ADVISORY COMMITTEE ON PUBLIC INTEREST OBLIGATIONS OF DIGITAL TELEVISION BROADCASTERS
CO-CHAIRS: Norman Ornstein; Leslie Moonves
(Meeting transcript available on Committee website, www.ntia.doc.gov/pubintadvcom/pubint.htm)
TIME and PLACE: September 9, 1998, 8:53 a.m -- 3:54 p.m., at the Hilton Crystal City, Arlington, VA
PURPOSE: Seventh meeting held to deliberate on the Committee's recommendations.
ESTIMATED SIZE OF AUDIENCE: 40 in the Admiralty Ballroom.
COMMITTEE MEMBERS PRESENT:
Leslie Moonves, Co-Chair
Norman J. Ornstein, Co-Chair
American Enterprise Institute
Chairman and CEO
Public Media, Inc.
Native American Public Telecommunications, Inc.
Harvard University Graduate School of Education
Founder, Action for Children's Television
Harold C. Crump
Hubbard Broadcasting, Inc.
Frank H. Cruz
Corporation for Public Broadcasting
Chairman and CEO
USA Networks, Inc.
William F. Duhamel, Ph.D.
Duhamel Broadcasting Enterprises
James Fletcher Goodmon
President and CEO
Capitol Broadcasting Company, Inc.
Paul A. La Camera
President and General Manager
Newton N. Minow
Professor, Communications Policy and Law
Counsel, Sidley & Austin
Jose Luis Ruiz
Shelby Schuck Scott
American Federation of Television and Radio Artists
Gigi B. Sohn
Media Access Project
Karen Peltz Strauss
Legal Counsel for Telecommunications Policy
National Association of the Deaf
Independent Television Service
Karen M. Edwards, Designated Federal Officer
Anne Stauffer, Committee Liaison Officer
SUMMARY OF GENERAL MEETING
The seventh meeting of the Advisory Committee on Public Interest Obligations of Digital Television Broadcasters (Advisory Committee or PIAC) began at 8:53 a.m. on Wednesday, September 9, 1998, with brief remarks from the Co-Chairs, Norman Ornstein, Resident Scholar at the American Enterprise Institute, and Leslie Moonves, President of CBS Television.
The Co-Chairs first outlined how the meeting would proceed and discussed the Committee's future workplan. Mr. Ornstein indicated that the Committee would review the Co-Chairmen's Framework for Recommendations of the Advisory Committee (Framework) as well as proposals from several other members, would begin drafting the report after the meeting, and would plan to meet on October 26, 1998 to discuss and formally accept the report. He emphasized the goal of reaching consensus on a core set of recommendations, but indicated that members would have an opportunity to submit separate statements.
Mr. Moonves noted that the Committee had come a long way towards reaching consensus on a lot of issues. He also urged the Committee to work toward a general framework, recognizing that there will be ample opportunity to reflect additional opinions in the final report.
The Committee then reviewed the Co-Chairmen's Framework section by section, with members expressing concerns and making suggestions.
Multiplexing. The Co-chairmen's Framework proposed the following approach to public interest obligations for broadcasters who choose to transmit multiple channels:
Mr. Ornstein explained that the multiplexing recommendation was designed to:
Mr. Moonves emphasized the uncertainties of the digital programming future as well as the financial consequences of the transition. He argued that the key issue is flexibility.
Gigi Sohn addressed the multiplexing recommendation, first commending the Co-Chairs for their work. In addition to concerns about the tone of the report and possible loopholes, Ms. Sohn strongly urged the Committee not to view this issue from a financial perspective, but rather in terms of opportunities. She was concerned that because additional public interest obligations are triggered by incremental profit gained from broadcasting multiple channels, the obligations might never attach.
Ms. Sohn was also concerned about the definition of multicasting, arguing that it should include all free programming services as well as subscription services. Ms. Sohn also noted that broadcasting multiple free channels should lead to an increased obligation to air general interest programming. Finally, she recommended that the Commission note explicitly that any public interest fees paid by broadcasters are for public interest purposes not for the general Treasury.
Charles Benton urged the Committee to think about the datacasting dimensions of multiplexing. He also queried whether the two-year moratorium would apply to ascertainment and reporting requirements. Mr. Moonves clarified that the moratorium is on fees assessed on the broadcasters.
Jim Goodmon urged the adoption of three overarching principles--that broadcasting's primary purpose is to serve the local community, that public interest obligations should apply to every broadcast channel, and that broadcasters should not be allowed to pay a fee and delegate their public interest obligation to others.
Jose Luis Ruiz addressed the issues of diversity of voices, minority participation and ownership. He asked the Committee to consider recommending a set-aside for new entrepreneurs with different programming and services. Mr. Ruiz expressed hesitation about supporting an educational channel, when the educational proposal did not include a mechanism to encourage new, diverse voices. Both Mr. Ornstein and Moonves agreed that the final report should discuss minority participation. Ms. Sohn suggested that as one of the menu of options available to broadcasters, broadcasters could be allowed to lease one program feed outside their editorial control to a programmer from an underserved community.
Newton Minow then raised a question about philosophy and tone. He urged the Committee to remember that the broadcasters had already received a windfall--the decision to give spectrum to broadcasters (favoring broadcasters over other uses) in exchange for a public interest commitment. Mr. Minow argued, therefore, that the question is what the public interest obligations should be, not whether public interest obligations should exist.
Frank Cruz also emphasized the need for the Committee to encourage entrepreneurship by women and minorities as well to recommend ways to promote equal employment opportunity. Mr. Cruz suggested that the Committee address these concerns in the education, multiplexing, and political discourse sections of its recommendations. The Co-Chairs agreed that the Committee needed to work on these issues and requested specific proposals.
Peggy Charren suggested that the voluntary code of conduct include language on the need to recruit minorities and the value of diverse programming and ownership. She also cautioned the Committee that a recommendation for "robust" programming lacked sufficient specificity.
Using the example of a multiplexed channel dedicated to broadcasting a regional news service, Paul La Camera queried whether some uses would not in themselves qualify as public or informational service. He also queried whether multiplexing should trigger additional public interest obligations and noted that broadcasters already must pay a fee to broadcast subscription-based services. Mr. La Camera also reasoned that it would be more efficient for stations to pay public broadcasting to provide public interest programming.
In response, Mr. Goodmon argued that a public affairs program broadcast on a single public interest channel would not get the same viewership as if it were broadcast as part of each station's lineup. He, therefore, argued that every station should have a public interest obligation.
The Committee then discussed a variety of issues about the digital future, including the propriety of using public, educational and governmental access on cable television as a model; how broadcasters should meet the needs of diverse minority community; whether potential revenue, or the opportunities digital television provides for more and new kinds of public service is the relevant question; and how to preserve the viability and diversity of the local marketplace.
The Committee ultimately agreed to:
The Committee did not reach consensus on whether public interest obligations should attach only to the primary channel or to each multiplexed channel. Ms. Sohn proposed to multiply public interest obligations by the number of channels, but allow broadcasters to choose whether to place public interest programming on a single or on multiple channels.
Education. The Co-Chairs proposed setting aside one 6 megahertz channel in each community for educational programming and giving public broadcasting the first opportunity to program the channels.
Mr. Ruiz and James Yee urged the Committee to broaden, beyond public broadcasting, the pool of organizations that would be eligible to program the educational channel. Mr. Ruiz also advocated partnerships with the Department of Education, as a means to encourage participation by independent programmers and minorities.
Peggy Charren supported Mr. Ruiz' general concern about diversity, but cautioned against pulling in the Department of Education. The Committee agreed to remove the reference to allowing public broadcasting "first" opportunity and to add language encouraging public broadcasting to include other groups.
Mr. Cruz reiterated the need for a permanent trust fund for public broadcasting and conveyed the concerns of the Corporation for Public Broadcasting, America's Public Television Stations, and Public Broadcasting Systems that the educational channel not become another unfunded mandate. However, he agreed with Mr. Ruiz that in programming the educational channel, public broadcasting should be include diverse groups and interests.
Mr. Moonves expressed hesitation about adding another layer of bureaucracy to the process, but also suggested that there might be a way to reconcile all the concerns. Mr. Ornstein agreed and explained that the recommendation had been drafted to avoid overwhelming the FCC with an open bidding process.
Mr. Benton expressed enthusiasm about the educational channel recommendation, but urged the addition of language referencing "lifelong learning, preschool and early childhood" to convey the importance of education from cradle to grave. William Duhamel also stressed the severe need for educational programming in rural communities like North and South Dakota, where there a small groups of people in isolated school districts. Karen Strauss urged the Committee to recommend that broadcasters specifically address the educational needs of teenagers.
Ms. Charren then focused on the funding mechanisms of the educational channel proposal, noting that the analog channel auction revenue may already have been allocated for other budget purposes. She argued that it would be very difficult to get Congress to reallocate it for a different purpose.
Ms. Sohn and Ms. Charren raised the need to make the definition of education more precise. Ms. Sohn was particularly concerned about programming targeted to underserved communities, independently-produced programming, and local and national public affairs programming. However, Mr. La Camera cautioned against broadening the definition too far.
Ultimately, the Committee agreed to define education more precisely to include preschool through lifelong learning, classroom education, and educational programming for diverse ethnic and racial groups. Ms. Sohn indicated that she would propose language for this definition.
Voluntary Code of Conduct; Minimum Public Interest Standards. The Co-Chairmen's Framework proposed a voluntary set of public interest standards. Shelby Schuck Scott strongly disagreed that a voluntary approach would be sufficient, arguing that broadcasters have failed to serve the public interest in local communities across the country, and that the National Association of Broadcasters is not interested in adopting a code of conduct.
Mr. Goodmon countered with a call for a minimum level of public interest requirements in addition to a voluntary code of conduct. The majority of the Committee agreed to support the a voluntary code if it were coupled with minimum standards. Ms. Sohn explained that minimum standards would create a level playing field for all broadcasters and would provide the incentives necessary for the "pay or play" model to work.
Barry Diller and Mr. Minow also supported minimum standards and indicated that the standards should also apply to cable television programmers. However, Mr. La Camera expressed concern that recommending that cable television adopt a voluntary code was beyond the Committee's mandate.
Mr. Diller then reasoned that in exchange for a free license to use the airwaves, there should be a minimum standard of public interest responsibilities and a rational code of conduct. He also argued that must-carry rights would have to be an integral part of the package. Mr. Minow and Ms. Sohn noted that the justification for must-carry hinges on whether the programming to be carried serves the public interest. Harold Crump also noted that a rapid transition to digital television would be extremely difficult without must-carry obligations.
Mr. Cruz urged the Committee to include a provision on equal employment opportunity in the minimum requirements.
In terms of the likely industry response, Mr. Moonves and Mr. La Camera cautioned that the National Association of Broadcasters (NAB) would not support the concept of minimum standards and recommended that the Committee focus on crafting a voluntary code that the industry could embrace. Mr. Moonves also signaled the high likelihood of a dissenting statement on this part of the report.
However, the Committee agreed (i) to recommend that the FCC or Congress create rational, minimum public interest requirements, (ii) that the minimum public interest standards be coupled with mandatory must-carry rights, and (iii) that the NAB adopt a voluntary code of conduct.
Under this recommendation, broadcasters would have flexibility to determine how they should meet the minimum requirements. The Committee also agreed to clarify that the minimum public interest requirements would not affect statutory requirements like the three-hour requirement for children's educational programming or closed captioning rules. Finally, the Committee created a working group to draft these recommendations.
Disclosure of Information. The Committee then discussed the need for public disclosure by broadcast stations of their public interest activities. Mr. Ornstein recommended that such disclosure include the kind of information the NAB requested in its public interest survey. Mr. Diller recommended a yearly check-off approach.
Mr. La Camera and Mr. Moonves also emphasized the value of disclosure in terms of the self-audit it provides for broadcasters. Mr. Crump urged the Committee to make this proposal concrete and provide incentives for broadcasters to share the public interest activities in which they are already engaged. The Committee create a working group to draft a sample check-off form.
The Committee reconvened after lunch. Mr. Moonves informed the Committee that there had been no official word from the White House on the Committee's request for an extension of its reporting deadline, but that there was every indication that the extension would be granted.
Political Discourse. The Committee then discussed the recommendations for political discourse. The key question here was how much the Committee should expect of Congress in terms of comprehensive campaign finance reform and whether the recommendation for five minutes of candidate-centered discourse should be offered in exchange for reform. A few members suggested that broadcasters offer a certain amount of candidate-centered programming as a challenge to Congress to pass real campaign finance reform.
Mr. Goodmon expressed interest in ensuring that the five minute proposal meant program time in which the candidate would appear and not commercials. He also suggested that issue advertising should not contain the name of a candidate or a party within 60 days of an election as one way to reduce candidates' reliance on issue advertising.
The Committee agreed that it is not possible to dictate the content of paid advertising such as campaign ads and issue ads. However, Mr. Ornstein explained that creating a voluntary system by providing incentives that reward certain behavior, such as the candidate appearing in an campaign spot, is theoretically possible.
Mr. Minow expressed the view that candidates do not have a constitutional right to buy broadcast time and airtime should not be sold to political candidates. He argued that as long as candidates can purchase time, other reform measures will not improve the democratic system.
Ms. Sohn raised a concern about blanket bans on selling broadcast time to state and local candidates. After a brief discussion, Mr. Ornstein and Mr. Moonves suggested that it would be appropriate to include language in the Committee's report signaling that blanket bans are inappropriate.
Finally, Ms. Sohn proposed that the FCC require a minimal amount of candidate-centered discourse. The Committee did not agree to Ms. Sohn's proposal, but it did agree to propose that broadcasters voluntarily provide five minutes of candidate-centered discourse as part of broader campaign finance reform. The Committee also expressed the hope that broadcasters would begin experimenting with the proposal in advance of Congressional reform.
Emergency Alerts. The Committee then briefly discussed the proposal from the Working Group on Natural Disaster Information Systems. Mr. Ornstein supported the recommendation that broadcasting early warnings of a natural disaster is a public interest obligation and that, in consultation with emergency specialists, a small portion of the digital television signal should be reserved for emergency alert systems. He also proposed that manufacturers of television sets and other equipment build in the capacity for such systems. The Committee agreed in principle with these recommendations.
Disability Access. Ms. Peltz Strauss reviewed several proposals on disability access. After some discussion, the Committee agreed (i) to urge broadcasters to take full advantage of the new digital closed captioning technologies, (ii) recommend setting aside audio bandwidth for video description, and (iii) suggest that broadcasters provide video description for ten percent of programming within ten years. The Committee decided not to recommend setting aside bandwidth for Radio Reading Services.
"Pay or Play" Model. The Committee then discussed recommending "pay or play" as a new model for public interest obligations. The "pay or play" model of public interest obligations would allow broadcasters to pay a fee and be relieved of public interest obligations. The fee would go into a fund to support public interest programming and activities on other stations.
As the following summary demonstrates, the Committee was divided on the question of recommending "pay or play" as a model. Mr. Diller and Mr. La Camera objected to the proposal as bad business and as going against the historic tradition of the industry. Ms. Sohn expressed support for a pay or play model as a mechanism for funding quality public interest programming and suggested the fee be based on gross receipts from advertising revenues. Mr. Ornstein also suggested that pay or play would allow resources to be allocated more efficiently.
Frank Blythe viewed pay or play as providing flexibility and a counterbalance to stations that are not at all interested in service to their communities. He also supported pay or play another revenue stream for educational broadcasting. Mr. Yee suggested that pay or play would help address concerns about who provides the content for public interest programming. Mr. Ruiz proposed that pay or play would allow smaller public broadcasting stations with limited resources to purchase the best of Public Broadcasting Service's programming if they received funds from local stations who chose to pay.
Frank Cruz asked how pay or play would be applied. He used an "all-soap" channel as an example of a channel that would have little opportunity to provide public interest programming. Both Mr. Goodmon and Mr. Diller maintained that even channels with specialized programming--such as an "all-soap" or "all-football" channel--could provide public interest programming for their viewers. Mr. Crump emphasized that involving the audience by providing public service has been a key factor in television's success.
The Committee than tackled the question of the dollar amount broadcasters should pay to be relieved of public interest obligations under a pay or play model. Mr. Ornstein mentioned a formula suggested by Henry Geller which sets the level at two percent of a broadcaster's revenues plus one percent of transfer fees. Mr. Diller objected to placing a value on public service and the broadcast license.
The discussion then focused on the issue of accountability and oversight as a means to ensure that stations meet the proposed minimum standards. Mr. Diller argued that the threat of license revocation by the FCC was a sufficient incentive. Ms. Sohn suggested that the FCC's current renewal process makes enforcement more difficult and thus makes the pay or play model more attractive.
Mr. Diller countered that a more invigorated FCC review process was required and that it would be difficult to argue for must-carry status unless it was linked to minimum standards that are upheld by the license holder. Mr. La Camera disagreed, noting that he could not see a logical connection between pay or play and a breakdown in the oversight function.
The Committee did not reach consensus on the question of pay or play and agreed that the report would present both sides of the issue.
Diversity in Broadcasting. The Committee next discussed diversity in broadcasting. Mr. Ruiz voiced concern over recommending a trust fund for the CPB without specifying that some of those funds be allotted for independent and minority programming. The Co-Chairs requested that Mr. Ruiz draft language for the report. Mr. Ruiz also suggested that broadcasters who multiplex provide minority entrepreneurs opportunities to enter the broadcasting business. Ms. Sohn suggested building upon language she had previously proposed and agreed to present the recommendation to the Committee for consideration.
Referring to a letter he had written to Committee members, Mr. Cruz reiterated his recommendation that the Committee encourage broadcast ownership by minorities and women and equal employment opportunity in broadcasting. Mr. Moonves repeated that diversity in broadcasting should be incorporated in the recommendations.
Public Comment, Questions and Answers
Hugh Carter-Donahue of the Annenberg Public Policy Center at the University of Pennsylvania encouraged the Committee to consider reserving some of the analog spectrum for educational and public interest purposes. Mr. Carter-Donahue proposed that some of the analog spectrum could be allocated to low power stations which would provide news and local programming and that funds from the auction of the remaining analog spectrum could be used to support these channels.
David Hatch of Electronic Media asked for clarification on which public interest obligations would fall within the voluntary code and which would be included in the proposed minimum standards. The Co-Chairs responded that the Committee was still working on that question. In response to another query from Mr. Hatch, Mr. Ornstein clarified that the Committee proposed a two-year moratorium on fees for multiplexing but not on minimum public interest requirements.
Mr. Ornstein proposed that a draft of the full report and recommendations be circulated to the members a week before the next meeting. He envisioned a large number of consensus recommendations with some separate statements and a point/counterpoint review of the proposed pay or play model. Some members requested that drafts be distributed electronically. The Committee discussed releasing its final report in mid-December.
Mr. Ornstein and Mr. Moonves thanked the members and adjourned the meeting at 3:54pm.
Meeting Materials (available separately)
Executive Order 13038 (3/97)
White House Press Release announcing the establishment of the Committee (4/97)
Charter of the Advisory Committee (4/97)
Radio Address by the President
announcing the Co-Chairs (6/97)
Amendment to Executive Order 13038 (10/97)
White House Press Release
announcing the members of the Committee (10/22/97)
White House Press Release announcing
the appointment of Jose Luis Ruiz (12/4/97)
Amendment to Executive Order 13038
Amendment to Executive Order 13038
List of members of the Committee
Biographies of members of the Committee
Secretariat contact information
Guidelines for public comment
Co-Chairmen's Framework for
Recommendations of the Advisory Committee (submitted by Leslie Moonves, CBS Television, and Norman Ornstein, American Enterprise Institute)
Proposal for Minority Participation in Public
Interest Obligations of Digital TV Broadcasters, submitted by Jose Luis Ruiz, Independent Producer.
A Call for a Minimum Level of Public Interest Requirements and A Voluntary Code for Television Stations, (submitted by James F. Goodmon, Capitol Broadcasting Company).
Revised Proposal for Public Interest
Obligations, dated September 1, 1998 (submitted by Gigi Sohn, Media Access Project)
Revised draft Broadcaster Code of Conduct and
History of the NAB Code (submitted by Cass R. Sunstein, University of Chicago Law School)
Election Coverage Guidelines, Hubbard
Broadcasting, Inc. memo (submitted by Harold C. Crump, Hubbard Broadcasting)
Letter regarding diversity in employment and
ownership in broadcasting, dated September 4, 1998 (submitted by Frank Cruz, Corporation for Public Broadcasting)
Letter regarding digital must carry, dated
September 3, 1998 (submitted by Frank Cruz, Corporation for Public Broadcasting)
Letter regarding issues before the Committee,
dated August 27, 1998 (submitted by Cass R. Sunstein, University of Chicago Law School)
Letter regarding issues before the Committee,
dated August 10, 1998 (submitted by Charles Benton, Benton Foundation)
Letter regarding issues before the Committee,
dated August 3, 1998 (submitted by Robert W. Decherd, A.H. Belo)
-- The Media Institute
-- Minnesota Broadcasters Association
-- Working Group on National Disaster Information Systems
Leslie Moonves, Co-Chair
Norman Ornstein, Co-Chair