of how many food drives they do and how much
15    money they give to charity and lots of good stuff
16    like that.
17              My quote is, says Gigi Sohn, "Supermarkets
18    Giant and Safeway also do charity work but they don't
19    receive licenses for it.  What broadcasters need to
20    do to justify their free licenses is to offer
21    programming that addresses issues of importance to
22    the local communities."
23              And Paul mentioned it, Luiz mentioned it,
24    Jim mentioned it.  It's been raised in several
25    different meetings.  I care about access to local

 1    voices and discussion of local issues, including
 2    access for local candidates.  Federal candidates are
 3    doing just fine.  That's not to prejudge what I think
 4    about free time.  But it's local and municipal
 5    candidates, statewide candidates that are having
 6    trouble getting access, and local communities,
 7    communities of color, disabled communities that are
 8    having trouble.
 9              And I think this is where some
10    broadcasters, of course not the ones seated at on
11    this table, are really falling down.  And what I
12    would like to see, one of the things I've been
13    thinking of -- again and I don't want to get too far
14    ahead of myself -- is how can we create what I call
15    civic space.  A space where, you know, local
16    community leaders, local candidates with a minimal
17    editorial intrusion of broadcasters both public and
18    commercial can be heard.  And that's what I really
19    care about.
20              And I want to, just to continue this for
21    another minute, want to address some of the sort of
22    more process-oriented things.
23              I think if you want to come up with a
24    voluntary code, that's great.  If that's all we come
25    up with, I think this Committee will have been a huge

 1    failure.  The same thing with broad principles.  You
 2    know, we can come up with some broad principles we
 3    all agree on, but if we don't come up with some
 4    specifics, I think this Committee will have been a
 5    failure.  And when I say "specific," I'm not
 6    necessarily talking about quantified.
 7              We can have a flexible menu of things that
 8    broadcasters could do if they choose.  That's not the
 9    same thing as saying 15 minutes of this or four
10    megabits of that.  That's not the same thing.  So I
11    want to clarify that.  But if all we're going to say
12    is we want democracy and we want access and thank
13    you, FCC, take our principles and implement it, I
14    just don't know why we should even continue.
15              The last point I want to make sort of
16    responds to what Rob said about different
17    technologies.  Maybe I didn't quite understand him. 
18    We've had a lot of discussion about, well, you know,
19    if we're going to suggest public interest obligations
20    for broadcasters, then we have to do it for satellite
21    and cable and on and on and on.
22              Well, first of all, I'll point you to the
23    handout I put in your packages this morning that
24    defines the many public interest obligations of cable
25    and satellite.  But I just want to remind people the

 1    name of this Committee is the Advisory Committee on
 2    Public Interest Obligations of Digital Television
 3    Broadcasters.  That's all we should be discussing.
 4              If we want to have some appendix to the
 5    report that talks about, you know, what Tracy Westen
 6    was talking about, other things we'd like to see the
 7    cable and satellite industries do, that's fine.  I'm
 8    all for it.  But if these deliberations get bogged
 9    down and why isn't HBO doing this, and why isn't TCI
10    doing this, it's going to be a morass and that's not
11    what we're tasked to do.
12              The last thing I want to mention is, I want
13    to come up with a politically possible result.  I
14    know if this Committee's recommendations is too one
15    way or another, the FCC's probably going to reject
16    them.  I'd like to see something that works for
17    everybody.  It may not be possible, but that's what
18    I'm going to be working towards.  And I hope we can
19    sort of all keep that in mind.
20              I don't know who it was that said it, but
21    if we all stick to our little niches -- I hate the
22    term "special interest," Les, but you used it, so
23    I'll use it -- and aren't willing, you know, to walk
24    a little, you know, to either the right or left,
25    depending on where you sit, I think we're going to

 1    have a lot of minority reports and we're going to
 2    have a confused FCC.  So I think we should work --
 3    you know, I could give you all my ideas what I think
 4    broadcasters could do.  But with this Congress and
 5    even with this FCC, which some describe is very
 6    liberal, and I tell you I will dispute you on that. 
 7    Would it work?  No.
 8              So let's try to get to somewhere that the
 9    FCC is willing to go and that Congress, you know,
10    won't go crazy and try to pass legislation to block.
11              MS. SHELBY SCHUCK SCOTT:  I came to this --
12    spilling my water.  The public trustee thing is what
13    I basically came for.  I think many broadcasters have
14    sort of dropped the ball.  I used to be an employee
15    of broadcasters, the person that you saw on the air
16    carrying out their commands.  And when they dropped
17    ascertainment and things like that, I saw program
18    after program of local community interest go off the
19    air.  They're no longer there.
20              And I really feel the community -- and this
21    is a local issue, not the networks.  The networks
22    can't do community issues.  They can do a
23    presidential campaign, but they can't do every
24    mayoral race in the country, nor can they do the
25    Asian community in Woburn, Massachusetts.  Those are

 1    things that only local stations can do.
 2              As for free time for candidates, I don't
 3    want any more 30-second spots.  I'm sorry.  They
 4    don't inform the electorate.  I don't care if they're
 5    paid for or free.  I'm really on the fence on that
 6    one.
 7              I'm sure you all got the same questions I
 8    did when you were being considered for this
 9    Commission asking where you stood on that issue.  And
10    I told them I don't know, because I don't know if you
11    put on two minutes will anybody watch it?  Will that
12    help inform our electorate?  I don't know the answer
13    to that.
14              I know in Britain they're stopping free
15    time because nobody was watching.  So that one I came
16    here to be convinced about.  I really don't know.  I
17    know that our electorate is not informed; our
18    electorate is not voting.  And that's a terrible
19    thing.  And I was hoping someone here would have a
20    brilliant idea how we could make it more interesting
21    for Americans to try to figure out which candidates
22    they want to vote for.  But in no way am I for more
23    30-second spots.  I'm sorry.  They don't tell our
24    voters anything.
25              I just hope, too, as Gigi said, we can come

 1    to something that's workable that we could all agree
 2    on because I'm really scared about the future of our
 3    country if we go on the way we are now.  I don't
 4    think we have -- not just on politics, but on many
 5    issues -- an informed public.  And that scares me
 6    more than anything.
 7              MR. MASUR:  It's great to be the completely
 8    ignorant one in the room because I have a totally
 9    fresh view of everything you're saying here.  I mean,
10    I've done a lot of the reading, but I haven't heard
11    people speak on these issues, and I don't know where
12    anybody stands -- well, I know better now that we've
13    just gone through this process.
14              But it seems like one of the things that we
15    have to recognize here is we've been given a
16    relatively impossible task.  And there's a dynamic
17    which has always existed between the commercial
18    nature of broadcasting and this theoretical public
19    responsibility.  And it's absolutely true that the
20    voting that was being described earlier, the process
21    of weekly signals coming from the public, happens
22    every day several times a day through the ratings. 
23    It's absolutely true.  That is the public responding
24    to the commercial nature.  Okay?
25              But one of the things that we have to try

 1    to take into account here, it seems to me, is is
 2    there a way to, as Shelby just said, taking the
 3    political process, taking children's broadcasting, is
 4    there a way to do that better so that more people
 5    will be interested.
 6              Now that's a heavy responsibility.  You
 7    can't legislate that.  We can't regulate that.  On
 8    the other hand, I'm extremely concerned, as Gigi just
 9    mentioned, about the possibility of leaving here with
10    nothing other than voluntary -- I've seen voluntary
11    things in this country go so sour so many different
12    times because you have this other driving force which
13    is commercial.
14              And anyone sitting in this room who says,
15    "Oh, no, but we're good scouts and we'll always be
16    good scouts," isn't being completely forthright
17    because you have to respond to the commercial needs
18    of your organization.
19              It's been said here.  It was an opening
20    comment about the whole electoral issue, you are --
21    you carry your organizations into this room.  So I
22    think that leads us to something like what Cass was
23    talking about which was -- and what I've heard Norman
24    talk about -- which is a kind of an amalgam of things
25    that do take voluntary code into account, but also

 1    where tremendous pressure is brought by the peer
 2    group to collaborate in seeing that that code is held
 3    to.
 4              And a very strong affirmative statement.  I
 5    think the pay-or-play system might have the same
 6    problems -- that's why I asked the question I did --
 7    have the same problems that Paul has.
 8              The idea that three local stations are all
 9    going to buy out of their children's local
10    programming is a real possibility, or that one of
11    them will get it and they will be defining everything
12    that children in that market see.  That's a terrible
13    idea as far as I'm concerned.
14              I understand, Norman, what you were saying
15    about different ways to try and help smooth that out,
16    but that doesn't seem completely sensible to me.  I
17    think every local station has to have some
18    responsibility to provide intelligent programming to
19    children.  I'm not saying how much.  I'm not saying
20    when it has to be on.  I'm just saying there has to
21    be some basic concept like that and some very strong
22    inclusionary concept as well, which has been talked
23    about by everybody in terms of access.
24              But again, one of the things we do, my
25    organization and Shelby's, we have very, very strong

 1    affirmative action policies.  And ours are the kind
 2    that even a good Republican can love, which is they
 3    are about access.  There are no penalties for not
 4    adhering to them.  It's moral assuasion is what we
 5    work on.  It's in our contract.  It's been agreed to
 6    by our employers.  And what it says is if someone is
 7    appropriate to the role, if it's a specified role, be
 8    it of an ethnic group, be it of a certain kind of
 9    disability, our employers have an affirmative
10    responsibility to afford access to those people
11    coming in and competing.
12              Now that has not really achieved the result
13    we're looking at a situation.  And this is the thing
14    about the commercial aspect of this industry I will
15    never understand, where you have what will arguably
16    be the largest single population group in the country
17    in 25 years, which is the Latino/Hispanic population,
18    effectively seeing no programming except on Spanish
19    language television.
20              Now how this market is being missed by all
21    these broadcasters around the country is a mystery to
22    me.  I mean, it's waiting out there to be seized
23    upon.  These guys don't just speak Spanish.  I mean a
24    lot of them watch English language television.
25              The largest single group controlling the

 1    greatest amount of money in this country are seniors. 
 2    They have disappeared from television except on Les'
 3    network.  And even there -- even there --
 4              CO-CHAIR MOONVES:  You were vilified for
 5    it.
 6              MR. MASUR:  Yes.  You could -- exactly. 
 7    You got smacked for that.
 8              CO-CHAIR MOONVES:  The old guy did it here.
 9              MR. MASUR:  And so what I'm saying is if
10    there is something that we can do in this, and this
11    may reach a little bit beyond what our mandate is,
12    but if there's something that we can do in the spirit
13    of what was mentioned before of this
14    cross-educational process to affirmatively state that
15    part of this process should be to review the
16    possibilities available to broadcasters to reach
17    audiences that they're not reaching, to address
18    specific needs, 28 million deaf or hard-of-hearing
19    people in this country who not only deserve to have
20    access, but also deserve to be seen and represented
21    on camera.  And that's another major issue.
22              So I'm not being very specific because it's
23    my first shot.  But I just want to lay those things
24    out and see if there isn't some way we can get that
25    philosophical message across, which I don't think

 1    anyone in this room disagrees with.  It's just a
 2    matter of trying to figure -- you can't legislate
 3    that.  You can only try and inform and raise people's
 4    consciousness and hope that they'll act in their own
 5    best interests and reach out for these markets that
 6    aren't being tapped.
 7              CO-CHAIR ORNSTEIN:  Thank you, Richard. 
 8    It's good to have you with us, by the way.  Good
 9    voice.
10              MR. MASUR:  I get paid for that, my voice.
11         (Laughter.)
12              CO-CHAIR MOONVES:  And paid very well, may
13    I add.
14              MR. MASUR:  Not for this job.
15         (Laughter.)
16              CO-CHAIR MOONVES:  As we go around the
17    room, I'm struck as I was when I first at our first
18    meeting together about what an accomplished group of
19    people are on this panel.  However, to agree with
20    Gigi, which isn't often, unless we really do, and
21    other people here, unless we really do find something
22    that we all can live with, and no matter whether it
23    is voluntary or it is mandated that we all can go out
24    and support wholeheartedly, we probably will have
25    failed in a lot of ways.  If there is not something

 1    that the broadcaster can live with and at the same
 2    time be strong enough for Gigi to live with, we will
 3    not have achieved what we would like to achieve.
 4              There are people here who do represent
 5    smaller groups.  I won't use that word, Gigi, that
 6    have needs that should be addressed and I think they
 7    will be addressed.  But, once again, everybody here
 8    has to realize there's going to have to be a great
 9    deal of compromise and something that I'm scared of,
10    and I'm nervous about, and I worry whether we can get
11    there.  And it's going to take a lot of hard work to
12    get there.
13              We also have to address something that's
14    very important.  If our mandate is to deal with what
15    is the future in digital television, we have not done
16    a very good job of defining that.  Truly, if a local
17    station has six channels, he's going to be dealing
18    with one world.  If he has two, he's going to be
19    dealing with another.  It's very easy to say if he
20    has six channels one of which should be devoted to
21    public service.  And that's a fair statement.  If
22    there are two channels, it may be a different world.
23              I think there is, on the part of certain
24    people, a failure to realize the huge economic
25    consequences as we are talking about stations, not

 1    all of which are in Los Angeles or in New York but,
 2    as been mentioned before, are the mom-and-pop
 3    stations.  And there are a lot of them out there that
 4    extra six minutes of time will make a big difference. 
 5    That extra 30 minutes of an access public service
 6    program will make a difference between their survival
 7    and not.
 8              So we do have to define some of the
 9    economics of what our business is.  But, most
10    important, I think we have to find a common ground,
11    and that's what our main task needs to be.
12              Norman.
13              CO-CHAIR ORNSTEIN:  Well, we found at least
14    one thing we can agree on, which is that if we end up
15    deeply divided, we will have a meaningless exercise
16    which will have taken a substantial amount of our
17    time and a lot of our money too along the way.  So we
18    have an incentive to do that.
19              I would suggest a couple of things.  I
20    think Cass was on to something as a general model
21    that we can agree on at least major components of it,
22    and there may be parts of it where we will have areas
23    of disagreement.  I think we can all agree that
24    starting with a strong statement about the public
25    interest and public trustee model and some of the

 1    elements that we have all talked about and agreed
 2    upon, access the diversity of voices, all of those
 3    different elements that we talk about, not in terms
 4    of a mandate, but in terms of what broadcasting
 5    represents in this democratic society.
 6              And if we make that strong statement and
 7    put it in those terms, we will bind ourselves
 8    together, but I think we also make a very strong
 9    statement to the community at large and to the
10    political community.  What follows from that should
11    be some sense of how we can improve the
12    self-regulatory mechanism in the broadcast community
13    and try and build in much more of a sense of what
14    obligations are within the community and how they can
15    be enforced through peer pressure and through other
16    mechanisms.
17              And I would suggest to you, Les, that
18    there's another reason for that.  There are small
19    mom-and-pop stations, but the larger trend in this
20    society has been to move from local mom-and-pop
21    stations to faceless, large entities buying large
22    groups of stations with no tie to the local
23    community.
24              That's not what we have represented on this
25    panel, but it is certainly a larger factor out there. 

 1    And building in the kind of peer pressure that
 2    suggests that you have to be tied to the local
 3    community is going to take some effort.  And it may
 4    have to move beyond just saying you should do this,
 5    too.
 6              With that, I would, as Cass would,
 7    recommend that we explore some of those options
 8    because we are moving into a world that we cannot
 9    define, that maybe we have a model that involves,
10    particularly if it doesn't involve specific large
11    sums of money, since we don't know what the revenues
12    are going to be early on or later on, where there
13    could be a kind of trade would work.
14              And I would say to you, Richard, if you go
15    back to the issue of children's television, some of
16    the discussions we had earlier, I think if we look at
17    the way this process has worked, nobody would agree
18    that it has worked exactly as intended and if you
19    have everybody have to do the same thing.
20              What's ended up as happening is, first of
21    all, you have CBS, which simply doesn't have that
22    audience, producing very high quality programming
23    that nobody's watching.  You have Fox come in and
24    basically buy, because it had the dollars, quality
25    programming from public broadcasting, and there

 1    wasn't money there to replace that.  So it didn't add
 2    to the store of good quality broadcasting.
 3              And if you look at the pollution rights'
 4    model, there are other ways in which you can smooth
 5    this process out and end up with a better procedure. 
 6    It's not just CBS.  Those local stations, many of
 7    them, that are getting no revenue.  If you could --
 8    many of them, I think, would be willing themselves to
 9    pay something in return for having that space over
10    and you could actually end up with better quality
11    programming.
12              So it's worth exploring.  Maybe we can't
13    find an entire consensus, but maybe we can find a set
14    of models to describe that ought to be carefully
15    considered.
16              Now I'd offer a couple of specifics that
17    have flown or that have come from our deliberations
18    as well that I think we ought to consider.  We
19    clearly have to, as we talk about mandates or
20    whatever mandates there are, we have to address, and
21    these are trivial things in terms of the commitment
22    of broadcasters, the Emergency Broadcast System.  We
23    now have a way of doing that.
24              We're talking about something that is the
25    equivalent of a human hair across the six-lane super

 1    highway in terms of the commitment, but it's there. 
 2    The closed caption is already there in the law, but
 3    we need to be sensitive to what happens with those
 4    future channels and as well with video description
 5    which we had discussed.
 6              We had a suggestion made at the last
 7    meeting that I believe has enormous merit, and that
 8    is to recommend that public broadcasting, when the
 9    conversion occurs, be able to keep its analog space
10    and therefore have a lot of additional capacity to
11    transmit programming and data.  That is not something
12    that has been factored into the scoring and the
13    budget, and it's a way, in effect, of providing an
14    additional benefit to public broadcasting that would
15    not come at any direct cost to others.
16              I would suggest that we consider a
17    recommendation that when stations multiplex, which
18    may come at different times of the day, that they be
19    required to give one of those six or eight channels
20    over to local access processes.
21              Now that's not a huge price to pay.  And,
22    in fact, we might very well be able to increase,
23    without a tremendous additional cost, the kind of
24    local access and opportunities that we've been
25    talking about.  We ought to consider whether there's

 1    a way of trading lowest unit rate in return for some
 2    provision of free time, and which is not mandating
 3    anything, but, in fact, providing a tradeoff that
 4    could be a win-win situation here.
 5              And I would suggest that it is probably
 6    visible to return to a mandate of ascertainment,
 7    particularly given the tendency to have stations no
 8    longer have the local ownership or control.  That may
 9    be a useful way to go.
10              So there's specifics that we might want to
11    address even separate from the larger and more
12    general model.  But within that, we may be able to
13    narrow our areas of disagreement or areas of great
14    contention and we might well in a report want to in
15    the end have some separate sections with some of
16    these areas of controversy and maybe even with a
17    dialogue and a give-and-take representing different
18    points of view.  That may be another way in which we
19    can express our viewpoints and get them out there.
20              With that, we really need to spend a few
21    minutes talking about our logistics for the next
22    time.  I want to mention a couple of things.  We have
23    calendars that people have given us for June, July,
24    August and September.  Some people have not given us
25    calendars, and we have calendars for you to fill out.

 1              We have Frank, Paul.  We have Richard
 2    Masur.  Let's see.  Who else do we have here?  We
 3    have James Yee.  We have Jose Luiz Ruiz and Shelby
 4    Scott.  So if you will fill out the calendars. 
 5    Frankly, we're not ready to set a schedule, I think,
 6    beyond the June meeting at this point.
 7              MR. BENTON:  We have a June date already.
 8              CO-CHAIR ORNSTEIN:  Yes.  Beyond the June
 9    meeting that we have.
10              MR. BENTON:  Right.
11              CO-CHAIR ORNSTEIN:  So it's the early part
12    of June.
13              MR. BENTON:  Right.
14              CO-CHAIR ORNSTEIN:  And we may have to come
15    back to you with an undated schedule.  I think in
16    April, we'll consider these.
17              Yes.
18              MS. SOHN:  Can I just ask a question about
19    the schedule?  Do you know if we're going to be
20    meeting both summer months?
21              CO-CHAIR ORNSTEIN:  No.  I think what we
22    need to do is we have an April meeting of which we
23    will have a very small share taken up by this
24    presentation by the NAB and some discussion that will
25    follow, and then we're going to continue these

 1    deliberations.
 2              And I hope what we will do at the April
 3    meeting is very specifically block out subcommittees
 4    to move towards the process of working on sections of
 5    the report.  Then I would hope by the June meeting we
 6    would actually have circulated some drafts of things
 7    and we can begin to move towards seeing where we can
 8    fill things out.
 9              And at that point, we will have to decide,
10    I think -- or by April we'll know, I hope, whether we
11    really need to block out -- how many further meetings
12    we need to block out before we actually get to -- for
13    the group as a whole.  We certainly will need one
14    more at least.  But when that will come, I'm not
15    sure.  So we're not quite there yet.  We have one
16    more item that --
17              DR. DUHAMEL:  But everything that's on the
18    calendar --
19              CO-CHAIR ORNSTEIN:  Yes.
20              DR. DUHAMEL:  You know, right now it's
21    awfully early in March to talk about the summer.
22              CO-CHAIR ORNSTEIN:  Yes.
23              DR. DUHAMEL:  And I would think sometime
24    like about mid-May before the June meeting so we know
25    where we're going.  I mean, I have commitments

 1    popping in all the time.
 2              CO-CHAIR ORNSTEIN:  Yes.
 3              DR. DUHAMEL:  So whatever I fill out right
 4    now would not be --
 5              CO-CHAIR ORNSTEIN:  Well, it may be that
 6    we're better off just waiting then because things
 7    will change.
 8              MR. JAMES GOODMON:  Then May's a little
 9    late to plan any --
10              CO-CHAIR ORNSTEIN:  Yes.  We can't wait
11    till -- till mid-May.  But it may be that we can wait
12    until the April meeting to do the calendars. 
13    Nevertheless, if those of you who haven't filled out
14    the calendars would fill them out now, at least we
15    can have a sense now of what dates are absolutely out
16    for enough of the group that we can narrow down the
17    possibilities.  It would be useful even though we
18    recognize there's a caveat here that everybody's
19    schedule will change between now and the beginning of
20    the summer.
21              What I guess I would like you all to do in
22    the meantime is to think about the areas that we've
23    been discussing that you might want to be involved in
24    in terms of subcommittee activity.  And recognize
25    there are going to be some other sections.

 1              Clearly we're going to want to have a
 2    section that provides the history of the public
 3    interest obligation as we had discussed at our first
 4    meeting or two.  And we have some presentations that
 5    we could use to build upon as a base.  We're going to
 6    have some discussion of the whole nature of the
 7    digital technology, and what we know about it, and
 8    what we don't know about it, where we are and where
 9    we're going.  And we'll need some people to help out
10    in that area.
11              And then if in the end we're agreed that we
12    want to work with the kind of framework that provides
13    a sense of what the public interest and public
14    trustee role should be in this democracy, where we
15    might want to go with the code, some of these models,
16    some of the specific issues, think of what areas you
17    believe your interest and expertise would take you so
18    that we can start tentatively to put together
19    groupings to consider at the next meeting.
20              Jim Goodmon had a couple of minutes he
21    wanted to spend.
22              Should we do that first?
23              CO-CHAIR MOONVES:  On what?
24              CO-CHAIR ORNSTEIN:  Jim handed out a chart
25    here, which we all have, which is unintelligible

 1    until he tells us about it.
 2              MR. JAMES GOODMON:  I'm going to spend just
 3    a minute on this because I think it will be very
 4    helpful.  Then I want to summarize a couple of things
 5    just to get you all to think about it.
 6              CO-CHAIR ORNSTEIN:  Okay.
 7              MR. GOODMON:  Sort of the watch -- the
 8    byword now in moving to this digital format really is
 9    confusion.  And the confusion is represented by the
10    14 different formats that are on this form, four of
11    them I left off.  There are really 18.  I left the
12    bottom four off.  But I'm showing you this for a
13    couple of reasons.
14              First of all, on the first page, look at
15    HDTV 16 by 9.  There are two formats that are now
16    officially called HDTV.  That's the 1920 by 1080, and
17    the 1280 by 720.  I just -- I just wanted you to see
18    that.  One thing we've already seen in the newspapers
19    is our TV sets are HD ready.  They can't be HD ready. 
20    I mean this labeling is something I want to talk
21    about.
22              But these are the two HD formats.  And what
23    I wanted to mention to you is pixels because I've
24    decided, and I can't get everybody to agree with
25    this, but the best way to talk about how good the

 1    picture is the number of pixels in it.  That's the
 2    resolution.  That determines how good the picture is.
 3              It's just like on a printed page.  It's the
 4    number of pixels.  And I wanted you to see how many
 5    pixels we can actually display in these different
 6    formats and what the video transmission bit rate is. 
 7    To do 1080i at the top there, it takes 18.8 megabits,
 8    and you can see the different formats.
 9              Now the video transmission bit rate, we've
10    got 19 megabits that we divide up.  You can just take
11    some of these things and put them in there.  But the
12    first point us -- then -- before -- look at SDTV 4 by
13    3 on the back page, SDTV 4 by 3.  What we do now is
14    704 by 480, 60 fields, the second one.  That's what
15    we do now.
16              Now if you look out at the display pixels,
17    236,000.  What I want everybody to understand is that
18    we're going from 236,000 pixels to two million pixels
19    to 800,000 or a million four pixels.  This is a
20    gigantic leap forward in terms of quality.
21              And so the first problem we've got is
22    should we tell the public what we're televising, what
23    we're broadcasting.  And I'm suggesting that there
24    ought to be some kind of symbol to tell everybody
25    what they're getting since there are 18 different

 1    things.
 2              And then the second problem is that in
 3    terms of demonstrating this to people we have not
 4    found a picture tube that will show more than 900,000
 5    pixels.  The TV sets I showed you HD on did about
 6    800,000 pixels, and it was a two million pixel input.
 7              So it's going to be even better than what
 8    we've been seeing.  Okay.  Where am I going with
 9    that?  I'm also wondering if television set
10    manufacturers shouldn't be required to tell us how
11    many pixels they'll do.  I mean, I checked on ten at
12    Circuit City.  And you can buy a TV set for $700 or
13    $3500, 35-inch, and you can get ten different pixel
14    levels.
15              So I'm just saying things are different
16    now.  In this one thing that we're doing we got these
17    different formats, and I'm suggesting that we should
18    put a code to tell the public what we're
19    transmitting.  And I'm also suggesting that the
20    public should have some notion as to how many pixels
21    their set will do when they buy it.  And that might
22    not have anything to do with this Committee.  But
23    it's a notion.
24              CO-CHAIR ORNSTEIN:  Charles, you wanted 45
25    seconds?

 1              MR. BENTON:  I was in Canada last week
 2    visiting City, Strum City, City TV.  Canada has been
 3    historically, because of it being the most wired
 4    cable country, has invested in its media
 5    disproportionate to its population because of the
 6    giant 5,000-pound gorilla to the south.  So they've
 7    been very attuned to media, media literacy, the
 8    nature of television, philosophical questions. 
 9    Marshall McCluen probably is the most famous critic
10    and philosopher of all this.
11              I'm going to send to you, everyone, a video
12    called "TV, TV, the Television Revolution," and a
13    booklet called "TV, TV the Debate," which argues with
14    video done by Moses Zymer.  And it really is the most
15    provocative program I've ever seen about the nature
16    of television.  So look at it and think about it as
17    we're thinking about the nature of television in the
18    next century.
19              CO-CHAIR MOONVES:  Thank you, Charles.
20              Karen?
21              MS. EDWARDS:  Yes.  I just wanted to talk
22    briefly, sort of emphasize something what Norm had
23    said about subcommittees.  And I'm not going to
24    prejudge the issue of whether that's the way the
25    Committee is going to work.  But I do want to remind

 1    everyone that if that format is chosen that there is
 2    this approval process and that the committees, these
 3    subcommittees, have to be approved before they
 4    convene.
 5              So what that means is we need to think a
 6    little bit ahead to make sure that the approval
 7    process does not slow this down.  So when Norm says
 8    start thinking about whether you want to do this and
 9    on what committee you want to serve, I want to say:
10    Yes, do it and get that feedback back to us so that
11    we can make sure that when you are ready to start
12    going, we're ready to do it as well.
13              MR. CRUMP:  Karen, who has to approve it?
14              MR. RUIZ:  And how long does approval take?
15              CO-CHAIR MOONVES:  Six months.
16              MS. EDWARDS:  Well, it has to be approved
17    by the Assistant Secretary for Communications
18    Information, a long title for my boss, Larry Irving.
19              CO-CHAIR MOONVES:  Larry Irving.
20              MS. EDWARDS:  And you ask how long it
21    takes?  I don't know.  But I think that the smart
22    thing to do is to allow sufficient time.  So that
23    means, you know, the week before you want to meet, it
24    would be great not to know that one week before.
25              MR. RUIZ:  But a week is substantial?

 1              MS. EDWARDS:  I wouldn't say so.  And I'm
 2    guessing now, Jose.  I'm guessing that, you know, we
 3    should think more in the range of three weeks or so.
 4              MR. RUIZ:  So are we going to have to meet
 5    to decide these committees?  Is this like something
 6    on the agenda for April?
 7              CO-CHAIR ORNSTEIN:  No, we may not.  I
 8    guess what probably the import of what Karen is
 9    suggesting -- Larry travels a lot so we can't count
10    on him always just being right there.  You should
11    probably get back to the two of us or to Karen and
12    Anne if you have strong preferences here.  And then
13    we will try and work out some tentative possibilities
14    before our April meeting.  And then perhaps try and
15    make it work at the April meeting so that we can get
16    them going so that you can meet very soon thereafter.
17              MR. MASUR:  Norman, have you all defined
18    what the subcommittees are going to be?
19              CO-CHAIR MOONVES:  No.
20              CO-CHAIR ORNSTEIN:  No, we haven't.  We
21    have these general -- we have areas --
22              MR. BENTON:  This is a little premature.
23              CO-CHAIR ORNSTEIN:  Tell us what areas you
24    want to pursue?
25              DR. DUHAMEL:  But the April meeting is when

 1    you define the committees, and then you go to Larry
 2    and say, "Here's what we want to do."
 3              CO-CHAIR ORNSTEIN:  Yes.
 4              DR. DUHAMEL:  And then you got a week or
 5    two weeks after that.
 6              CO-CHAIR ORNSTEIN:  Right.
 7              DR. DUHAMEL:  But I mean now if we give
 8    three weeks' format lead time, we got one week now to
 9    decide what committee we're supposed to be on.  We
10    don't even know what the committees are.
11              CO-CHAIR ORNSTEIN:  We're asking you, Bill,
12    just to indicate the areas you have interest in
13    pursuing.  That's all you have to do.
14              DR. DUHAMEL:  When?
15              CO-CHAIR ORNSTEIN:  As soon as you can.
16              DR. DUHAMEL:  I mean, within a week?
17              CO-CHAIR ORNSTEIN:  Think about what area
18    -- you don't have to -- we don't have a specific
19    subcommittees.  We have areas that I suggested that
20    include the code, that include the models, that
21    include the technological issues, that include the
22    question of defining the broader public interest and
23    making our statement.
24              Just give us a sense if you have any
25    particular strong feelings about being on or not on

 1    one or more of those.  And then we will have a better
 2    idea about how we might shape them when we get to the
 3    April meeting.  That's all.
 4              DR. DUHAMEL:  Okay.  So we aren't going to
 5    set the subcommittees until the April meeting?
 6              CO-CHAIR ORNSTEIN:  Right.
 7              DR. DUHAMEL:  Then we go to Larry with them
 8    afterwards.
 9              CO-CHAIR ORNSTEIN:  Right.  We're just
10    trying to move this process along as quickly as we
11    can.
12              MR. RUIZ:  Karen, doesn't Larry trust us? 
13    Can't we get it preapproved?
14              MS. EDWARDS:  Yes.  This isn't Larry's rule
15    actually.  This is the Federal Advisory Committee
16    Act.
17              CO-CHAIR ORNSTEIN:  And, believe me, you'll
18    get a subpoena if you don't get follow this Act.
19              MR. MASUR:  Norman, is there any concept
20    that's been laid out about how these subcommittees
21    would work?  Can they meet in telephone conference or
22    must they meet --
23              CO-CHAIR ORNSTEIN:  Yes.
24              MR. MASUR:  Oh, they can.  Okay.
25              CO-CHAIR MOONVES:  They would have to.

 1              MS. EDWARDS:  Well, --
 2              CO-CHAIR MOONVES:  No?
 3              MS. EDWARDS:  As you know, sort of whether
 4    a subcommittee or the Committee, you know, has to
 5    meet in an open forum like this one depends on the
 6    content of what they're doing.  And this is why I've
 7    prepared this sort of two-pager to talk about when
 8    the full Committee or subcommittees do not have to
 9    meet in an open forum.
10              In other words, the Federal Advisory
11    Committee Act, as you know, defines what a meeting
12    is.  And there are certain things that are not
13    meetings.  If a subcommittee or the full Committee
14    meets to draft the report, in other words, put down
15    on paper the thoughts or the principles that the
16    Committee has already approved, then that does not
17    require a public meeting.  And all of that is laid
18    out here, so I won't take time to go over it.  But
19    you can certainly read it, ask me any questions.
20              CO-CHAIR ORNSTEIN:  The operative paragraph
21    here, Richard, is this does not qualify as an
22    official meeting, which means you can do it over a
23    telephone conference.  "Meetings of two or more
24    Advisory Committee members or subcommittee members
25    for the sole purpose of gathering information,

 1    conducting research or drafting position papers or
 2    recommendations for the Committee."
 3              Now we have to present whatever emerges
 4    from that at the full Committee.  So the purpose of
 5    the subcommittees would be to discuss -- pull
 6    together information about what might be included in
 7    a section of the report and then work to draft the
 8    report.  That presumably can be done through a
 9    telephone conference.  Then whatever emerges from
10    that, as you go through these iterations, we must
11    present at the Committee.  So it doesn't require
12    everybody to meet together for every part of it.
13              MS. SOHN:  Norm, could I just suggest to
14    the extent that you were looking at ascertainment and
15    local access separately that they are really of a
16    piece.  If you have ascertainment but nothing comes
17    of it in terms of access for local communities, it's
18    a hollow requirement.  I mean, it could also lessen
19    your subcommittees.  Just a suggestion.
20              CO-CHAIR ORNSTEIN:  It's a good idea.
21              CO-CHAIR MOONVES:  All right.  Now is the
22    exciting time when the public comment, questions and
23    answers from anybody out there.
24              Please, anybody would like to say anything? 
25    Ask us any questions?

 1              MS. EDWARDS:  Anne.
 2              CO-CHAIR MOONVES:  Yes.  Please address
 3    yourself.
 4              CO-CHAIR ORNSTEIN:  There's a microphone
 5    here, if you'll wait.
 6              MR. PETERSON:  Right.
 7              CO-CHAIR MOONVES:  Name and any
 8    organization that you may be representing?
 9              MR. PETERSON:  Hi.  My name is James
10    Peterson.  I'm with Sky Writer Communications. 
11    Arthur Kent has contacted most of you, I think, with
12    some issues regarding the news and the news issue
13    before this group.  I'm also the president of a group
14    called the America Voter Coalition.  So I'm involved
15    in both democratic participation but also the news
16    issue.
17              And the two concerns that I have is that
18    though you've talked about free air time for
19    candidates, which presumably the goal of that is to
20    have higher democratic turn out and democratic
21    participation.  Elections only occur every two years
22    at the national level.  And you were talking about 60
23    days of potential advertising.
24              Well, the news happens every day.  And
25    despite that and despite that being the factor that

 1    really motivates civic and democratic participation,
 2    it's not even being addressed by this Commission. 
 3    Despite the efforts of our organization, we've tried
 4    to ask you to bring a journalist before the
 5    Commission and talk about journalistic issues
 6    because, as Newton Minow said way back in the 1960s,
 7    news is at the heart of the public interest.
 8              But if you look at the news today a couple
 9    of weeks ago, you saw a car chase which lasted for
10    hours on local L.A. television.  That took place of
11    CBS news.  It ran over it.  The local broadcast then
12    aired ten minutes of the national broadcast later. 
13    You have issues like that.  You have O.J. Simpson. 
14    O.J. Simpson coverage thousands of minutes, is that
15    really in the public interest, or Marv Albert, or any
16    of the other tabloid TV issues?
17              But still at what time is this group going
18    to consider those issues of the news and journalistic
19    input?  So far, there is no scheduled time for that. 
20    And as you're approaching the end of your deadline, I
21    don't know when you plan to do that.  This directly
22    reflects on voter turnout.  And, as we saw on the
23    last election, voter turnout is becoming alarmingly
24    low.
25              This is a trend that's been going on for

 1    over 50 years.  At what point, whether it's -- is it
 2    45 percent, 40 percent, 35 percent?  When does a
 3    group like this that has an opportunity to address
 4    issues as far as voter participation, a democratic
 5    participation, at what point do you become alarmed
 6    and do something about it?  When will you start
 7    talking about the news?
 8              The other issue that I wanted to address is
 9    that virtually no one knows that you exist.  It's a
10    very inside industry issue.  If you look at the list
11    outside, the only people, the only reporters here
12    that I saw listed were from trade journals, from the
13    Hollywood Reporter, from Variety.  The New York Times
14    isn't here.  CBS, though I applaud the fantastic
15    efforts compared to NBC to bring up valid hard news,
16    where are their cameras?
17              I just want you to address that and do what
18    you can to bring this before the public and not just
19    have this a private meeting between industry
20    executives and nonprofit groups.
21              Thank you.
22              CO-CHAIR MOONVES:  Anyone else?
23              Yes.
24              Thank you, by the way.
25              MR. SPITZER:  My name is Matthew Spitzer. 

 1    I work for the University of Southern California. 
 2    I'm a Professor in the Law School.  And I'm the
 3    Director of the USC Communications Law and Policy
 4    Center.  I want to address two things.
 5              First, I think it's pretty clear that if
 6    this group, or the FCC, or any other administrative
 7    body were to attempt to exercise the degree of
 8    oversight over news gathering and reporting that I
 9    thought I heard in the previous comment, it would
10    almost certainly fall under the First Amendment.
11              And so there are probably good reasons why
12    you haven't spent a lot of time considering just how
13    detailed the oversight of news reporting should be
14    with respect to making sure that the electorate is
15    fully informed.
16              An attempt to force broadcasters to stop
17    covering car chases with O.J. Simpson and start
18    covering more public interest regarding news events
19    would certainly be struck down by the Court.
20              Second, with respect to the argument that
21    you heard from Mr. DeVore regarding the
22    unconstitutionality of free time, I see absolutely no
23    way that he can make the argument in a way that also
24    continues to support the justifications for the
25    regulatory regime in the following sense.  Red Lion

 1    is not a case caught in amber in 1969.  It's
 2    repeatedly been affirmed by the Supreme Court both in
 3    Metro Broadcasting and in Turner 1.
 4              And, in fact, the Supreme Court may be the
 5    only group left on earth that seriously believes in
 6    the scarcity rationale as a justification for the
 7    regulation of broadcasting.  But since they have all
 8    the votes and the rest of us out in academia and in
 9    trade magazines and so forth don't, for the time
10    being, it's still a good case.
11              If the Supreme Court have to jettison Red
12    Lion, they would basically have to jettison the
13    scarcity rationale at the same time.  But if they
14    were to jettison the scarcity rationale, the
15    rationale for federal ownership of the spectrum and
16    the rationale for the U.S. government allocating it
17    to the broadcasters would be in grave jeopardy at
18    exactly the same time.
19              And so I see absolutely no way that the NAB
20    can continue to assert that it's unconstitutional to
21    demand free time without at the same time more or
22    less proving that the licenses that they hold are
23    also unconstitutional, which is a very odd sort of
24    situation to find the NAB in.  And that's the only
25    comment I have.

 1              CO-CHAIR MOONVES:  Thank you.
 2              Anyone else?  Questions?  Comments?
 3              Norman, anything further?
 4              CO-CHAIR ORNSTEIN:  No.
 5              CO-CHAIR MOONVES:  Well, we shall adjourn. 
 6    Thank you, everybody.
 7              Once, again, thank you, Jeff, for your
 8    hospitality.
 9         (Whereupon, the Committee meeting was adjourned
10    at 4:22 o'clock p.m.)
12                 ---o0o---

Go to the transcript of the morning session