1 1 2 3 4 5 UNITED STATES DEPARTMENT OF COMMERCE 6 NATIONAL TELECOMMUNICATIONS 7 AND INFORMATION ADMINISTRATION 8 9 10 11 MEETING OF THE ADVISORY COMMITTEE 12 ON PUBLIC INTEREST OBLIGATIONS 13 OF DIGITAL TELEVISION BROADCASTERS 14 15 16 17 Commerce Auditorium 18 14th Street & Constitution Avenue 19 Washington, D.C. 20 Wednesday, October 22, 1997 21 22 2 1 COMMITTEE MEMBERS PRESENT: 2 LESLIE MOONVES, Co-Chair President, CBS Television 3 NORMAN J. ORNSTEIN, Co-Chair 4 Resident Scholar, American Enterprise Institute 5 CHARLES BENTON 6 Chairman and CEO, Benton Foundation and Public Media, Inc. 7 FRANK M. BLYTHE 8 Executive Director, Native American Public Telecommunications, Inc. 9 PEGGY CHARREN 10 Visiting Scholar, Harvard University Graduate School of Education 11 Founder, Action for Children's Television 12 HAROLD C. CRUMP Vice President, Hubbard Broadcasting, Inc. 13 FRANK M. CRUZ 14 Board Member, Corporation for Public Broadcasting 15 President, Cruz & Associates, Inc. 16 ROBERT W. DECHERD Chairman, President and Chief Executive 17 Officer (CEO), A.H. Belo Corporation 18 WILLIAM F. DUHAMEL, Ph.D. 19 President and General Manager, Duhamel Broadcasting Enterprises 20 ROBERT D. GLASER 21 Founder and CEO, RealNetworks 22 3 1 COMMITTEE MEMBERS PRESENT (CONT'D.): 2 JAMES FLETCHER GOODMON President and CEO, Capitol Broadcasting 3 Company, Inc. 4 PAUL A. LA CAMERA Vice President and General Manager, WCVB-TV 5 NEWTON N. MINOW 6 Professor, Communications Policy and Law, Northwestern University 7 Counsel, Sidley & Austin 8 SHELBY SCOTT President, American Federation of 9 Television and Radio Artists 10 GIGI B. SOHN Executive Director, Media Access Project 11 KAREN PELTZ STRAUSS 12 Supervising Attorney, National Association of the Deaf 13 CASS SUNSTEIN 14 Professor, University of Chicago Law School 15 JAMES YEE Executive Director, Independent Television 16 Service 17 ALSO PRESENT: 18 KAREN EDWARDS Designated Federal Officer, National 19 Telecommunications and Information Administration 20 21 * * * * * 22 4 1 C O N T E N T S 2 PAGE 3 Opening Remarks and Welcome 5 Secretary William M. Daley 4 Keynote Address 8 5 Vice President Albert Gore 6 General Committee Session 26 7 Discussion of Organization and 63 Structure of Committee 8 Briefing I: Evolution of the 112 9 Public Interest Standard in Broadcasting 10 Briefing II: Relevant Provisions 187 11 of Telecommunications Act of 1996 and the FCC's 12 Implementation Efforts 13 Committee Discussion of Future 200 Agenda 14 Public Comment, Questions 234 15 and Answers 16 17 * * * * * 18 19 20 21 22 5 1 P R O C E E D I N G S 2 (9:50 a.m.) 3 OPENING REMARKS AND WELCOME 4 MR. IRVING: Ladies and gentlemen, 5 Vice President of the United States Al Gore 6 accompanied by Secretary of Commerce William 7 Daley. 8 MR. DALEY: Good morning. I would 9 like to thank and welcome each of you to the 10 Department of Commerce, and thank you for 11 joining the first Digital Television Advisory 12 meeting. We are obviously pleased and honored 13 that the Vice President is with us today. 14 Forty-five years ago, Edward R. 15 Murrow said of television, "This instrument can 16 teach, it can illuminate, and it can even 17 inspire, but only if human beings are willing 18 to use it to those ends." 19 We are here today to talk about 20 public interest obligations for digital TV 21 broadcasters. Members of the committee are 22 leaders from both the public and also the 6 1 private sectors. We believe that working 2 together, and with generous input from all 3 concerned, they can offer a real vision of 4 where we can go as an industry and as a nation 5 in this new era. 6 We stand in a unique position with 7 respect to digital television. We have a 8 history of analog television from which to 9 learn. And we have a glimpse of the potential 10 that digital TV holds. 11 President Clinton and Vice President 12 Gore rightly feel that now, the beginning of 13 this new initiative, is an opportune time to 14 reexamine public interest obligations and to 15 determine what should be retained, repealed or 16 added. 17 Traditionally, in exchange for 18 exclusive rights to use scarce electromagnetic 19 spectrum, broadcasters have had certain public 20 interest obligations. And I should note that 21 the Commerce Department has had an historic 22 role in communications policy stemming back 7 1 from the early century when ships were using 2 the wireless. Today, our National 3 Telecommunications and Information 4 Administration, which will be serving as the 5 Committee's secretariat, helps address the 6 diverse technical and policy questions that a 7 responsible national telecommunications policy 8 demands. 9 Your challenging assignment is to 10 look hard at the current public interest 11 obligations to determine if and how they will 12 serve our nation's future goals in this new 13 era. You will be balancing very important 14 values. Television has been called the most 15 powerful social force in the world's most 16 powerful nation. We look to you to help make 17 it the instrument of good that Edward R. Murrow 18 spoke of. 19 We are extremely fortunate to have as 20 our helmsman on this journey a statesman, a 21 parent, a visionary leader with the remarkable 22 ability to see how both tradition and advanced 8 1 technologies can be combined in ways to 2 strengthen our great nation. Vice President 3 Gore's outstanding leadership in promoting 4 government reinvention, a safe and healthy 5 environment, science and technology's position 6 in our country for a prosperous and a peaceful 7 21st century. 8 Ladies and gentlemen, it is with 9 great pleasure and honor that I introduce 10 someone who I consider a friend, a man of 11 tremendous intelligence, drive, integrity, the 12 Vice President of the United States. 13 KEYNOTE ADDRESS 14 VICE PRESIDENT GORE: Thank you very 15 much, ladies and gentlemen. Thank you. Thank 16 you very much. And Secretary Daley, I 17 appreciate those overly generous words. 18 And to you ladies and gentlemen who 19 have agreed to serve on this commission, 20 profound thanks from the President and myself 21 and from millions of Americans who will learn 22 of your work in the results of what comes out 9 1 of your deliberations. 2 But I want to again thank Secretary 3 Daley not only for his kind words, but also for 4 his leadership and for giving us this critical 5 forum here today. And among those who have 6 agreed to serve on the Advisory Committee, I 7 want to especially thank the co-chairs, Norm 8 Ornstein of the American Enterprise Institute 9 and Les Moonves of CBS Television. They are 10 lending their time and talent to this important 11 enterprise, and we are very grateful. 12 And I want to thank each and every 13 single member of the Committee. Their names 14 were formally announced this morning. And 15 those of you who are following the creation and 16 then the deliberations of this Advisory 17 Committee have been given the information and 18 background on each of these men and women. 19 Suffice it to say, it is a very 20 distinguished and talented group. You bring to 21 this work not only a broad and deep expertise 22 and all of the challenges of modern 10 1 broadcasting, but also a commitment to serving 2 the public. And I am very grateful that you 3 have chosen to serve. 4 I want to thank all those who have 5 played a part in assembling this group and in 6 charting its course. I want to thank Larry 7 Irving, the Assistant Secretary of Commerce, 8 who has worked so long and hard on this issue, 9 and of course the staff of NTIA, as Secretary 10 Daley mentioned, will serve as the secretariat 11 for the Advisory Committee. I want to thank 12 Don Gips and Jim Kohlenberger on my staff and 13 others who have worked extremely hard to make 14 this day possible. 15 We are here today to formally begin a 16 study of one of the most important questions of 17 our time: how to ensure that one of our most 18 precious public properties continues to serve 19 the public's needs, not just for entertainment, 20 but for enlightenment, education and civic 21 debate as well. 22 Almost 60 years ago, after seeing an 11 1 early demonstration of television, E.B. White 2 predicted, and I quote, "We shall discover 3 either a new and unbearable disturbance of the 4 general peace or a saving radiance in the sky." 5 The truth is neither has come to pass, but E.B. 6 White was right in one important sense: The 7 broadcast medium is what we make of it. And it 8 can be a saving radiance shining through, but 9 only when we provide it. 10 For this reason, America's 11 broadcasters are really the trustees of a 12 critical public resource. When you consider -- 13 and I am always surprised freshly when I look 14 at these statistics about how much we Americans 15 watch television -- but when you consider that 16 the average 70-year-old will have spent a full, 17 solid 10 years watching television, that's 18 amazing. And when you consider that a typical 19 child will watch 25,000 hours of television 20 before his or her 18th birthday, you begin to 21 realize the magnitude of the public interest 22 obligation. 12 1 Fortunately, as far back as the Radio 2 Act of 1912, the United States of America has 3 understood and acted on those obligations. It 4 was in 1952 when TVs still looked like this one 5 here (indicating), the 1946 television to my 6 right, it was way back then in 1952 that the 7 FCC set aside a full 12 percent of all TV 8 channels for educational, noncommercial use. 9 It was in 1967 that President Johnson 10 won passage of the Public Broadcasting Act, 11 making public television a part of our daily 12 lives. Thanks to many of the people in this 13 room, we have expanded children's programming 14 and made it easier also for federal candidates 15 to have equal and affordable access to 16 broadcast time. 17 Well, we are here today because that 18 tradition of trusteeship must continue in the 19 future. And of course, we are now on the cusp 20 of a new era in which television is going 21 through the greatest transformation in its 22 history, one that is truly an awful lot bigger 13 1 than the shift from black and white to color 2 that many of us remember, bigger than the 3 expansion of the size of the screen, bigger 4 than all of the other changes that have come 5 before. I am talking about the move from 6 analog to digital broadcasting. It is like the 7 difference between a one-man band and a 8 symphony. 9 (Video presentation) 10 VICE PRESIDENT GORE: I don't know 11 from that distance if you can see the startling 12 clarity of that picture on the screen. But 13 none of us can predict exactly what this new 14 technology will bring, whether it will be 15 high-definition or multicast; whether it will 16 broadcast to TV screens, to computers, or to 17 digital TVs, or to all three; whether it will 18 bring dramatic changes in content and 19 programming or just a wider range of channels 20 and choices. 21 We do expect that we will see even 22 more entertainment, and education -- more and 14 1 better educational and children's programming, 2 and we also hope and expect to see free TV time 3 for candidates for public office. David Broder 4 remembers that one pretty well. 5 (Video presentation) 6 VICE PRESIDENT GORE: In any event, 7 we also know that digital broadcasting will be 8 more dynamic and more flexible, more 9 competitive and more interactive, and 10 potentially much more responsive to the needs 11 and interests of the American people, if we 12 prepare for it in the right way. 13 The fact that it is so limitless, the 14 fact that so many of our present rules and 15 expectations will not apply, makes digital 16 broadcasting the Wild West of the television 17 age. If we don't map out some of that terrain 18 for public purposes, if we don't carve out 19 meaningful public space on our newest public 20 airwaves, we could lose that opportunity for 21 good. 22 This is a little bit like the Lewis 15 1 and Clark expedition to the future of digital 2 television, to bring us back the maps of what 3 is out there, let us know what opportunities 4 are there to be used for the good of the 5 American people. 6 We know that the digital spectrum is 7 a valuable asset that will bring an explosion 8 of opportunities for broadcasters. But what we 9 have asked for in return and what we must get 10 in return is a significant commitment to the 11 public interest. 12 We all know what the critical needs 13 are: the need to educate and inform our 14 children; the need to protect them from harmful 15 influences, or more precisely to give their 16 parents and guardians the tools necessary to 17 exercise their judgment and allow them to 18 protect them from influences that they don't 19 think are appropriate for young children; and 20 also the need for free and open political 21 debate driven not by dollars and sound bytes, 22 but by issues and ideas. 16 1 The challenge we now face is meeting 2 those needs, protecting our oldest values in 3 the face of new and changing technology. 4 That's why President Clinton and I created this 5 Advisory Committee, and that is why the report 6 you submit to me next June will be such a 7 critical road map for the new broadcast medium. 8 Of course, your paramount obligation 9 must be to sustain and strengthen the First 10 Amendment freedoms that are so critical to all 11 media. We cannot allow or condone censorship 12 of any kind. We must respect the free 13 enterprise approach that has always governed 14 our airwaves. But we must also recognize that 15 broadcasting is not a right, but a privilege, 16 and one that confers great responsibilities. 17 I expect the work of this Committee 18 to be broad, and I certainly don't want to 19 prejudge or preordain its outcome. But with 20 your permission, I would like to begin this 21 first meeting with a discussion of first 22 principles, some of the challenges that the 17 1 President and I believe must be met if we are 2 to truly harness the new media for the good of 3 all Americans. 4 The first is children's programming 5 on our airwaves, and there are really two sides 6 to this equation: helping parents screen what 7 they believe to be inappropriate for their own 8 children, and also giving them more of what we 9 know to be good, more of what they want. 10 You all know how hard President 11 Clinton and I have worked with the broadcast 12 industry, with Congress and with parents groups 13 to achieve both of these goals: requiring the 14 V chip, for example, so that parents have the 15 power to block what they as parents find 16 objectionable for their own children; bringing 17 together the majority of the broadcast industry 18 to launch voluntary TV ratings, so that parents 19 have an early warning system when it comes to 20 content that they find objectionable, and that 21 they have information that they can use 22 hand-in-glove with the V chip, even when they 18 1 are off at work and their children are watching 2 television not in their presence. 3 This is an achievement that we are 4 all committed to continuing in the digital age. 5 And I certainly hope that NBC will soon join in 6 this voluntary effort as well. 7 These ratings will serve us well in 8 the digital age. They are overwhelmingly 9 popular with parents for a good and simple 10 reason: Parents understand that they have been 11 given false choices in the past. One group has 12 said, well, just turn off the TV and unplug it 13 and throw it out the window if you do not like 14 what is on. 15 But that's not practical, and most 16 everybody knows it. There are a few families 17 that take that approach, and far be it from me 18 not to recommend it. We haven't been able to 19 do it, and most families aren't able to take 20 that option. 21 But the second option that has been 22 offered in the past is also a false choice, and 19 1 that is to lecture parents on the fact that it 2 is their responsibility to sit there every 3 minute of every day and personally watch 4 everything that their children are watching. 5 With two or more televisions in most 6 households now, with one or both parents 7 working in most households now, with kids 8 watching so much television, that, of course, 9 is patently ridiculous. Parents cannot take 10 that option, and pretending that they can is 11 really no solution to the problem. 12 So this third path of having 13 information provided to supplement what the 14 consumer knows about the product that he or she 15 is consuming and giving parents the ability to 16 exercise their role as parents, this is an 17 approach that the American people really do 18 want to see work. 19 Now, in addition, we fought for and 20 won passage of the three-hour rule: requiring 21 broadcasters to air a minimum of three hours of 22 genuine, high-quality, educational programming 20 1 each week. It was no accident that President 2 Clinton's letter to the FCC urging them to pass 3 this rule was the very first such letter ever 4 sent by a President of the United States to the 5 Federal Communications Commission. 6 Well, now our challenge with the 7 birth of digital broadcasting is to translate 8 these rules into the digital age. We must 9 provide families with more quality educational 10 programming from which to choose. 11 I personally will never forget the 12 hours I spent with my own children watching 13 Sesame Street, Mister Rogers' Neighborhood, or 14 more recently documentaries on the Civil War, 15 baseball, et cetera, and new educational shows 16 such as Science Court. That's one of my 17 favorites. We want to create more of those 18 experiences, not fewer, in the digital age. 19 The other critical issue and one 20 which is especially important to the president 21 and me is the need for free TV time for 22 candidates for public office, to create a 21 1 meaningful public forum that does not require 2 an endless steeplechase to raise and spend 3 campaign contributions. You know, our current 4 system has candidates for every office raising 5 tons of money and then spending it to buy 6 television time. 7 The television time which belongs to 8 the public is given away for free and then 9 purchased back in 30-second chunks with these 10 campaign funds that are raised in the current 11 system. If we can change that and recognize as 12 part of the public interest obligations that 13 broadcasters have the providing of free time 14 for the discussion of ideas critical to the 15 survival of our self-government, then we can 16 solve several problems all at the same time. 17 Some of you may know that I don't 18 come new to this issue. I introduced the very 19 first free TV legislation in the Senate exactly 20 nine years ago this past Saturday: October 18, 21 1988. Sadly, nine years later, little has 22 changed in our system for financing campaigns. 22 1 Candidates still raise and spend too much 2 money, mostly to buy those 30-second slivers of 3 TV time to put on their commercials. And too 4 many candidates still don't have access to the 5 airwaves, which means they often don't have 6 access to the voters. 7 As this Committee deliberates and 8 defines the public interest in the digital age, 9 I urge you to pay special attention to the need 10 for TV time to be set aside free for the 11 survival of our democracy, and please come 12 forward with a serious proposal to provide it 13 if you can find consensus on such a proposal. 14 Beyond these two central issues 15 related to content, the needs of our children 16 and the needs of our democracy, there are other 17 issues that I urge you to explore. In all of 18 your recommendations, you should strive to 19 design rules and principles that are flexible 20 enough for a technology that will change very 21 rapidly and is still wildly unpredictable. At 22 the same time, you will have to struggle with 23 1 how to establish a clear and meaningful public 2 interest obligation. 3 For this new media, that may mean 4 something different than a number of hours or a 5 percentage of broadcast time. It may mean 6 specifying a portion of the megabits of 7 information that will flow through tomorrow's 8 digital airwaves. I hope you will consider 9 creative ways to map out such goals as we 10 strive to make public interest obligations 11 real. 12 There are, of course, many other 13 issues to consider, and what we are asking 14 above all is that you provide us with your best 15 judgment and best assessment. What should a 16 broadcaster's obligations be in areas such as 17 public service announcements, closed-captioning 18 and video description? 19 Let me close by saying that we are 20 very, very lucky to have such a talented and 21 diverse membership on this Committee. It 22 includes leading broadcasters and producers, 24 1 academics and executives from a variety of 2 fields, and members of the public interest 3 community. Together as a group you must be the 4 guardians of the public interest, and America 5 is counting on your counsel and leadership. 6 The broadcast spectrum, worth untold 7 billions of dollars, is not a mere commodity; 8 it is a public trust. There is a reason that 9 so many democratic nations have established 10 state-run TV networks to harness its power to 11 educate and inform, and there is a reason that 12 so many autocratic nations have harnessed it 13 for less noble purposes and propaganda. 14 We in America chose a far different 15 course. We chose a system that is privately 16 run, but publicly regulated; one that grants 17 tremendous freedom to the market, 18 appropriately, but bestows obligations that are 19 just as great. 20 It is not a perfect system. A 21 perfect system doesn't exist anywhere. But for 22 more than a half century, the United States of 25 1 America has had the vision to believe that 2 broadcasting could be better, that the industry 3 could uphold the public interest and live up to 4 the obligations of such an enormous 5 trusteeship. 6 It is that same vision and commitment 7 that must be summoned again today as we shape 8 and create a new broadcast technology for the 9 electromagnetic spectrum. In some ways, the 10 challenge is exactly the same, but all of us in 11 this room know that the job could be done 12 better. Let's commit ourselves to that simple 13 goal. Let's believe in TV's ability to educate 14 and inspire and challenge us and chart new 15 terrain, and let us resolve to make the digital 16 age the true golden age for this crucial 17 medium. 18 So thank you, and I look forward to 19 working closely with you in the months ahead. 20 Thank you very much. 21 (Recess) 22 GENERAL COMMITTEE SESSION 26 1 MR. MOONVES: My name is Leslie 2 Moonves. I am president of CBS Television. 3 First of all, I am pleased and 4 honored to serve as co-chairman of this 5 Committee. I would like to thank Vice 6 President Gore, Secretary Daley, Assistant 7 Secretary Larry Irving, and Anne Stauffer and 8 Karen Edwards from the NTIA for setting all of 9 this up. 10 Needless to say, we have a very 11 difficult task ahead of us in the coming year. 12 I think this Committee is already two meetings 13 behind, being as we are supposed to turn in a 14 report, I believe, in June. We may have to 15 change that calendar. A little bit later we 16 will get into some of the housekeeping duties. 17 I would like to say a few introductory remarks 18 and then my co-chairman, Norman Ornstein, will 19 be doing the same. And then we would like each 20 one of you, in the form of an introduction of 21 yourself or anything you would like to say, to 22 talk for about a minute so that we can all get 27 1 to know each other better as we get through the 2 day. 3 As I said, we do have an extremely 4 difficult task ahead of us. Like each of you 5 on the Committee, I was appointed, at least in 6 part, to bring to this Committee a viewpoint 7 based on experience and interest about what 8 role the federal government should play in the 9 broadcasting industry and what role 10 broadcasters have in providing public service 11 to the American people. 12 Collectively, these diverse 13 viewpoints will be vital as we work through our 14 agenda over the coming weeks and months, 15 hopefully not years. To be successful, 16 however, it is essential that we agree to look 17 at these complex issues with a fresh 18 perspective and be open to findings that 19 challenge conventional wisdom and 20 preconceptions. 21 As a result, I urge all of us to keep 22 open minds to assure that the public policy we 28 1 recommend is not only in the public interest, 2 but takes into account that there are differing 3 opinions on what is appropriate. And we will 4 see those opinions from various members of the 5 Commission as well as certain outside people. 6 For example, there continues to be a 7 great deal of speculation about what shape the 8 digital world will take, and many different 9 viewpoints about the worth of digital channels. 10 There are some who are convinced that the world 11 known as "multiplexing" holds the promise of 12 huge incremental revenues for television 13 station owners. We have heard the word 14 "billions" thrown around. 15 Others believe that a more likely 16 scenario is that stations will air a single 17 HDTV channel that will not generate any 18 additional revenue. As one broadcaster said to 19 me, "Ten years from now we may have a prettier 20 picture, but I don't know if advertisers will 21 pay any more for that." We will hear later on 22 from experts on both multiplexing and HDTV 29 1 options in future meetings. 2 There are also questions to be 3 explored about what broadcasters are already 4 doing to fulfill their public interest 5 obligations: What is effective, what is not, 6 how much is fair, how much is not. And this 7 pertains not only to the large broadcasters, 8 like the ones I represent, but also the 9 hundreds of local stations reaching every city 10 and town in America. 11 And obviously, there are questions 12 about the role of broadcasters in political 13 campaigns. I believe that a vast majority of 14 the American people support campaign finance 15 reform, as do many broadcasters, but don't we 16 all want reform that is comprehensive in 17 nature? In that regard, this Committee has 18 been set up to deal with public interest 19 obligations of broadcasters. 20 Yet it appears that in certain 21 circles it is claimed that the only issue we 22 are going to be dealing with is free airtime 30 1 for political candidates. It is incumbent upon 2 us to look at a much more comprehensive list of 3 issues facing broadcasters, including 4 children's television, public service 5 announcement requirements, closed-captioning, 6 and the support of national and local causes, 7 among others. 8 I learned long ago that there is no 9 black and white in the entertainment business 10 or in government, and there are no easy answers 11 to issues as complex as these. Our challenge 12 is to develop a public policy that is founded 13 in the realities of today with the flexibility 14 to meet the circumstances of a future none of 15 us can accurately predict today. 16 Like all of you, I care deeply about 17 our country and the intrinsic link between 18 broadcasting and the cultural and political 19 life of America. I look forward to working 20 with this Committee and all who come before us 21 in a constructive and positive manner, and I am 22 hopeful that the result of our efforts will be 31 1 recommendations that provide a foundation for 2 continued public benefits to the American 3 people in a fair and constructive manner. 4 As you contemplate your personal 5 points of view, please remember: This group 6 must try to reach a consensus that all parties 7 can feel satisfied with, otherwise it will not 8 be a successful Commission. 9 Thank you. Norm? 10 DR. ORNSTEIN: Thanks very much, Les. 11 It is a pleasure and an honor to be a part of 12 this Advisory Committee and to be a co-chair 13 along with my longtime friend, Leslie Moonves. 14 I, too, want to thank Vice President Gore, 15 Secretary Daley, Assistant Secretary Irving and 16 our able staff. And we should acknowledge 17 right here that Anne Stauffer and Karen Edwards 18 have been working extremely long hours, 19 including into the wee hours of the morning, to 20 provide us with the materials we have gotten 21 and all of the other things that make a meeting 22 come together. 32 1 For those of you who don't know, I am 2 Norman Ornstein. I am a resident scholar at 3 the American Enterprise Institute and sometime 4 analyst on CBS News, among other things. 5 Vice President Gore mentioned this 6 morning that our task was perhaps the 7 modern-day equivalent of Lewis and Clark. I 8 turned to my co-chair and said, "I feel more 9 like Lewis and Martin." 10 But I hope we can cover new ground as 11 both of those teams managed to do. 12 As I see it, we have two 13 complementary roles here. The more I look at 14 the executive order that created our Advisory 15 Committee, a simple and relatively brief one, 16 the more I realize how difficult and vast the 17 tasks are. 18 This is the Advisory Committee on the 19 Public Interest Obligations of Digital 20 Television Broadcasters. We know, of course, 21 that there are a number of -- Les Moonves 22 mentioned many of them -- public interest 33 1 obligations for analog television broadcasters 2 now. One of our tasks, one of our charges, is 3 to look at systematically what this new 4 technology will mean -- a different form of 5 communicating to people -- and seeing how 6 existing public interest obligations for analog 7 television ought to apply, if they should, to 8 digital television. 9 At the same time, we have another 10 task. We have new responsibilities because of 11 this valuable spectrum -- I, too, have heard 12 the term "billions." Actually, I think it was 13 more the Carl Saganesque "billions and 14 billions" of value. 15 And none of us knows what the 16 additional commercial value of this spectrum 17 will be, but what we do know is that certainly 18 by the simple reality that the competitors of 19 broadcasters were not allowed to compete for 20 this particular spectrum, something of value 21 was created here. And Congress and other 22 government agencies have made it clear that we 34 1 need to consider some public interest in return 2 for that. And we will have, no doubt, some 3 sizable discussion of what all of that means. 4 We have a tough task in both cases 5 and in a more general way, because the frank 6 reality is that none of us knows what this new 7 technology will mean or provide, and what we do 8 know is that the technology and multiple 9 technologies are changing every minute as we 10 speak. And we are finding that separating out 11 broadcasters from other forms of communication, 12 that determining who broadcasters are, even, is 13 changing daily, even as we speak. The whole 14 world of communications is changing. 15 We have an elusive and moving target 16 here, and in the span of several months, one 17 obviously very important part of this effort is 18 one that my co-chair alluded to, which is as 19 broadcasters begin to think about the simple 20 questions of high-definition television versus 21 multiplexing. But that is only one part of 22 where the digital age may take digital 35 1 television broadcasters. We have to try to 2 make some projections ahead to what kind of 3 communication might be there, and then decide 4 how to apply to a very different world some 5 standards. 6 We are going to have to look 7 systematically at the existing obligations, 8 from public service announcements and 9 must-carry through children's television and 10 education, and consider new ones including, of 11 course, as the Vice President said and as the 12 President said very clearly when he announced 13 the executive order creating the Committee and 14 when he announced in his Saturday morning radio 15 address that the two of us would be co-chairing 16 it, the question of campaign finance reform. 17 But I agree wholeheartedly with my 18 co-chair that that is one of a number of issues 19 that we have to consider. It is certainly not 20 the only one. 21 At the same time, I would suggest to 22 you, we have to look at innovative approaches 36 1 to what public interest obligations are or 2 should be. There are a number of them out 3 there. It is not necessarily the case that 4 simply defining an obligation in terms of 5 minutes or hours of time provided for a 6 particular purpose has to be done in this case. 7 And we may be able to do something 8 very valuable for the future, which is to 9 consider all kinds of additional approaches, 10 including a number of market-based approaches, 11 that might give us a better opportunity, in 12 fact, to serve the needs of everybody, public 13 broadcasters and other entities in this 14 process. We have to do that in a very short 15 period of time. And one of the things we will 16 start doing this morning, after our 17 preliminaries, is to work through how we will 18 be able to accomplish those tasks. And it is 19 something we will have to continue, no doubt, 20 this afternoon. 21 Just a brief word for the two of us 22 on what we had intended for today: In effect, 37 1 when Les and I talked about the first meeting, 2 we wanted to build a foundation, we decided, 3 for our future deliberations and work from the 4 title of our Commission. It is on the public 5 interest obligations of digital television 6 broadcasters. 7 So after we talk about organizing and 8 the future and some of the areas we will 9 consider and the roles that the members might 10 play, we will focus on public interest 11 obligations. We will have a presentation from 12 an individual who is extraordinarily 13 knowledgeable in this area, Erwin Krasnow, 14 about the history of public interest 15 obligations. We will have some discussion 16 among ourselves about the existing state -- 17 legal, constitutional and otherwise -- of them. 18 We will then move to the link, which 19 is the Telecommunications Act of 1996, between 20 public interest obligations and digital 21 broadcasters. Our own Karen Edwards will give 22 us a sense of what that Act itself says, and we 38 1 will have some discussion. 2 And then, finally, perhaps some this 3 afternoon but certainly more tomorrow morning, 4 we will begin to look at what exactly or 5 approximately digital television broadcasting 6 is and what its future might hold. 7 So we are going to lay a foundation 8 out this morning. And through the rest of this 9 meeting that will, I hope, lead us into the 10 future areas of deliberation that we will have. 11 And we will discuss those in a short while. 12 Perhaps it is a good time now. We 13 are going to have a briefing from Karen Edwards 14 on the Federal Advisory Committee Act. Should 15 we have the members, I think, introduce 16 themselves first? 17 MR. MOONVES: Yes. 18 DR. ORNSTEIN: If you could each take 19 just a minute or two, no more, to say who you 20 are and also what you expect this service on 21 our Advisory Committee will provide. And we'll 22 start. 39 1 MR. BENTON: First of all, I want to 2 say how delighted I am to be here. And I want 3 to introduce my colleague, Kevin Taglang, who 4 is in the audience here, at the Benton 5 Foundation. He is a policy analyst, has been 6 providing the e-mail service, abstracting both 7 the trade and public and consumer press, and 8 will be our Web site reporter. And you will 9 have a summary of these meetings on the Web 10 site, which he will provide for us. And that 11 is a service that we are very happy and proud 12 to provide. 13 A couple of points: From my 14 experience in philanthropy and the nonprofit 15 world and business and government, I think 16 win-win solutions are the best. And in 17 addition to the public service obligations, I 18 think we need to really focus on the public 19 service opportunities that broadcasters have, 20 opportunities to differentiate themselves from 21 their cable and telephone, the other 22 competition. So a win-win would focus on these 40 1 opportunities, and that is something I am 2 really looking forward to the discussion on. 3 A final quick point: In addition to 4 the excellent points that the Vice President 5 made this morning about children and about 6 democracy, I think the third dimension that 7 needs some real discussion is community. Sort 8 of the ABCs of public service are, as we see 9 it, the children, community and democracy. 10 And this, again, is where the 11 broadcasters from their community base have 12 great power, an opportunity to serve from the 13 local broadcast experience and in that 14 community service that is perhaps unique among 15 the broadcasters' potential for public service 16 contributions. So the ABCs are children, 17 community and democracy, and I hope we can 18 really focus on the community aspect. 19 MR. BLYTHE: I am Frank Blythe from 20 Lincoln, Nebraska, and working with a group, an 21 organization called Native American Public 22 Telecommunications. 41 1 I think in my point of view, I hope 2 this Committee will be able to create a more 3 broad-based awareness to the general public 4 about what public interest obligations are from 5 broadcasting. I just do not think they are 6 totally aware of it. 7 I have been asking people on the 8 street over the last two or three months if 9 they know anything about the conversion to 10 digital television and what impact it has in 11 their living room, and very few people know any 12 answers to that question. And I hope that this 13 will be one of the things where we can provide 14 some information that makes the public more 15 aware of what the impact is. 16 I think having a broadcast license is 17 sort of like having a driving license. It is a 18 privilege, but you also assume some obligations 19 when you are driving a car to obey certain 20 rules. You have obligations to your fellow 21 drivers. 22 I think broadcasters are in the same 42 1 seat: They are in the driver's seat. They get 2 a license from the FCC which carries some 3 obligations. And I hope this Committee here 4 will review what the past obligations are and 5 will try to project ahead: What is of value to 6 the public? And I think that is my main 7 interest here. 8 I was with commercial stations in the 9 early '80s when the FCC dropped the 10 ascertainment rule for community broadcasters, 11 and I saw a definite pull-back in public 12 interest programming and public service 13 programming from at least the commercial 14 station that I was working with at the time. I 15 do not know if that is a trend that happened in 16 the whole industry, and I do not know exactly 17 how public service programming is now tracked, 18 but I would certainly think it is an important 19 area that public broadcasters have an 20 obligation to serve in their communities. 21 MS. CHARREN: I am Peggy Charren, and 22 I am here because I started something called 43 1 Action for Children's Television 30 years ago. 2 I guess I am the grandma of the three hours of 3 educational programming. I would have been the 4 mother, but it took too long. 5 ACT had a three-part agenda. One was 6 very pro-choice in programming. We think the 7 way that you get communications to serve any 8 audience is to have the kind of choices you 9 have in a good library, and that means there is 10 some stuff you do not want to take off the 11 shelves, but you certainly do not want anybody 12 burning the books or taking them off for you. 13 So the other part of what we did was 14 act violently anti-censorship for all those 15 years, which is I think why the press kept 16 talking to me. Sometimes I think my tombstone 17 is going to say, "She was a sound byte." 18 I am also opposed to 19 overcommercialization of the medium, especially 20 as it relates to children. I use those seven 21 words, "serve the public interest, convenience 22 and necessity," which some broadcasters may 44 1 think are the seven dirty words. I use them as 2 the basis for everything I talked about in 3 television, and it is nice to be part of 4 something that is going to figure out what they 5 mean. 6 I think that I endorse everything 7 everybody has said about the role of electronic 8 communications in a democracy, and I think that 9 plus getting the message out are the most 10 important things we are doing here. 11 MR. CRUMP: My name is Harold Crump, 12 and I am a broadcaster. I feel very privileged 13 to have been appointed to this Committee. 14 I believe and I know that public 15 service is the foundation of successful 16 television stations. Professional broadcasters 17 were raised on this philosophy, and it has 18 proven successful, we think, through the years. 19 Technology has advanced and it has 20 changed, but our commitment to serving the 21 public has never wavered, and I personally 22 believe it never will. I have personally been 45 1 involved in continuing public service endeavors 2 for some 41 years now. In fact, since 1986 I 3 have had the privilege to be a member of the 4 Muscular Dystrophy Association Board of 5 Directors. 6 I really welcome this opportunity 7 that the Committee presents to me to have the 8 ability to engage in dialogue with all of you 9 as we do the work of this Committee. Many of 10 you I have not known personally, but I have 11 seen your pictures and I have read about you 12 over the years. And I think a good exchange of 13 ideas is very healthy and in the long run it 14 will prove successful. 15 MR. CRUMP: My name is Frank Cruz. I 16 am the vice chairman of the Corporation for 17 Public Broadcasting. Many of you know the 18 Corporation for Public Broadcasting is the 19 entity created by Congress back in 1967 to 20 ensure the development of public broadcasting 21 in America. 22 We are the largest, if you will, 46 1 single source of funds for what you commonly 2 know as public broadcasting on the television 3 side and National Public Radio, NPR, on the 4 radio side. We oversee, if you will, close to 5 1,000 public radio and television stations 6 across this country. 7 Personally, it is an honor to be on 8 the Commission, and I am also grateful to the 9 President and Vice President Gore for ensuring 10 that the voice of public broadcasting will be 11 heard on this Commission. Public broadcasting 12 has always had a great interest, perhaps a 13 little more so than the commercial side, in 14 ensuring that there are public interest 15 obligations that must be met by the industry of 16 ours as a whole. And from that particular 17 basis, I operate, and I am proud to represent 18 public broadcasting on this Commission. 19 MR. DECHERD: I am Robert Decherd, 20 chief executive officer of A.H. Belo 21 Corporation, based in Dallas, Texas. You could 22 describe our company, I think, as a traditional 47 1 broadcaster. We go back to 1922, when we first 2 were in the radio business in Dallas, and early 3 in television in 1950, when we signed on the 4 station or acquired the station in Dallas-Fort 5 Worth which has become the ABC affiliate, WFAA 6 Television. 7 Today, we are a much larger company 8 probably than any of us would ever have 9 imagined, partly because of changes in rules at 10 the federal level. We own and operate 17 11 network-affiliated television stations balanced 12 among the three traditional networks: CBS, ABC 13 and NBC. We also are in the newspaper 14 business. We own six daily newspapers 15 including the Dallas Morning News, the 16 Providence Journal-Bulletin, and the Press 17 Enterprise in Riverside, California. 18 I think that Leslie and Norm have 19 outlined a very challenging agenda for us, 20 because what we must do is anticipate a future 21 that is changing literally daily, certainly 22 from the technological standpoint, in an 48 1 industry that is consolidating at an 2 unprecedented rate, and where, as Norm pointed 3 out, content as we have known it historically 4 will be coming from many more sources including 5 ones which are just coming to be prominent. 6 And certainly the Internet has much 7 to do with that, but also the consolidation we 8 see in the cable industry and the many 9 offerings, networks and various programming 10 offerings, that are coming from that industry. 11 Maintaining an equilibrium between the public 12 interest obligations, which I think the best 13 broadcasters have always taken seriously and 14 performed upon; the constitutional questions 15 the Vice President raised; and the obvious 16 interest we all have in securing our democracy 17 for many, many generations to come is the most 18 important task we have at hand. 19 I think we can make progress. We 20 probably won't come up with final answers to 21 any of these questions, but this is a very 22 timely dialogue and we are privileged to be a 49 1 part of it. 2 MR. DUHAMEL: I am Bill Duhamel, and 3 I am from Rapid City, South Dakota. And I am 4 the president of Duhamel Broadcasting, which is 5 a family-owned radio and television group, very 6 small-market. My mother went into the radio 7 business back during World War II. So it is a 8 small-market family business. And then I am 9 the second generation. I have a daughter who 10 is the third generation in the business. 11 One of the things I just mention 12 there, they have my biography, but they 13 neglected to mention that along with other 14 things, I did have an academic career briefly 15 at Northwestern. I was at the Graduate School 16 of Business, and I was in quantitative methods 17 in those days, and then I also was an 18 econometrician along the way too. 19 But I have been in the broadcast 20 business, well, 30 years continuously. I 21 started actually when I was in high school back 22 in the 1950s. 50 1 And having come from a small market, 2 I have grown up with both localism and 3 community, both of which are important. And I 4 am well aware of the public service obligations 5 in the past, and we have taken these very 6 seriously. 7 The other side that I do have a 8 concern that just the cost for our company to 9 convert to digital television is going to be 10 about 50 percent of the value of our company. 11 That is just the cost of doing it, and that is 12 not operating cost. I am talking about the 13 physical cost. And that is a scary thing in 14 the small markets. Everybody thinks about New 15 York, Los Angeles, Chicago, but you have got to 16 think about Billings, Casper, Bismarck, Rapid 17 City. And that is a concern out here. 18 I guess that is probably about all I 19 would say for the moment. Thank you. 20 MR. GLASER: Hi. I am Rob Glaser, 21 founder and CEO of RealNetworks. We started 22 our company about three and a half years ago, 51 1 and our focus is basically turning the Internet 2 into a broadcast medium for audio and video 3 delivery. Our software is used by 20 million 4 or 25 million consumers around the world to 5 listen to broadcasts from tens of thousands, 6 hundreds of thousands of broadcasters. 7 What I hope to contribute to this 8 Committee -- and again, I am honored to join 9 the esteemed colleagues here, distinguished 10 colleagues -- is thinking a little bit about 11 not just the technology -- hopefully I can help 12 there a little bit -- but also how what we are 13 learning about the early days of basically 14 digital broadcast on the Internet might inform 15 this discussion. 16 These different worlds that are going 17 digital -- be it traditional broadcast, be it 18 satellite or cable, or be it the Internet -- 19 all have things that they can teach each other. 20 And certainly, the public interest tradition of 21 traditional broadcasting has a lot that it can 22 teach these other worlds. And hopefully, this 52 1 Committee can play a role in bringing those 2 together. Thanks. 3 MR. GOODMON: My name is Jim Goodmon. 4 I am president of Capitol Broadcasting Company 5 in Raleigh. We are a family-owned broadcasting 6 company. I am the third-generation president 7 of the company. 8 I would like to say I think we are 9 working on the right thing here, and I am 10 excited about the opportunity to talk about 11 this. I hope we do not spend any time talking 12 about whether there should be public interest 13 obligations of broadcasters, because that is a 14 perfectly sensible notion. I hope we come out 15 of this -- you asked us what we hope to come 16 out with, and I hope we come out with a 17 recommendation as to what those public interest 18 obligations ought to be. 19 Insofar as your charge that we be 20 open-minded, we have been operating an HDTV 21 station for a year and a half, and I think it 22 is the greatest thing that ever happened. And 53 1 I think everybody should do HD and there 2 shouldn't be any multicasting, and that is my 3 story and I am sticking to it. 4 But on every other thing I will be 5 open-minded. So I look forward to our 6 deliberations. 7 MR. LA CAMERA: I am Paul La Camera, 8 the general manager of WCVB-TV in Boston, which 9 is that city's ABC affiliate, although it is 10 owned by First Argyle Television. The station 11 is only 25 years old and has a somewhat unique 12 history, but over that period, it has worked 13 hard and consistently to try to distinguish 14 itself as a community force, not only in our 15 city, but in the industry itself. 16 On a personal level, I have had the 17 good fortune of being there through its entire 18 history. I rose up from the ranks of community 19 service and local programming, and so would 20 describe myself as an old-school broadcaster 21 who still deeply believes in the traditional 22 public interest standard that is defined by 54 1 public service initiative and local programming 2 service. 3 I obviously look forward to trying to 4 apply or contribute to applying those historic 5 principles to the future of what our business 6 will be. Thank you. 7 MR. MINOW: I am Newton Minow from 8 Chicago. Vice President Gore said this morning 9 when a person reaches 70 on average he has 10 spent 10 years with television. In my case, I 11 would bring up the average very materially. 12 I have spent the last 36 years deeply 13 involved in every conceivable aspect and 14 perspective in this communications world. I 15 have been blessed and privileged to serve as a 16 board member of a major network, CBS; as 17 chairman of the Public Broadcasting Service, 18 PBS; as a member of the board of the largest 19 independent broadcaster, the Tribune Company; 20 as a director of a major advertising agency; 21 chairman of the presidential debates. 22 I have been very lucky. And also 55 1 served in the government as chairman of the 2 FCC; and in the classroom as a teacher of law 3 and journalism students. I have seen every 4 side of the elephant. 5 And I am particularly pleased to have 6 the opportunity to deal with these issues, 7 because I don't think there is any institution 8 in America or in our civilization that has a 9 greater impact on our future than the 10 communications industry. 11 MS. SCOTT: I am Shelby Scott, also 12 from Boston, but I worked for a different 13 station than Paul's as a news broadcaster. But 14 I am really here as president of the American 15 Federation of Television and Radio Artists, 16 which represents many of the people you see 17 delivering the news, writing the news, 18 reporting the news, and entertaining you on 19 television. 20 Our members have a great concern 21 about just what is public interest and what are 22 our bosses telling us is public interest. We 56 1 are the faces that have to deliver the message 2 to you. And we are concerned that perhaps we 3 are not doing it quite correctly yet, and want 4 a voice in the future of what we see is a very 5 exciting future for the whole communications 6 business. 7 MS. SOHN: Good morning. My name is 8 Gigi Sohn. I am the executive director of the 9 Media Access Project. For those of you who 10 don't know what MAP does, we are a public 11 interest telecommunications law firm that 12 represents the public at the FCC and in the 13 courts. 14 First, I want to thank the Vice 15 President and the White House not only for 16 placing me on this distinguished panel, but 17 also for recognizing the importance of trying 18 to formulate appropriate public interest 19 obligations for digital television. 20 I have spent the vast majority of my 21 career representing the public's First 22 Amendment right to receive access to diverse 57 1 viewpoints from diverse sources. In the last 2 few years, I have toiled for many, many hours 3 on the particular issue of digital television. 4 Now, I am sure some people might have 5 some preconceived notions of how I am going to 6 vote or how I am going to think about these 7 public interest obligations, but I want to make 8 one thing very clear: that I approach this, to 9 repeat a cliche again, with a very open mind. 10 I look forward to having spirited discussions 11 and debates with my fellow panelists, many of 12 whom, I think all of whom I have already met 13 and spoken with at some length. And I think 14 this is going to be a terrific experience. 15 And I do expect that we are going to 16 have some very interesting and imaginative and 17 outside-the-box thinking, recommendations to 18 make to the Vice President and to the FCC. 19 Thank you. 20 MS. PELTZ STRAUSS: Hi, I am Karen 21 Peltz Strauss and I am a legal counsel for 22 telecommunications policy at the National 58 1 Association of the Deaf. Prior to that time, I 2 spent about 11 or 12 years at Gallaudet 3 University's National Center for Law and 4 Deafness. 5 For most of the people in this room, 6 television is the norm, but for the population 7 that I represent it is still a fairly new 8 medium. And until the 1980s, my constituency 9 didn't even have access to television. 10 Fortunately, now, thanks to many of our 11 broadcasters sitting around this table, a 12 significant amount of broadcast television is 13 closed-captioned. For the blind community, 14 however, video description has not come about. 15 That is a technology that supplements the 16 soundtrack for blind and visually impaired 17 people. 18 As the digital age comes about, I am 19 here to try to make sure that this 20 distinguished panel takes into consideration 21 the access needs of people with disabilities, 22 so that as these new technologies come about, 59 1 the needs of these people are not forgotten at 2 the outset. And I, too, want to thank the 3 President and the Vice President for putting me 4 on this panel and for bringing 5 closed-captioning to the forefront of these 6 issues. 7 MR. SUNSTEIN: My name is Cass 8 Sunstein. I am a professor at the University 9 of Chicago Law School, and I teach 10 constitutional law and the law of free speech. 11 This is a very exciting committee, in 12 part because our constitutional law is in flux 13 right now, and I think we can contribute a fair 14 bit to the nation's understanding of free 15 speech issues. The Court and the nation are 16 caught between two simple ideas, one of them 17 captured by a recent head of the FCC who said 18 that television is just another appliance. It 19 is a toaster with pictures. 20 That understanding sees unregulated 21 speech markets as the First Amendment's goal 22 and takes the metaphor of a marketplace in 60 1 ideas very, very seriously. 2 The alternative idea is a lot older. 3 James Madison, our Constitution's most 4 important founder, saw the First Amendment as 5 associated with democratic self-government and 6 thought that the notion of "We the people" was 7 the lens through which the free speech 8 principle should be viewed. 9 On the Madison view, some controls on 10 speech markets can actually promote the 11 purposes of the First Amendment by ensuring 12 more in the way of democratic self-government. 13 We might be able to bring together the 14 marketplace view with Madison's view by looking 15 toward market-oriented, flexible, innovative 16 techniques, and I hope that is what we will 17 look toward, views that incorporate incentives 18 rather than government commands. 19 In any case, with respect to 20 constitutional law, we are very much in a 21 crossroads period. We can contribute a great 22 deal to the nation's understanding of what the 61 1 First Amendment is about. 2 I hope that we will see free speech 3 issues and public interest obligations through 4 the ideas of Justice Louis Brandeis, Madison's 5 heir, who said that the greatest menace to 6 freedom and democracy is an inert people and 7 who wrote that the purpose of the First 8 Amendment is to ensure the development of human 9 capacities. 10 MR. YEE: My name is James Yee. I am 11 the director of the Independent Television 12 Service based in San Francisco. 13 Gee, what can I say? I do feel that 14 this is an opportunity afforded to us, really 15 not just to reaffirm the whole notion of public 16 interest and public service, nor should digital 17 television and the technology that comes with 18 this be the tail that wags the discussion here. 19 It is an opportunity to be educated and to 20 learn, and it is really to broaden our 21 understanding of what this country is about in 22 terms of how public interest can serve all of 62 1 us. 2 As someone who funds and distributes 3 programs onto public television and works with 4 stations, I am struck by how important public 5 service is, but we interpret it very 6 differently. To me it is something we give to 7 our citizens. We do not look at it from a 8 point of just a consumer-based discussion. 9 We are going to be talking about 10 marketing strategy. It should be in the form 11 of how can we serve the citizens, not just 12 looking at it as just a consumer-based 13 discussion. 14 I do feel like this Committee is 15 charged with an opportunity to examine, to be 16 educated, but to also take some risks in terms 17 of broadening this vision of public interest 18 and public service. And I look forward to our 19 stimulating, provocative discussion on that. 20 MR. MOONVES: Thank you. I have to 21 tell you, I am very impressed with the group 22 that has been put together here. I think we 63 1 have a diversity of backgrounds and opinions 2 and thoughts. And I think the members of this 3 group are pretty spectacular, so I think we are 4 going to have an interesting year together. 5 There are a few other members that 6 are either not here or have not been cleared 7 yet, so this is not the entire group. There 8 will be a few more members joining us, 9 hopefully by the time we have the next meeting. 10 Now I would like to turn it over to 11 Karen Edwards, who is going to give us an 12 overview of the Federal Advisory Committee Act 13 guidelines for our group, letting us know what 14 we can and cannot do and what our 15 responsibilities are. 16 So, Karen? 17 DISCUSSION OF ORGANIZATION 18 AND STRUCTURE OF COMMITTEE 19 MS. EDWARDS: I am really excited to 20 be working with all of you. You know by now 21 that I work here at the Department of Commerce 22 in the National Telecommunications Information 64 1 Administration, or NTIA for short. NTIA is 2 pleased to serve as the secretariat for this 3 Committee. And functioning as the secretariat 4 means that we will provide for the Committee, 5 to the extent our resources permit, 6 administrative and logistical support. 7 I wanted to take a moment to call 8 your attention to a handout in your briefing 9 materials that we titled "Advisory Committee 10 Basic Operating Guidelines." It seemed to make 11 sense, before you get started here, to 12 highlight a few of the most important rules of 13 the road, so to speak. 14 As you know, the Committee operates 15 under the Federal Advisory Committee Act, and 16 that Act is all about public access to, and to 17 the extent practicable, public participation in 18 the deliberations of this Committee. This way 19 the Committee can benefit from the expertise of 20 the members of the public and they can be privy 21 to your discussions. 22 This means no closed-door meetings, 65 1 is simply what it means. You operate in the 2 sunshine. All of the meetings are public 3 meetings, as this one is, unless they fit into 4 a narrow exception that allows us to close 5 them. For example, if privileged information 6 is going to be disclosed, then we might seek to 7 close that part of the meeting. 8 Notices of the meeting must be 9 published in the Federal Register. And we 10 actually included the notice that we issued for 11 this meeting, so you have a sense of what is 12 going out. We try to publish these, or must 13 publish these 15 days in advance of the 14 meeting, so last-minute changes are difficult 15 for us. 16 The public can comment on our agenda, 17 and probably will. Written comments may be 18 submitted to the Committee at any time. In 19 fact, in your briefing materials today, we gave 20 you the first set of public comments. I am 21 sure you will be receiving a lot more of those, 22 and we will facilitate getting those to you. 66 1 So what qualifies as a meeting of the 2 Advisory Committee that's subject to these open 3 meeting requirements? Well, under the Federal 4 Advisory Committee Act, when committee members 5 gather, how you determine whether that 6 gathering is a meeting is based on the content 7 of what happens, sort of the nature of the 8 communications that you have. So any fact 9 gathering or sharing of facts or administrative 10 or social functions, those are not meetings, 11 and those do not have to be open to the public. 12 However, a meeting happens when there 13 is any effort to reach consensus, when you 14 deliberate, when you hammer out a compromise. 15 That is a meeting, and those things have to be 16 done in the open and in a publicly accessible 17 forum. 18 I think the only other thing I want 19 to mention now, and I would just refer you to 20 the handout that sort of lays all of this out, 21 is that when you are trying to determine 22 whether a meeting is taking place and whether 67 1 that has to be open or not, the content 2 guideline that I just described applies 3 regardless of the communications vehicle that 4 you use. 5 So for example, if you are talking on 6 the telephone or whether the communication is 7 via fax or e-mail, the content guideline still 8 applies. If you start getting into 9 deliberations or discussions about the 10 substantive work that the Committee has to do, 11 stop. That has to be done in the public eye. 12 I want to remind you, of course, that 13 any reports that you get from other agencies or 14 from other sources outside of NTIA, I need to 15 get a copy so I can make those available to the 16 public as well. They have, the public has, 17 access to your working papers and drafts and 18 transcripts and minutes and all of that 19 material, so they can participate in your work. 20 I look forward to working with all of 21 you. I would be happy to answer any questions 22 now or you can catch me later on in the day. 68 1 Thanks. 2 DR. ORNSTEIN: Let me just clarify, 3 Karen. The activities not covered by the 4 Federal Advisory Committee Act, as you have 5 written down here, meetings of two or more 6 Advisory Committee members or subcommittee 7 members solely to gather information or to 8 conduct research, analyze, draft position 9 papers for the committee. 10 So if there is a substantive 11 discussion among members, but it is to gather 12 research and facts and talk about drafting 13 something that ultimately goes to the full 14 Committee in an open sense, that is okay? That 15 is not covered? 16 MS. EDWARDS: Exactly. 17 DR. ORNSTEIN: So talking substance 18 is okay as long as it is not coming to 19 conclusions that would not be ventilated before 20 the full committee; correct? 21 MS. EDWARDS: Right. I think you 22 have the technical requirement. I think, of 69 1 course, there is always the spirit and the 2 letter of the law problem. So the idea is to 3 try to keep as many of the discussions as 4 possible open to the public. But you are 5 correct, Dr. Ornstein. 6 DR. ORNSTEIN: So if we create 7 working groups that are designed to help 8 structure our plan for the next meeting, for 9 example, those working groups can communicate 10 among themselves without being subject to the 11 Open Meetings Act? 12 MS. EDWARDS: Right. As long as all 13 of the members come from this group, which I 14 assume they would. 15 DR. ORNSTEIN: Yes. 16 MS. EDWARDS: There is no problem 17 there. 18 DR. ORNSTEIN: Okay. Good. 19 MR. MOONVES: Any other questions, 20 anybody, of Karen? 21 Thank you. 22 DR. ORNSTEIN: Okay. We are running 70 1 a little bit late, but we have some time now 2 before we break for lunch, which we really do 3 need to begin the discussion of our agenda and 4 the future. 5 We have a big calendar up there of 6 1998, and you also have some at your places, 7 some calendar sheets which we will come back 8 to. But let me suggest this to all of us: At 9 the moment, at least, we have a deadline for 10 issuing a report to the Vice President of 11 June 1, 1998. Now, admittedly that is a 12 deadline that was established when the 13 President initiated this executive order some 14 eight months ago, I think probably anticipating 15 that the wheels of justice and the nominating 16 process would move somewhat more quickly than 17 they have and that we would be meeting 18 beginning before now. 19 But we have to operate under the 20 assumption that we have that June 1 deadline, 21 and we then go out of business 30 days 22 thereafter. We need to work back from that, at 71 1 least at the moment. And that makes our task, 2 frankly, considerably more daunting, given what 3 we know now to be our vast mandate. I do not 4 think Lewis and Clark could have crossed the 5 country in quite that length of time. Maybe we 6 need Stephen Ambrose on our committee to help 7 us along. 8 The practical reality, I think, is 9 that we have to look towards a final meeting 10 for the purpose of coming up with whatever 11 recommendations that will then be translated 12 into a written report that will be circulated 13 among the members probably around April of next 14 year. Maybe we can push this to the middle of 15 April, but we need to work back from that. 16 And I would just suggest to you, at 17 least at the outset, a number of things that we 18 need to accomplish, at least in our public 19 deliberations. We are going to need to have 20 one or more opportunities for some voices to be 21 heard in a hearing kind of process. Now, that 22 will start, I think, with the dominant voices 72 1 out there in these particular deliberations, 2 and that means broadcasters and probably the 3 public interest community. We need to talk 4 about all of that. And then there are lots of 5 others, but I think we can hold that until a 6 later point. 7 We will begin to discuss the 8 technology tomorrow, but the reality is we are 9 barely going to scratch the surface of what 10 digital is, and we really do need to, because 11 it is so critical to our functioning to figure 12 out where this technology differs from analog 13 broadcasting, in terms of what delivery is 14 there, spend more time on it. 15 So we are going to have to have at 16 least an intensive period where we look at 17 something that may begin with the questions of 18 high-definition television versus multiplexing, 19 but also gets to many of the questions that Rob 20 Glaser would raise, given what he does, and 21 others will as well. 22 We clearly have two larger mandates 73 1 that the Vice President mentioned that I think 2 we all would agree on as well. One, we could 3 put under the broad rubric of education. It 4 includes the children's focus as well. The 5 other, which will take some extensive 6 discussion, no doubt, is the question of free 7 time and the political discourse. 8 We have many other areas that include 9 closed-captioning, public service 10 announcements, all of the other elements that 11 have been public interest obligations or 12 charges and others, perhaps small, perhaps 13 large, that will be mentioned along the way 14 that we will have to consider either together 15 as a group or perhaps in some separate way. 16 I believe we need a session in which 17 we can really explore innovative approaches 18 that go beyond the fairly narrow way in which 19 we have defined those obligations for analog. 20 And that will be preceded, I hope, by some 21 serious thinking on the part of us and perhaps 22 others outside. If we can come up with 74 1 something new, that itself would be an enormous 2 public service. 3 And clearly, we are going to need a 4 session in which we actually talk about and 5 hammer out the recommendations that will be the 6 backbone of whatever report we issue to the 7 Vice President. That is at least seven or 8 eight separate things. Clearly, we could spend 9 two days on each of them. Clearly, we are not 10 going to have eight meetings between October 11 and April of next year. 12 So we are going to have to figure out 13 ways of dividing our labor and also combining 14 into full-day or day-and-a-half sessions. And 15 I think my own judgment is that the practical 16 reality is that anything more than a day and a 17 half is just not workable. We won't be able to 18 maintain any level of focus and intensity 19 beyond that. And for the most part, we will 20 probably try to do what we can in a long day 21 with maybe two half days on this. 22 But we need to have some discussion 75 1 of those things, and we need to have some 2 consideration of whether and how we apply 3 working groups to provide some backing for what 4 we are doing. 5 Let me suggest, and then see what Les 6 thinks, and we will open things up, just a 7 couple of other things. We had talked among 8 ourselves about a date for the next meeting and 9 wanted to try an option out on you to see if it 10 works for most of you, and that is looking 11 ahead to December. 12 MR. MOONVES: December 4. 13 DR. ORNSTEIN: December 4, which is a 14 Thursday, or as an option December 5, which is 15 a Friday. 16 MR. CRUMP: I have a Muscular 17 Dystrophy Association board meeting on the 4th 18 in Miami. I could easily make the 5th. 19 DR. ORNSTEIN: Okay. Peggy? 20 MS. CHARREN: The 5th is easier, but 21 I could make something on the 4th. 22 DR. ORNSTEIN: Is the 5th all right 76 1 for people? Okay. Why don't we then just 2 settle on the 5th of December, and count on a 3 full-day meeting that will probably run from 4 either -- 5 MR. MOONVES: We are never going to 6 get everybody into every meeting. 7 DR. ORNSTEIN: No. No, that is 8 simply a reality. But we wanted to set one 9 date now if we could. Let's count on the 5th 10 and assume that it is a meeting that will go 11 probably from 8:00 or 8:30 until 5:00. 12 MR. LA CAMERA: Will all of them be 13 in Washington, D.C.? 14 MS. CHARREN: That is what I was 15 going to ask too. 16 MR. MOONVES: Well, that is something 17 else we have to discuss. Karen, is that in the 18 charter or is there any rule on that? 19 MS. EDWARDS: I think there is a 20 rule, and I think they need to be here in D.C. 21 DR. ORNSTEIN: They have to be in 22 D.C.? 77 1 MR. DECHERD: At the NII task force 2 meetings, they had six in D.C. but they had 3 several others. 4 MS. CHARREN: Yes. Right. 5 MS. EDWARDS: I am looking. 6 DR. ORNSTEIN: While Karen is 7 looking, let me suggest something else: What 8 we have done is to provide you with calendars 9 here for future months. Starting in January, 10 would you please -- if you can today; if not, 11 get it to us -- just mark off on those 12 calendars days you know you cannot make. And 13 what we will do is take those and try to work 14 up a meeting schedule that has as few conflicts 15 as possible, looking down the road. In the 16 meantime, we will see where we can hold the 17 meetings. 18 I think the practical reality is we 19 should look towards a meeting in December and 20 probably monthly meetings, something like one 21 meeting a month during a month in the period 22 that follows. We will work on the assumption 78 1 that each of those meetings will be a full day 2 and possibly, if needed, spilling over to a 3 second morning as we are doing this time 4 around. Knowing that for many of you it is a 5 long distance to travel, we might as well do it 6 as efficiently as we possibly can to reduce the 7 costs. 8 And by the way, just for everybody 9 out there who is paying attention to this, you 10 should know that all of the members here are 11 paying their own expenses, so there is an added 12 element of cost to the public service which is 13 being provided here. 14 MS. CHARREN: Did we decide about -- 15 DR. ORNSTEIN: December 5. 16 MS. CHARREN: No. Other places? 17 MR. MOONVES: Karen is going to check 18 on that. 19 DR. ORNSTEIN: We are checking on 20 that. 21 MS. EDWARDS: A quick update here: 22 In the charter for the Advisory Committee, it 79 1 says that meetings are expected to be held in 2 the Washington, D.C., metropolitan area. And I 3 think one of the reasons for that is because 4 there is no appropriation for travel. So, for 5 example, members of the secretariat would have 6 difficulty traveling to other places. It's not 7 in the executive order, but it is in the 8 charter. 9 DR. ORNSTEIN: Okay. And the 10 secretariat has to travel -- we have no funds 11 to cover the cost for the staff going someplace 12 else, or is that possible? We need to explore 13 our possibilities here. 14 MS. EDWARDS: I think we can 15 certainly explore them. 16 DR. ORNSTEIN: Yes. 17 MS. EDWARDS: My sense is that funds 18 are at a premium here. 19 DR. ORNSTEIN: It would clearly be 20 desirable, if we could, to have at least one 21 meeting outside of Washington. 22 MR. CRUMP: For what it's worth, I am 80 1 with Hubbard Broadcasting, as you know, in 2 corporate management there, and we would be 3 happy to -- we are happy to extend an 4 invitation to this Committee to meet in 5 Minneapolis/St. Paul. 6 We would be happy to host dinners, 7 lunches, breakfasts, and we would be happy to 8 provide the meeting place. This is right in 9 the middle of the country, if this made it 10 easier for people from the two coasts to come 11 together. And we would be happy to do this any 12 month, but I would add to that, you would 13 probably be happier in April or May. 14 MS. CHARREN: May I just add that 15 since there are some public interest people 16 here who pay their own bills, in contrast to 17 some corporate corporations that may help out, 18 if all of us are on the East Coast, the closer 19 we stay to the East Coast would help our bank 20 accounts. 21 MR. MOONVES: There are some of us on 22 the West Coast. 81 1 MS. CHARREN: Yes. 2 MR. MOONVES: There are people from 3 all over the country here. 4 MS. CHARREN: Yes, but I mean -- 5 DR. ORNSTEIN: It is worth exploring 6 some different venues, and it may be that we 7 could pick places where the airline costs are 8 not that considerably greater than the cost 9 between Boston and Washington, or we could find 10 ways of accommodating that. I mean, it would 11 certainly be nice to get outside. 12 MR. BENTON: May I add something to 13 what you said for consideration only? 14 DR. ORNSTEIN: Yes. 15 MR. BENTON: And that is, when we 16 talk about airline costs, if we were willing to 17 meet over a weekend, where you had a Saturday 18 night stay, the cost would be reduced 19 considerably. 20 DR. ORNSTEIN: Yes. Bill? 21 MR. DUHAMEL: That was the point I 22 wanted to make, because the cost for me to come 82 1 in here was outrageous, and I've got to pay for 2 it. And that's because there was no advance 3 notice and no Saturday night stay. And like a 4 Friday, I mean, I will just spend Saturday 5 night here, because, I mean, it's the only way 6 I can afford to do this thing. That is why I 7 was going to say at least Friday or Monday, but 8 a weekend would help. 9 MR. MOONVES: Well, how does the 10 Committee feel about meeting on a Saturday, per 11 se? 12 MR. DUHAMEL: They would probably 13 prefer it. 14 DR. ORNSTEIN: Yes. 15 MR. DUHAMEL: Certainly on a Friday 16 or a Monday. 17 MR. MOONVES: I certainly would. 18 DR. ORNSTEIN: Why don't we establish 19 a principle here that we will, wherever we can, 20 try to meet on Friday or Monday or on a 21 Saturday if it turns out to be a workable 22 process, so we give people the option, at 83 1 least, of fairly easily making it a Saturday 2 night stay. 3 MR. MOONVES: Yes? 4 MS. EDWARDS: I just wanted to remind 5 you that the Federal Advisory Committee Act 6 requires us to try to hold all meetings during 7 normal business hours. So unfortunately, 8 Saturday does not count. 9 MR. MOONVES: Okay. So Saturday is 10 out. 11 DR. ORNSTEIN: Okay. 12 MR. GOODMON: I was going to say, I 13 work every Saturday, so that is a normal 14 business day for me. 15 DR. ORNSTEIN: Yes. Well, I want to 16 make a point here that Karen probably would not 17 make herself, which is that she is a 18 Seventh-Day Adventist and cannot work on 19 Saturdays, from Friday sundown until Saturday 20 sundown, and she is our designated federal 21 officer. And to whatever degree we can, we 22 should be very sensitive to that. So if we do 84 1 Fridays or Mondays, we can work around that 2 particular constraint. 3 MR. SUNSTEIN: Norman, if you are not 4 here, can you participate by telephone? 5 DR. ORNSTEIN: That is an interesting 6 question. I suppose we could probably work out 7 a hookup to make that operate. I am not sure 8 you want to sit there for a whole day, but I 9 think we should do everything we can to make 10 sure -- maybe the digital technology. We will 11 get Rob working on this. We will find 12 innovative ways of videoconferencing here, 13 perhaps. 14 MR. MOONVES: It shouldn't be that 15 hard to do. 16 DR. ORNSTEIN: Yes. 17 MR. MOONVES: I mean in terms of the 18 telephone, anyway. 19 MR. YEE: Excuse me. As we try to 20 figure out these housekeeping details, I just 21 want to remind us, as costly as it was for us 22 to get here, it is also costly for those who 85 1 wish to testify or speak to us if we are not 2 going to be, shall we say, traveling around the 3 country to hear other voices beyond just the 4 usual, with all due respect, just the Beltway 5 ones. Because I do feel that other voices, 6 other people, wish to participate and to be 7 heard. And I think it is part of the 8 educational process. 9 I do believe that while there may be 10 some constriction in terms of budget in the 11 Department of Commerce, since we are all paying 12 the bill and making dedicated time, I would 13 duly expect some flexibility of that 14 interpretation. And I think if the secretariat 15 is serving the will of this Committee we should 16 make it so. 17 DR. ORNSTEIN: That is certainly 18 sensible, although I do want to suggest to us 19 that we are probably simply not going to have 20 the time and resources to be able to do 21 extensive public hearings including field 22 hearings. Part of the reason that our 86 1 Committee is 23 members as opposed to the 2 original executive order limit of 15 was to try 3 to incorporate some of those voices inside. 4 And we have other innovative ways of 5 having voices heard. We have an Internet site, 6 and we have already gotten some communications 7 on that. We may want to think about a hearing 8 that is teleconferenced in which we can, in 9 fact, bring in voices from a number of 10 different places around the country. That is 11 something we ought to put on our agenda. And 12 we can probably find the digital industry 13 willing to help us do this in the most 14 innovative way imaginable. 15 MR. GLASER: I can offer the offer 16 that we would provide, at no charge to the 17 government or anybody, the ability to broadcast 18 outward over the Internet whatever proceedings 19 we would want to do that way. 20 DR. ORNSTEIN: And that, I think, is 21 a terrific idea. What we do in house, my 22 understanding -- tell me if I am right, 87 1 Karen -- is if the members provide services to 2 the Committee, that is okay; if others do, then 3 it becomes a more difficult problem under the 4 Gift Act. 5 MS. EDWARDS: I think you are right. 6 As a general matter, if the members give a gift 7 to the Committee, that is okay. Each of those 8 gifts, however, need to be approved, because we 9 want to make sure that we have the appearance 10 of impartiality, and propriety is taken care 11 of. It is really an appearance issue. We want 12 to make sure that the public has trust in the 13 recommendations that eventually come out of the 14 Committee. 15 DR. ORNSTEIN: Yes. 16 MS. EDWARDS: I don't know if makes 17 sense to suggest that we sort of explore a 18 couple of the things you mentioned here, one, 19 the possibility of having these meetings in 20 other cities. Honestly, I don't know sort of 21 the history of this provision in the charter. 22 I would want to explore that a little bit. We 88 1 can certainly explore the teleconferencing 2 option. 3 And I would just add: The Committee, 4 when we say that the Committee welcomes public 5 comment, that is very true. We are going to 6 try to make sure that written comments can be 7 submitted any time, and we will get them to 8 each of you. If people call your offices to 9 ask, "How can we participate?" we have the 10 high-tech ways, but we also have sort of the 11 paper ways too. 12 DR. ORNSTEIN: Why don't we make sure 13 that as soon as we can, we can get out to the 14 Committee, if it is possible before we are done 15 with our deliberations, the word on those 16 questions, travel outside and also things like 17 the teleconference. 18 But I do want to emphasize that we 19 need to figure out ways of bringing in other 20 voices, while recognizing the practical reality 21 here that we simply are not going to be able to 22 hold a lot of meetings. We are not like a 89 1 congressional committee that is going to go 2 around doing field hearings and hearing people 3 in the formal fashion. 4 I think, realistically, we have to 5 limit that as much as we can to the things that 6 are most important to us now and handle the 7 other public input through us as 8 representatives of interests and through other 9 venues, because we just are not going to have 10 the time or the capacity to have more than a 11 handful of meetings in this process together. 12 MR. MOONVES: Karen, can we deal with 13 the date when the supposed paper is due? Are 14 we being entirely unrealistic to think that we 15 really can, being it is October 20, prepare 16 something by June 1; that we are going to have 17 to recommend a paper by April to have it to us 18 in May to go over for June? It seems like we 19 are going to have three meetings and then have 20 to do recommendations. I think that is going 21 to be awfully fast. 22 MR. BENTON: That causes me great 90 1 concern. 2 DR. ORNSTEIN: Yes. 3 MR. MOONVES: What? 4 MR. BENTON: The fact that we would 5 have to rush so. 6 MR. MOONVES: I agree. 7 MR. BENTON: The point is that the 8 President and the Vice President felt it was 9 important enough to create enough this 10 situation, and we know that there have been 11 some delays along the way. I would certainly 12 like to see us ask for an extension. 13 MR. MOONVES: Yes. I am wondering if 14 we shouldn't make it a calendar year and 15 literally present the paper one year from 16 today, something like that. 17 DR. ORNSTEIN: Right. 18 MS. CHARREN: I second the motion. 19 DR. ORNSTEIN: The only question I 20 would have is whether -- I think realistically 21 there is no way we can operate under this 22 deadline. The only question is whether we 91 1 start with the assumption we operate under this 2 deadline that keeps us focused and moving and 3 then change it as we move closer, or move it to 4 a calendar year, in which case we will expand 5 our operations and deliberations more. And I 6 am neutral on that; I just raise it. 7 MR. DECHERD: My preference would be 8 to change the schedule exactly once and do it 9 up front, and then build a schedule based on 10 that and discipline ourselves and hold 11 ourselves to that. 12 DR. ORNSTEIN: Yes. 13 MR. MOONVES: I agree. 14 DR. ORNSTEIN: Okay. 15 MR. DECHERD: And that would 16 basically help us buy into collectively 17 understanding how to get to our goals, whether 18 it is a calendar year or not. 19 DR. ORNSTEIN: And does a calendar 20 year make sense to everybody? 21 PARTICIPANTS: Yes. 22 MS. SOHN: But even with the extra 92 1 couple of months, we are still going to have to 2 operate on a very tight schedule or in a year 3 we are not going to reach our goals. 4 DR. ORNSTEIN: Yes. Sure. Yes, and 5 the reality is we are going to have some 6 slippage in the summer as well. 7 MS. PELTZ STRAUSS: Yes. And we may 8 still want to have as our goal a draft of what 9 we are going to be producing by June, for 10 example, because the summer months are quieter. 11 DR. ORNSTEIN: We are probably going 12 to have some areas where we won't be able to do 13 that, but certainly there are parts of the 14 report that we will want to produce. I am 15 hopeful. 16 We are issuing a report to the Vice 17 President, but this is also a report that ought 18 to serve as a guide to all kinds of other 19 communities out there, not just the 20 policymaking community, about the nature of 21 public interest obligations, about the 22 transition from analog to digital, about what 93 1 that future might hold, that will have a longer 2 shelf life. 3 And so the longer we wait to at least 4 get some even better assessment of where the 5 technology might take us, the better off we 6 are. But some of that we can do, we can even 7 begin thinking about now, and soon we may even 8 begin to charge some people with particular 9 responsibilities in this area. 10 We need to, then, talk about some 11 blocking out of the schedule for future 12 meetings, and we need to talk about task forces 13 or whether we are going to divide our labor up 14 so that we can maximize the potential here. I 15 don't know whether we should do that now or -- 16 MR. MOONVES: Yes, I think we can get 17 into that. We talked about on our next meeting 18 in December beginning our hearings with two 19 different groups, one from the broadcasting 20 side and one from the public interest side, and 21 literally ask three people to prepare 22 presentations for each one. And this is all, 94 1 obviously, open for debate -- about five 2 minutes apiece for the three people and then 3 open it to the panel for questioning. 4 As I said, one broadcasting panel, 5 because there are a lot of broadcasters who we 6 obviously have heard from, and there are a lot 7 of public interest people who would like to 8 appear before us. And I am wondering if there 9 is anybody on the Committee who would like to 10 head or find the three people on either side 11 for our next meeting on December 5? 12 MR. GLASER: Les, a few people have 13 approached me in the Committee asking about how 14 do we make sure we all have the same 15 technological understanding of what the issues 16 are. 17 MR. MOONVES: Bob, we are going to 18 deal with some of that tomorrow, and also 19 part 2 of the second meeting will be exactly 20 that. 21 MR. GLASER: There is a question in 22 my mind as to whether there might make sense to 95 1 have a third panel, if you will, along the 2 lines to make sure that everyone understood 3 what sort of the technology enabled or did not. 4 MR. MOONVES: No question about it. 5 As I was saying, part 2 of the December 5 6 meeting was going to be dealing a lot with the 7 technology so we really understand where we are 8 going, all the different options. And if you 9 would like to head panel three, we would love 10 you to. 11 MS. SOHN: Les, I would be glad to 12 head that public interest panel. I just want 13 to express concern, and this was in my opening 14 remarks, too, that I do not want this to be 15 viewed as a battle of public interest versus 16 broadcasters. It is more of an informational 17 thing. 18 MR. MOONVES: I do not think it has 19 to be, but I think we have to get the issues on 20 the table as quickly as possible. 21 MS. SOHN: Right, understood. 22 MR. MOONVES: You know, Norm and I 96 1 actually had a discussion and he said, "Well, 2 shouldn't we wait for a few meetings down the 3 line for those panels?" I felt it was pretty 4 important that we sort of set up what the 5 concerns are, because they are out there and I 6 don't think we should ignore them, frankly. 7 But I don't want it to be 8 adversarial, I really don't, and I hope it is 9 not that. But obviously, a lot of people have 10 very specific points of view, and we have all 11 heard them. Since I got named, I can give you 12 the list of hate mail I have gotten from all 13 over the country. 14 DR. ORNSTEIN: Well, no, I want to 15 start that process because my hate mail started 16 before yours did. 17 MR. MOONVES: It did. And 18 well-deserved, I might add. 19 DR. ORNSTEIN: Well, yours is richer. 20 But we should -- 21 MR. GOODMON: Are we going to get to 22 deciding we are going to have a session on 97 1 political broadcasting? 2 DR. ORNSTEIN: Yes. 3 MR. GOODMON: Are we going to have a 4 session on this? I mean, having a panel of 5 broadcasters and the public interests, they 6 could have lots of different interests. And I 7 have the notion that we ought to work on 8 certain areas and have people in that want to 9 talk about those areas. If we are going to do 10 political broadcasting, let's do it. If we are 11 going to do ascertainment, let's do it. If we 12 are going to do public service announcements, 13 if we are going to do children's programming, 14 whatever we are going to do, I would like to 15 hear from the people that are interested in 16 that. I am trying to help. 17 MR. MOONVES: I appreciate that. 18 Yes, Charles? 19 MR. BENTON: Just to pick up on Jim's 20 point, I think the structure of how we break 21 ourselves down will in no small part determine 22 the content of what we come out with at the end 98 1 of the day. Sort of lining up with 2 broadcasters on one side and public interest 3 groups on the other side may not be the best 4 way of coming up with new ideas. 5 If we are trying to do win-win and 6 get some new ideas, perhaps there is a better 7 way of dividing up the content and maybe 8 democracy, children -- you know, we are all 9 working together in trying to figure out how to 10 serve those interests through this great medium 11 of broadcasting. Again, I am just raising a 12 question about how we break ourselves down. I 13 just think it needs to be discussed a little 14 further, perhaps. 15 MR. MOONVES: I think my theory, and 16 once again this is certainly open for 17 discussion, was the fact that there are a lot 18 of broadcasters who feel, and rightly so, that 19 they have done a lot. There are a lot who 20 haven't and who don't want to deal with this 21 issue. And it really is a more general issue 22 than that, i.e., what have we done, and what 99 1 are you going to be asking us to do? 2 And by the way, it may be the wrong 3 way. Maybe the right way is to divide it up 4 into smaller subsections of that. I am not 5 sure. 6 MS. CHARREN: As you just said that, 7 what you are really talking about, it sounds 8 like, is the public interest definition. 9 Separate from other aspects of what we are 10 doing here, the kinds of things you just said 11 about broadcasters, their feeling about what 12 they are doing is what they are doing in the 13 public interest, not what they are doing about 14 digital. 15 MR. MOONVES: Right. Well, it is 16 what they are doing currently for the public 17 interest and how that will evolve. Robert? 18 MR. DECHERD: Leslie, a point of 19 clarification: Is the next meeting intended, 20 as I construed it to be, part of the 21 Committee's learning curve, if you will, as to 22 what has come before and what the general 100 1 positions are of public interest groups, 2 broadcasters and what the general technological 3 platform is? 4 And if that is the case, I do not see 5 that it conflicts with what Jim has proposed 6 our work regimen be subsequently. I think it 7 would be very valuable, I know it would to me, 8 to have that kind of general presentation of 9 what are all the public interest issues here, 10 and, conversely, for those who aren't in the 11 broadcast industry, what do broadcasters think? 12 And if that is the purpose of that meeting, I 13 think any of us would be eager to help you 14 organize it. We certainly could. 15 MR. MOONVES: I think it is. I think 16 today we are going to get information on what 17 the history of public interest has been. The 18 bill that was in 1996, that bill, I think 19 different broadcasters certainly, and you know 20 a lot of them and I know them, interpret it in 21 very different ways. There are some that are 22 very responsible; there are some that aren't. 101 1 I don't think it is mutually exclusive to what 2 Jim is talking about. 3 DR. ORNSTEIN: The idea here as we 4 talked it through was to make this a part of 5 the learning curve. But we do not want to have 6 this appear as if all broadcasters speak with 7 one voice and it is a voice at one end of the 8 spectrum, and all public interest groups speak 9 with one voice and it is at the other end of 10 the spectrum. And that would be a terrible 11 thing for us to do. 12 So if we put these panels together in 13 just the way that you said, Robert, which is 14 let's get a sense in the general way of what 15 people think, where people are coming from as 16 we approach our work, and then as we move into 17 the specifics we hear very specific viewpoints. 18 Because clearly, I mean, one thing we 19 know is that there are lots of broadcasters who 20 would be more open to one kind of obligation 21 but are dead set against another, and they may 22 be very different from another group of 102 1 broadcasters. We ought to try to get some 2 range of viewpoints here, but not set it up as 3 one panel very much over on one end and one 4 panel very much over on the other. 5 In the same way, Rob, we need to get 6 people thinking along the same lines of 7 technology. But we also know -- one of the 8 things we were going to try to do tomorrow, but 9 in fact it appears we have not been able to 10 just for logistical reasons, was to have 11 somebody very much ardently promoting the idea 12 that this spectrum is an HDTV future and 13 somebody arguing that it is a multiplexing 14 future, just to give us a sense of those 15 viewpoints. So we need to get those strands 16 working through here on the technological side 17 as well. 18 MR. MOONVES: So anyway, Robert, 19 would you be willing to head it up, and Gigi? 20 MR. DECHERD: I would be very happy 21 to. 22 MS. SOHN: Yes. 103 1 DR. ORNSTEIN: And make sure it is a 2 representative group. 3 MR. DECHERD: Yes. 4 DR. ORNSTEIN: But what we are 5 talking about here is we will hear -- I do not 6 think we want to do this as a kind of formal 7 hearing, as a congressional hearing would be. 8 It is getting some initial presentations, and 9 then having very much a discussion among 10 ourselves. And obviously, that means we draw 11 on our own expertise and viewpoints. I mean, 12 Jim has a lot of expertise and a viewpoint on 13 HDTV. Some of us know an enormous amount about 14 the technology here, and some of us know next 15 to nothing. So we need to use our own 16 expertise here, but this will get us going. 17 So we will do three sessions: one in 18 which we hear from a range of broadcasters, one 19 in which we hear from a range of people who 20 have dealt with this from the public interest 21 community, one in which we will hear from and 22 interact with people who talk about some of the 104 1 technology. 2 MR. MOONVES: And I think openness, 3 Gigi, I think you said it right. It should be 4 the spectrum and it should be fact-finding and 5 it will be open for all of us to ask all of 6 them questions. 7 DR. ORNSTEIN: We will cover more 8 than 6 megahertz. 9 Okay. I think that probably -- yes? 10 MR. SUNSTEIN: Just one small point, 11 which is I think it would be good for the 12 chairs to give the broadcasters and the public 13 interest people a sense of what you want them 14 to be talking about. Because what wouldn't be 15 so productive, I don't think, is if the 16 broadcasters were showing their good faith and 17 the public interest people were attacking their 18 good faith. That is, we do not want so much 19 backwards looking. 20 MR. MOONVES: Yes. 21 MR. SUNSTEIN: That would be 22 informative. But if we could give them some 105 1 direction about what would be helpful, 2 particularly for us so they can focus their 3 minds on that. 4 MR. MOONVES: I think that is valid. 5 Although, Cass, I must say some of the 6 broadcasters will want to say these are the 7 things. Some of them will, and I think that 8 should be part of it. 9 You're right, if that is what it is 10 all about, look what a good guy I am, that is 11 not going to accomplish anything. By the same 12 token, I think there are a lot of things being 13 done, and some of them may want to point out 14 things that we are not aware of, by the same 15 token. 16 MS. SOHN: I do not think anybody 17 wants to fight old battles, but I think it is 18 fair that either side should be able to point 19 out what they believe are flaws or 20 technological impossibilities in the other 21 person's wish list. 22 MR. MOONVES: Right. That is a good 106 1 point. Yes? 2 MR. GOODMON: I just wanted to 3 mention just one thing about technology: As 4 the rules are written, broadcasters have the 5 option of doing HDTV or multicasting or some 6 HDTV and some multicasting. I am not sure that 7 technology is an issue for us. 8 I think the notion is that we are 9 obligated to have one free over-the-air 10 channel, and what are the public interest 11 obligations of that one free over-the-air 12 channel? And more importantly, should there 13 be -- and to me this is the big question -- 14 should there be public interest obligations for 15 the channels other than the free channel that 16 we are obligated to maintain? 17 The technology is not an issue. The 18 issue is: Are there public interest 19 obligations for the multichannels or just for 20 the one free channel that we have to have? And 21 that is what I am interested in talking about. 22 DR. ORNSTEIN: I would disagree with 107 1 you to this extent, Jim: That is one issue, 2 but it is not by any means the only issue. And 3 of course, we also know that the 4 Telecommunications Act built into it a 5 requirement that the FCC attach fees to some of 6 these secondary channels if they are 7 moneymaking operations. 8 And we have to discuss among 9 ourselves, that's a part of digital television 10 broadcasting, where the fees go. It seems to 11 me we are free to recommend an allocation of 12 those fees to the Vice President that then 13 might get communicated to the Congress. They 14 do not necessarily have to go to the general 15 treasury; they may be part of public interest 16 spectrum. But it is more than that. 17 MR. GOODMON: So you are adding what 18 to do with the fees to the list of -- 19 DR. ORNSTEIN: I think we are free to 20 make recommendations about digital -- 21 MR. GOODMON: All right, I've got 22 some ideas. 108 1 DR. ORNSTEIN: That is one part of 2 it, but there is more than that. Let me throw 3 something out to you: It is quite possible, 4 indeed it may be likely, that in our future 5 everybody will be an Internet provider, and 6 that broadcasters will be a part of that 7 spectrum. 8 If that is the case, we have to look 9 at children's television, educational 10 television, and a whole range of other things 11 in a very different way than we do if we are 12 talking about people just sitting at home 13 watching their television sets. 14 And that means we simply have to 15 stretch our minds. That's where technology 16 takes us, that plus a whole bunch of other 17 places, in terms of rethinking public interest 18 obligations. So I believe that technology is a 19 very important question. 20 MS. CHARREN: Who is going to provide 21 some economic data for this bunch to help make 22 decisions like that? 109 1 DR. ORNSTEIN: As we go along and we 2 need economic data, then I think as a group we 3 have to decide what we need and then as a group 4 or as subgroups decide where we want to get it. 5 There are lots of people out there willing to 6 provide us with economic data. 7 MS. CHARREN: I think that these 8 kinds of choices usually need some numbers 9 associated. 10 DR. ORNSTEIN: Well, that's another 11 aspect of the technological issue as well. 12 There may be one free channel plus all kinds of 13 other things, but obviously there are many 14 questions. 15 There is a lot of controversy of what 16 this will cost and when it will roll out, and 17 as Bill suggested, who will pay those costs and 18 what that means in terms of the future as well. 19 So sure, we have to raise those. 20 This is probably a good time for us 21 to break. It is 12:30. We will break for 22 lunch. We will be having lunch in a separate 110 1 room somewhere around here. We will reconvene 2 at 1:30. 3 (Whereupon, at 12:30 p.m., a 4 luncheon recess was taken.) 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 111 1 A F T E R N O O N S E S S I O N 2 (1:45 p.m.) 3 DR. ORNSTEIN: Ladies and gentlemen, 4 we will convene now for our first afternoon 5 session. I see most of our cameras are gone. 6 The one that remains, I want to assure you, is 7 not from the White House Communications Agency, 8 so feel free to say whatever you want. 9 We are going to now talk about the 10 history and nature of the public interest 11 obligation. And we have asked, and he has been 12 gracious enough to join us, to start us off, 13 Erwin Krasnow, who is the head of the 14 communications practice group of Verner, 15 Liipfert, Bernhard, McPherson & Hand, where 16 among other things he supervises such junior 17 lawyers as Bob Dole, George Mitchell and Gary 18 Pearson. 19 He is somebody with extensive 20 experience in the broadcast world, having 21 served as senior vice president and general 22 counsel of the National Association of 112 1 Broadcasters. He worked on Capitol Hill for 2 the House Communications Subcommittee and its 3 late chairman, the late Chairman Torbit 4 Mcdonald. And he has also written a number of 5 books including one that is used as a textbook 6 in many, many places, "The Politics of 7 Broadcast Regulations." So we have somebody 8 who is very knowledgeable in this area and he 9 is going to give us the facts. 10 BRIEFING I: EVOLUTION OF THE 11 PUBLIC INTEREST STANDARD IN BROADCASTING 12 MR. KRASNOW: Thank you, 13 Mr. Co-Chairman. 14 I am somewhat overwhelmed addressing 15 this topic, since Chairman Minow has written 16 several books that are sort of the definitive 17 works on the origins and the development of the 18 public interest standard. 19 What I propose to do this afternoon, 20 I have prepared a very detailed paper. Being a 21 lawyer, there are lots of footnotes here. And 22 because of the fact that you have other things 113 1 to do, and as a concession to the shortness of 2 life -- 3 I will not read from this paper but 4 will try to highlight. And I would welcome 5 questions as we go along under threat of 6 banishment. 7 Karen Edwards sent me a fax the other 8 day saying that in addition to talking about 9 the origins of the public interest standard, I 10 should be prepared to talk about what are the 11 public interest obligations of broadcasters 12 today in the present FCC. 13 And I have a handout which basically 14 takes an excerpt from the table of contents of 15 the legal guide of the National Association of 16 Broadcasters, which basically just in headline 17 form lists some various rules, regulations and 18 policies of the FCC governing broadcaster 19 conduct. And I would be happy at some point if 20 someone has some questions. 21 And just because in another life I 22 worked with the National Association of 114 1 Broadcasters, I thought before we get 2 sidetracked on whether the public owns the 3 airwaves, which doesn't seem to be the issue 4 today, that I would submit for the record a 5 copy of an article that I wrote several years 6 ago sort of debunking what some of us think is 7 a myth of public ownership. 8 I would like to start with just 9 talking about public interest standards. And 10 in this paper, one, I have made no attempt to 11 try to analyze or submit a suggested proposal 12 of the public interest for the digital age. So 13 this merely recounts the origins of the public 14 interest standard and the development by the 15 Federal Radio Commission, the Federal 16 Communications Commission and the courts, and 17 then has some observations about the standard. 18 I started out this paper by saying 19 Taylor Branch once said that there are two 20 types of agencies in Washington. One is 21 "deliver the mail" agencies. Those are 22 logistical agencies getting something from one 115 1 place to another, like the Post Office 2 Department. And then there are the "Holy 3 Grail" agencies. And so I think what we are 4 talking about today is the FCC is a Holy Grail 5 agency because it has as its mandate achieving 6 the public interest. 7 There was an interesting article in 8 Broadcasting this week by Irv Duggan, who said 9 that successive regimes at the FCC have 10 oscillated wildly between enthusiasm for the 11 public interest standard and distaste for it. 12 And so we will see that, although we 13 look at it historically and in somewhat legal 14 and political science terms, often the public 15 interest is no more than what a majority of 16 commissioners at a given point say it is. It 17 is a very sort of vague and elastic standard. 18 A brief review of how we got to the 19 public interest standard: We start with the 20 Radio Act of 1912. Unlike the Radio Act of 21 1927, the Communications Act, it was too 22 narrow. And the Radio Act basically said that 116 1 the Secretary of Commerce had authority to 2 approve applications for radio licenses. What 3 they didn't put into the Act was that he had 4 the authority to reject licenses. And 5 apparently, Congress did not anticipate that 6 there would be lots of applications for radio 7 licenses. 8 And as a result of the narrowness of 9 the statute and some subsequent court 10 decisions, basically it was just chaos. And 11 Herbert Hoover called a series of radio 12 conferences, conferences like this that brought 13 together people from the government and people 14 from the industry to talk about what should be 15 done. And he had an idea that perhaps there 16 would be self-regulation, but that didn't prove 17 to work out. 18 And in the course of the conferences, 19 Herbert Hoover suggested earlier, but in the 20 fourth conference he sort of set to paper, his 21 idea of the public interest. The delegates 22 basically agreed with that concept, but they 117 1 were gridlocked on how to define it. But it 2 was that recommendation of the public interest 3 that was adopted in the 1927 Act. They took 4 the phrase in the 1927 Act, "public interest, 5 convenience and necessity." 6 And Chairman Minow wrote that he had 7 a conversation with Clarence Dill, one of the 8 co-authors of the Radio Act of 1927, and he 9 asked Clarence Dill how did they get to the 10 "public interest, convenience and necessity" 11 standard. And according to Chairman Minow, 12 Clarence Dill said that they had on the staff 13 of the Senate Commerce Committee a lawyer who 14 worked for the Interstate Commerce Commission 15 who said, "Well, it was good enough for the 16 ICC, it should be good enough for the Congress 17 and the Radio Act." 18 And that is how they got the phrase 19 "public interest, convenience and necessity." 20 It came out of public utility legislation and 21 from the Transportation Act of 1920. 22 You will see later on, this is on 118 1 page 28 of this magnum opus here, that Judge 2 Henry Friendly basically said the "public 3 interest, convenience and necessity" makes 4 sense for the Transportation Act, but basically 5 makes no sense at all for a communications act. 6 But that was the standard. 7 And you will see that that phrase is 8 used in the Communications Act today at various 9 places. And it comes out as "public 10 convenience and necessity," "public interest, 11 convenience and necessity," "public interest, 12 convenience or necessity," et cetera. 13 At one point in time, in the early 14 '80s, the FCC said let's knock off all of these 15 other phrases of "convenience" and "necessity" 16 that are superfluous. It made sense, but 17 Congress didn't adopt it, and we still have in 18 the Communications Act various references to 19 "public interest" and "public interest, 20 convenience, and necessity." 21 I thought I would try to make this 22 briefer, this highlighting. We start with the 119 1 Federal Radio Commission, who had the public 2 interest standard. And basically, the Federal 3 Radio Commission, especially in its Great Lakes 4 decision, started to flesh out the public 5 interest standard and provided some guidelines 6 on the standards. 7 And some of those guidelines, 8 although they were done a long, long time ago, 9 in 1929, resulted in the sort of germinal of 10 concepts that the FCC later adopted about 11 ascertainment of community needs and interests. 12 And there is even some precursor of a fairness 13 doctrine notion. 14 Then the Federal Radio Commission had 15 a couple of cases where they took away 16 licenses, license revocation, based on 17 programming content. And they both sort of 18 involved fairly extreme, somewhat bizarre 19 situations. 20 One was Dr. Brinkley. I think he got 21 his M.D. from a mail-order house in Kentucky. 22 Basically, he had his own pharmaceutical house, 120 1 and he hawked various pharmaceutical remedies 2 including sort of a goat's gland remedy that 3 was good for male virility. When people would 4 call in with their complaints and talk about 5 their ailments over the air, he would usually 6 recommend something that was manufactured by 7 his pharmaceutical house and which could be 8 ordered by mail. So the FCC took away his 9 license. 10 Then there was the Reverend Shuler, 11 whose church owned a station in Los Angeles. 12 And Reverend Shuler used the station basically 13 as a forum to vent anti-Semitic, anti-Catholic 14 views and attack virtually everybody in Los 15 Angeles. And the FCC took away the license, 16 and the courts upheld that. So that ends the 17 saga on the Federal Radio Commission. 18 If we go to the FCC, FCC didn't do 19 very much -- 20 MS. CHARREN: Excuse me. 21 MR. KRASNOW: Yes? 22 MS. CHARREN: I understand the drug 121 1 guy. But what was the basis for taking away 2 the second one, Shuler's license? 3 MR. KRASNOW: Basically, he had 4 slandered, made defamatory comments against a 5 number of people on that. 6 MS. CHARREN: Slander? 7 MR. KRASNOW: And there was a public 8 hearing on that in Los Angeles. The Federal 9 Radio Commission had a strong record in that 10 regard. 11 So except in the '30s and the '40s of 12 the FCC going against what they called 13 "propaganda stations," the FCC didn't get very 14 much into program regulation. 15 Just as a footnote, curiously, first 16 the FCC said you can't use a station for 17 propaganda purposes. If you use the station to 18 editorialize, in a way you are using the 19 airwaves to propagandize for your own point of 20 view. And they held that in the Mayflower case 21 in 1941. And then you will see in the Blue 22 Book they say that editorializing is one of the 122 1 major components of the public interest. 2 So you see, the FCC has gone AC/DC on 3 some of these issues. And through the years 4 they say some things are in the public 5 interest, such as processing guidelines on 6 commercial standards or programming content, 7 and then they say that it is not in the public 8 interest. And that is both one of the 9 strengths and curses of having a public 10 interest standard which can change from time to 11 time. 12 FCC asked its staff -- this was in 13 the mid-'40s. There were a lot of changes in 14 terms of the economies of network radio, and 15 they asked their staff to write a report with 16 guidelines on the public interest to take into 17 effect all the different trends in programming. 18 So the staff came up with a report 19 which is properly known as the Blue Book, for 20 obvious reasons. And the Blue Book had a whole 21 bunch of guidelines on programming of the 22 public interest, including the need for 123 1 unsponsored sustaining programs and balanced 2 programs. That Blue Book was denounced by 3 Broadcasting Magazine, which came out with an 4 article entitled "Federal Censorship 5 Commission." And it was so controversial that 6 the FCC didn't do very much with it. They 7 neither repudiated it nor enforced it. 8 Then they came up with in 1960 a 9 program policy statement where they enumerated 10 various components of the public interest, 11 including sort of the need for some balanced 12 programming on different topics. 13 But one of the problems with both the 14 Blue Book and the 1960 programming statement 15 was that they were really just generalized 16 guidelines. They were qualitative as opposed 17 to quantitative, and they were very difficult 18 to enforce, so there wasn't very much 19 enforcement. 20 Then we get into the '60s and '70s, 21 coming now to the time that I started to 22 practice law, where communications lawyers made 124 1 a nice living representing broadcasters because 2 renewal applications were quite thick. It was 3 the time of formal ascertainment of community 4 needs and interests and there were questions on 5 the form having to do with minimum amounts of 6 non-entertainment programming, and there were 7 just lots of rules and regulations. 8 And then there came a time in the 9 '70s, starting with the Carter administration, 10 that it was felt that there was too much 11 regulation. And it lead to, in the '80s, a 12 marketplace deregulation that was championed by 13 Mark Fowler. And you will see there is a 14 listing of various decisions that the Fowler 15 administration took to eliminate 16 broadcasting -- called Radio and TV 17 Deregulation, getting rid of program logs, 18 commercial guidelines, guidelines on 19 non-entertainment programming, et cetera. 20 They also did it for television. 21 They got rid of a whole bunch of other 22 policies, the so-called "underbrush 125 1 proceeding." There is a quote that captures 2 the flavor of what the Fowler FCC was doing. 3 It says, "Policies cautioning broadcasters not 4 to engage in certain programming practices or 5 establishing rigid guidelines in relation to 6 such programming raise fundamental question 7 concerning the constitutional rights of 8 broadcast licensees, and therefore cannot be 9 retained in the absence of a clear and 10 compelling showing that the public interest 11 demands their retention." 12 And then the FCC has what is now 13 called a "postcard renewal," and the Court of 14 Appeals held that, despite the objection of the 15 appellants, that the FCC didn't have to ask 16 program-related questions on a renewal form. 17 And I believe except for children's television 18 programming, there are no questions on a 19 renewal form that relate to programming today. 20 And then, when Dennis Patrick was 21 chairman of the FCC, it got rid of the fairness 22 doctrine. And they got rid of it on both 126 1 policy grounds, saying it was against the 2 public interest, that it had the effect of 3 chilling the airing of controversial points of 4 view, and they also did it on constitutional 5 grounds. And the Court of Appeals basically 6 affirmed the FCC on the public interest 7 grounds, but punted, didn't get to the 8 constitutional issue. 9 And in the next part of the paper, 10 which I promise will be a shorter summary, we 11 are talking about the public interest standard 12 as interpreted by the Supreme Court. And I 13 have narrowed it. I have left out of this 14 paper a recitation of sort of First Amendment 15 cases that dealt purely with First Amendment 16 questions and focused mainly on issues relating 17 to the Court's interpretation of the public 18 interest. 19 And the Nelson Brothers case is the 20 first case where they upheld the Federal Radio 21 Commission's right to consider programming 22 under the public interest standard. There was 127 1 a case, Sanders Brothers, which seemed to 2 indicate a retreat by the Supreme Court from 3 the direction that the Nelson Brothers case 4 took and the Federal Radio Commission was going 5 in. And in Sanders Brothers, the Court said, 6 "The Act does not say to regulate the business 7 of the licensee. The Commission is given no 8 supervisory control of the programs, of 9 business management, or of policy." 10 But other Supreme Courts basically 11 did not pay much attention to that, and the NBC 12 case is perhaps the most significant Supreme 13 Court case in terms of giving us a sweeping 14 endorsement of the FCC's sort of broad powers 15 under the public interest standard for many 16 years, and continues to be cited as authority 17 for the FCC's ability to take various actions 18 on what it conceives to be the public interest. 19 Then we go on to the Red Lion case, 20 which involves the Supreme Court upholding the 21 fairness doctrine and the related personal 22 attack and political editorializing rules. And 128 1 in Red Lion, the Court basically said it is the 2 right of the viewers, not the right of 3 broadcasters, which is paramount. And they 4 talked about the scarcity of spectrum, although 5 they did say they might reconsider the case if 6 experience with broadcast technology proved 7 that the net effect of the administration of 8 the fairness doctrine was to reduce rather than 9 to increase the volume and quality of coverage. 10 Then I thought there was a phrase in 11 the CBS v. DNC case that if I were on the 12 Advisory Committee would show basically the 13 task that you have before you. The Court noted 14 that the problems of regulation are rendered 15 more difficult because the broadcasting 16 industry is dynamic in terms of technological 17 change, and solutions adequate a decade ago are 18 not necessarily so now, and those acceptable 19 today may be outmoded 10 years from now. 20 Then we go on to the Pacifica case, 21 the George Carlin dirty words case, where the 22 Supreme Court, in addition to scarcity, talked 129 1 about the pervasiveness of the broadcast media 2 and how basically it impacted on children, and 3 that it was not simply a question that you 4 don't have to buy a radio or television set or 5 you could tune out, but someone could just tune 6 in and tune out without any warning and get 7 offensive matter. 8 In the Listeners' Guild case, the 9 Supreme Court accepted the FCC's determination 10 that it did not have to get involved in 11 regulating entertainment formats. The FCC said 12 that the marketplace, rather than the 13 government, is a better determiner of the 14 public interest vitality of an entertainment 15 format, and the Supreme Court agreed. 16 In League of Women Voters, basically 17 the Court indicated that there were increasing 18 criticisms of the scarcity rationale in Red 19 Lion, but they were not prepared, the Court 20 said, to deviate from that absent some sort of 21 indication from the FCC or Congress. 22 And in the first of the Turner "must 130 1 carry" decisions, the Court seemed to just give 2 lukewarm support for Red Lion, saying, "The 3 rationale for applying a less rigorous standard 4 of First Amendment scrutiny to broadcast 5 regulation, whatever its validity in the cases 6 elaborating it, does not apply in the context 7 of cable regulation." 8 This sort of now takes me just to the 9 end with just some general observations about 10 the public interest. And it starts out with a 11 definition by a political scientist which 12 suggests that one criterion of the public 13 interest is the predominant acceptance of 14 administrative action by politically 15 influential groups, and he goes on and 16 elaborates that. 17 Jim Crowell said it better. He said, 18 "On the eighth floor," which is where the FCC 19 commissioners reside, he said, "what we try to 20 do is arrive at decisions designed to make all 21 sides reasonably unhappy." 22 And the theory of that is that where 131 1 you have antagonistic parties and interests, if 2 you can come up with a decision that doesn't 3 upset someone so much that they will go to the 4 courts or to the Congress, that that is a 5 pretty good indication that you have come up 6 with a public interest determination that is 7 going to survive judicial appeal or attack from 8 the Congress. 9 Then it is mentioned that there are 10 certain strengths in the public interest 11 standard in terms of its flexibility and that 12 it can meet sort of changing needs. Judge 13 Prettyman said it in a nice way. He talked 14 about how you can come to sort of opposite 15 points of view. As I mentioned, one FCC says 16 editorializing is against the public interest, 17 and another FCC says editorializing is in the 18 public interest. I mention that these matters 19 are basically "political" in the highest sense 20 of that abused term. 21 And one of the issues that you will 22 be dealing with is the tension that comes 132 1 between the First Amendment, "Congress shall 2 make no law," and the no-censorship provision 3 of the Communications Act and the public 4 interest. 5 In the CBS case, the Supreme Court 6 said that all public interest determinations 7 basically have to be grounded in First 8 Amendment principles, but there obviously is a 9 tension there. 10 And since the purpose of my paper was 11 not to take a position or be presumptuous 12 enough to propose a standard, I ended off with 13 a quote -- and I am not trying to patronize 14 him, but I quoted him 17 times in the paper -- 15 from Chairman Minow, who said that the heart of 16 the Communications Act is its clear emphasis on 17 the public interest. Whatever the temptations 18 to abandon the notion -- and they are many -- 19 the stakes are too high. Without commitment to 20 the public interest, all government actions 21 vis-a-vis communications would be without 22 meaning. 133 1 That is the end of my summary. And I 2 would be happy to take questions on also the 3 part of the paper which I submitted which is an 4 outline of what broadcasters are required to do 5 today under the public interest standard, and 6 also various provisions of the Communications 7 Act. 8 DR. ORNSTEIN: Okay. The floor is 9 open. Yes? 10 MR. SUNSTEIN: I guess I have five 11 supplemental legal notes. None of them is 12 inconsistent with anything you have said; they 13 are just kind of additions. 14 One is that scarcity is gone, as you 15 suggest, and that is worth underlining, as a 16 basis for government regulation of 17 broadcasting. The courts have been very clear 18 on that in the Turner case. 19 There may be other rationales 20 available. The Court has said that with 21 respect to the protection of children from 22 profanity, the fact that TV is less escapable 134 1 and once you turn it off it is too late, that 2 may give wedge for regulation of some things 3 that have caused problems for kids. So that is 4 worth noting. Scarcity is gone, so there has 5 to be something else. 6 The second notation is that the Court 7 more recently has drawn a very sharp 8 distinction between content-based and 9 content-neutral regulation of speech. It is 10 kind of a mouthful, but it is really a simple 11 idea. "Content-based" means content of the 12 speech is the basis for regulation, like in a 13 requirement of children's programming or free 14 airtime for candidates. Both of those are 15 content-based. And the court doesn't hate 16 them, but it dislikes them. 17 A "content-neutral" regulation is 18 like the antitrust law or structural 19 regulation. We might be able to think of 20 things that are content-neutral. The Court 21 doesn't even dislike them. Those are much more 22 likely to be upheld. 135 1 Most of what the Vice President 2 talked about this morning was content-based. 3 That is not automatically invalid by any means. 4 But the Court, you know, a way to think of it, 5 dislikes them, doesn't hate them. 6 A third note on this list of five is 7 that it is very important to notice that in the 8 two Turner Broadcasting cases the Supreme Court 9 upheld the "must carry" rules, those rules 10 requiring cable operators to carry local 11 broadcast television. 12 The Court's theory, which is as 13 important as the Court's action, is that it is 14 a very important government interest to ensure 15 that people generally have access to free 16 television programming. And if the world goes 17 all cable or goes in a direction that makes 18 people have to pay for their television, there 19 is a problem, and government can legitimately 20 respond to that problem. So the Court upheld a 21 pretty intrusive former regulation, the "must 22 carry" rules, on the ground that it was 136 1 ensuring access for everyone to free TV, and 2 that is worth underlining. 3 The next thing worth underlining, 4 number four on this list of five, is that in a 5 case that is very important for our decision 6 making, the Court invalidated, basically 9-0, 7 maybe 7-2, there was a little split among the 8 two, but the overwhelming majority invalidated 9 a part of the 1996 Telecommunications Act. 10 That is the Communications Decency Act. 11 The Court invalidated that because 12 there was this vague ban on indecent speech on 13 the Internet. We know that the Communications 14 Decency Act is unconstitutional because the 15 predicate for criminality was too vague. So 16 that is important for us to keep in mind 17 throughout: If we have a vague basis for 18 regulation, it might be struck down. 19 Okay. The last point, which is kind 20 of good news, is that in a case that is not 21 mentioned here that is really important for us 22 also called Denver Area Educational 137 1 Programming, the Court upheld a pretty flexible 2 idea, which is that cable operators can, if 3 they want, exclude indecent programming from 4 their airwaves. 5 First, the Court upheld it on the 6 ground that it was content-based, but it was 7 kind of voluntary, not intrusive. It gave the 8 cable operators permission to do something, 9 maybe a little bit like the V chip or the 10 exemption from the antitrust laws which Senator 11 Simon has pushed to regulate violence on TV. 12 Those aren't coercive; they are enabling and 13 facilitative. And Justice Breyer emphasized 14 that point in this Denver Area case. 15 That points to Co-Chairman Ornstein's 16 reference to more market-oriented, innovative 17 solutions. The Court liked that in that case. 18 Also, the Court said communications 19 are changing very quickly. The technology 20 today is very different from the technology 21 next week. We are not going to freeze the 22 Constitution in stone, which is I think an 138 1 invitation by the Court for groups like this 2 one and others to take the Constitution as 3 something whose content we should be thinking 4 about, rather than thinking that preexisting 5 categories settled our judgments. That is kind 6 of just an amplification of some recent Supreme 7 Court decisions. 8 MR. GLASER: First, I have a question 9 about the scarcity point. And I guess this is 10 for any of the experts in this room. Why did 11 the Court rule that scarcity is no longer an 12 issue? Is it a new interpretation of a 13 consistent set of facts? Is it based on the 14 view that there are other transmission methods 15 that provide functional equivalence? What is 16 the reasoning behind that? 17 MR. SUNSTEIN: Okay. The idea was in 18 the old cases the Court said, gee, if you only 19 have three or four stations, then the 20 government can legitimately regulate because it 21 is regulating something that is in the nature 22 of a monopoly. Consumers don't have a wide 139 1 variety of things to go to, and maybe the 2 government by regulating can provide something 3 to people that wouldn't otherwise be available, 4 because there are just three or four stations. 5 What the Court said in the context of 6 cable television is that there are so many 7 channels now, the old argument does not apply. 8 And what the FCC and others have said is often 9 there are more television channels than there 10 are newspapers. 11 MR. GLASER: But is there not still a 12 difference between channels that operate over 13 the air and can be decoded for no fee versus 14 cable or other transmission methods where there 15 is a charge for access to the transmission 16 system? 17 MR. SUNSTEIN: It is a good point. 18 MR. GLASER: But the Court doesn't 19 seem to think so? 20 MR. SUNSTEIN: No. The Court in the 21 Turner Broadcasting case said that. The best 22 bet is that to use scarcity now, that is 140 1 "dinosaur" language. 2 MS. SOHN: Well, I will be the 3 dinosaur. I strongly disagree with you, Cass, 4 that the Turner case said anything about 5 abandoning scarcity. I will agree with Erwin 6 that it has been questioned, but the Court has 7 had opportunities to overturn Red Lion and 8 hasn't. It is still good law. The Turner 9 case, even the NAB argues that it only applies 10 to cable. I could make an equal argument that 11 the Turner case strongly reaffirmed Red Lion. 12 I think the point is that reasonable minds 13 could differ as to whether scarcity is still a 14 basis. 15 But I do agree with you, Cass, that 16 it doesn't need to be the basis of what we do 17 here. But the D.C. Circuit just about eight 18 months ago used Red Lion very strongly in 19 upholding public interest obligations on direct 20 broadcast satellite folks, again on the 21 scarcity basis. That is Time Warner v. FCC. 22 That was the D.C. Circuit but still used -- 141 1 MR. GLASER: That was scarcity of 2 broadcasting? 3 MS. SOHN: That is absolutely right 4 because direct broadcast satellite uses 5 broadcast spectrum. So, as far as I am 6 concerned, the rationale is alive and well, but 7 perhaps within our deliberations it is 8 irrelevant. 9 MR. SUNSTEIN: I do not think we 10 disagree. I should be more precise. Insofar 11 as we are talking about regulation of 12 programming where there are lots and lots of 13 stations, like cable, the Court says no 14 scarcity rationale. With respect to 15 broadcasters themselves, the scarcity rationale 16 may be available, though the existence of cable 17 as a competitor complicates that. My guess is 18 the Court would not accept it, but the comment 19 is quite right that that remains available 20 insofar as we are just talking about 21 broadcasters. 22 MR. GLASER: My question is simply 142 1 that I come at this from a standpoint of a 2 domain that has no spectrum associated with it. 3 I just want to ascertain whether we think that 4 there are certain principles that would only 5 apply in cases where there was scarce spectrum 6 involved and where there were certain cases 7 where the principles that we articulated or the 8 conclusion that we reached might well equally 9 apply to a wide range of transmission 10 mechanisms, regardless of whether it was based 11 on spectrum transmission. 12 What you are saying is that there is 13 a set of rationales that are not 14 spectrum-specific and there is a set of 15 rationales, scarcity, that is probably turning 16 out to probably be specific to spectrum 17 situations, if I am understanding you 18 correctly? 19 MR. MINOW: I think you have got to 20 define "scarcity" more precisely. The argument 21 is often made you now have more broadcast 22 channels than newspapers. The fact is when 143 1 newspapers die, and over the last 25 years we 2 have seen newspapers die in almost every big 3 city, nobody comes along to start a new 4 newspaper. The economics do not justify 5 starting a new newspaper. 6 When a television channel becomes 7 available or even a radio channel in certain 8 communities, there are as many as a dozen 9 people applying and saying, "Give it to me. Do 10 not give it to the other 11, give it to me." 11 So if you define "scarcity" in terms of is it 12 available to every citizen who wants it, that 13 is one definition of scarcity. I would say 14 today that that scarcity still exists as a real 15 thing in terms of the broadcasters and cable as 16 well. 17 DR. ORNSTEIN: For our purposes 18 beyond scarcity, you just briefly alluded to 19 other rationales. Why don't we spend a couple 20 of minutes talking about what some of those 21 other rationales are, whether scarcity 22 continues to be one, what else provides the 144 1 rationale for applying these standards. 2 MR. SUNSTEIN: Offhand, there are 3 three: one is this intrusiveness, and that is 4 basically about things that are hurting kids, 5 that kids cannot get away from. 6 Another which is very controversial 7 is the quid pro quo rationale, which I know 8 several people here like and my guess is 9 several people here do not like. That is the 10 idea that as a quid pro quo for getting a 11 license you are legitimately imposed on. 12 The third is that the First Amendment 13 is about democratic self-government, and if the 14 regulation promotes that, as educational 15 programming for kids and more free airtime for 16 candidates might, then it is constitutionally 17 acceptable. Those are three. 18 MS. SOHN: I might add one, Norm, the 19 sort of notion that broadcasting and broadcast 20 spectrum is like a public forum. It ties into 21 the democratic self-governance, that it is some 22 sort of public forum and that the public has 145 1 some right to dictate its uses somewhat. 2 DR. ORNSTEIN: On that basis, all 3 except arguably the quid pro quo, which itself 4 could be applied to awarding cable franchises 5 by communities as well as something that is a 6 monopoly being provided, but all would apply or 7 could apply to entities other than 8 broadcasters, those rationales. 9 MR. GLASER: Although intrusiveness, 10 I think, is fascinating on two dimensions: one 11 is intrusiveness differentiated by the 12 sophistication of the audience, i.e., children 13 versus adults, and second is intrusiveness 14 differentiated. Is there any legal cannon yet 15 or is it too new to differentiate between 16 intrusiveness with the devices passive and 17 therefore can be intruded upon -- you know, 18 control over whether it intrudes upon you, 19 whether the device is active and you can impose 20 filtering or other technology as a means of 21 mitigating or in some cases eliminating 22 intrusiveness. The latter may be too new, but 146 1 in either case do we have anything dispositive 2 to go on there? 3 MR. SUNSTEIN: No, all we have is 4 this case involving the comedian George Carlin 5 and seven dirty words and what the court said 6 in allowing the government to regulate the 7 seven dirty words was that a kid could be 8 exposed to that when it is too late and that 9 has immediacy in intrusiveness that other media 10 do not have. It is a very limited idea, and I 11 think insofar as our deliberations are 12 concerned it would not reach free airtime for 13 candidates, for much about children, even. It 14 is about the assaultive nature of it that makes 15 voluntary turning away more difficult. Now, I 16 do not know if we are going to get into 17 indecency issues, but that is what it would 18 relate to. 19 MR. GLASER: It would seem to me, 20 following up the CDA case and the Supreme Court 21 language there, it would seem to me very broad 22 with regard to, if there are technological 147 1 solutions that have the property, that they can 2 mitigate intrusiveness to perhaps that those 3 have some impact on our deliberations as well 4 insofar as digital TVs have the ability to 5 include some of that function. 6 MR. SUNSTEIN: That is excellent, and 7 I think the Court is on to the existence of 8 less intrusive government remedies for the 9 problems that government sees, and the Court 10 actually discusses that. It would probably be 11 worth circulating to all of us. As legal prose 12 goes, it is not that horrible. 13 It is the most recent and ambitious, 14 the Court's opinions in the Communications 15 Decency Act case. I can actually do that. 16 MR. GOODMON: Can I mention one 17 other, just a note about scarcity in terms of 18 thinking that through? That multiple voices 19 notion, scarcity is not a problem; there are 12 20 stations. That was considered when there was a 21 different set of ownership rules. You could 22 have 12 stations now and two owners, which 148 1 sounds scarce. All I am saying is maybe -- do 2 you see what I mean? 3 MR. SUNSTEIN: The ownership rules 4 can change. 5 MR. GOODMON: The ownership rules 6 changed the notion under which -- the multiple 7 voices notion that you considered. Okay, I am 8 just talking -- 9 MS. SCOTT: Doesn't that also apply 10 to cable? Using up all the cable -- I mean, 11 buying up cable, are the broadcasters? Or 12 vice-versa, the cables are gobbling up the 13 broadcasters? I mean, it is the same people; 14 therefore you've got five people in the whole 15 country. That is an exaggeration, but that is 16 what it appears to the public, that five or six 17 giant corporations own everything as far as 18 broadcasts goes. 19 MS. CHARREN: Actually, it is only 20 10. 21 MS. SCOTT: I am sorry, Peggy? 22 MS. CHARREN: I said it is 10, not 149 1 six. 2 MS. SOHN: Ken Oletta just had a 3 chart in The New Yorker last week that he 4 called the "kairetsu," basically six media 5 companies that owned the vast majority of the 6 media in this country. That is what Newt was 7 talking about, what we call "allocational 8 scarcity." It is exacerbated a great deal by 9 the ownership rules, that is, more people 10 wanting to broadcast than there are frequencies 11 available. 12 There is also this notion that there 13 is no longer a numerical scarcity. That is 14 what Cass was saying was essentially rejected. 15 Frankly, I might argue that in the wake of the 16 1996 Telecommunications Act there still is 17 numerical scarcity because consolidation has 18 gotten so intense and vertical integration has 19 grown as well. 20 DR. ORNSTEIN: Yes? 21 MR. CRUMP: I realize your charge was 22 not to come up with a public interest standard 150 1 for digital TV in your doctoral tome, and I 2 will greatly read it with a lot more 3 concentration after. But are there any kinds 4 of sense of directions or kinds of guidelines 5 that you see either from a legal perspective or 6 areas that we should consider in trying to 7 formulate a public interest standard, policies, 8 as we wade our way through? 9 MR. KRASNOW: They say in Washington 10 where you stand depends on where you sit, and I 11 sit representing broadcast license, licensees 12 of television stations, which are a little 13 apprehensive about the new digital television 14 technology because they are not sure how it is 15 going to work and how they are going to use 16 digital technology. 17 One of my biases as a lawyer and also 18 as a reader of Supreme Court decisions is 19 whatever responsibilities that you come up with 20 basically have to be supportive of the First 21 Amendment. That basically seems to have more 22 longevity than the Communications Act or some 151 1 new technology. 2 Then, basically you need to see how 3 regulation has worked out. Has imposing 4 behavioral restraints on the licensees of 5 broadcast stations really worked to the public 6 interest? If you have, you can go in one 7 direction, if you believe that they have made 8 sense. Basically, if you think that much of 9 the regulation doesn't make any sense and 10 doesn't really impact on the public, then you 11 go in another direction. 12 You have a very, very difficult task. 13 I think one of the things that would be useful 14 to look at before you think of new public 15 interest responsibilities is to take a look at 16 for television what are the current public 17 interest responsibilities of broadcasters, and 18 then the issue is, in light of the digital age, 19 need they be added to or not. 20 DR. ORNSTEIN: Go. 21 MS. CHARREN: Go ahead. 22 MR. DECHERD: Norm, I think this is a 152 1 very useful discussion. I think scarcity as it 2 applies prospectively is going to be a far more 3 important issue for this Committee than what 4 has come before. 5 I think we are going to have a 6 collision in that discussion with the First 7 Amendment issues that have been raised here and 8 would say one thing by way of entreaty and one 9 anticipating that discussion, the entreaty 10 being that we not include on our agenda a 11 discussion of concentration of ownership. 12 The Telecommunications Act of 1996 13 took hundreds of thousands of person hours, 14 certainly tens of thousands. The Congress has 15 enacted it. Anyone who reads it can come to no 16 conclusion other than there is going to be 17 concentration. 18 The fact that there is now concern at 19 the Justice Department and other places about 20 that concentration is a natural byproduct of 21 the pace and degree of concentration. I do not 22 think that is what we have been asked to deal 153 1 with here, and so I would hope as it relates to 2 scarcity and other related matters we not spend 3 a lot of time on it. That is really for the 4 Congress to decide. It is a very recent Act. 5 We are going through the natural throes of 6 something of that importance and consequence 7 being enacted and implemented. 8 The issue, though, with respect to 9 our charge in the digital television age as it 10 relates to whether you would call it "scarcity" 11 or "number of choices," we, for example, look 12 at ourselves as a global broadcaster that is 13 creating content in partnership with our 14 network partners and syndicators and in our own 15 programming which we produce, which I believe 16 has consistently served all of these public 17 interest requirements way beyond what has been 18 asked of us. 19 We see that content being delivered 20 in numerous ways in the future, and we are 21 comparatively indifferent to it, whether it 22 gets there over the air or whether it gets 154 1 there via cable, via satellite, over computer 2 and Internet kinds of delivery systems, I think 3 that is our charge, how does all of that 4 converge prospectively. 5 We need to be very careful on these 6 constitutional questions because, if you set 7 aside the unique aspect of over-the-air 8 broadcasting, which is the license, all of 9 these mandates could be equally applied, at 10 least argumentatively, to cable, to satellite, 11 to computer delivery of Internet and other news 12 and content services, and it is my opinion, at 13 least, that is a swamp with more alligators 14 than we can count. 15 MR. GLASER: I am just interested in, 16 since I am from one of the swamps, are you 17 saying that we should not address those issues 18 that are that broad or that, if we do address 19 issues that are that broad, that we should 20 prepare to wade through a lot of swamp water? 21 MR. DECHERD: I am saying the latter. 22 I am saying that we have to acknowledge that 155 1 this isn't just about over-the-air 2 broadcasting. Our signal gets to the home a 3 lot of different ways. Almost every local 4 broadcaster now has a Web site or is 5 contemplating a Web site. If we mandate, the 6 government mandates, public interest 7 requirements, free political time or whatever 8 it may be, by extension we are going to go way 9 beyond broadcast licensees. 10 MR. GLASER: I agree with what you 11 are saying, and I think it is the gravitational 12 force of technology that will either compel us 13 to do that or render our recommendations 14 irrelevant if we do not. 15 DR. ORNSTEIN: Let me just respond 16 for myself. First, I think we do not need to 17 spend a lot of time talking about 18 concentration; it is a given. I mean, when I 19 looked at The New Yorker chart my only thought 20 was how many degrees is this from Kevin Bacon? 21 We can leave that for another time as well. 22 Our charge is to look at the public 156 1 interest obligations of digital television 2 broadcasters. We do not have a charge to look 3 at specifically the public interest obligations 4 of all others, but I also take it as a given 5 that we are heading into a different world and 6 a world where the lines are getting blurred 7 everywhere. 8 I am hopeful that whatever report we 9 issue that talks about the nature of public 10 interest obligations will be viewed by 11 policymakers, especially given that we have a 12 whole set of standards that the Court has 13 suggested that do not necessarily apply solely 14 on the basis of a license of public interest, 15 will take that into account for all of the 16 other interrelated, intermixed, and blurred 17 entities down the road. We need to be mindful 18 of that but also mindful that we have a 19 particular focus. 20 MS. CHARREN: The only point I was 21 going to make based on Gigi and Cass analyzing 22 where we are at is that a lot of these cases 157 1 are based on the right to speak, that part of 2 the First Amendment, you know, the right to 3 speak, and then there is the right to hear. 4 One of them, the right to speak 5 whatever you want, you can deal with 6 technologically by putting something in that 7 keeps it from getting heard, but the right to 8 choice and enough choices so that you hear what 9 you need to hear in a democratic society is 10 another aspect of free speech. 11 My sense of the public interest 12 obligations of broadcasters has always been 13 focused on the right of the public to hear more 14 than they are hearing, not the right of 15 somebody to say something. You know, I 16 actually sued the FCC when they tried to limit 17 that stuff, but I have a lot of problems with 18 how we get to hear what we should be hearing. 19 And those cases all fit on one side or the 20 other of that. 21 DR. ORNSTEIN: Does anybody want 22 to -- 158 1 MR. SUNSTEIN: This has been a very 2 helpful discussion because Gigi's comments and 3 some of the others suggest the possibility that 4 for digital broadcasters the scarcity 5 rationale, which was closely tied up with the 6 Court's old idea that it is the rights of the 7 listeners that are paramount, not the rights of 8 the speakers, once we know about the 9 technology, if there is scarcity it is very 10 hard to know how to define the relevant market. 11 Do we define digital broadcasters as 12 competing with cable operators or not?Because 13 it is a different technology? One thing we 14 want to think about is whether a scarcity 15 rationale and then the attendant rights of 16 listeners and viewers isn't a dinosaur any 17 more. That is actually extremely interesting. 18 MS. SOHN: I do not know if they are 19 necessarily tied. The point I want to make is 20 when we talk about (and this is tied to what 21 Peggy said) the First Amendment we are talking 22 about competing First Amendment values. We are 159 1 not only talking about the broadcasters' First 2 Amendment rights, we are also talking about the 3 public's First Amendment right not only to hear 4 in an age of new technology but perhaps to 5 speak. 6 MS. CHARREN: Perhaps to speak. 7 Right. 8 MS. SOHN: At this point in the 9 technogical age, maybe we are not just talking 10 about passive viewing and passive listening, 11 maybe we are talking about an opportunity to 12 speak as well. 13 DR. ORNSTEIN: Look, let me change 14 the focus a little bit for a few minutes for 15 another foundation that I think we need to lay 16 here. If we go down through those public 17 interest obligations of broadcasters today, who 18 set those obligations? 19 Erwin, answer this question for me. 20 How many of these obligations were set by 21 Congress via statute, how many were set by 22 court decisions, and how many were set by 160 1 regulatory action through the FCC? Did 2 everything stem basically from the statutes in 3 some way? 4 Our audience very directly has a 5 report to issue to the vice president. But it 6 would be useful to know the genesis of these 7 earlier standards and who basically has 8 exercised the power and the privilege and the 9 right to do so. 10 MR. KRASNOW: If you take a look at 11 the handout which has excerpts in the table of 12 contents of a listing of rules and regulations 13 that broadcasters abide by, I have in a sense 14 done that by putting an asterisk next to those 15 requirements that are statutory. 16 For example, under political -- equal 17 opportunities, reasonable access, lowest unit 18 chart -- Congress did that. Sponsorship 19 identification, I have seen indecent 20 programming, and then there is, like, a whole 21 series of congressional provisions dealing with 22 lotteries. Children's television is an example 161 1 of the FCC starting to formulate policies and 2 the Congress taking a stronger stand and then 3 the FCC responding to the Congress. 4 Congress says to the FCC broadcasters 5 have this obligation to provide educational 6 programming for children, and then the FCC has 7 to grapple with whether they can do it on a 8 quantitative basis. Under the Hunt 9 administration, they came up with the 10 three-hour requirement. 11 There was a mention of 12 content-neutral regulations. Ownership rules 13 are content-neutral. When Charles Ferris was 14 chairman of the FCC, although he was not 15 popular with broadcasters, he wanted to have 16 some deregulation, but the price of 17 deregulation was structural change, change in 18 the ownership rules, getting tighter on that, 19 or equal employment opportunities, another 20 structural content-neutral approach. 21 Equal opportunity is something that 22 the FCC has come up with for broadcasting, not 162 1 the Congress. In the ownership area, it has 2 been a mixture of the FCC and Congress. In the 3 Telecommunications Act, Congress has talked 4 about the multiple ownership rules, but a 5 number of the other FCC policies on 6 cross-interests have linked newspaper-broadcast 7 cross-ownership are basically FCC. So, it is a 8 combination. 9 An example, I think, that might be a 10 model for the type of regulation that tries to 11 balance the broadcasters' First Amendment 12 rights and also the rights of citizens, the 13 goal of an informed electorate, has to do with 14 broadcasters' obligations to air 15 issue-responsive programming. 16 The FCC says that is something you 17 have to do on a regular basis, and you have to 18 quantify it every quarter by putting out a 19 report showing which of your programs that you 20 carried during the preceding three months were 21 responsive to significant needs and interests. 22 They said the old days of where you 163 1 had to have the formal ascertainment and select 2 from among 19 approved categories of community 3 leaders, we will leave it up to you as to how 4 you are going to ascertain it, but you have to 5 identify what those problems are and how you 6 went about it. Great discretion is afforded to 7 the broadcaster in that regard. 8 That is an example of something that 9 stems from the public interest obligation and 10 is not statutory. So what we have when you 11 look at the list of rules and policies that 12 govern the conduct of a television station, it 13 is a combination of both statutory and public 14 interest. 15 Usually, Congress has an opportunity 16 to respond when the FCC comes up with a rule or 17 regulation. If they do not like it, basically 18 Congress will say something either through the 19 appropriations process or in some other way. 20 MS. PELTZ STRAUSS: I want to add one 21 to the list that is missing here, and that is 22 the obligation in the 1996 Telecommunications 164 1 Act to provide closed-captioning on television. 2 In addition, there was a provision for video 3 description, but that was one situation where 4 Congress told the FCC to conduct a study, and 5 it is still under review by the FCC, so there 6 actually haven't been any obligations imposed, 7 but they are pending. 8 MR. KRASNOW: Right. I think the FCC 9 has adopted some rules on closed-captioning 10 which go into effect in the future on that. 11 MS. PELTZ STRAUSS: On 12 closed-captioning, in January, yes. 13 MR. GLASER: Can we get into what the 14 current obligations are? 15 DR. ORNSTEIN: I think it would be 16 useful. Mostly, let's face it, we are not 17 going to be getting into ownership for any of 18 these areas. We are mostly talking about the 19 content-based regulations. 20 So it may be useful, and in fact we 21 just got a document that the staff and the NTIA 22 put together for us, which you have here, a 165 1 primer on the public interest obligations of 2 television broadcasters that itself in its 3 table of contents lists mostly the kinds of 4 things that we are talking about. Maybe we can 5 talk a little bit about those. 6 Erwin, if you could, go down through 7 those and talk for a second about each of them. 8 Also, again, these are mainly based on statute, 9 but, of course, in some cases the statutes are 10 very specific on what the obligations are, and 11 in other cases there is a kind of vague 12 approach, and it is either the Court or the FCC 13 or somebody else who stepped in and made this 14 specific. 15 MR. KRASNOW: Right. 16 DR. ORNSTEIN: So we want to have a 17 sense of who has done what and what they mean. 18 MR. KRASNOW: Right. The first 19 requirement listed is program responsive to 20 community needs and interests, and that is what 21 we just discussed is the issues programs list. 22 That is a primary embodiment of something 166 1 discussed by the Federal Radio Commission and 2 the FCC through the ages is about the 3 importance of a broadcaster responding to 4 community needs. 5 Educational, informational 6 programming, that must refer to children's 7 programming. In a very, very contentious 8 rulemaking, the FCC said starting in September 9 of this year broadcasters, television 10 broadcasters, had to air a minimum of three 11 hours per week of core television programming. 12 By the way, when we talk about these 13 various rules and regulations, there are some 14 that the FCC enforces vigorously and some 15 basically that they do not. Some come up 16 through the license renewal process and some do 17 not. 18 Children's programming, I think you 19 can expect, will be an important determinant of 20 whether a broadcaster gets smooth processing of 21 a renewal application. I see parental choice 22 in television programming. I am not sure what 167 1 that -- 2 MS. CHARREN: Ratings. 3 MR. KRASNOW: Oh, you are talking 4 about the V chip. 5 MR. MOONVES: Well, the V chip is 6 later. I think it is the program ratings. 7 MR. KRASNOW: Well, they go together 8 on that, the V chip and the program ratings. 9 MR. MOONVES: Yes, all the letters, 10 G, PG -- 11 MR. KRASNOW: Right. 12 MR. MOONVES: Again, October 1. 13 MR. KRASNOW: That is Congressional. 14 MR. MOONVES: Right. 15 MR. KRASNOW: Then indecency and 16 obscenity, that is something that is in the 17 criminal code, and that is statutory. By the 18 way, there are some who believe -- it is hard 19 to be basically for indecency and obscenity -- 20 but there are some that believe that the FCC 21 should not police that. The licensing agency 22 should not make decisions as to whether 168 1 Pacifica Foundation basically is a good 2 broadcaster. It should be done through the 3 courts, and the courts are better equipped than 4 the FCC in reaching those decisions, like 5 obscenity, about community standards, et 6 cetera. 7 Television advertising, there are 8 very, very few FCC regulations on television 9 advertising. One that relates to children's 10 programming, there are some strict requirements 11 on the amount of advertising that can be 12 broadcast in children's programming. The FCC 13 limits children's programming for children 12 14 years and younger so that, if you have a 15 program that is designed for teen-agers, 16 basically there are no limitations on the 17 amount of commercials that you have. 18 MR. CRUMP: Erwin, how about, along 19 the television advertising, the alcohol? 20 MR. KRASNOW: The what, sir? 21 MR. CRUMP: The alcohol, the liquor, 22 the hard liquor. 169 1 MR. KRASNOW: That is something that 2 a future FCC will decide as to whether there 3 will be, and that is something that it looks 4 like will be a combination of Congressional 5 feedback and the FCC. 6 DR. ORNSTEIN: At the moment it is 7 voluntary. 8 MR. CRUMP: That is what I wanted to 9 get at. There is no ruling on that now? 10 MR. KRASNOW: No, as of now, if you 11 own a television station, you can carry liquor 12 advertising. I am told, and I haven't been to 13 Puerto Rico in a while, that if you go to 14 Puerto Rico you will see rum advertising on 15 Puerto Rico stations on a regular basis. 16 Broadcasters can do that now; FCC has no rules 17 or regulations about that. 18 MR. MINOW: While you are on that, 19 cigarettes is a very good, instructive example 20 of how the government got into that. That 21 started with the FCC requiring, under the 22 fairness doctrine, that anticigarette 170 1 commercials go on. That is how that began. 2 That led eventually to the Congress outlawing 3 cigarette advertising totally. 4 MS. CHARREN: Isn't there still at 5 the Commission a set of requirements for a 6 separation for children between the program and 7 the advertising? 8 MR. KRASNOW: Yes. There are some 9 more policies. 10 MS. CHARREN: Right. 11 MR. KRASNOW: Exactly. There are 12 wholesaling policies and that you cannot mingle 13 commercial content and programming content 14 because children cannot tell the difference in 15 a program as to whether it is a commercial. 16 MS. CHARREN: Right. So there are 17 separators. 18 MR. MOONVES: It also is being used 19 for the star of a television show hawking a 20 product for a toy at the same time. 21 MS. CHARREN: During the show, right. 22 MR. KRASNOW: Right, the so-called 171 1 "ÄÄÄÄ division." 2 MR. MOONVES: Yes. 3 MR. CRUMP: Let's remind ourselves of 4 from a historical perspective, too, that for 5 many, many years the National Association of 6 Broadcasters had a code of conduct for 7 commercial content, and the broadcasters 8 adhered to that strictly or got into deep 9 trouble. That went away when, I believe, a 10 court action struck it down, did it not? 11 MR. KRASNOW: That was a strange 12 court action, yes. 13 Basically, the court action, just 14 briefly, if I were to tell you and as you know 15 the First Amendment right that Congress shall 16 pass no law, you would think that a court would 17 strike down as unconstitutional only a law 18 enacted by Congress or an agency of Congress, 19 but Judge Ferguson in the family viewing case 20 said that the NAB violated the First Amendment 21 by adopting the family viewing provision. That 22 was in the wake of "All in the Family" and 172 1 concern about primetime programming. 2 The NAB said the first hour of 3 primetime had to be viewing acceptable to the 4 family. Judge Ferguson said that what happened 5 is that members of the public complained to 6 Congress. Congress then said to the FCC our 7 constituents are up in arms about programming; 8 do something about it. 9 The FCC said, well, there is not very 10 much we can do because of the First Amendment, 11 no censorship. So the FCC told the NAB do 12 something about it. 13 Judge Ferguson said that, in effect, 14 the NAB was an agent of the FCC and the 15 Congress. With that premise, you can no longer 16 have a regulation that someone can say you did 17 that because you were fearing that the Congress 18 or the FCC would adopt it formally. That is a 19 longish explanation. 20 MR. CRUMP: I think it is good to 21 remember, though, the fact that we as 22 broadcasters were quite willing and did in fact 173 1 enforce it upon ourselves regulations and rules 2 that limited the amount of advertising so that 3 when we get today, well, why are we doing these 4 things and, my God, how many can you run, we 5 tried to set this thing up and then it was the 6 Court that struck it down. 7 MR. MINOW: Harold's point is a very 8 important point. The NAB had a code that set 9 commercial limits and had standards. Our 10 government in a moment of temporary insanity -- 11 MR. CRUMP: Amen. 12 MR. MINOW: -- one of many, in the 13 Antitrust Division of the Department of Justice 14 went to court under the antitrust laws and 15 knocked the code out. It was absolutely nuts. 16 MR. CRUMP: It sure was. 17 MS. CHARREN: But I want to point out 18 that the protections in that code for 19 children's advertising came as a result of 20 strong noise and regulatory tension and 21 articles in newspapers. "It did not grow out 22 of some remarkable concern for children that 174 1 was not connected to anything else," she says 2 gently. 3 MR. GOODMON: That was a voluntary 4 code. 5 MS. CHARREN: Yes. 6 MR. KRASNOW: The other part of the 7 code is Judge Green said that it was a 8 violation of the antitrust laws. When Judge 9 Ferguson's decision came out, the NAB got rid 10 of the programming part of the code, and that 11 left the commercial part. 12 On the commercial part, Judge Green 13 said that the NAB code said that if you have a 14 30-second commercial you cannot put in two 15 15-second commercials that are unrelated. 16 Judge Green said, well, that is inherently 17 anticompetitive. Basically, it is designed to 18 force people to buy 30-second commercials. Art 19 Buchwald thought basically it was crazy that 20 Judge Green was saying we need more commercials 21 on television. 22 In any event, when Judge Green issued 175 1 that decision, NAB, fearing treble damage 2 antitrust lawsuits, basically got out of that 3 business. It is too bad because 4 self-regulation played a very, very important 5 role. It goes on to a certain extent now. 6 Each of the networks has their own code, et 7 cetera, but an industry code at that time made 8 a lot of sense. 9 MR. SUNSTEIN: This is something that 10 should be on our agenda a bit because Les 11 probably knows a lot about this. Senator Simon 12 got enacted an exemption from the antitrust 13 laws four codes that would reduce violence, and 14 that was a very important bill. There are now 15 measures before Congress -- Senator Lieberman 16 was very enthusiastic about them -- that would 17 extend this from violence to lots of other 18 things, including educational programming. 19 It is a messy bill, and it is a 20 little stuck because of the political 21 agreements that came out of the rating issue. 22 The agreement that Harold refers to was 176 1 explicitly put before Congress and invoked with 2 enthusiasm by Senator Lieberman and others as 3 something that could be reintroduced in some 4 other way. Now, whether that is wonderful or 5 awful, it should be part of our thought. 6 DR. ORNSTEIN: Did the Supreme Court 7 ever speak on this issue or was it just the -- 8 MR. SUNSTEIN: No, no, and if Senator 9 Simon's bill became the law of the land, for 10 better or for worse, it is extremely unlikely 11 the Supreme Court would say that that violated 12 the First Amendment. 13 DR. ORNSTEIN: So we definitely 14 should work through some of these issues, 15 including voluntary actions. 16 MS. PELTZ STRAUSS: Can I just add 17 one? 18 MR. CRUMP: I am sorry. Please. 19 MS. PELTZ STRAUSS: Okay. This is a 20 little bit off the beaten track, but I just 21 wanted you to know just for your own 22 information, one thing that is interesting is 177 1 that we approach advertising from a very 2 different perspective. The FCC just exempted 3 advertisements under five minutes' length from 4 the captioning requirements. 5 So, in fact, last week we submitted a 6 request for reconsideration to the FCC to 7 require captioning on advertisements. And our 8 population is complaining that they do not have 9 access to advertisements and that 10 commercialization, or commercials, are a way of 11 keeping informed about products and services. 12 MR. CRUMP: I can recall in the 13 initial days, back in 1956 when I got started, 14 people would talk to me about selling 15 commercials. I was a salesman on the street. 16 We would point out that this was a public 17 service because we would tell them where they 18 could get the cheapest goods, and I liked that. 19 You have just backed that up. 20 MS. PELTZ STRAUSS: It is funny 21 because I do find myself at odds with some 22 other of my colleagues on this. In fact, I was 178 1 also going to mention that you do not need to 2 go to Puerto Rico to get advertisements on 3 alcohol, that the Spanish-speaking, 4 Spanish-language stations right here in America 5 throughout the 50 states also still have 6 alcohol advertising. There is a movement to 7 try to end that. 8 In my efforts to obtain more 9 advertising for my clients I actually came at 10 odds with somebody else who was trying to 11 curtail advertisements for their clients, for 12 the Spanish-speaking clients. I find myself 13 having funny bedfellows on this one, but our 14 clients want access to advertising. 15 MR. CRUMP: Sure. 16 MS. PELTZ STRAUSS: They have never 17 had it before. 18 MR. CRUMP: I was one of the founders 19 of one of the Spanish-language networks here in 20 the United States back in its early days in 21 1985. We would carry some hard liquor 22 advertising towards the tail end of the year 179 1 during the holidays. 2 I must admit I would spend an 3 enormous amount of hours on the telephone 4 answering questions to people who would 5 literally blast away, I mean, from Hispanics 6 who would say you are contributing to 7 alcoholism, which there is already a high 8 incidence thereof, and all of the related 9 ancillary problems. 10 I would get them also to argue by 11 telling me, I said, "Well, how do you deal with 12 automobiles? They kill people, too. Do we not 13 advertise Fords? Do we not advertise sugar 14 products because of their high content of 15 sugar?" So, it is a very difficult slope to 16 travel when you start discussing these 17 particular issues, very tough. 18 Ironically, let me just add this, I 19 now work for -- I should say I am on the board 20 of the Corporation for Public Broadcasting 21 where encroachment of commercials is becoming a 22 problem, yet the 1967 Act, clearly those that 180 1 see it see that it was to be commercial-free. 2 MR. GLASER: I just wanted to thank 3 NTIA for pulling this document together; it is 4 extremely valuable. I had a question probably 5 for the NTIA folks. I assume that everything 6 in here applies to spectrum broadcasters. I 7 was curious if it would be simple to do a form 8 of this document that described the subset or 9 maybe it is a side set of regulations that 10 apply to satellite broadcasters and also to 11 cable transmissions. 12 It would be relevant to understand as 13 we are trying to look at things moving forward 14 if there are categories of obligations that 15 span all of those, for instance, the children's 16 area, a whole set of them where you can say 17 that a lot of principles that we think about 18 ought to apply across the board. That would be 19 very valuable. 20 MS. CHARREN: I second that. 21 MR. KRASNOW: To continue on? 22 DR. ORNSTEIN: Yes, let's just finish 181 1 these. 2 MR. KRASNOW: Next, is access to 3 broadcast by candidates for political office. 4 That refers to the requirement in the 5 Communications Act that every candidate for 6 federal office has an absolute right to access 7 on a radio or television station, has the right 8 either to purchase time or to get program time. 9 A station basically cannot say we are not going 10 to carry that advertising or give you that 11 programming time. 12 DR. ORNSTEIN: It should be noted 13 that is for federal candidates. 14 MR. KRASNOW: Only. 15 DR. ORNSTEIN: We now have some 16 considerable controversy over state candidates, 17 including a case here in Virginia right now. 18 MR. KRASNOW: There is one in 19 Arkansas, Forbes v. Arkansas. 20 MR. MINOW: Unless you are Ross 21 Perot, who could buy a half hour. 22 DR. ORNSTEIN: Yes. 182 1 MR. KRASNOW: The FCC has made very 2 clear that, if you are a candidate for a state 3 or local office, a broadcaster could say we are 4 just not going to sell advertising for that 5 particular race on that. 6 Then there is something called a fair 7 break doctrine, which I had to read on to see 8 what that was. I have never heard that phrase 9 before, and I gather that it talked about some 10 corollaries, adjuncts of the fairness doctrine 11 that have still survived, and that is the 12 political editorializing rule and the personal 13 attack rule. 14 I gather there is an attempt by the 15 NAB and the radio television news directors to 16 get a court of appeals or a court to mandate 17 the FCC to act in that area. Anyway, those 18 rules are still on the books, but I dare say 19 that the Commission does not enforce them. 20 Part of it is the Commission earlier said that 21 they are subsets of the fairness doctrine, and 22 the fairness doctrine does not meet the public 183 1 interest standard and is unconstitutional. 2 We have mentioned the 3 closed-captioning requirement. That is 4 something from Congress, and the FCC recently 5 adopted rules that go into effect next year. 6 Then lastly is mentioned the main 7 studio location of the local public inspection 8 file. Every broadcaster is required to have a 9 presence in their principal city coverage 10 contour and to have a management and staff 11 presence there, and they are also required to 12 maintain in their community of license a file 13 available to members of the public. In the 14 file, they have to put copies of their renewal 15 application, their children's programming 16 reports, issues, program statements, ownership 17 reports, employment reports, et cetera. 18 MR. MOONVES: Erwin, there are a 19 couple. Could you deal with lowest unit charge 20 and comparable use rate, discuss that for a 21 minute? 22 MR. KRASNOW: Yes. It is just lowest 184 1 unit charge -- I was going to say it sounds 2 simple, but basically there are lots and lots 3 of FCC interpretations of that phrase. You can 4 see Congress passed this law. It says that, if 5 you are a political candidate, whether federal, 6 state or local, you are entitled to the lowest 7 unit charge that the broadcaster charged the 8 commercial advertisers. 9 If a commercial advertiser buys a 10 schedule over a year's time of 6,000 spots for 11 $300 and a politician wants to buy one spot and 12 if it is that same class and rate of time, you 13 have to give the politician the benefit of the 14 lowest unit charge. 15 Then there is a doctrine of 16 comparable charges. The lowest unit charge 17 only applies 45 days before a primary, 60 days 18 before an election, and if it is outside of 19 those periods, you have to give comparable 20 rates. You cannot discriminate against 21 politicians. 22 MS. CHARREN: There is one addition, 185 1 actually, I think, to the public inspection 2 file concept, which is under the new guidelines 3 for the three hours. The FCC said that the 4 station should get the message out in addition 5 to putting it in the public file, that you get 6 it out to the public. 7 MR. KRASNOW: That is a good point. 8 There are a whole series of affirmative actions 9 that broadcasters have to take in notifying the 10 media as to what their core programming is. 11 MS. CHARREN: Right. 12 MR. KRASNOW: They have to tell the 13 public who to contact at the station, carry 14 announcements about that. That just went into 15 effect earlier this year. The three-hour 16 requirement went into effect last month. 17 MS. SOHN: Erwin, I just wanted to 18 make two quick points. On the political 19 editorial/personal attack rule, the pertinent 20 authority, the most pertinent authority in my 21 mind, anyway, is Red Lion, which specifically 22 upheld those two rules. Also, I believe the 186 1 fair break doctrine only applies to, like, 2 religious points of view. 3 Is that right, Karen? They have to 4 make an opportunity available? It is has been 5 particularly applied to religious broadcasters 6 presenting one point of view? 7 MS. EDWARDS: I think it has not been 8 applied very much, somebody said that, and, to 9 the extent that it has been applied, it has 10 been applied to religious broadcasters. 11 DR. ORNSTEIN: Any other comments or 12 questions? 13 MR. MOONVES: Is there an assumption 14 that these rules currently exist for digital as 15 well? In other words, that they have been 16 transferred to digital until something else is 17 enacted to change that? 18 MS. EDWARDS: Actually, the FCC 19 specifically says that the current public 20 interest obligations will continue in effect 21 until they determine whether they want to 22 change them. 187 1 DR. ORNSTEIN: Erwin, thank you very 2 much for your public service here today. 3 MR. MOONVES: Thank you. 4 DR. ORNSTEIN: We will take about a 5 10-minute break, and then we will come back and 6 talk more specifically about Telecommunications 7 Act. 8 (Recess) 9 MR. MOONVES: Can we reconvene? The 10 next briefing will be given by our own Karen 11 Edwards who will talk about the Telecom Act of 12 1996, and after that is over we will be opening 13 up the microphones for public comment. 14 Karen, it is all yours. 15 BRIEFING II: RELEVANT PROVISIONS 16 OF TELECOMMUNICATIONS ACT OF 1996 17 AND THE FCC'S IMPLEMENTATION EFFORTS 18 MS. EDWARDS: Great. Well, my 19 assignment, as Mr. Moonves just said, is to 20 give a very brief briefing of the relevant 21 provisions -- 22 DR. ORNSTEIN: Karen, let me just 188 1 stop you because we are having trouble hearing. 2 We would like you to come up here. 3 MR. MOONVES: Good idea. 4 (Pause) 5 MS. EDWARDS: Yes. I was saying that 6 my assignment is to give a very brief briefing 7 on the relevant provisions of the Tele- 8 communications Act of 1996. 9 Are we still having a problem 10 hearing? 11 And to say a word or two about how 12 the FCC has gone about implementing these 13 provisions. I realized just from listening 14 that a lot of you are experts already on maybe 15 I should say the DTV Telecom Act issue, and you 16 have probably followed this issue from draft 17 bill to the actual enactment. 18 As Dr. Ornstein indicated previously, 19 a discussion will follow my presentation, so my 20 purpose here is to simply provide a bare-bones 21 framework and allow you to put the meat on the 22 bones. I realize a lot of the information I am 189 1 going to talk about is in your briefing book, 2 so you shouldn't have any problem with that. 3 Let me start by saying the 4 Telecommunications Act, as you know, 5 established a basic framework by which the FCC 6 would issue licenses for advanced television 7 services which have come to be called "digital 8 television" because of the signal that will be 9 used to transmit. 10 In April of this year, the FCC issued 11 an order, the fifth in this proceeding, on 12 advanced television sort of fleshing out the 13 Congressionally-mandated framework and 14 promulgating a licensing regime for digital 15 television. 16 The other significant fact here is 17 that the Balanced Budget Act, the recent one 18 passed, modified several aspects of the FCC's 19 plan. What I am going to do is I am going to 20 take basically maybe just five minutes or so 21 and just talk about six main areas. 22 I took these areas primarily from the 190 1 law itself or from the FCC's reports. My list 2 of six is, one, eligibility to receive digital 3 television licenses; number two, minimum 4 service requirements imposed on digital 5 television licensees; number three, ancillary 6 and supplemental services; number four, the 7 public interest requirement, which is most 8 relevant to you; number five, the construction 9 schedule; and number six, the return of the 10 analog spectrum. 11 What I will do for each of these is 12 give you the Telecom Act provision and how the 13 FCC has implemented it, and if the Balanced 14 Budget Act changes it I will tell you about 15 that as well. So let's dive in to my list of 16 six. 17 First of all, eligibility to receive 18 digital television licenses. You know that the 19 Act provided that, if the FCC decided to issue 20 DTV licenses, it should restrict eligibility to 21 the existing broadcasters, that is, those who 22 have licenses now and those who hold 191 1 construction permits, permittees. 2 We also know that the FCC decided to 3 award digital television licenses, or else we 4 would not be here, to full-power broadcast 5 licensees and permittees. It actually pledged 6 in its original order to explore ways to enable 7 low-power television operators to convert to 8 digital television at some point. 9 Well, the Balanced Budget Act said, 10 no, the FCC is directed to find ways to assure 11 that sufficient spectrum or adequate amount of 12 the frequency will be allocated to low-power 13 television stations so that they can continue 14 their operations. That is about eligibility. 15 Let's move to minimum service requirements. 16 The Act did not define any minimum 17 service requirements for DTV licensees, but the 18 FCC has mandated some requirements. One, you 19 have to offer at least one free digital 20 programming service, one free digital 21 programming service that operates during the 22 same hours as the licensee's analog channel and 192 1 that has at least the same resolution as the 2 broadcaster's existing analog service. 3 Second -- 4 MR. BENTON: Excuse me, are you 5 speaking to something in this book, and, if 6 not, do we have any paper on what you are 7 saying or not? 8 MS. EDWARDS: You do not have a paper 9 on my presentation, but I pulled this from 10 things that are in that book. One, the Telecom 11 Act provisions themselves, they are in the back 12 and, two, the FCC's orders are also in the back 13 of your briefing book. 14 MR. MOONVES: But there is no paper 15 that you can follow? 16 MS. EDWARDS: There is no paper to 17 follow. I apologize. 18 The other thing that the FCC said is 19 that digital broadcasters need not broadcast a 20 specified amount of high-definition television, 21 so-called HDTV. Also, they said in terms of 22 simulcasting requirements, for the first five 193 1 years of operation there are no simulcasting 2 requirements. 3 What that means for the future is in 4 Year 6 (I said for the first five years no 5 requirement to simulcast any of the analog 6 programming on the DTV channel) 50 percent 7 accrues in Year 6, so you have a 50 percent 8 simulcasting obligation in Year 6, 75 percent 9 in Year 7, and then 100 percent in Year 8 and 10 each subsequent year until the analog channel 11 is terminated and returned for reallocation. 12 Let us move on quickly to ancillary and 13 supplementary services. 14 Well, what happened is the Telecom 15 Act required the FCC to allow DTV licensees to 16 offer these services over their new facilities, 17 but there were several conditions attached and 18 here they are. One, it had to be consistent 19 with the transmission technology or standard 20 that was designated by the FCC. 21 Two, the services must be subject to 22 the same FCC regulations that apply to 194 1 analogous services offered by nonbroadcasters. 2 Three, the FCC has the flexibility 3 granted to them by the Telecom Act to prescribe 4 any other regulations that may be necessary to 5 protect the public interest, giving some 6 flexibility to the expert agency. 7 Lastly, to the extent that a 8 broadcaster chooses to provide ancillary 9 services, they have to pay a spectrum fee -- I 10 think that was raised earlier -- that the FCC 11 will determine later. 12 One thing I did not say is what are 13 these services. What are these ancillary and 14 supplementary services? What the FCC has said 15 or how they have defined them is to include 16 everything except free over-the-air service. I 17 think what will happen is the FCC will 18 eventually initiate a rulemaking to determine 19 some of these open questions, like the spectrum 20 fee, for example. 21 Let's move to the heart of the 22 matter, then, the public interest requirement. 195 1 I will spend a little bit more time here 2 because it seems like it is probably the most 3 relevant provision to you. What the 1996 Act 4 said is that nothing in its DTV provisions 5 relieves broadcasters from their obligation to 6 serve the public interest. 7 It also required all broadcasters who 8 offer these ancillary and supplemental services 9 that I was talking about before to demonstrate 10 during license renewal that all of their 11 programming services are being operated in the 12 public interest. 13 Finally, the Telecom Act specified 14 that, if a broadcaster violates the FCC's rules 15 governing ancillary services, that would 16 reflect negatively on the broadcaster's 17 qualifications to remain a licensee. 18 Well, what has the FCC done in this 19 area? They have done basically four things. I 20 am a lawyer, so I tend to think in lists. I 21 apologize. One, the FCC has said very clearly 22 that although the business and the technology 196 1 may be different, dynamic, evolving, 2 broadcasters will remain public trustees of the 3 public's airwaves. 4 They have also said that they will 5 issue a notice of inquiry to collect and 6 consider all of the views on what these public 7 interest obligations should be. That is where 8 I think the recommendations of this Committee 9 come in. 10 Third, they have put broadcasters and 11 members of the public on notice that the 12 existing public interest obligations continue 13 to apply until they decide otherwise. That was 14 the question Dr. Ornstein asked me earlier. 15 Finally, the FCC has said, you know 16 what, in terms of what the public interest 17 obligations of digital television broadcasters 18 will be, it is all up for grabs. We have not 19 prejudged this. We may adopt new public 20 interest rules or not. 21 Moving on, construction schedule. 22 There is no specific guidance from Congress on 197 1 this. It was not in the Act, and they have not 2 done it since. In the absence of specific 3 guidance from Congress, the FCC has established 4 some deadlines for constructing DTV stations. 5 I will run through those quickly. For the four 6 networks ABC, NBC, CBS, and Fox, in the top 10 7 television markets, they have to construct 8 their facilities by May 1, 1999. 9 MS. SOHN: Excuse me? 10 MS. EDWARDS: May 1, 1999. For those 11 same networks, ABC, NBC, CBS, and Fox, but for 12 the affiliates in television markets 11 through 13 30, they have to construct theirs by November 14 1, 1999. All other commercial stations have to 15 construct by May 1, 2002, so they have a bit 16 more time, and all noncommercial stations by 17 May 1, 2003. Okay, that is what we know about 18 construction. Finally, I want to talk a bit 19 about the return of the analog spectrum. 20 MS. SOHN: Karen, can I just ask a 21 question vis-a-vis the rollout? 22 MS. EDWARDS: (Nodding) 198 1 MS. SOHN: Is there a provision, I 2 don't recall in the Commission's decision, that 3 provides for request for extensions of the 4 rollout dates, or is it just the return date? 5 MS. EDWARDS: I think it is just the 6 return date, but I can check that. 7 MS. SOHN: Okay. 8 MS. EDWARDS: Sure. In terms of 9 return, though, what the Act required is that 10 broadcasters agree to surrender one of the 11 licenses as a condition of receiving the second 12 DTV license. The FCC has set 2006 as a target 13 date for a return of the analog license that 14 broadcasters are currently operating on. The 15 FCC pledged to monitor, though, the deployment 16 of digital television and to modify the 17 surrender deadline if it was necessary. 18 Here comes again the Balanced Budget 19 Act, and what that Act said was that no analog 20 broadcast license may be renewed beyond 21 December 31, 2006, so that is the drop-dead 22 date so to speak. 199 1 At the same time, there is an escape 2 clause. Congress directed the FCC to extend 3 the deadline in certain television markets, and 4 here they are. If one of those big four 5 networks that I talked about before, NBC, ABC, 6 CBS, and Fox, is in a market that is not 7 broadcasting a digital broadcasting signal, 8 assuming that the FCC finds that the station 9 has exercised due diligence in trying to deploy 10 DTV, then there is an escape valve. 11 Also, if the digital to analog 12 converter technology is not generally available 13 in the market, another escape. Finally, if 15 14 percent or more of the households in the market 15 do not subscribe to a multichannel provider, 16 meaning cable, MMDS, DBS, that retransmits at 17 least one digital programming service and those 18 households do not have a digital television 19 set, then again an escape clause. 20 I think that is in brief what the law 21 says, what the FCC has done and how Congress 22 has responded. Again, I realize that a lot of 200 1 you might have been following this a lot more 2 closely than I have, and so I know Dr. Ornstein 3 wants a little bit of a discussion here. 4 DR. ORNSTEIN: Well, what Karen has 5 done is give us the facts. I mean, this is 6 what is in the law and this is what the FCC has 7 explicitly held. We really need to go through 8 that, what it tells us about our particular 9 charge, and, obviously, added on to that was 10 the president's Executive Order for us, but 11 there is also, of course, a lot more of 12 background here and a lot more that is going on 13 out there. 14 We know, for example, that at least 15 some members of Congress believe that there 16 were more explicit pledges made by broadcasters 17 about what they would provide here on 18 high-definition television, even though the Act 19 itself does not say that at all. We should 20 probably spend a little time going through what 21 the actors have said and what they have done 22 and how that bears on us. If anybody has any 201 1 comments to that, that will be a part of what 2 we are doing. 3 Cass? 4 MR. SUNSTEIN: I just have a question 5 about one sentence in the FCC's opinion on 6 public interest obligations of digital 7 broadcasters. I just do not understand what 8 specifically the authors are referring to. The 9 sentence, and it is a very simple sentence, it 10 is on page 23, but, if you do not want to refer 11 to it, I am just going to read it: "The 12 dynamic and flexible nature of digital 13 technology creates the possibility of new and 14 creative ways for broadcasters to serve the 15 country in the public interest." 16 Now, this is not a question about 17 getting into the technological issues for 18 tomorrow, but just what is the FCC thinking 19 when it says that? Do you know what that -- 20 MS. EDWARDS: Is that a question to 21 me? 22 MR. SUNSTEIN: Yes. 202 1 MS. EDWARDS: I was hoping that I 2 could just give the facts and give no 3 interpretation today. I am not sure exactly 4 what the FCC is thinking. I do not know. If 5 someone is a bit more informed about that -- 6 MR. GOODMON: It sounds like a CYA to 7 me. 8 MR. DECHERD: May I speculate? 9 Cass, I will speculate and qualify it 10 as being for those who followed the history of 11 the technology period, you will know that the 12 Grand Alliance, which Dick Wiley chaired, had 13 clear standards which the Commission adopted in 14 December 1996, I believe it was, and that would 15 have made more simple the transition to HDTV 16 because it would have set a single standard for 17 all of us moving to HDTV. 18 Equipment manufacturers would have 19 known what the construct is within which they 20 were supposed to deliver equipment either for 21 consumer purposes or the equipment internal to 22 television stations to pass through a 203 1 high-definition television signal. 2 Chairman Hunt and others on the 3 Commission, I believe, are on the record as 4 saying that they found that restrictive because 5 it did not contemplate the manner in which the 6 computer industry would deliver various video 7 signals to these same monitors or television 8 sets. In effect, the Commission opened up the 9 technological equation rather than say the 10 Grand Alliance is it. 11 You get into some very arcane things 12 that I am sure someone more qualified than 13 yours truly will talk about tomorrow. Chairman 14 Hunt acknowledged as much at Senator McCain's 15 recent hearing on this conflict, as Norm said, 16 what had broadcasters agreed to do and on what 17 timetable. 18 So, I think that the Commission has 19 been aggressive in expanding the HDTV 20 opportunity beyond broadcasters. In fact, the 21 timetable that Karen set forth has been 22 modified partly through the Budget Act. We are 204 1 on a shorter time fuse, as are any top 10 or 2 top 20 broadcasters. It is November 1998, I 3 believe, now. 4 We ought to clarify that because I 5 think it is an important point in terms of the 6 rollout. Right now, there has not to this 7 point been a lot of clarity about what 8 programming and what degree of programming the 9 networks are going to provide their affiliates 10 in high-definition, and that has caused a lot 11 of consternation on the part of several people 12 on the Hill. 13 MR. MOONVES: November 1, 1998. 14 MR. DECHERD: Yes, for the top 20 15 markets, if I am not mistaken. 16 MS. SCOTT: For the top 20? 17 MR. MOONVES: Affiliates of four 18 networks in the top 10 markets, 11 through 30, 19 November 1, 1999; all commercial television, 20 May 1, 2003, and return analog in 2006 is 21 mentioned. 22 MR. DECHERD: With one caveat, which 205 1 is Commissioner Ness then got on the phone and 2 asked us and others in the 10 through 20 to 3 ÄÄÄÄ sooner. For example, a number of 4 broadcasters are committed, as we are in the 11 5 and 12 markets, to be there by November 1998. 6 MR. MOONVES: Actually, correction, I 7 think the November 1, 1998, some of them were 8 voluntary. 9 MR. DECHERD: Yes, that is what I am 10 saying. 11 MR. MOONVES: I think the mandatory 12 is May 1, 1999, because we have four of our top 13 10 affiliates on November 1, 1998, of voluntary 14 and then three more on May 1, 1999. 15 MR. DECHERD: I cannot tell you 16 whether it was a formal action, but I know we 17 all got committed. 18 MR. MOONVES: Yes. Yes, that is 19 correct. 20 MR. DECHERD: In direct conversation 21 with the Commission. 22 MR. MOONVES: Right. 206 1 MR. SUNSTEIN: Voluntarily whether 2 you like it or not? 3 UNIDENTIFIED MEMBER: No, it was 4 voluntary. Norm, or Karen, I heard Bob mention 5 the Grand Alliance. I have read some 6 references to it in some of the readings we 7 had. Can somebody give us just a brief 8 background on who the Grand Alliance is? 9 DR. ORNSTEIN: Tomorrow morning I 10 should note that Dick Wiley -- 11 MR. MOONVES: He is the architect of 12 that. 13 DR. ORNSTEIN: He is the architect of 14 that will be appearing and give us all of that 15 history and background. 16 MR. MOONVES: Yes, Charles? 17 MR. BENTON: It is really a point of 18 process. I found Karen's paper exceedingly 19 interesting but of great detail and far beyond 20 my capacity to absorb the detail. It is an 21 enormous amount of information thrown at us 22 very quickly. I think it would be really 207 1 helpful if we could not only get the paper so 2 we can have it but also have staff 3 recommendations as to where we ought to focus 4 our attention. 5 We are rapidly moving to a state of 6 information overload here, and I think we need 7 staff help in not only giving us the facts but 8 in giving us some points of judgment about 9 where we should focus our attention. Time is 10 short and the challenge is huge, and we do need 11 some help. 12 MS. EDWARDS: Maybe, Mr. Benton, you 13 could clarify exactly the kind of help you 14 wanted in terms of staff recommendations 15 because I want to make certain our staff versus 16 your staff -- I want to make sure we do not 17 step on toes. 18 MS. CHARREN: A summary. 19 MR. BENTON: No, if you are doing 20 relevant provisions of the Telecommunications 21 Act of 1996 and FCC implementation efforts, 22 obviously, there are many relevant provisions. 208 1 You have given us a huge amount of factual 2 information, so, really, as we look at the 3 challenges of this Committee, where should we 4 focus and go in depth? 5 We are going to make an impact 6 insofar as we are able to focus on a few things 7 and do them really well. We need your help not 8 just in giving us the facts but pointing us in 9 the direction that you feel, given the facts -- 10 you do this full time -- of where we really can 11 make a difference and get more information. 12 That would really help us in our work. 13 MR. MOONVES: Peggy? 14 MS. CHARREN: If you find that is too 15 focused on what sounds like recommendations, 16 you can think of it as a summary, so that it is 17 shorter, I mean. 18 MR. MOONVES: No, I think the point 19 is that we are all coming at this from 20 different points of expertise. Some of us need 21 help in certain areas, others in other areas. 22 I mean, we have four spectacular legal minds or 209 1 more, and some of us laymen may need a little 2 help in that area. I think that is the point. 3 DR. ORNSTEIN: Let me just note that 4 the fact that we even got a briefing book out 5 to you, given the timeframe, is a testament to 6 the incredible work that our staff has done. 7 MR. MOONVES: Yes, congratulations. 8 DR. ORNSTEIN: We had every 9 expectation and it took some extra effort 10 because we wanted to be sure that you had 11 something in your hands before we convened. It 12 will be supplemented with some additional paper 13 here. Also, keep in mind that we have staff 14 through NTIA giving recommendations. We have 15 to be very sensitive to what their own vision 16 of their own role is, and so it is not going to 17 be one where they are going to be pushing us in 18 any directions. 19 MR. MOONVES: Let me just add to 20 that. I think one of the difficulties of this 21 commission is we are dealing with a huge amount 22 of information. We do have to try to hone it 210 1 into a level that is manageable, and it is a 2 difficult task for all of us. 3 MS. PELTZ STRAUSS: If I can add also 4 to that? 5 MR. MOONVES: Yes, Karen. 6 MS. PELTZ STRAUSS: I think it is 7 going to help tremendously when we learn what 8 digital television is tomorrow because I think 9 many of us do not know what it is anymore. I 10 do not know whether the FCC knows what it is 11 anymore. 12 To answer your question, I can just 13 give you a very small example of something of a 14 new and creative way that broadcasters might 15 serve the public interest, just as a way of 16 showing what might be one difference between 17 broadcasting and digital or, rather, analog and 18 digital. Again, from my experience, it is the 19 access issue. Closed captioning, right now 20 there is one kind of closed captioning for 21 every program. 22 Well, with digital television, that 211 1 does not have to be the case, and there could 2 be two different strains of closed captioning 3 going to the viewing public, one perhaps in a 4 foreign language and one perhaps in a more 5 elementary language for children while one is 6 in a more adult language. I am not saying that 7 these are necessarily things that I am going to 8 be advocating for, but that is an example. 9 Also, video description which 10 provides more narrative for programming right 11 now has not been seen with favor because there 12 is only one second audio channel, but with 13 digital television, if there are multiple 14 second audio channels, which would be third, 15 fourth and fifth, then that opens up the 16 possibility for video description. 17 That is just two examples of where in 18 the past there might not have been a public 19 interest obligation for this type of access, 20 but there might be with digital television. 21 But, then again, there may be a multitude of 22 others that I do not know of and that nobody 212 1 else here knows of because we are not quite 2 sure what digital television is yet. 3 MR. MOONVES: I think tomorrow 4 morning we will get a better idea of that 5 between digital and analog. 6 DR. ORNSTEIN: Let me also suggest to 7 you that we are going to try as best we can to 8 keep from getting stupefyingly technical as we 9 go about this. We all have homework to do. 10 One of the things I would ask all of 11 us to do is, if we find things that are 12 readable and informative in the areas that we 13 have deal with, share it with us and we will 14 try to make sure that we keep a kind of ongoing 15 reading schedule out there, some of which we 16 can do just over the Web site or e-mail, just 17 to let you know what is there. Indeed, we may 18 be able to put some of those things up on the 19 Web site so that you can get access to them 20 directly without having to mail a bunch of 21 stuff to you. We should try wherever we can to 22 share some of these things. 213 1 I know the industry, the 2 manufacturers, who have a very strong interest 3 in this, are themselves putting out some 4 materials explaining what digital television 5 is, some of them in very readable form. So we 6 will try to do what we can to bring us all up 7 to speed. 8 MS. SOHN: Norm, could I just ask? 9 You said that Dick Wiley is going to be 10 speaking tomorrow about the Grand Alliance. Is 11 anybody from the computer industry who is going 12 to talk about their system as well? 13 DR. ORNSTEIN: Tomorrow, no, but, 14 presumably at our next meeting, yes. 15 MR. MOONVES: Our next meeting, the 16 panel that Rob is going to put together we will 17 have a lot of different people from different 18 technical areas. I urged him to try to keep it 19 as simple as he could. 20 DR. ORNSTEIN: Tomorrow is our first 21 cut, basically. 22 MR. MOONVES: Yes. Anybody else? 214 1 Any other further comments on the Tele- 2 communications Act? 3 MR. GOODMON: I have read it twice. 4 Is it clear whether they intended for the 5 public interest obligations to apply to all of 6 the channels if you do multichannels or just 7 the free channels? I have read it twice and 8 decided I could not tell. 9 MS. SCOTT: What page did you read it 10 on? 11 MR. GOODMON: The public interest is 12 on page 45 of the Act -- was it 45? -- I mean, 13 Section 45. 14 MS. SOHN: Section 201. It is not, 15 like, paginated and that is part of the 16 problem. Are you talking about the FCC, Jim, 17 or Congress? 18 MR. GOODMON: The FCC. 19 MR. SUNSTEIN: The quote on page 22 20 of the FCC opinion, is that what you are 21 referring to? 22 MR. GOODMON: Yes. 215 1 MR. SUNSTEIN: It says, "Nothing in 2 this section shall be construed as relieving a 3 television broadcasting --" 4 MR. GOODMON: Right. 5 MS. EDWARDS: Jim, is the question 6 whether the public interest obligations attach 7 to the broadcast license, the digital broadcast 8 license, or to the free over-the-air channel 9 that has to be provided? Do I understand your 10 question correctly? 11 MR. GOODMON: Well, we could be doing 12 multichannels. 13 MS. EDWARDS: Right. 14 MR. GOODMON: Some of those channels 15 could be pay channels. I mean, we are jumping 16 all around now. Does each channel, each 17 service, have those requirements? 18 MS. PELTZ STRAUSS: Here is a 19 follow-up question. Will each channel be 20 required to apply for renewal of the license? 21 There will only be one renewal of the license. 22 MR. GOODMON: There is only one 216 1 license. 2 MS. PELTZ STRAUSS: There is only one 3 license. So the question is, in determining 4 whether that renewal is owing and should be 5 forthcoming, are they going to take into 6 consideration the public interest obligations 7 of multichannels and not just the one? Will 8 that be one of the considerations? 9 MS. SOHN: Well, Karen, if I could 10 try to answer Jim's question? 11 MS. EDWARDS: Sure. 12 MS. SOHN: There is actually in 13 Section 201 of the Act, which is replicated in 14 the briefing book, there is actually two 15 separate public interest requirements, that is, 16 Section (b)(5), which when talking about the 17 ancillary and supplementary -- well (b)(5) 18 actually is a catch-all, that the Commission 19 could prescribe such other regulations as may 20 be necessary for the protection of the public 21 interest, convenience, and necessity. 22 Actually, I am sorry, there are three public 217 1 interest provisions. I forgot about that. 2 MR. GOODMON: Where are you now? 3 MS. SOHN: The first one is in 4 Section (a)(2), and it says: 5 "If the Commission determines to 6 issue additional licenses for advanced 7 television services, the Commission shall adopt 8 regulations that allow the holders of such 9 licenses to offer such ancillary and 10 supplementary services on designated 11 frequencies as may be consistent with the 12 public interest, convenience, and necessity." 13 I would argue that means that some 14 kind of public interest standard would apply. 15 It obviously would depend on what you are 16 providing on those ancillary and supplementary 17 services. If you are providing a wireless 18 paging service, obviously, you are not going to 19 demand the same kind of public interest 20 obligations as you might if you are doing 21 something else. 22 Then, Section (b)(5) is the catch-all 218 1 phrase, "In prescribing the regulations 2 required by Section (a), the Commission shall 3 prescribe such other regulations as may be 4 necessary for the protection of the public 5 interest, convenience, and necessity." Some of 6 the exciting stuff that lawyers do. 7 Then, there is Section (d), which is 8 mentioned on page 22 of the Commission's 9 section, which is -- I do not need to read it 10 to you. You can read it for yourself. 11 Obviously, the public interest, although 12 Congress decided not to define it specifically, 13 obviously, it is something they wanted to 14 attach to both the ancillary and supplementary 15 and the main channel. 16 DR. ORNSTEIN: Let me, if I may, take 17 a couple of minutes to go beyond this just to 18 offer a little what can easily be challenged 19 and may very well be, the interpretation of a 20 bit of what went on. I do not want to go into 21 great detail. 22 When Congress considered all of this, 219 1 a lot of people were saying a lot of different 2 things. Clearly and obviously, we got into 3 some considerable controversy over whether this 4 spectrum would be auctioned off or given or 5 traded. A number of members of Congress said 6 at the time and some in the industry said at 7 the time that this was a one-for-one trade that 8 would be a single channel of high-definition 9 television in return for a single channel of 10 analog television. 11 There was a considerable amount of 12 debate and discussion and dispute about that. 13 In the Act itself, as Karen made clear, it does 14 not say that. It, indeed, very explicitly 15 makes clear that there will be many uses, some 16 of them ancillary and supplemental ones, and 17 that for those ancillary and supplemental ones 18 that go beyond a single channel of 19 high-definition for a single channel of analog, 20 that the FCC will determine fees for those 21 purposes. But it does not explicitly say that 22 there will be just the one. 220 1 When a prominent member of the 2 broadcast community said that we don't know 3 where the market will take us, and we might 4 very well consider just having six channels and 5 not go to high-definition television, very 6 prominent members of Congress, particularly 7 those who had been most active against an 8 auction said we have been betrayed. They 9 called broadcasters to the carpet and said our 10 understanding is you are going to do 11 high-definition television, and we had some 12 hearings, including some contentiousness in 13 those hearings, and there was a voluntary 14 promise made. 15 MR. MOONVES: That broadcaster did 16 change his mind very quickly. 17 DR. ORNSTEIN: Yes. 18 MR. MOONVES: He was not speaking 19 with the authorization of the entire industry. 20 I just wanted to clarify. 21 DR. ORNSTEIN: There was a voluntary 22 statement made that's voluntary the way so many 221 1 of these other things are voluntary, that of 2 course we are all going to do high-definition 3 television. Clearly, we are going to have some 4 discussion about what directions we go in down 5 the road. 6 Let me also suggest to you the Act 7 itself did not address in any great detail, as 8 we have seen, public interest obligations. It 9 pretty much left it up to the FCC, although, 10 obviously as we all know, Congress at any 11 moment can step in and itself define or 12 redefine the public interest obligations. 13 The FCC is now charged with at least 14 beyond saying that there will be a continuation 15 of existing obligations. Until there is 16 something else, the FCC is charged with a rule- 17 making that will look at these things. 18 I say all this because we have to ask 19 ourselves where we fit in. Where we fit in 20 basically is that the president and the vice 21 president, who have a strong and abiding 22 interest in this issue broadly, plus, as they 222 1 have indicated, a strong and abiding policy 2 interest in other things like campaign finance 3 reform, have created us as an advisory body 4 that reports specifically to the vice 5 president. 6 But we have to be mindful of the fact 7 that these other entities out there are 8 obviously going to be involved in the 9 policymaking process of implementing what 10 standards there are, so it is important for all 11 of us to realize that. If there is more to be 12 added to that or if I am inaccurate in some 13 way, anybody intervene. 14 MR. BENTON: Just to go back to Jim's 15 question, which he has raised twice and I think 16 is a very important question and we should get 17 some clarification on the point he has raised, 18 unless I am reading this wrong, and I am not a 19 lawyer, in the FCC section here in our books, 20 relevant section of FCC orders implementing 21 Section 201 on page 22, under Section 48, where 22 it says "Decision," it reads at the end of the 223 1 decision point: 2 "In enacting this provision, Congress 3 clearly provided that broadcasters have public 4 interest obligations on the program services 5 they offer regardless of whether they are 6 offered using analog or digital technology." 7 It seems to me that that conclusion 8 on the decision point answers the question that 9 Jim has raised, and, if it does not answer it 10 and it is still ambiguous, we should get this 11 cleared up so that we understand. 12 MR. SUNSTEIN: Just a lawyer's point, 13 it is hard to answer this without knowing the 14 technology. I think Jim's question is suppose 15 you have multiple program streams going onto a 16 single station and one stream is, let's say, 17 educational and another set of streams, maybe 18 four, are not, has the obligation been complied 19 with? Is that your question? 20 MR. GOODMON: (Nodding) 21 MR. SUNSTEIN: Okay. Then I can 22 answer, which is there is a principle of law 224 1 which says where a statute is ambiguous the 2 agency's interpretation prevails so long as it 3 is reasonable. 4 I think we might think that Congress 5 has done a bad job here, but the FCC probably 6 has discretion, so long as it has reason on its 7 side, to answer Jim's question either way; that 8 is, I would say at first cut the FCC could say, 9 if they have three streams that are educational 10 and two that are just fine, that is okay, or 11 the FCC could say that is not okay. It looks 12 like Congress, not having answered the question 13 has under the Supreme Court's decisions 14 delegated the FCC's power to resolve the 15 ambiguity. 16 DR. ORNSTEIN: Clearly, part of our 17 role and responsibility should be to in a 18 separate fashion address these issues, and, if 19 we have recommendations to make, they will get 20 out there into the dialog to be considered. 21 MR. BENTON: I think that is 22 extremely helpful. I think that is an 225 1 extremely helpful clarification, really. 2 DR. ORNSTEIN: Good. 3 MR. DECHERD: Norm, may I amplify on 4 your comments and anticipate tomorrow's 5 discussion by Dick Wiley? 6 I actually spoke on behalf of the NAB 7 at the hearing that you just alluded to. The 8 point I made, which I think is important for 9 all of us to recognize, is that, while two 10 individuals made public statements this summer 11 about multiplexing or multiple use of the 12 digital spectrum, not a single industry group, 13 not a single affiliate body, not a single 14 broadcast group associated with the leadership 15 of any of those organizations has said anything 16 other than we are going to meet our obligation 17 to provide high-definition television in effect 18 reinforced with the Congress through the Budget 19 Act and the Telecom Act. 20 I think that hearing was very useful 21 because it gave the industry a wake-up call, if 22 you will, to say we know we made an agreement, 226 1 and we are committed to it. We may differ 2 among ourselves about how it evolves over a 3 long period of time, but let us focus on HDTV 4 and let us maintain spectrum flexibility. 5 Now, the other important point is 6 spectrum flexibility as contemplated in the Act 7 has been interpreted by Chairman Hunt and 8 encouraged by the vice president to be a very 9 flexible notion because it is their view, as I 10 believe it is here, that the convergence of 11 video will find its way to computer screens. 12 What Dick Wiley will be talking about 13 tomorrow insofar as the Grand Alliance is 14 concerned is a high-definition standard which 15 was adopted by the Commission and if were 16 enacted solely there would have been 17 technological incongruity with the computer 18 standard. 19 The Commission, led by the chairman 20 and encouraged by the vice chairman, have 21 really pushed us in the direction of spectrum 22 flexibility to enable computer manufacturers, 227 1 software companies, and others, to perhaps 2 create more outcomes than an HDTV television 3 over-the-air signal. I think those dynamics 4 are important as we listen to Dick tomorrow. 5 DR. ORNSTEIN: Boy, I'll say. That 6 is at the crux of what we have to worry about. 7 COMMITTEE DISCUSSION OF FUTURE AGENDA 8 MR. MOONVES: Anything else on this 9 bill? 10 Thank you, Karen. Let me talk about 11 a little bit of housecleaning quickly before we 12 throw it open for public comment. The next 13 meeting, December 5, there will be three 14 groups, one lead by Robert Decherd for 15 broadcasters. Gigi will have public interest, 16 and Rob Glaser will bring in a technology group 17 there. 18 We have ascertained that we will be 19 in Washington certainly for the next one. We 20 will check out futures there, but probably will 21 stay there. If we are able to get our 22 extension through October, we may try to 228 1 separate the meetings by more than four weeks. 2 It probably will be difficult for a lot of 3 people in the group to come in to Washington 4 once a month, so we will try to move them to 5 six weeks. 6 A couple of social things. Frank, 7 you want to mention your invitation? 8 MR. CRUMP: Mr. Chair, thank you very 9 much. November 7, next month, marks the 30th 10 anniversary that President Lyndon Johnson 11 enacted and passed the Public Broadcasting Act, 12 signing into law the creation of public 13 broadcasting here in the United States. We are 14 holding -- when I say "we" I mean the public 15 broadcasting community, CPB, PBS, and National 16 Public Radio and APPS -- are holding a 30th 17 anniversary celebration. 18 I want to extend, as vice chairman of 19 the Corporation for Public Broadcasting, an 20 invitation to all of you to join the 21 festivities this afternoon. It is from 5:30 to 22 7:30 in the Cannon Caucus Room, Room 345. We 229 1 are honoring, if you will, joining us at that 2 time, we will be recognizing members of 3 Congress who were involved in the creation of 4 Public Broadcasting back in 1967. You are all 5 welcome to attend tonight. It is on the house, 6 5:30 to 7:30, literally on the House, in Room 7 345. 8 MR. MOONVES: Thanks, Frank. 9 Charles, you wanted to extend an invitation to 10 the group for our next meeting? 11 MR. BENTON: Thank you so much. We 12 are actually inaugurating the Richard M. 13 Neustadt Center for Communications for the 14 Public Interest at the Benton Foundation next 15 Friday. The vice president is coming and we 16 are very proud of that. 17 If the group would like, we would be 18 very happy to host a reception between 6:00 and 19 8:00 on the Thursday before the next meeting at 20 the Neustadt Center. Actually, through the 21 center we might help with some teleconferencing 22 and other things we were talking about earlier. 230 1 Since we have to come in the night 2 before for an 8:30 meeting on Friday, if the 3 group would like to do that, we would be happy 4 to host a reception between 6:00 and 8:00 on 5 December 4 at the Benton Foundation. We will 6 get formal confirmation of that out. 7 DR. ORNSTEIN: What is the address of 8 the Neustadt Center? 9 MR. BENTON: It is 1634 Eye Street. 10 We are two blocks from the White House. 11 DR. ORNSTEIN: Okay. 12 MR. MOONVES: Any other 13 announcements? Comments? Norm? 14 DR. ORNSTEIN: Just some 15 housekeeping. I just want to mention a couple 16 of housekeeping things, and then Karen also has 17 a couple. I want to thank Charles for the 18 invitation to volunteer to host a reception. I 19 should note that, as most of you know, the 20 Federal Rules are such that we could not have 21 the federal government or NTIA provide lunch 22 for us, so your co-chairman did it today. 231 1 MR. MOONVES: I hope you enjoyed it. 2 DR. ORNSTEIN: I would like to ask 3 for volunteers. For those of us who are 4 well-heeled enough to kick in for future 5 meetings, if you are so inclined and are 6 willing to sponsor any of those things that the 7 laws do not provide or if you want to work with 8 Congress to change the laws. 9 The Telecom Act of 1998 maybe will 10 have a few amendments. 11 I also want to once again, and I do 12 not want to belabor this, thank our staff and 13 mention and note, for those who think that 14 government employees come in at 9:00 and leave 15 promptly at 5:00 and get out of there because 16 they do not have any other requirement, these 17 people have been working night and day and last 18 night until the wee hours of the morning. We 19 are very fortunate. 20 MS. EDWARDS: Thank you. I am very 21 excited to be working with all of you as well. 22 I just wanted to take just a moment to deal 232 1 with three logistical issues. I know they are 2 minor, but they are important. One is tomorrow 3 the entrance that you will take to enter the 4 building is different because, if you are like 5 me, you will wander the halls. There will be a 6 sign out front. I think the entrance you will 7 take will be to the left of the entrance you 8 took this morning. 9 DR. ORNSTEIN: Still on Fourteenth? 10 MS. EDWARDS: Still on Fourteenth 11 Street. There will be a sign, but I wanted to 12 alert you to that. One other thing we gave out 13 in your packets, in the NTIA folder a contact 14 information sheet because we anticipated, and 15 it has come true, that we have made certain 16 errors in the contact information or it has 17 changed or needs to be updated. I would really 18 appreciate getting that back from everyone 19 today, so we can redistribute it quickly. 20 Also, we are going to try to 21 facilitate as much as possible public 22 participation in the work of the Committee. I 233 1 talk about this all the time. One thing we are 2 going to do is on our Web site we would like to 3 have photographs, to the extent that you are 4 willing to provide that, and biographies of 5 each of you. 6 I think I forecasted this in the 7 materials that I sent over. If you have your 8 photo, give it to me or Anne. Also, the bios 9 in your briefing book, if you can vet those and 10 see if that is what you want to have on the Web 11 site, I would really appreciate that. 12 Finally, I think it is really great 13 that you are considering giving some gifts to 14 the Committee. I have heard a couple of 15 different suggestions here from a couple of 16 different people, and I know that the Committee 17 generally is happy and I think NTIA is as well. 18 I just want to forecast for you that 19 some of these gifts will have to be approved. 20 Again, it is just to make sure that we have the 21 right face, okay, that the appearance of 22 impartiality and propriety is maintained, and 234 1 so do not be at all perturbed if I have to say 2 that to you and there is a short turnaround 3 period. We are really, really excited that you 4 are committed to this and want to put your 5 money where your mouth is. 6 DR. ORNSTEIN: Just two other small 7 things. Tomorrow we will convene at 9:00. I 8 think Wiley is coming at 9:30, but we certainly 9 do not have to be here earlier than that. We 10 should also note that, if Gigi and Robert and 11 Rob have the primary responsibility for helping 12 put together the sessions for the next meeting, 13 they are not alone. I assume that they will 14 reach out, but all of us should feel free to 15 give suggestions and not leave them just 16 hanging by themselves. This is a cooperative 17 venture for the next meeting as well. 18 MR. MOONVES: There is a microphone 19 out there. Are there any public comments, 20 questions, inquiries? 21 Yes? Please identify yourself. 22 PUBLIC COMMENT, 235 1 QUESTIONS AND ANSWERS 2 MR. THOMPSON: My name is Brad 3 Thompson. I am a professor at Penn State. I 4 drove four hours to come here. I would like to 5 encourage you to the maximum extent you can to 6 provide for public participation. I know you 7 have talked about that. I want to suggest that 8 you hold meetings around the country, as you 9 have already talked about. 10 I know that the charge says that they 11 will generally be held in Washington, D.C., but 12 I think it would be a good idea if you held 13 them elsewhere, also. Keep in mind, I think, 14 that your responsibility is not solely 15 deliberative but also educative, that you need 16 to educate the public. They do not understand, 17 I do not believe, what the issues are. They do 18 not know about digital television, and they 19 need to hear this from people like you. 20 I would like to ask if you can you 21 drop the onerous requirement for public 22 participation that 35 paper copies be 236 1 submitted. I know that you have a Web site and 2 are trying to incorporate material there, but 3 not everybody has access to the web. I ask 4 that you affirmatively solicit public 5 participation. Simply listing in the Federal 6 Register when meetings are going to be held may 7 not be enough. 8 I would like to encourage you to 9 revisit the question about meeting on weekends 10 and nights to provide time for people who work 11 in the day to come to your meetings. I would 12 like you to clarify at some point the number of 13 committee members. The president's Executive 14 Order said that there would be a maximum of 15 15 committee members. I do not understand how the 16 number has reached what it has. I am sure 17 there is some explanation. 18 Finally, I would like to ask that you 19 do not get stuck on specific legal minutiae, 20 that you consider issues of broad social 21 importance where you can. Laws are made by 22 people. They are webs of significance we 237 1 ourselves have spun. If they are not 2 appropriate, you ought to recommend that they 3 be changed. 4 Thank you. 5 DR. ORNSTEIN: Thank you for your 6 comments. 7 MS. CHARREN: Very crisp. 8 DR. ORNSTEIN: Let me just address 9 the part about the number of members. The 10 Executive Order, there are ways in which 11 Executive Orders can be amended. It does not 12 have to be done, as it turns out, by issuing a 13 new Executive Order. It can be done through a 14 process that involves the Office of Management 15 and Budget. It is my understanding that that 16 is basically what was done here and what we 17 will be asking the president to do again when 18 we request that the date be changed from a 19 report on June 1 to a report before the end of 20 the year. 21 MS. EDWARDS: I would just also add 22 that several days ago the Executive Order was 238 1 amended to increase the number of members to 2 22. If you see me afterwards, I can certainly 3 provide you with copies of that. 4 In terms of the number of paper 5 copies for public comment, I want to assure you 6 that, if you cannot provide 35 copies, we will 7 waive that requirement. Do not let that be an 8 impediment at all for providing the Committee 9 with your views. 10 MR. MOONVES: Yes, Peggy? 11 MS. CHARREN: In response to the 12 concern about the Web site, which is a 13 reasonable concern, you might want to get 14 started even before the next meeting to alert 15 libraries to the importance of what we are 16 doing here and to help them get involved in 17 making that Web site available to the community 18 when they might be interested in access to it. 19 MR. MOONVES: Charles, what exactly 20 is the young man who works with you doing on 21 that? 22 MR. BENTON: Kevin, are you still 239 1 here? 2 MS. CHARREN: He left, Charles. 3 MR. BENTON: Perhaps Kevin could 4 explain very briefly -- 5 MS. CHARREN: He is not here, 6 Charles. 7 MR. MOONVES: Yes, he is. 8 DR. ORNSTEIN: There he is. 9 MR. MOONVES: There he is. 10 MR. BENTON: Kevin, can you explain, 11 briefly, what you will be doing? 12 MR. MOONVES: Yes, Kevin, explain 13 what you will be doing for us on the Web site. 14 MR. BENTON: That is our Web site 15 reporter. 16 MR. TAGLANG: The Benton Foundation 17 runs two listservs and also a Web site. On our 18 listserv we often send updates about activities 19 in Washington, and we have also often reported 20 on congressional hearings and such. We just do 21 unofficial summaries of proceedings and put 22 them out. I would be happy to continue to do 240 1 that on our site for these meetings, of course, 2 noting that it is an unofficial summary and 3 pointing people to the official site. 4 DR. ORNSTEIN: Perhaps we could and 5 maybe the Benton Foundation could help in 6 carrying out Peggy's suggestion and alerting 7 the library community because, clearly, if 8 people do not have their own computers and 9 access to the web, public libraries often do, 10 and that would be a very, I think, good way to 11 expand our reach. 12 MR. BENTON: We would be very happy 13 to do that. 14 DR. ORNSTEIN: Go ahead. 15 MS. EDWARDS: I mean, this is an 16 ongoing process. To the extent that there are 17 suggestions about how we can facilitate public 18 participation better, I would really like to 19 hear them. I think all the committee members 20 would. You can certainly e-mail us or call me 21 or whatever, and we can figure out what we can 22 do to make it easier. 241 1 MR. MOONVES: Anything further? Yes? 2 MS. CHARREN: I would like to commend 3 the speaker. Having traveled so long to get 4 here, that was an extremely terse and short 5 presentation. Very unusual in these kind of 6 surroundings. 7 MR. MOONVES: Yes. Thank you for 8 your comments. 9 DR. ORNSTEIN: And constructive. 10 MR. MOONVES: We are adjourned. 11 Thank you everyone we will see you in the 12 morning. Thank you for a good day. 13 (Whereupon, at 4:30 p.m., the 14 MEETING was continued.) 15 * * * * * 16 17 18 19 20 21 22