Transcript of the morning session

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Admiralty Ballroom
Hilton Crystal City
2399 Jefferson Davis Highway
Arlington, VA
Wednesday, September 9, 1998

              LESLIE MOONVES, Co-Chair
              NORMAN J. ORNSTEIN, Co-Chair
    PEGGY CHARREN                HAROLD C. CRUMP
    FRANK H. CRUZ                BARRY DILLER
    GIGI B. SOHN                 KAREN PELTZ STRAUSS

             KAREN M. EDWARDS, Designed Federal Official
             ANNE STAUFFER, Committee Liaison Officer

                      P R O C E E D I N G S
                                             (8:53 a.m.)
             CO-CHAIR ORNSTEIN:  Ladies and gentlemen, let's
   get started if we can.  As you can see -- have we got our
   mike working?  It doesn't sound like it.  Can we get our
   technical support?  There we go, okay.
        We have most, but not all, of our members here.  We
   have a couple who are going to be here, but who are not
   here yet.  But we have an ample majority, so we'll get
    started for what I expect is our penultimate meeting. 
         The hope basically is that we can go through the
    framework that your two Co-Chairs have put together along
    with the suggestions and recommendations that are out
    there that have been put on the table by other members of
    the committee, have full discussion of them, see where we
    can reach an overall consensus, see where we have points
    of disagreement, move from this meeting then to drafting
    the report, including recommendations that we will trade
    back and forth, until we can either reach a consensus or
    find that we cannot, and then meet again on October 26th
    for discussion and presumably acceptance of the report
    that we have.
         We have reserved a day and a half for that meeting,
    October 26th and 27th.  If all goes well, we will not use
    the day and a half, but what we'd like is to keep that as

   an option and hope you can keep it on your schedules just
   in case it takes us more time to work these things through
   and redraft perhaps to reach that point.  Then we'll go
   back to producing a report.
             MR. RUIZ:  In Washington?
             CO-CHAIR ORNSTEIN:  I assume it will be here in
   Washington, yes.  Now, I do want to say we are here in
   beautiful downtown Crystal City, which for many years
    probably advertised itself as a place, because of its
    tunnels and the like, that you could live and work in
    Crystal City and never go outside.  I would only say that
    if we have real trouble today and we have to have more
    meetings, on that basis I hold over your head the threat
    that we'll hold them all in Crystal City.  So there's a
    major incentive to reach agreement quickly.
              MR. DUHAMEL:  All day the 26th?
              CO-CHAIR ORNSTEIN:  Yes.  We start holding out
    the day of the 26th and then a half day on the 27th, but
    with every hope that we won't have to go to that full
    measure of time.  So we'll see how it goes.
         What I hope we will do today is go through these
    various suggestions, recommendations areas, get opinions
    and views, and in many of them I hope and think that we
    can reach a general consensus.  As I said to you before,

   my view of consensus, it doesn't have to be unanimity, but
   I hope we can reach a point where the overwhelming weight
   of opinion of the committee will agree with what we're
   doing and we can maybe tweak some language.
        Let me also say that I expect that our report will,
   like Supreme Court decisions, have an open opportunity for
   concurring and dissenting opinions.  In most cases I hope
   those will be concurring opinions, where people agree with
   the thrust of what we're doing but want to offer
    additional expansive views or suggest more specific things
    themselves, and we want to leave every opportunity for
    that to happen.
         But my goal -- and I don't want to speak entirely for
    my Co-Chair.  Our goal I think is that we can reach
    consensus on a core of recommendations that will cut
    across all of our lines, and we say that in significant
    part because I believe, we believe, that as an advisory
    committee without any formal powers, the power that we
    have to have an impact on the policy is that of the weight
    of our members -- a very impressive group of people,
    cutting across a wide range of viewpoints and positions
    and perspectives.
         The power that we have as a committee is considerably
    greater in having resonance out there in the policy
    community if we can cut across those lines and reach a

   consensus, particularly since there are large numbers of
   people out there who have been saying all along that
   there's no way that this group of diverse voices could
   reach any consensus on anything.  So that's the hope here.
        The game plan is that we will start with the Co-
   Chairmen's framework of suggestions, go through those
   areas one by one.  In many cases the proposal that Gigi
   Sohn has put on the table parallels those recommendations
   in the areas that are considered, so we can have a
    discussion of the different perspectives there. 
         Then we'll turn to the other areas.  That includes
    some of the questions of how we deal with notification of
    disasters, which we had discussed at an earlier meeting,
    and we have a suggestion that was put to us by the Federal
    Task Force on the notification of disasters.  We do not
    have a specific proposal down here on the issues of
    captioning a video description, but I think we're close to
    a consensus on some of the language that Karen had
    submitted to us and we need to have further discussion of
    that so we can flesh that out and frame it through, and
    then the other suggestions that we have. 
         We have a set of ideas that emerge for each of us to
    look at this morning from Jose Luis Ruiz and I would
    suggest that we take that up last so that we have time in
    the lunch period for everybody to read it so that we can

   know what's there and discuss it.
        So that's the game plan and we'll start shortly on
   that basis.  
        Let me turn to Les.
             CO-CHAIR MOONVES:  Thank you, Norm.
             By and large -- not by and large.  I agree with
   everything that Norm has just stated.  Clearly, the Co-
   Chairmen's framework for our recommendations took a lot of
   work.  There was a lot of effort on the part of a lot of
    members of this committee.  In terms of recommendations,
    and I think we've come a long way towards reaching
    consensus on a lot of issues, there is still a lot of work
    to be done and I know a lot of discussion that we will
    have today.
              I think the good news is we have an entire day
    to do that.  There are a lot of issues we need to get to. 
    But to reiterate what Norm has said, I think it is almost
    essential that we reach agreement on a lot of these
    issues.  If there is a great deal of dissent or in fact
    dissenting opinions and we can't come to a consensus, I
    think a lot of the work that we will have done will be in
              I think if we can get a general framework, there
    will be plenty of opportunity for other opinions to go
    into the document that we put out.  But as Norm said, it

   is essential, I think, that we do have an informal
   consensus on this. 
             In terms of -- we have a lot of issues to deal
   with.  Everybody is going to get an opportunity to discuss
   all these issues, but there is a lot of ground to cover
   today.  So everybody will get a lot of opportunity to
   speak.  But just please keep it as succinct as possible,
   and I think we can get a lot accomplished.
             So back to you, Mr. Ornstein.
              CO-CHAIR ORNSTEIN:  Does anyone have anything
    they want to say right at the outset?
              (No response.)
              CO-CHAIR ORNSTEIN:  Okay.  It seemed to us that
    the best way to handle this was simply to go through these
    areas one by one and see where people have problems with
    or want to expand upon the recommendations that we put out
              Let's start with the question as we have it in
    our framework.  Clearly, this recommendation flowed from a
    lot of our discussion about the conditions under which
    additional public interest obligations might be
    appropriate for broadcasters as we move into the digital
    age.  A lot of discussion in our meetings about the
    distinction between a world in which we would move from
    one analog station broadcasting one signal 24 hours a day

   to a world in which there would be one digital signal, a
   digital station, high definition digital, broadcasting 24
   hours a day after we make that transition -- something
   that many during and particularly after the debate on the
   Telecommunications Act in Congress believed would be the
   world that would emerge and was the rationalization for
   many of the members, many of the most prominent of the
   members, for suggesting that we not auction off the
   spectrum, but rather go through this process of lending
    the digital spectrum to go through the transition, and
    then the theory was that it would be a good deal for the
    public because they exchanged one lousy signal for one
    fabulous signal.
              But we recognize that the Act did not mandate
    that possibility and that there are lots of other
    possibilities.  Now, of course the Act also said that if
    the digital spectrum were used by broadcasters for
    subscription services for paid purposes, for what were
    called ancillary and supplementary uses -- paging, pay per
    view, and whatever it might be -- rather than commercial-
    driven, free, over the air purposes, that fees would be
    assessed, and the Federal Communications Commission is in
    the process of assessing those fees.
              We in our deliberations, accepting that, also
    wanted to make a distinction between one over the air

   commercial-driven channel and multiple channels that were
   free, commercial-driven, over the air.  I think we came to
   an agreement at an earlier point that under those
   circumstances, and in particular if the digital spectrum,
   in a world that is unpredictable, of course, turned out to
   be one that provided a lot of commercial benefits to
   broadcasters by moving to multiple channels, then it was
   appropriate to assess additional public interest
   obligation in return.
              The recommendation that we put on the table is a
    reflection of that and it's a suggestion, with a number of
    options, on how to handle it.  We wanted to be sure that
    we didn't kill any experimentation or opportunities that
    might be out there for people to see what would work in
    the marketplace.  We don't know what will work in the
              So we included in this proposal a 2-year
    moratorium to allow experimentation to take place and then
    a suggestion of a menu of options or obligations if
    following that broadcasters do indeed for some or all of
    the day move to multiple over the air commercial-driven
    channels, that range from assessing a fee to turning over
    one of those multiple channels for public interest
    purposes, but not following the cable model as a kind of
    empty public access experience, but rather with some

   robust programming provided, or in lieu of the fee in-
   kind contributions of public interest activities, with of
   course Congress and the FCC to assess the specifics down
   the road.
             So that's what we have in this recommendation,
             CO-CHAIR MOONVES:  Yes.  The only thing I want
   to add to that is the key to our recommendation in terms
   of multiplexing is the idea that -- is the fact that we
    know so little about what this world is going to look
    like.  We still don't know whether certain stations are
    going to be using HDTV or multiplexing.  We don't know the
    financial consequences of it.
              The key issue here is flexibility in all aspects
    in terms of what the future will look like, how much money
    is involved, and the options that are available if it does
    turn out to be a great windfall.
              So with that, we should open it up.
              CO-CHAIR ORNSTEIN:  Yes, Gigi?
              MS. SOHN:  Well, first -- I don't think this is
              Well, first I wanted to thank Les and Norm
    because I know a lot of sweat has gone into this
    framework, and my, I don't want to say criticisms about
    this issue, but my criticisms are not intended to diminish

   what you guys have done.  I think you have done a
   tremendous job.
             There is some language stuff in this draft that
   doesn't exactly excite me.  I don't want to waste our time
   with that.  I think we can work that out later.  My
   preference is, if we want to achieve a consensus, let's
   have neutral language as opposed to provocative language
   on either side.
             So I want to limit my comments on the
    multiplexing, which I agree with in principle, to some of
    the substance.  My concern is that the proposal as it's
    laid out here has some loopholes that could really render
    the obligation almost worthless.  So again, I agree with
    the principle of the menu.  I like the menu you've laid
    out, Norm.  Just there are a couple of details, and I'll
    go through them very, very quickly just to get them on the
              My first concern, overall concern, is that I
    don't think we should be looking at this from a financial
    perspective.  For example, the framework says that the
    obligations would only kick in when the revenues from the
    incremental channels, from the extra channels,
    incrementally exceed the revenue from the main channel. 
    First of all, again, I think we need to look at this in
    terms of opportunities and not who's making money and

   who's not making money, number one.
             Number two is, my concern is that since the
   primary channel is going to be having the best programming
   on it, the programming that brings in the most advertising
   revenues, we're never going to get to a point where the
   extra channels, even put together, are making more money
   than the primary channel, and therefore the obligations
   never kick in.  That is probably my biggest concern.
             If there's a way of redoing that language so
    that it becomes more likely that the obligations will kick
    in than less likely, I can live with that.  That's my
    biggest concern.
              My second concern is the definition of
    multicasting as several free over the air channels. 
    Again, my concern is that most of what we're going to see
    -- again, we don't really know; there is uncertainty, I'll
    certainly agree to that.  But a lot of what we're going to
    see is a mix of subscription and free.  Again, we're not
    talking about money.  We're talking about opportunity.
              We also may see multiple free or subscription
    high definition pictures.
              In the second paragraph you say "at less than
    high definition."  Granted, at 1080I you won't have
    multicasting, but at 722 you can have multiplexing.  And
    as compression technology changes, who knows; you may be

   able to have three or four high definition pictures.  So
   we don't want to limit it to that. 
             So again, I think it should be multiple free or
   subscription, and it shouldn't be limited to whether it's
   high definition or not.
             The last substantive comment I have to make is
   just a general disagreement.  I think when we go back --
   I'm sorry.  Let me go back to my prior point.
             My biggest concern on the subscription versus
    free is, what if you have a program stream that is both
    subscription and advertiser-supported.  Then you basically
    have double-dipping because you're making money both from
    the subscription fees and from advertising fees.  Yet it
    doesn't count towards your multiplexing obligation for the
    obligations kicking in.
              So there may be a compromise to be drawn here. 
    It may be where it's both advertiser-supported and
    subscription, because the concern is double-dipping.
              My last concern is in paragraph 6, and again
    just to reiterate -- I will not have as many comments with
    regards to the other things, thank goodness.  But this is
    just generally a disagreement, that if you have multiple
    free channels that you shouldn't multiply your obligations
    to do general interest programming.  That's something that
    is contained in both of my proposals, the one I made on

   April 15th and the one I'm making today.  That's just a
   fundamental ideological difference.
             I really don't have much else to say about that. 
   Actually, there is one more thing I want to say.  At the
   end of that paragraph I think we need to be very careful. 
   This is more in terms of the language.  When we talk about
   where we put the fees, we talked about putting it in some
   other fashion, "agreed to by Congress, the President, and
   the FCC."  My concern is that that kind of language opens
    it up to negotiation with the Treasury, which we don't
              I think we need to be very, very specific that
    we want the money to go into good public interest purposes
    and not to the Treasury and other functions.
              That's it.
              MR. BENTON:  Two points.  First, in public
    broadcasting's briefings generally about digital
    television they talk in terms of three dimensions:  the
    high definition television, the multicasting or multiple
    channels, and the datacasting.  This is kind of silent on
    the datacasting dimension and I think we really need to
    beef up the role of datacasting, because we all know that
    television and computers -- we're in the era of
    convergence.  It's now a cliche, and we really need to
    think through the datacasting dimensions of the

   multiplexing, which are not mentioned here but are
   critical in terms of the enriching and additional
   information supplementary and complementary to the
   broadcasting.  So that's the first point.
             Secondly, your point about the moratoria, I am
   not sure I really understand this.  Certainly I agree with
   giving broadcasters flexibility for experimentation and
   innovation.  I have no problem with that at all, but it
   seems to me that things like ascertainment and reporting
    on what's going on should start from day one, should start
    immediately.  There should be no moratorium on those
    processes that will allow us to gather information about
    what really is going on.
              So I would like to understand better the
    moratorium point, the goal of which, i.e., giving
    flexibility for innovation, I'm entirely in favor of, but
    the reporting of the facts here, what's going on, we've
    got to build in here.  So I hope that is what you had in
              CO-CHAIR MOONVES:  Yes.  The moratorium is not
    referring to the other issue, the financial.
              CO-CHAIR ORNSTEIN:  It's strictly a moratorium
    on fees assessed, not on any other obligations, including
    not just existing ones but ones that we recommend
    otherwise.  It's on fees.

             The idea here is you want to do nothing to
   stifle innovation and experimentation, to see what works
   in the marketplace.  I think partly our idea here is that
   if it's going to work in the marketplace, whatever fees we
   assess are not going to be a deterrent once it's taken
   hold in the market.
             MR. GOODMON:  Let me just restate my view about
   this quickly.  It seems to me that we really do know
    what's going to happen in digital.  I know I can run one
    station or five stations or one station or two stations. 
    To the viewer at home, this means more television stations
    and a mix of that, and it seems to me that the public
    interest obligations should apply to every channel that we
              I don't know why any second or third or fourth
    channel should be any different.  So whatever the public
    interest obligations are for our stations should apply to
    all of our channels.
              I would also suggest that the notion that in my
    view we can somehow pay somebody something to not do that
    is not serving the public interest.  These can be good
    stations that do a good job and the public interest
    programming on these stations is important.  As a matter
    of fact, I think it's more important than paying somebody

   something.  That's why we have the stations, to serve the
   local community.
             So I'm off the page here.  Every channel that we
   operate should have the same public interest requirements,
   whatever they are, and there shouldn't be any paying here.
             MR. CRUMP:  I have a question.
             CO-CHAIR ORNSTEIN:  Yes?
             MR. CRUMP:  Am I correct in the assumption,
   though, because I'm hearing something a little different
    here today, and perhaps I'm incorrect, that when all of
    this would kick in would be when digital television kicks
    in, not that we assume the new recommendations today
    before we have the digital stations on the air and going? 
    Is that correct or incorrect?
              CO-CHAIR ORNSTEIN:  Yes, it's correct.  when
    digital kicks in.
              MR. RUIZ:  I just want to second what Jim said. 
    I know you agreed to talk about my fax here, but there are
    some points that I think are important to this matter.  If
    you're talking about multicasting or repeating the same
    thing and putting it on other channels or versions of it,
    like a soap opera channel, things like that, are we really
    serving the public?  
              And I raise the question that we've always had a
    lack of minority ownership and participation in network

   television and in local television, and I think this is an
   opportunity to introduce some notion that will allow
   minority participation.  Is it going to be repeating the
   same thing we're doing in other channels?  What is it
   we're proposing?  Isn't there a better way to serve the
   public, bringing in new voices, new interests, and better
   services to underserved communities?  Because if we don't
   change that, if we don't look at that seriously, we're
   looking at another 50 years like the last 50 years, and I
    think it would be very short-sighted.
              Can there be set-asides?  Should we request set-
    asides for new voices, for new players to come in?  We're
    not saying they're not going to be entrepreneurial.  We're
    not saying that they're not going to try to make money for
    their institutions.  We're saying these are new revenue
    streams, but there can be different programming, different
              Why haven't we looked at that?
              CO-CHAIR ORNSTEIN:  Well, I think we should have
    a fuller discussion of the larger question of minority
    participation and ownership as we move along.  In this
    particular context it's certainly worth talking about as
    well.  But partly it's a question of I think the reason we
    haven't looked at those issues so much is that they were
    not brought up in any of our earlier meetings.  They were

   brought up in the meeting we had in Minneapolis almost for
   the first time.
             We haven't had, either from our members or from
   outside groups, proposals on the table here in this
   particular area until recently or just now. 
             The question of whether or not we set aside
   channels specifically for that purpose, other than in the
   discussion we've had of an educational channel, obviously
   is something we need to talk about.  Partly it's whether
    we want to.  Of course, one of the suggestions that we
    have here at the table is that an option in multicasting
    is that a channel be set aside for public interest
    purposes.  We can get more specific in that regard.
              If, however, you are talking about mandating or
    requiring that if there's multiplexing a channel be set
    aside or used by broadcasters -- not set aside -- used by
    broadcasters for a particular programming purpose, that's
    a slightly different issue and one in which I think there
    are differences of opinion. 
              CO-CHAIR MOONVES:  Obviously, the FCC right now
    is dealing with at great length the problem of minority
    ownership, that there certainly isn't enough either in the
    local television or radio level throughout the country,
    and it is something that needs to be dealt with.
              I don't know if multiplexing is the answer to

   that particular question.  Obviously, you have a proposal
   on the table which we just received, which certainly
   should be, elements of that, incorporated into our
   document.  But in terms of being part of this particular
   discussion at this moment, I think it's rather difficult. 
   I think it is apples and oranges right now.
             MR. RUIZ:  I guess my dilemma is I'm trying to
   envision -- and I'm in a large market, Los Angeles -- what
   the future is going to look like.  Like everybody here, we
    don't know what it's going to look like.  But I'm sitting
    here saying, okay, there's a very large PBS station there
    that's going to be having five to seven channels or
    whatever the future holds.  There's a board of education
    station.  There's the University of California station. 
    There's a college station, a 2-year college station. 
    There is four public broadcasting stations.  Then there
    are four -- there's five:  FOX, ABC, NBC, CBS, and then
    the others.  They're all going to set aside an educational
              Where's all that programming going to come from? 
    I mean, are we really talking about certain services, that
    we want to have diverse services in markets and access? 
    Do we really want to make a blanket statement that all
    broadcasters in a market, say like Los Angeles, are going
    to set aside an access station, each one of them?  They're

   each going to set aside an educational station?  And then
   you're going to have the public broadcasters?  Where's all
   this programming going to come from?
             Aren't there other avenues and other ways of
   cutting up that pie to make it more inclusive to other
   groups and to other endeavors, commercial endeavors as
   well?  Because we don't want to have seven access
   stations, seven educational channels, and the PBS
   channels.  What we want is quality and good service.  We
    want diverse voices.
              I think it's just more complex than making the
    very blanket statement or position.  I think we would be
    in error, I'm sorry.
              MR. MINOW:  Like Gigi, I first want to thank Les
    and Norm.  I think you've made a significant contribution. 
    With that, I want to just address philosophically the tone
    of the thing about what digital is.
              We're sort of saying, if there's a windfall
    here, if there is a windfall then something should follow. 
    There's already been a windfall.  The police would have
    loved to have these channels.  The firemen would have
    loved to have these channels.  The hospitals would love to
    have these channels.  The schools would love to have these
              But the decision was made not to give it to

   them, but to give it to the broadcasters in exchange for a
   public interest commitment.  So I wouldn't look at this as
   if it's a windfall.  There's already been a windfall, to
   the exclusion of police, fire, and all the others who
   would like to use the channels.
             So the question is what should the public
   interest obligation be, not whether there should be a
   public interest obligation.  So it's a matter of tone and
              CO-CHAIR ORNSTEIN:  Okay. 
              MS. SOHN:  I just want to make one suggestion
    that I don't think is going to completely ameliorate Luis'
    concerns, but may at least get us a little of the way
    there.  My proposal proposes as one of the menu options
    that, basically a set-aside, that a broadcaster could
    choose to lease one program feed outside of the
    broadcaster's editorial control to another, to an
    unaffiliated programmer.  Perhaps you want to say it could
    be a minority or a programmer from an underserved
    community, but that's certainly an option which I didn't
    see in the framework, which if you're amenable might be a
    good thing to add.
              CO-CHAIR ORNSTEIN:  Sure.

             MR. CRUZ:  I submitted also a document on my
   behalf in reference to this particular concern of Jose
   Luis, which I wholeheartedly endorse.  I think we would be
   very remiss as a body if, in consideration of the
   framework that we're undergoing now, the different areas
   of discussion, if we really didn't seriously take this
   into account.
             I think as you indicated, the two of you, at the
   start of this conversation here today, that by virtue of
    the weight that we carry as a body that we might have some
    influence on policy.  I think the FCC, I think Congress,
    and I think the President and all are very, very
    interested in the kind of positions that we take.
              We would be remiss, I think, certainly I know I
    would as an individual, if we didn't take some kind of a
    stance to endorse women and minority entrepreneurship as
    well as employment opportunities.  For us not to mention
    that in some capacity as we go through these discussions
    today -- and I think some serious thought has to be given
    to what Jose Luis has indicated, but I think we would be
    very remiss.  And whether it was raised in Minnesota or
    not, it should always have been of interest to us from the
    beginning.  We shouldn't have to wait for a proposal from
    any one of us to indicate that. 
              I know I raised it simply because I had not seen

   it mentioned at all before.  But I think it's a very
   crucial issue.  In light of the fact you have 1600
   stations, and my good friend Mr. Goodmon here to my left
   just did the statistics for me.  We have 1600 public
   television stations now.  In the very near future there
   may be 8,000 channels.  That's a lot.  It says a lot.
             I think we should take those entrepreneurial and
   employment opportunities and concepts into consideration
   as we go through the educative, the multiplexing, the
    political discourse. 
              CO-CHAIR ORNSTEIN:  Certainly we can raise each
    of these serially and see what we can come up with. 
              MS. CHARREN:  Whatever we do about the
    programming concerns and the ownership concerns, certainly
    I don't think the Code is the kind of mechanism that
    promotes good policy, because when it's so voluntary the
    option is not to do it altogether.  But we could get in
    there at least language about the need for attention to
    recruitment of women and minorities and the need for
    outreach efforts in this area.
              We seem to comment about everything else the
    broadcaster should pay attention to.  That may not solve
    the problems you're talking about, but at least it
    recognizes that we have our efforts going into the twenty
    first century.

             CO-CHAIR ORNSTEIN:  There are clearly three
   areas of concern and they are of great concern, I think,
   to all of us.  There's ownership, there's employment, and
   there's programming.  We ought to see where we can draft
   these in different places, and perhaps they ought to be
   addressed in all of those places.
             Let me ask Jose Luis:  If we included in the
   multiplexing area the option which you just suggested,
   which is as we go through fees and alternatives to fees,
    one of them is giving access to a channel specifically to
    minority and underserved communities, would that be useful
    and acceptable and satisfactory?
              MR. RUIZ:  Yes, it's a first step.  I don't want
    to ghetto-ize it.  I think these are entrepreneurs that
    are coming in and building service to sizable audiences in
    their area.  I think as you multiplex you are moving more
    and more toward niche programming.  As you move toward
    niche programming, the reason why minorities have been
    excluded in the process is because we broadcast to a
    general audience.  We are broadcasters, not narrowcasters.
              As you move into multiplexing, you are going to
    become more narrowcasters.  You are going to go after
    specific groups, a specific age group, a specific ethnic
    group, or something like that.  I think this opens the
    door for the same kind of philosophy to go into those

   other kind of communities.
             I don't know if it's a set-aside.  I guess my
   problem, Norm, is that if somebody can get up and draw me
   a picture of what, say, a market like Los Angeles would
   look like under what we're proposing, I would have a
   better understanding of it.  But right now it's a very
   blurred picture, with too much access and not enough
   quality of service.  I would like to try to refine that to
   make sure that we have a quality of service as well as
              It doesn't make any difference if you put a
    children's programming channel on if nobody watches it and
    it's a bad children's programming channel.  What we want
    is good children's programming, good service.  If we're
    going to put on African-American programming, we want good
    African-American programming that serves that community,
    or Latino programming or any other community.  I think
    that's what we should do.
              I'm not just saying a broad thing of access. 
    Access doesn't help anybody if nobody watches it.  What
    broadcasting is about is serving people, people watching
              The problem with the cable access channels is
    that nobody knows they exist, because nobody watches them. 
    We don't want to do that again.  We don't want to make

   that mistake.  Let's learn from that mistake.
             CO-CHAIR ORNSTEIN:  Certainly, as I said
   earlier, when we talked about one of the options here
   being using one of those channels for public interest
   purposes, we put in that it had to be programmed robustly. 
   We certainly don't want to get into that. 
             As we move ahead and talk about the educational
   channel, we made it contingent upon funding programming so
   it isn't just an empty exercise.  We've got to be
    sensitive to those things.
              But I guess, Jose Luis, we need to get more
    tangible here in terms of options.
              MR. RUIZ:  If you used a local children's
    channel and it was only CBS', their children's channel,
    their obligation, it would probably cost less,
              CO-CHAIR MOONVES:  Sure.
              MR. RUIZ:  Which tells me if it's too much
    access that no one's going to be able to afford the
    quality.  They can afford the quality of two hours, three
    hours a day possibly, but not 14, 16 hours a day.
              CO-CHAIR MOONVES:  Jose Luis, you bring up a
    very good point overall.  When a local station goes from
    one channel to the world of six, what are they going to
    put on those other five channels?  What are they going to

   put on that makes economic sense?  What are they going to
   put on that qualitatively can be good enough so people
   will watch it in a world of a 150-channel universe?
             That's the question we all have to deal with. 
   Going back to your earlier point, there is ample
   opportunity for us throughout this document to be dealing
   with some of the issues that you and Frank have brought up
   and that you have written up.  I think what we need to
   come up with is how to be more specific in terms of what
    you would like to see done and how is this possible in
    this new world.
              Part of what we're wrestling with now is exactly
    what you said:  What is going to be on these channels?
              MR. RUIZ:  I think part of my dilemma is
    visualizing what we have here already.  You propose
    something; I want to be able to visualize what we have. 
    In trying to look at this, are we saying that every
    channel will set aside a channel for access in the market?
              CO-CHAIR MOONVES:  No.
              CO-CHAIR ORNSTEIN:  No.  What we're suggesting
    is that stations may in some cases, may just do one 24-
    hour high definition signal.  That's what Jim has in mind. 
    Others may not do it much at all.  Some may go with two
    channels all the time.  Indeed, those might be, as Gigi
    suggested, two what could be defined as high definition

   channels, albeit less than 1080.  And obviously we did not
   mean to suggest that they would be immune from any fees.
             Some may go with however many compression will
   allow.  Those that do multiple channels will have
   obligations, but those obligations will not be the same
   for all of them.  There will be, to provide flexibility, a
   menu of alternatives.  They might be simply a fee, dollars
             What we're suggesting -- to get back to another
    point that Gigi made, in no instance here in this or in
    any other place, and we will make it as explicit as we
    can, would any of those fees revert to the Treasury.  They
    are to be used for public interest purposes, including --
     we will make this more specific as well -- programming,
    particular programming, and programming to make sure that
    it's enriched programming for a variety of communities to
    meet those diverse needs.
              In other instances we want to provide the
    flexibility to provide different kinds of public interest
    services in lieu of a fee, but that are at that same
    market level.  That might be a channel that's set aside
    and programmed for public interest purposes or it might be
    providing free time to parties, that during the campaign
    that was the market value of whatever the fee would be, or
    it might be some other public interest purpose.

             So we're not envisioning a world in which
   everybody will do exactly the same thing.  We're trying to
   provide flexibility to serve public interests and we're
   trying to provide flexibility for broadcasters to feel out
   the marketplace.
             MS. CHARREN:  Based on 30 years of experience
   worrying about children's television and program
   diversity, I worry about a proposal that talks about
    robust programming.  It reminds me about the way the
    Children's Television Act first said provide educational
    programming for children.  If the broadcaster still has
    the power to make money from that public, so-called
    "public interest programming," there's a push to have it
    work in the marketplace.  And for a lot of programming the
    marketplace doesn't provide the kind of choices and
    alternatives that I think you're talking about.  If it did
    we wouldn't have to sit here talking about programming.
              So we can't legislate good programming.  We
    thought maybe saying educational would help.  I mean,
    after all, public broadcasting tends to know what
    educational means, at least most of the time.  But when
    you have the -- I don't know.  This isn't to attack NBC,
    but when we have the "Saved By the Bell" philosophy of
    education and that is what you get to serve the public

   interest, then it's not working.  I think we have to set
   up a structure that encourages the choice, without
   expecting the word "robust" to do anything in a system
   that is still working to serve the bottom line, and maybe
   the idea of noncommercial programming gets around that
   because at least it takes that pressure away.  There's no
   question.  Then you have to figure out how to pay for the
             But I would worry about us recommending that the
    broadcaster fulfil all these needs of the public.  I also
    think that to talk about the idea that there just isn't
    enough programming and what are we going to do -- if we're
    not careful we'll have like HBO; I get seven opportunities
    to see the same movies in my cable system.
              It's like saying, I think, why do we need any
    more books in the children's television library for? 
    We've got all these books and you do a new book and how
    much audience can it get?  I mean, sometimes even I think
    about that with the range of children's books there are. 
              There's always opportunities for new ways to
    talk, say, to children and also to the rest of us, and
    there's creative people who figure out how to do it.  I
    think the idea that you can't fill channels -- there's new
    ways of thinking about what children's programming should
    be, not based on what we've had for the last 30 years, but

   other kinds of things that all these opportunities made
   possible, the kind of thing Charles has talked about,
   connections with data and getting out materials to
             Now, some of that fits into education.  But when
   we're talking about programming, education is what we're
   talking about.  I think we should just be careful not to
   set up a structure that limits what we get to the kinds of
   things that Jose is worrying about.
              CO-CHAIR ORNSTEIN:  I worry too about how you
    can somehow encourage the possibility that you have a
    channel set aside, that it actually has something
    reasonable on it.  I haven't come up with a better way of
    doing this. 
              We certainly have -- there are a lot of
    arguments to be made on either side of whether you want to
    have commercial-free or not.  If you have commercial-
    free, you may guarantee getting nothing out there.  If you
    have some opportunity for commercial, it may provide a
    strong encouragement to put something that's better on the
    air.  It may be that the best way to do this is not to
    have the broadcaster run that channel if that's the
    opportunity, but rather indeed to turn it over to some
    group in the community with the provision of studio time
    and editing and let them program it as they wish.  That

   may be a better way to go.
             We need to work that through a little bit more
   to reach a consensus.  I agree that that's certainly a
             Yes, Paul and Jim and Charles. 
             MR. LA CAMERA:  Norm, first of all let me add my
   voice to thank you for this framework.  It's very logical
   and rational.  Flexibility and openness is essential, I
   think, both to the group and to digital broadcasting.  In
    the same way that Peggy said that you can't legislate good
    programming, that's why I worry also about this.  You
    can't legislate economic success.
              I've said this before, as to how that
    multiplexing might work, if there was an immediate thought
    as to how to use that channel within the existing
    resources of a commercial television station, it would be
    a regional news service, a 24 hours a day regional news
    service modeled on the dozen or so cable news services
    that have been around the country now for 5, 6, 7, 8
    years.  Still I don't think there's one of them yet that's
    broken into the black, although I think some of them are
    getting close now.
              If I do that with a second channel, provide an
    ongoing 12, 14, 16 hour a day news service, I don't
    understand the logic of why that brings me the additional

   burden of paying ascertainments, the additional burden of
   paying a fee, the additional burden of providing
   children's programming.
             Is that not by definition a service in itself? 
   "Public service" may be too sweeping a term.  It's an
   informational service.  It's a news service.
             Gigi raised the point about subscription, use of
   some of these auxiliary channels for subscription use.  I
   think we need to be concerned about that.  But I thought
    again, as you pointed out, that the FCC was dealing with
    that point on the fee structure.
              As far as whatever resources emerge from this or
    whatever obligations, how those will be directed, I'd go
    back to what Robert Decherd and others have talked about
    earlier, and that is we should be looking at people who do
    that best and assist them to get some more resources, and
    that's public television. 
              I don't think, as Jose Luis has said, the
    concept of seven additional educational channels, seven
    additional public service channels in the marketplace,
    makes any economic, practical, or programming sense.  I
    just don't think it's feasible or possible.  I just don't
    think it is.
              I think again, if we have resources to redirect,
    it shouldn't be to ourselves or in that direction or

   taking on additional infrastructure burdens or programming
   obligations to ourselves, but to redirect them to those
   people who can and seem eager and appropriate to do it
   best, and that's public television.
             MR. GOODMON:  We're getting to it here now.  We
   might as well.
             I want to make two points.  This from a
   practical point of view, WCVB can do a public affairs
   programming in prime time and get a five or so, get a good
    rating for it.  Or WRAL can do a public affairs program in
    prime time and we'll get a good rating for you.  If you
    put them in the community access channel in Raleigh,
    nobody will watch. 
              But what we're trying to do here is, whatever
    our audiences are, everybody has an obligation to serve
    the public interest, and to come up with some channel that
    we're going to announce, here's all the public affairs
    stuff, it's not going to get the same viewership as if we
    do it on every station.  Every station has a following.
              Again, I think we're making this way too
    complicated.  We're either going to have 1600 stations or
    8,000 stations or a combination, and if a station has a
    public interest obligation, and we think they should, then
    every station should have that obligation.
              I don't think that Paul thinks -- I know Paul

   doesn't think that ascertainment is a burden or children's
   programming is a burden.  It's an opportunity, it's a
   responsibility that we have, and we should do that on
   every station that we have. 
             The public doesn't know whether it's digital or
   analog or anything.  It's just another channel.  This is
   really a straightforward proposition from the public's
   point of view.  So I'm really interested in the notion
   that every channel has a public interest obligation,
    whatever they are, and that that's what we're doing.  I've
    said that three times.
              CO-CHAIR ORNSTEIN:  Charles.
              MR. BENTON:  I think as we talk about the
    failure of access and the PEG, the public government
    access experiment on cable television, that we should
    remember what Henry Geller's conclusion on all this is, is
    that this was really a very good case of the failure of
    the public interest community to really push hard for the
    allocation of the access -- of the franchise fee, the 3 to
    5 percent franchise fee, to programming.
              As you all remember the decision, when the Cable
    Act was passed in the eighties, it was to apply that
    franchise fee to the general fund of the cities and
    therefore it was lost to noncommercial programming and
    therefore gutted the public education access, the PEG.

             So the funding of these public interest
   programmings is really absolutely central, and we need to
   take the lesson of what was not done in cable and bear
   this in mind in our current discussion.  That's really
   point number one.
             Point number two, and I hear Jim and I'm
   enormously in admiration of his courage for his paper the
   last time in Minneapolis and the revised paper that he's
   given us today.  Jim, the one point which we need to talk
    more about is the very important point that you have just
    made, your being vigorously opposed to the pay or play
              If Luis is right in that as we're moving from
    the -- and Frank Cruz -- from the 1600 channels to the
    8,000 channels in the next 5 to 10 years, then we are
    moving from a broadcasting to a narrowcasting model, and
    obviously all the programming requirements in the
    broadcasting environment should not apply to a
    narrowcasting environment.
              So how to maintain the spirit of your idealism,
    which I admire enormously, in calling for public service
    thinking and obligations on every channel, to the
    realistic point that every channel can't do everything and
    as we move into the narrowcasting mode, which is the
    trend, how can there be a better division of labor between

   the commercial and the noncommercial interests?
             So in some cases the commercial folks will say,
   I don't want to do this, but I'm willing to pay out of
   this.  I think that is a rational solution.  How to do
   this precisely I don't know, but I think that is the very
   key point you've raised and it's something we need to talk
   about further.
             CO-CHAIR ORNSTEIN:  Certainly there are going to
   be places where we're going to talk about that.  Let me
    just stop for a minute.  I want to raise some points that
    were raised earlier that we can dispose of relatively
    quickly and then come back to a couple of areas where we
    clearly need to spend more time.
              Some of the things that Gigi had raised -- let
    me say first, the notion of multiple high definition
    channels we clearly had no intention of leaving ambiguous
    or even suggesting otherwise that if there are multiple
    high definition channels that that would not fit a
    definition of multiplexing.  We can change the language to
    fit that. 
              In terms of the advertising-subscription mix,
    which clearly can happen, my judgment on that would be
    that if there is a fee structure set in place for
    ancillary and supplementary services, subscription
    services, and secondly for fees for multiple commercial-

   driven over the air channels and there's a mix, that you
   have two fees assessed that wouldn't necessarily be the
   full fees.  There'd be some proportional fee, but
   presumably it's going to be based on the revenues coming
   in, so that would be taken care of.
             I think we need to elucidate that more, but if
   you're going to do a mix of both you don't escape either,
   is the basic point.  Clearly, in every instance in which
   we are recommending fees for revenues coming in we want to
    explicitly suggest that those moneys are to be used for
    the multiple public interest purposes that we are
    promoting in this process and not for general Treasury
    deficit reduction or for other related purposes.
              The moratorium, to reiterate, is only on
    whatever fees, we suggest, not on any other public
    interest obligations.
              Charles has raised a very interesting point, the
    question of channels that are used for datacasting.  I
    think we need to work that through a little bit more, but
    obviously that's something we can include in this process.
              The question of the formula for revenues, and
    this gets in part to something that you were suggesting as
    well.  We do have, as our deliberations have suggested,
    basic differences expressed among the members about what
    the grant of the digital spectrum meant.  We have some

   members, I think, who would try and make the case that
   broadcasters ought to be given money for taking on this
   tremendous burden, and obviously other perspectives that
   suggest that, even if no additional revenues accrue, this
   is a tremendous boon.
             I personally thought it fruitless to try to draw
   those lines in the dust and instead to see where we could
   compromise so that we could reach a point where we could
   come to some substantial additional benefit.  So at this
    particular recommendation I thought it wise to be very
    sensitive to the questions of both the uncertainty of the
    marketplace and also to make this threshold where we could
    all agree that, if there were some financial boon for
    broadcasters, then clearly we all agree that there was
    something owed in return.
              On that, it's very difficult to come up with a
    formula.  The idea here is that you have a formula, so
    that if there is multiplexing it isn't just a
    cannibalization, that if you get into a situation where
    you're going to run five signals and in effect you're just
    dividing up the old revenue pot the same way that's very
              Now, my own judgment is that basically
    broadcasters, because there's an incremental cost to
    putting out an additional signal, aren't going to do that. 

   They're going to run additional channels if there's a
   commercial benefit to running additional channels.
             I also believe that to take a static model that
   suggests that if you move from analog to digital all
   you're doing is dividing up marketplace is ridiculous. 
   What we've seen is in every innovation in communications
   you expand the marketplace.  That happened with the CD,
   it's happening with DVD, it happened with the VCR.  It
   creates new markets and it expands markets.  So I don't
    think we need to operate on the basis of a static model. 
              We maybe can't find an appropriate formula here. 
    It may be better for us simply to suggest that this is our
    intent.  Besides, any formula that we offer is only a
    suggestion to be picked up by whatever bodies, the FCC and
    the Congress.  The FCC presumably would assess fees.  But
    that's the idea here.
              Perhaps we can discuss it more if there's some
              MS. SOHN:  Norm, if you presume, and I think
    you're correct in presuming, that broadcasters are only
    going to do multiple channels if they know they can make a
    profit from it -- and this is setting aside, of course, a
    couple years of experimentation, and both you guys and I
    agree that we should have a phase-in or a moratorium or
    whatever you want to call it, then what's the concern?

             If broadcasters are going to do things that are
   profitable, then what is the money concern?  You're kind
   of undercutting your argument.
             CO-CHAIR ORNSTEIN:  At least what some would say
   is that this may be done just for competitive reasons in
   the marketplace, to compete against cable, and it may not
   be additional revenues.  My own view is going to be
   different from some of the others, some of the
   broadcasters on the panel, in terms of what will happen
    and what they owe in terms of an obligation.  But I wanted
    to be sensitive to all the different viewpoints here so
    that we can reach a consensus on the thrust of this, which
    is the most significant element.
              CO-CHAIR MOONVES:  Gigi, I might respond.  Let
    me throw the question back to you:  What is the concern if
    we have set up a formula whereby, when and if -- with all
    due respect to Mr. Minow, the windfall has not happened. 
    It very well could and there is the obvious hope that it
    will.  And there will be an investment, that this will
    happen.  But this allows us the flexibility that, when and
    if this does happen, then there will be fees and other
              MS. SOHN:  Well, one is an ideological viewpoint
    concern, which I mentioned at the very beginning, although
    not very articulately.  I don't think I was awake yet. 

   That is that I don't think that revenues are relevant.  I
   don't think the windfall question either way is relevant. 
   I think this is about what are the opportunities
   broadcasters are going to get, what are the opportunities
   for more public service, what are the opportunities for
   the public?  So that's the way.
             I framed the debate differently.  Number one, my
   only concern is a more substantive practical concern as a
   risk:  at the risk of repeating myself, that the way this
    is formulated now I think is highly unlikely, because
    you're going to put your best stuff on the primary
    channel.  And if the broadcasters here think I'm full of
    it, please tell me.  Because you're probably going to put
    your best stuff on the primary channel, it's unlikely that
    you're ever going to reach the point where the second,
    third, and fourth channel, even combined, have a revenue
    that exceeds the primary channel.  I'd like to hear from
    the broadcasters.  Tell me on that? 
              MR. DUHAMEL:  You're wrong on that, because the
    thing is, suppose you've got a Warner Brothers catalogue
    on the side.  You want to take and develop that channel so
    that you've got some revenue potential.
              MS. SOHN:  It's got some revenue potential.e
              MR. DUHAMEL:  The point I'm trying to say is,
    suppose you were with NBC and you had this on the side. 

   You don't just take it all and the best of the deal you
   put on one channel.  Then you've just got nothing.  You
   have to spread it around and try to attract an audience on
             MR. RUIZ:  Norm, I think what's going to make
   economic sense to begin with is the same thing that made
   economic sense in cable.  That was other channels at
   different hours of the day.  You're going to repeat much
   of what you've already paid for, product you've already
    paid for for your main channel. 
              If you take away reruns from cable, what do you
    have?  How much programming is actually manufactured today
    for cable itself?
              CO-CHAIR MOONVES:  More and more every year.
              MR. RUIZ:  More and more every year as the
    economic base grows, but the economic base is growing on
    reruns, not originated programming.  I think if stations
    are going to survive, the first thing they're going to do,
    they're going to have to put on reruns.  For economic
    reasons they're going to have to do that. 
              To clarify, my biggest fear is exactly what Paul
    alluded to:  deciding to put on another all-news channel. 
    Do we really need, is the public really crying for,
    another all-news channel?  And how much of an all-news
    channel is repeating and repeating and repeating the same

   stories the next hour?
             MS. SOHN:  Can I just speak to --
             MR. RUIZ:  One second.
             With the explosion of cable, cable channels, can
   somebody here at this table tell me who caters to the
   needs of the Native American community today with all
   these channels?  Who really caters to the needs as a
   broadcaster or cablecaster of the African-American
   Community or the Asian community or the Latino community? 
    And don't tell me Spanish language broadcasts.
              The same thing could potentially happen again if
    we're going to repeat and repeat and repeat what we did
    with cable.
              CO-CHAIR ORNSTEIN:  Gigi.
              MS. SOHN:  I just want to make one quick point. 
    I think what you and he are both missing is the beauty of
    the menu.  You talk about having seven access channels. 
    No.  If the marketplace is providing for education
    channels or all-news channels, a broadcaster is not going
    to be so stupid as to try to repeat the same thing.
              So if they want to give the money to public
    broadcasting, as you suggest is the object of very good
    programming, they can do that.  That's why I think this
    works so well, is you don't have to.  You can choose among
    a menu.

             I'd like to expand this menu, but, as I've just
   said, with public interest things to do, and then you
   don't have to worry and the marketplace works.
             MS. CHARREN:  Just two points relating to Paul's
   news channel.  The fact is what's missing in prime time
   television as we know it is news for kids, news that helps
   kids understand what's happening, where it's happening,
   why it's happening.  And on that news channel, if you were
   doing it, it would be appropriate to set some block aside
    that parents, who are having a little trouble with
    violence or whatever on the news, could find at the dinner
    table, for example.  That could be a very practical part
    of that schedule.
              Secondly, I think we haven't really considered
    as we think of what programs are going to win the ratings
    game, what we're going to watch, that with all this stuff
    out there, with all these platforms and programming, we
    the public are going to have a different way of watching
    television.  Cable changed how we watch television.  When
    it started on television, UHF was a disaster.  You
    couldn't even tune it in.  You had to get the FCC to make
    rules for a click-dial on UHF stations, which was a real
    problem for early public broadcasting.
              Then cable came.  At the beginning it didn't
    have much of an effect.  Now nobody knows whether they're

   watching cable or broadcast television.  You have to put a
   little thing in the corner to know what you're looking at.
             When we have all this new way of getting stuff
   to the public, it's going to change how we watch and what
   we expect and where we go for programming.  It won't be
   perfect.  We might all still watch CBS, but I can't do
   anything about that.  That was a joke.
             CO-CHAIR MOONVES:  Thank you, Peggy.
              MS. CHARREN:  But this would be a new world if
    it works right, not in the first 5 years, but later.  And
    with the synergy that Charles talks about and with data,
    hopefully this is going to be a new opportunity for the
    public to relate to each other, to acknowledge, to at
    least think in terms of what it could be like as we make
    the rules, and don't sort of limit it just to make sure we
    have some little things.
              CO-CHAIR ORNSTEIN:  Let me make a couple of
    larger points here, one related to something Jose Luis
    said earlier.  We haven't spent a lot of time on this, but
    one of my greater concerns that we are moving so rapidly
    towards this rich menu of narrowcasting that we are losing
    what broadcasting brings to the society and has brought to
    the society.
              When I go out and talk about this to the public

   at large, I make the point that the last episode of
   Seinfeld, which was hyped more than any other television
   experience in history, was on the cover of every magazine
   imaginable, it went on for weeks and weeks, and it got an
   audience that was about 60 percent of the audience that
   had been there for the last episode of MASH.  That's a
   reflection of the fact that broadcasting, which is the
   public square, which is where more Americans than anyplace
   else go for a common experience and a common message, is
              One of the reasons, it seems to me, one of the
    rationales, for giving the digital spectrum to
    broadcasters as opposed to others is the hope that this
    can help us preserve at least some elements of a public
    square.  I don't know what we can do to encourage all of
    that, and we obviously have to let the marketplace
    operate.  That marketplace may lead us more and more to a
    kind of narrowcasting that has many advantages in terms of
    giving voice to different communities and satisfying
    different narrow interests.  But that also runs the risk
    of compartmentalizing the society and taking us away from
    these common experiences.
              Indeed, as Jose Luis said, it's one thing if you
    have programming by minorities for minorities, but
    presumably we ought to have programming by minorities for

   everybody.  That's a part of what we want in a large and
   diverse society.  So we have to deal with that. 
             In terms of the narrowcasting, I for one do not
   believe that we are moving into a desert where we have 600
   lanes of the superhighway and most of them are occupied by
   clunkers.  Frankly, as I look at what's happening in the
   innovative marketplace I cable, as I see new channels
   developing, some of which are repackaging, they're
   terrific.  The Classic Sports Channel is repackaging, but
    it's bringing back wonderful, rich information, indeed
    information to young people, generations, who didn't know
    that this stuff existed before. 
              I love the fact that we have Turner Classic
    Movies now competing with American Movie Classics and
    those movies are back.  A lot of what happens on Nick At
    Night is repackaging.  But you can find ways to repackage
    and make it tremendously commercially successful.  I
    believe in this marketplace the likelihood is that
    broadcasters are going to go out there and they're not
    going to just repackage the news.
              When I see what goes on the cable local news
    channel here, it's evolving to an extremely rich channel
    that often has a lot more local news, with a lot more
    community orientation, than what you find even in the
    multiple hours of news that go on the commercial channels.

             So there are ways of making that both
   commercially viable and feasible.  So I expect that indeed
   we will see a lot of richness here.  How we can convert
   that richness in ways that best serve the public interest
   along with what the marketplace offers is a part of our
   goal.  I expect that there will be multiple channels that
   will be commercially viable and then we can use whatever
   revenues accrue from fees or whatever options occur here
   to make it an even richer experience.
              To turn to another area that we clearly need to
    spend more time on, the question of whether public
    interest obligations, existing ones and others that we
    recommend, then should apply equally to all channels in a
    multicasting world.  There are going to be some
    differences here.  Those differences it is clear cut
    across the normal lines.
              A part of the reason we put it down here, as I
    see it, that if you paid the fees then you only have to
    perform those other obligations on the one channel is for
    a couple of reasons.  But one of the reasons is that the
    argument is that if you're going to run an all-soaps
    channel, say, it makes more sense to get fees.  And
    instead of having them do three hours of children's
    programming, which will mean a soap for children
    presumably or something else, and there won't be an

   audience, to take revenues for another opportunity to then
   provide enriched programming for children or for
   minorities or in other ways.  That's some obligation,
   certainly, whether it's ascertainment of community needs,
   which I suspect that if the station's going to go out
   there and do ascertainment of community needs you're not
   going to have to do six separate ascertainments that are
   completely different if you're running six channels. 
   You're going to be able to do that in a very efficient way
    that can meet all of those needs.
              Other things like closed captioning obviously we
    need to apply to all, but some of these other things could
    be done much more efficiently. 
              Now, we need to air our views on this, I think,
    a little bit more and maybe we will come to a conclusion
    that's different than that.  But it seems to me that a
    world in which you have a fee structure and they apply
    those obligations in the richest fashion in the place
    you're going to get the most audience, appropriate
    audience, and then have money that you can use for other
    obligations that are applied that can be spread out
    better, is a more efficient and a better way.
              MS. CHARREN:  Just one point I forgot to
    mention.  I think it's the third paragraph, you talk about
    the fees going to subscription channels, pay services, pay

   per view.  You didn't mention public broadcasting.  You
   don't mean to keep them out of that mix, did you?
             CO-CHAIR ORNSTEIN:  Those are the fees that are
   set to come in under the Act already for ancillary and
   supplemental services.
             MS. CHARREN:  Yes, but we don't say where those
   fees are going.
             CO-CHAIR ORNSTEIN:  In other places we do.
             CO-CHAIR MOONVES:  In other places we say it's
    going to public television.
              MS. CHARREN:  The more you mention that the
    happier I am, since I think that a lot of the public
    interest programming would get produced by public
              CO-CHAIR MOONVES:  You've said that several
              CO-CHAIR ORNSTEIN:  On that point, Paul
    obviously raises a point that we all have discussed and
    are sensitive to and generally agree with.  We want, in a
    world where we want broadcasting and where we want these
    enriched experiences, to enhance to role of public
    broadcasting as much as we possibly can.  But I don't want
    to dump all kinds of stuff simply into the laps of public
    broadcasting.  I believe that we ought to encourage, as we
    do here in our language, that the transition to digital be

   made easy for public broadcasting and that they be
   provided a base of ongoing revenues through some kind of
   trust fund and that they be given additional
   opportunities, but not the exclusive franchise for the
   creation of an educational channel, which we will
   determine very soon.
             I also think that commercial broadcasters in a
   digital age ought to play a very significant role and a
   role beyond just this minimal level of standards here,
    with a lot of opportunities that can enrich this
    experience.  We've used the term before "ghetto-ize."  I
    think it would be unfortunate if we ghetto-ize any area of
    public interest obligation into public broadcasting.  It
    ought to be letting many flowers bloom.
              MR. LA CAMERA:  I think you misunderstood a
    couple of my points.  One, Peggy made a very good point
    about news for children and I was remiss in not thinking
    of that. 
              CO-CHAIR ORNSTEIN:  But you won't make that
    mistake again.
              MR. LA CAMERA:  In 27 years, you'd think I'd
    have learned.
              To use the term "robust," I would anticipate

   that, again, if the station did decide to use one of these
   companion services for a local and regional news service
   it would be a robust news service and not a repackaging. 
   I didn't mean to suggest that.  That's where our expertise
   and resources tend to lie, to rest.
             Gigi, I understand the beauty of the menu.  What
   i don't understand the beauty of is if I do that service,
   and again it's the most logical one available to us, why
   it brings with it a fee, the payment of a fee.  If I'm
    providing an additional news service in a robust, creative
    way to my community, I don't understand why it brings with
    it the payment of a fee obligation, but if on the other
    hand I take one of those channels and give it back to my
    network -- and if my particular network is very interested
    in a soap channel, then I could understand there's
    economic consideration there.  But if I'm providing a
    service locally, I don't understand why it necessitates
    additional obligations and burdens when I'm going into
    this experimental arena as it is.
              As I said, there are models, including the
    Washington model.  These are yet to be determined
    economically viable or successful models.  That's what I
    like about this, is that it does have within this model
    the component of the revenue, this being a successful
    venture, and if it becomes a successful revenue venture

   then, yes, I agree with you and Jim that it should bring
   other obligations.  If it's not, then these obligations
   become simple burdens and tend to be discouragements to
   experimentation and innovation.  I sincerely believe that.
             MR. GOODMON:  Norm.
             CO-CHAIR ORNSTEIN:  Yes.
             MR. GOODMON:  It seems to me the goal is to
   preserve and strengthen the local free, over the air local
   broadcasting system.  Another model here is not that we
    create all these new wonderful program channels, but that
    business continues as it is now and it is now a fight for
    the best programming, a fight for the programming that
    gets the ratings.  
              There's nothing to prevent one station now from
    having Fox and Warner Brothers, and if they're not going
    to do HD they could run three.  We're going to really
    disenfranchise local broadcasters if we don't pay some
    attention.  The big organizations that have the big power
    with the networks, what's to prevent UPN and Warner
    Brothers from being on the same station?
              MS. SCOTT:  They are now.
              MR. GOODMON:  Not at the same time.  You only do
    that if there's not another one to do it.  But now the
    networks are divided because of the number of stations. 
    But when we get into the multicasting business somebody

   could have two.  I mean, we could really mess up the local
   broadcasting system that we have if we don't pay attention
   to this.
             What's going on now is who has the market power
   to get the best programming and that's what it's all
   about, and we're going to find some local broadcasters are
   going to be left without any if we don't pay attention to
             Is that too simple?  That's just the market kind
    of notion.
              CO-CHAIR ORNSTEIN:  But in part, if you have a
    local broadcaster who decides simultaneously to run Warner
    Brothers, UPN, Fox, or whatever, then at least under our
    model they will end up having to pay a significant fee
    that can be used for public interest purposes in the local
              MR. GOODMON:  But it's undercutting the
    viability and the diversity of the local marketplace,
    which it seems to me we ought to be working the hardest on
    to make sure that our digital revolution doesn't destroy
              MR. CRUMP:  I know this has been said many times
    before, but let's remember that what is going on here is a
    huge expenditure of money by the local broadcasters to go
    into digital.  Our trade publications within the last

   couple of weeks pointed out that in the four weeks of
   August for the first time if we added all of the network
   programming together, they were beaten by the total of the
   cable viewing that we had, which tells us how the
   narrowcasting is accumulating a total audience.
             What that means is our competition is getting
   more and more difficult to deal with.  We're looking, many
   of us, looking at digital as a means of trying to, not
   preserve, but to try to resurrect, a larger audience that
    we used to possess previously but we don't have today.
              Then when we start to talk about we're going to
    narrowcasting and this -- well, there are many
    broadcasters who say:  My God, people talk about this, you
    know, but what I'm about to do is take my own audience and
    split it as well, so that again I'm supposed to make money
    by splitting an audience as I go, when all of these years
    we've been trying to get to the largest audience we could
    get, and it's going to cost us additional expenses in
    order to do this. 
              It's going to be an interesting situation. 
    There undoubtedly will be great experimentation in various
    markets as to who does what, but I think in the very
    beginning and for many years it's going to be a continuing
    fight on the part of the local broadcaster to try to
    preserve the audience that he has for his main channel,

   because we're losing it every single year.  Now it's
   getting down to the point that for the first time we've
   looked the evil guy in the eye and have to say:  My God,
   you're not only gaining on us, we're getting behind in
   this fight.
             I think we should remember that when we talk
   about a windfall coming to us.  There's no built-in
   windfall there and it's going to be years before we can
   see any real results, because until the sets get out there
    and people can receive the digital signal that's going out
    in whatever form it's in, we have nothing to sell.  But we
    have effectively increased tremendously the cost of what
    we are presenting to program because of the simulcast.
              MR. MINOW:  Mark Twain once said:  "One should
    never make predictions, especially about the future."  I
    know when I served on the board of CBS at the beginning of
    the year we would be shown a presentation of what the
    schedules would be like of ABC, NBC, CBS.  The second year
    I was on the board I said:  You know, they used to have a
    chart like that in Detroit; it said "Ford, General Motors,
    and Chrysler."  They didn't have room on the chart for
    Volkswagen or Toyota or anybody else.  I said:  What kind
    of chart have we got here?  What about cable?  What about
    UHF?  What about satellite television?
              People in the business tended not to see what

   was happening about them.  When UHF was beginning and I
   was in the government, the UHF people were very worried
   about cable.  They came to complain to me.  I said:  You
   know, cable is the best thing that's ever happened to you
   because it's going to make your channel as available as a
   V channel. 
             This business is changing constantly.  The best
   thing that's in your draft is the openness to
   experimentation.  You've got the brightest, most creative
    minds in the country in this business.  They'll figure out
    a way to do it.
              I don't know which way it's going to be, but
    you'd better look at this as a great opportunity to
    compete with cable, because you have the same opportunity
    they have of having more than one channel.  The test here
    is going to be the limit of your imagination and
              The worst thing we could do or Congress could do
    or the FCC could do would be to write rules here which are
    inflexible.  That's the point I want to make, although I
    do believe you can call it -- it gets into semantics.  You
    can call it a windfall or whatever.  I regard it as a
    choice that Congress made to say no to the policemen, no
    to the firemen, no to the hospitals, yes to the

             But if it's a yes to the broadcasters, there's
   got to be an opportunity here to provide public service.
             CO-CHAIR ORNSTEIN:  I think we're going to have
   to move on in a minute.  Before we do, just for our own
   guidance, it seems to me we have some signals in most of
   these areas on what we can do to tighten our language and
   be more sensitive to these menu options and to diversity
   concerns.  Let me just quickly read the couple of
   sentences that we have about the public interest
    obligations on all or one channel and see what the sense
    of the group is and whether we ought to change that,
    eliminate it, or leave it. 
              What we say is:  "With this fee or in-kind
    arrangement in place, other statutory or regulated public
    interest obligations in areas like children's television
    would only apply to the primary channel and not in equal
    amounts to all the other multiplexed signals, unless the
    broadcaster could demonstrate the public interest benefit
    to the FCC of proportionally spreading specific
    obligations around the multicast channels.  For example,
    it may prove advantageous to give a broadcaster
    flexibility to place political messages on whatever
    channels attract the right demographic audience to achieve
    maximum benefit."
              MS. CHARREN:  I'd like to do away with the word

   "only" in that sentence.
             CO-CHAIR ORNSTEIN:  "Would apply," yes.
             MS. CHARREN:  The idea that it applies only to
   the primary channel is what that sentence is about and
   that's ridiculous.  It may not apply to the equivalent of
   a porno channel, but the fact is there's a lot of places
   where a children's piece would be appropriate, and I think
   what you're trying to say is that there are some places
   where it might not be appropriate.
              I really am not terribly interested in a home
    shopping place for children on the Home Shopping Network,
    although the Girl Scouts just made it possible to get a
    fashion badge from the Express Fashion Store, which is
              So that I think that that's a flexible thing,
    too, that children belong in some places and not in
    others.  But I think that this idea that it only applies
    to the primary channel is not the way to go.
              MS. SOHN:  Maybe I misunderstood this, but my
    position has always been if you're doing three channels
    you've got to multiple the public interest obligation
    times three.  You shouldn't necessarily have to spread
    them out over the channels, but you could, except for the
    political programming, which I think you have a legal
    problem on, which I don't want to get into right now

   unless you really want to.  But you could segregate them
   onto the primary channel if you wanted to.
             But you're saying you don't like my
   multiplication thing, right?
             CO-CHAIR ORNSTEIN:  I want to get the sense --
             MS. SOHN:  I think you should multiply, but I
   don't have a problem with giving the broadcaster
   discretion to put them on one or another channel.
             MR. GOODMON:  I don't know what the primary
    channel is.  A channel is a channel.  I don't know how
    you're going to define which one of your channels is the
    primary channel.  If there are three or four channels,
    they're all --
              CO-CHAIR MOONVES:  My guess, Jim, is if you run
    five channels we'll be able to pick out what's the primary
              MS. SCOTT:  The one that makes the money.  The
    one that makes the money.
              MR. GOODMON:  The highest ratings?
              CO-CHAIR MOONVES:  No.  I think you'll find --
    if you are a CBS affiliate at the moment, my assumption is
    you will put on that first channel what is the normal CBS
    schedule.  On subsequent channels you will experiment
    somewhat more than that.  My guess is that you will be
    able to tell what the primary channel is.

             Gigi had a valid point, although I don't
   necessarily agree exactly with the economic model, because
   the secondary channel could in fact make more money than
   the primary channel.  But I think it'll be fairly self-
   evident for the first several number of years what is the
   primary channel.
             MR. LA CAMERA:  ...know what the primary channel
             MR. ORNSTEIN:  To use an even better model, with
    HBO there's now a one, two, three, four, five family, and
    it's fairly clear what the primary one is, even though
    there's a lot of blurring.  But it's fairly clear. But
    it's really a question of, that issue aside, I suppose
    it's at least theoretically possible that you could have a
    huge amount of blurring, although not likely.
              The larger question is the one that Gigi raised: 
    Do we want to say that all channels are equal in this
    regard and they all have exactly the same obligations?  Do
    we want to provide flexibility?  Do we take care of that
    flexibility and remove the word "only"?
              MS. CHARREN:  Not just remove "only."  Well,
    that helps, but "not in equal amounts" is really the most
              In looking at that sentence, I think what's
    troubling me is "children's television."  In all of this,

   that's the one place where we really mandate to do three
   hours and it seems like this was a way of undercutting
   that mandate.
             CO-CHAIR CRUZ:  That's easy.
             MS. SOHN:  It's non-statutory.  Again, you've
   got major legal problems segregating them.
             CO-CHAIR ORNSTEIN:  Under Jim's recommendations
   here under multicasting, this statement seems pretty
   simple to me:  "If the broadcaster selects the
    multichannel option of broadcasting in digital, he should
    be required to fulfil the same public commitments on each
    channel.  Then he goes on to say there should be no
    opportunity for pay or play, which I'm sorry to say I
    disagree with and I think there should be discussion later
              CO-CHAIR MOONVES:  I think if somebody has 5
    channels I think he'd be hard-pressed to have 15 hours of
    educational children's programming on his 5 channels.
              MS. CHARREN:  I disagree with that. 
              CO-CHAIR MOONVES:  I know you do.
              MR. BLYTHE:  Could he run the same programming
    or does it have to be different? 
              MS. CHARREN:  The specials from ABC, ten years
    worth of programming.
              MR. GOODMON:  It doesn't have to be different

             CO-CHAIR ORNSTEIN:  No, presumably it doesn't
   have to be.  But then you run into the question, does it
   serve the public interest if you have a sports channel or
   an all-sports channel to take three hours to run
   children's programming.
             CO-CHAIR MOONVES:  The idea of the model is
   flexibility, flexibility to demand that the same...
             MS. CHARREN:  I'd like to know why when we talk
    about public interest obligations on each station you use
    children's television as the thing that we don't have to
    do?  Why does that come up?  Because we have a legal
    mandate now?
              CO-CHAIR ORNSTEIN:  No, it's because it's the
    most powerful.
              MS. CHARREN:  Believe me, it's the most
    necessary kind of way of getting a democratic society to
    continue.  I could give you 5,000 hours of programming
    that don't exist for children that should in a society
    that cares about young audiences.  That doesn't mean ours
    is bad, but there's an opportunity for all kinds of
    programming for children.  Now, I don't want to say that
    it has to happen in a particular way and I don't want to
    say that that's the only thing we need to do, but I don't
    want to preclude the idea that children are not

   appropriate for any channel except the primary channel,
   which we have the obligation now.
             It isn't just, narrowly stating, education which
   is a particular type of programming children are entitled
   to.  You know, it's 40 million individuals.  It goes up to
   17.  By law now, when you're 18 you can vote, and only 17
   percent of this audience votes when they're 18.
             If you want to reach the teen audience to try to
   make them understand what their responsibilities are, why
    it's important to know that you have to participate in
    making this country work, you could spend a lot of time on
    a lot of different channels making that happen.  So I
    don't want to say children on the primary channel.  I
    think that undercuts the whole purpose of what the digital
    opportunity is.
              On the other hand, I think there are more needs
    than just children.  
              MS. CHARREN:  My God, the whole place got
    silent.  I didn't mean to turn you all off.
              CO-CHAIR ORNSTEIN:  Our primary channel -- well,
    we'll grapple with this.  I guess that's the best we can
    do right now.  Let's move on to discuss the education
    issue, and we have some questions here as well.
              It probably isn't necessary to go into great

   detail on what we have here in the proposal.  It follows,
   I think, very much what we've talked about before, setting
   aside one 6-megahertz on the analog spectrum in each
   community for educational purposes, broadly defined, with
   first dibs on applying this going to the public
   broadcasting station or stations in the local area, but
   they have to come up with a plan and that plan has got to
   show great sensitivity to the local community, the diverse
   needs of that community, cooperation with institutions,
    libraries, schools, and others in the community, and a
    programming distinct from what otherwise is on those
    channels; and if the FCC doesn't approve the plan then
    it's open for bidding by others.
              So let's see what kind of comments we have on
              MR. RUIZ:  Several I have.  You have my paper.
              I don't think the public broadcasting station
    should be given first, no more than I think Les would say
    that, because NBC had football last year, they should have
    first option to carry it this year.  It should be a
    laissez faire.
              For example, in Los Angeles we have a board of
    education station, then you have KCT.  Well, KCT is the
    bigger, stronger, better financed station.  But which one
    is the one that's totally dedicated to education?  So I

   think you have to be very careful there.  They may be able
   to form a better partnership.  So I don't want to exclude
   the public broadcasting station, but I don't want to give
   them first option.
             I don't think I can, as I spell out, support the
   trust without knowing what the trust is doing and what
   it's going for and how it's doing it.  I think Congress
   needs to support public broadcasting as it makes the
   transition to digital and I support that.  The request is
    $400 million, Frank?
              MR. CRUZ:  Yes, for digital. 
              MR. RUIZ:  I support that.  The other things I
    could not support unless I knew much more than I do.
              Now, I think we have to support the Department
    of Education in what they're doing.  The only time that
    truly independent producers as well as minorities
    participated in children's programming, and others, was
    when ESAA was in existence, which Ronald Reagan knocked
    out in 1980.  But under the ESAA grants you really had
    programming which dealt with not generalities, but
    specific needs of children in this country, and I think we
    are remiss in not looking at the public education in this
              CO-CHAIR ORNSTEIN:  Explain what you mean by
    incorporating the Department of Education? 

             MR. RUIZ:  Under ESAA the Department of
   Education gave grants.  Things like Villa Allegre, Que
   Pasa and many, many other projects came out.  It really
   launched some of your top minority producers today --
   Montezuma Sparza, Juan Garcia got his start.
             But they were very specific.  They would get a
   proposal.  They weren't broadcasters, they weren't looking
   at what affects the whole nation, will this fly in the
   whole nation.  They would sit there and say, here's the
    children's need, here is a proposal from producers to meet
    that child's need, and they would fund and produce the
              I think if we leave the Department of Education
    out of it, you have the FCC and you have stations and
    other things happening.  If you really want to, say,
    address the question of preparing our children in math or
    science, which are really things that are pretty universal
    across the country, you're not going to get into the
    conflict with the Texas criteria or the California or New
    York criteria, I think there are certain standards that
    the Department of Education can work with producers to
    produce programming for our children in those fields of
    math, science, and other areas.
              So I think when you talk about funding and the
    month going to areas, I think we really want a partnership

   with the Department of Education if we're going to talk
   about education channels. 
             MS. CHARREN:  It was always my feeling that
   public broadcasters would do more to serve kids, would do
   more to serve diverse audiences, if they had more money,
   if the structure was such that they could serve our
   audiences and still get funded.  I think that California -
   - Los Angeles is such an unusual market in terms of how
   many stations you have that it's an unusual way to think
    about whether or not public broadcasting works.
              It's my feeling that public broadcasting has
    done a pretty good job with kids.
              MR. RUIZ:  Recently?
              MS. CHARREN:  It's a structure that's been set
    up.  The Department of Education is not necessarily the
    best place to be a broadcaster.  It has other things.
              MR. RUIZ:  It's not a broadcaster.  It's a
              MS. CHARREN:  Programming.  Well, I think the
    programming from the Department of Education could be part
    of the public broadcasting service.  But if you don't
    think of public broadcasting as the institution that
    serves education, I think we're missing a very good bet in
    terms of what structure is going to run those.
              Villa Allegre was on PBH in Boston.  Who's going

   to distribute all of that?  
             I do think that the producers, to get a
   diversity of producers, is important.  But it sounds like
   I'm hearing that public broadcasters should not be where
   the education starts.  That's like saying commercial
   television shouldn't be where the entertainment starts or
   the news starts.  We could set up a whole news institution
   in the country to do news, which might be less connected
   to "if it bleeds it leads," but that's not what we're
              I don't know, I may be hearing something you're
    not saying, but it sounds sort of negative to public
    broadcasting.  As it encourages diversity, I think it's
              MR. RUIZ:  I think that single public
    broadcasting as one homogeneous system would be a mistake. 
    I think what I'm recommending in my paper is that there
    are educational licensees; because they get their licenses
    through an educational system doesn't mean that they are
    small systems.  If you look at South Carolina, if you look
    at Nebraska, if you look at some of the others, I think if
    you bring those into the Department of Education to really
    work at addressing the issue, you come out with a better
              This is not excluding the delivery system,

   Peggy.  This is expanding the products, how does the
   product get manufactured, who manufactures the product,
   what is the intention of the product, that you will expand
             I don't think Los Angeles is a unique market.  I
   think if you look at New York, if you look at Connecticut,
   if you look at New Jersey, if you look at the two stations
   that are in New York itself, you have a lot of that
   overlapping, but it's to do what.  And you may find in
    that area -- for example, the New Jersey one is a network,
    is a State license.  It has stations throughout the State
    of New Jersey, but they go into New York as well.  The
    actual WNET is a New Jersey licensee, but it's housed in
    New York.
              CO-CHAIR MOONVES:  Can I ask Frank what he
    thinks about this?  A lot of this was based, obviously, on
    things that you had brought up.  I'd like to hear your
    point of view.
              MR. CRUZ:  A couple of thoughts.  In reference
    to the proposal that was submitted on behalf of the
    Corporation for Public Broadcasting, ABS, PBS and the
    public broadcasting industry, our greatest concern, and I
    think the writings reflect it now, is that we certainly
    believe that we have a very difficult task in public
    broadcasting when we are subjected to the whims and ways

   of Congress year in and year out.
             Just to take you back a couple of years ago,
   there were threats of zeroing public broadcasting out
   completely and we barely survived.  The financial, the
   appropriations on an annual basis, is very problematic,
   because we never know how high it will be, how much they
   will cut.  So the advocacy and the framework and the
   documentation that we submitted for a permanent adequate
   trust fund for the creation and for this conversion to
    digital I think is on target and that's what we would like
    to see.
              The second channel, the 6 megahertz, I think
    public broadcasting in essence, and our paper says that we
    are prepared to apply for that, to deal with that. 
    However, our concern was that if it becomes another
    mandated issue and not funded that we would have the same
    problem that we have with regular public broadcasting that
    would have to be at the whims and ways of going back to
              I also happen to feel that the digital era -- I
    think I see things more in terms of opportunities than I
    do problems, and I think Jose Luis is on target in wanting
    to extract perhaps or at least ask of public broadcasting,
    if it does get this permanent trust fund and should it
    also get the second channel, that we certainly become more

   inclusive and we become more adaptable to all of the
   different kinds of programming that is available, because
   I think it will offer an enormous amount of opportunities
   and an enormous amount of different kinds of new services
   and public services that we can apply.  We should take all
   that into account.
             CO-CHAIR MOONVES:  I think there may be a way to
   incorporate both of these things in language which does
   include public broadcasting as well as open up
    possibilities for other.
              MS. CHARREN:  I agree with Frank, but what I got
    nervous with was saying -- I agree with all the
    programming concepts, but I worry about a gradual
              CO-CHAIR ORNSTEIN:  Let me say that the reason
    we drafted it this way was in part a sensitivity to public
    broadcasting, but it was also out of fear that we would
    overwhelm the FCC if they had a completely open bidding
    process for every single area and then they had to
    evaluate however many plans came in.
              At the same time, we clearly didn't, because
    everybody knows the quality and sensitivity to local needs
    of public television stations around the country is
    uneven, so we clearly didn't want to simply give it to
    stations that in many cases wouldn't be able to do the

   job.  So taking both of those things into account is why
   we came up with this process of giving them a first cut
   and then seeing if they could pass muster.
             But if there's a better way of doing that --
             CO-CHAIR MOONVES:  I also hesitate, on the
   Department of Education, to bring in another bureaucracy
   into the process.  That scares me, adding yet another
   layer to accomplish what we want to.  And I'm aware of a
   lot of the good shows you mentioned, a lot of the good
    programming, but I really feel that in the hands of public
    broadcasting as well as some of the other producers that
    you have brought up, I think it's better not to bring in
    another institution.
              CO-CHAIR ORNSTEIN:  There may be a way at least
    of making sure that there's a linkage between the concerns
    the Department of Education has had in these areas and
    making sure that we have these channels, that there's a
    communication link set up.  That's a thing we can work on.
              Charles and then Bill.
              MR. BENTON:  I agree with this section as
    written, with a minor addition at the bottom of page 4
    which I'll come to shortly.  But I think, as I mention in
    my letter that I sent to you both and copies to everyone,
    that this single recommendation or set of recommendations
    in the arena of education could be the most important

   legacy of our Commission if it actually did get
             I think Robert Decherd in suggesting a permanent
   retention of the 6 megahertz on a one channel per market
   basis has made a really fundamental contribution to the
   work of our Commission and I hope we do not lose sight of
   his vision on this as we move forward here.
             This one channel per market with the extra 6
   megahertz could also help in a beginning way to solve the
    problem that is of deep concern to Mr. Tauzin in Congress
    and that public television is struggling with in an effort
    to sort out the overlapping stations.  If there was one
    station per market for education, then there would be --
    and some funding attached to it, obviously, which is
    critical -- then there would be an arena for cooperation
    among the competing overlapping public telecommunications
    entities on a per market basis.  So this could really be
    good news.
              The specific that is missing, that I would like
    to suggest adding in the second paragraph, page 4, below
    the bottom, starting with "Under current law," you do need
    to add before "elementary, secondary, postsecondary,"
    along with "lifelong learning," "preschool, and early
    childhood."  So really the intent here should be cradle to
    grave and we do need to recognize the centrality, the

   centrality of television in the preschool years, not just
   starting with elementary.  So this is a crucial point.
             Let me just say finally that, despite Peggy's
   enthusiasm for public television's role here, that public
   television by and large on a national basis has failed in
   this area.  They've failed badly.  Educational television,
   with the exception of the Adult Learning Service, which
   has been a modest success, has been a failure and it's
   administered by public television, who has in fact just
    fired all the people and gotten out of the business. 
              So the educational television forces, which are
    local in their control and meets at this convention which
    I was at in St. Louis last month, is radically underfunded
    and suffering from poverty big time.  To give you the hard
    fact here, which I have mentioned several times before,
    the total amount of money for K-12 schools programming in
    this country, that is for production of new programming
    and for acquisition, is at best $5 million, compared to
    $50 million for the U.K. for new programming only with the
    two channels, BBC and Channel 4.
              Our use of the medium of television for
    education in this country is really nothing short of
    disgraceful.  So the notion of harnessing this really
    powerful medium, not just for in-school programming but
    for addressing national problems and challenges like adult

   functional literacy -- we've got 40 million adults who are
   functionally illiterate -- or job training and retraining,
   the opportunities for television here on a constructive
   basis, both from commercial stations and public stations -
   - this is not just a public television deal here; this is
   their opportunities.  There are tremendous opportunities
   for the commercial sector as well.
             This is something I've spent my life in, trying
   to serve educational needs for the private sector, and the
    opportunities here for service and making money in a
    constructive way are enormous.  So if we can get this
    permanent retention of the extra 6 megahertz on a one
    station per market basis as a result of our Commission
    activities, I believe it'll be one of the great legacies
    that we can be enormously proud of, and I give Robert
    Decherd the credit that is due to him for first initiating
    this idea.  Hopefully he can get the NAB to support us as
    well and we can work together and make this really work.
              So this is a fabulous plan.  I support it. 
    There are some refinements, obviously.  We'll have a
    chance to discuss those refinements later.  But I think
    this plan as laid out in your paper is outstanding.
              CO-CHAIR ORNSTEIN:  The record should reflect
    that Gigi came up with a comparable proposal
    simultaneously, so you can both share the credit.

             MS. CHARREN:  Just as I complain of the fact
   that our schools are falling apart structurally from lack
   of funding, not because people want kids to be in
   buildings that don't work, I feel that way about the fact
   that public broadcasting doesn't do enough in this area on
   funding problems, which are not something which they
   endorse.  They know they have funding problems.
             I just want to add that we should recognize, I
   think, as a group because we have to deal with it after
    the fact of the proposal, that the money from auctioning
    this additional spectrum that we're going to presumably
    say should go to public broadcasting is already allocated
    in the budget, in the deficit, and whatever one does with
    money.  That's going to be a politically tough row to
    push, or to plant or something, for all of us, because if
    the money is allocated in the budget getting it back is
    very difficult. 
              CO-CHAIR ORNSTEIN:  It is no doubt very
    controversial to recommend that money that has already
    been allocated for budget purposes be reallocated.  We are
    an Advisory Committee, obviously.  That's a decision that
    has to be made by Congress.  I would hope that here is
    another area where the power of our commitment and what we
    do afterwards will matter.
              MS. CHARREN:  I agree with that. 

             CO-CHAIR ORNSTEIN:  Bill and James, did you have
   a comment as well?  Let me turn to Bill first.
             MR. DUHAMEL:  Actually, what I wanted to say has
   been said here, but my children were preschoolers in
   Chicago before I moved to South Dakota and the educational
   programming that was there in those days, it was just
   marvelous, the things they were doing.  And it's gone, or
   maybe if it's not gone it's limited.
             I think the crying shame is the potential for
    educational programming.  That's why I wanted to emphasize
    this.  The thing is now that I live in South Dakota, South
    Dakota-North Dakota is probably 700 miles north and south
    and 400 miles east and west, and there's about 1.4 million
    in that.  There are very tiny school districts out there
    that are 50 miles from anybody else.  They have severe
    educational problems.  They're trying to keep these things
    open because they physically can't move people more than
    50 miles a day.
              The need is here in the rural areas.  Frank
    would probably say the same thing in Nebraska, Wyoming,
    Montana, and the need is here.  I agree with Charles on
    adding the preschool in there, but I would like to see the
    emphasis on this expanded spectrum here go into this
    lifelong learning from preschool on, and not just -- one
    of the criticisms I have is I'm old enough I remember in

   the sixties when it was ETV and it became public
   broadcasting.  Public broadcasting has done some marvelous
   things, but I just don't want to see another deal that's
   put out here generally and somehow we forget the
   educational things because, as Peggy says, there are
   serious problems in our schools and nobody can figure out
   how to solve these things.
             Maybe if we took some of the money they're
   dumping in there, somehow they can figure out how to solve
    them.  But the rural areas are just -- oh God, it's just
    terrible out there.  That's what I wanted to say that this
    is critical on.
              CO-CHAIR ORNSTEIN:  James.
              MR. YEE:  I guess the comments I'm stating are
    one sitting have already been stated, but I must disagree
    with Jose Luis on why public television did not get first
    shot at this.  I still have mixed opinions on this,
    because I do believe that this is an opportunity to fire
    up public broadcasting again and give them a clarity of
    mission and purpose.  In some ways they've been calcified
    over the years due to survival purposes.
              I also do think that if we do let the public TV
    stations go in first they'll come back with the same
    things, the same old things.  By forcing them to open up a
    little bit, I'm not sure whether by a one or a two-step

   process or just one step -- I think that's something that
   could be negotiated -- I think it will really make them
   competitive to bring in new leadership, to bring in ways
   of doing things, create again in a creative way.  They're
   not challenged now other than just limping along.  That
   disturbs me because I think that they're just at a
   midpoint where public broadcasting don't want to be
   unwell, but they ought to bring in the alliances, the
   partnerships they may not be thinking about.
              If you open it up to not just public TV, but to
    other bodies in this nonprofit vein, I think we could see
    something happen here, something creative, something
    flexible.  I do think that that again goes back to the
    importance of greater participation and thinking and
    imagination and commitment, not just a single focus.
              CO-CHAIR ORNSTEIN:  What do members think about
    an alternative to having this two-step process?  If
    there's a better way of building more flexibility in the
    beginning, then we certainly can incorporate that. 
              MR. RUIZ:  I think it's just taking out the word
    "first."  Page 4, the bottom, last paragraph:  "hope that
    public television stations will be given first
    opportunity."  No, be given opportunities, but not first
    opportunities.  Have them work on a partnership, that's
    all I'm saying.  I'm not excluding them from the process. 

   I'm including them.  I'm just saying, let's say laissez
   faire:  the best proposal. 
             CO-CHAIR ORNSTEIN:  What you're saying is that
   there should be simply an open proposal process to any and
             MR. RUIZ:  As Jim puts it, we would encourage
   them to form partnerships, local partnerships.
             MS. CHARREN:  I think that if we did that we'd
   have to open up the digital stations to all comers.  If we
    have the station in a market, the commercial station,
    getting this opportunity to increase their service to the
    public and their bottom line, that the same should hold
    for the public station in the community.
              MR. RUIZ:  We're not talking about the digital.
              MR. DUHAMEL:  This is the extra channel.
              MS. CHARREN:  Yes, but you are going to set up a
    whole new structure.
              MS. STRAUSS:  I'm not sure it's going to make
    that much of a difference if you take out the word
    "first."  I think that because the public stations are in
    the position which they are now, they're automatically
    going to have significant advantages in that. 
              CO-CHAIR MOONVES:  I think we can easily take
    out the word.  I think we can also put in something about
    encouraging PBS to bring in.

             CO-CHAIR ORNSTEIN:  Yes, we can do that very
             MS. STRAUSS:  I want to add one more point about
   the age groups that we're talking about.  I've heard a lot
   about preschoolers and as a parent of both a preschooler
   and a teenager I can tell you that actually I'm pretty
   satisfied with what's out there for preschoolers.  It may
   have been a little better, I admit, a little while back. 
   But I still think that there's a significant amount of
              There is nothing for teenagers.  There's
    absolutely nothing.  The point, Peggy, about news for
    teenagers, especially given what's gone on in this country
    over the last ten months -- I turn off the news rather
    than leave it on and let them hear some of the things that
    are being said over the mainstream news stations.
              Not only that, but, as you pointed out, by the
    time they turn 18 hardly any of them are voting.  I would
    like to see something in our final report addressing the
    need for stations to address the needs of the teen years
    in broadcasting, because it's just, it's absolutely not
    being done anywhere.
              CO-CHAIR ORNSTEIN:  One of the things that we
    might do here is to actually add another paragraph or at
    least a couple more sentences on what we define as

             CO-CHAIR MOONVES:  Dawson's Creek doesn't fit?
             MS. CHARREN:  And neither does Melrose Place.
             CO-CHAIR ORNSTEIN:  That can certainly be
   defining education here, as Charles said, to make sure
   that we start with preschool and to emphasize lifelong
   learning.  I think we can also say this goes well beyond
   classroom education and includes public education, it
   includes public affairs education.  It ought to show in
    any of these plans a commitment to covering all age groups
    in different ways across the spectrum or it's not going to
    be an acceptable plan.
              MS. CHARREN:  Ethnic, racial.
              CO-CHAIR ORNSTEIN:  Yes.
              MS. SOHN:  I had drafted just such language,
    anticipating that.  That had been my concern, is the
    narrowness of the definition, although there's different
    ways to skin the cat.  It appears to me from discussions
    I've had outside this committee, in the committee, that
    what's missing from public broadcasting or what's being
    underserved in public broadcasting is programming that's
    targeted to underserved communities, independently
    produced programming, and local and national public
    affairs programming.
              Now, I'd like to see the definition expanded to

   include that.  In the alternative we could, because we're
   giving public broadcasting a pot of money, ask them to do
   program streams dedicated to any one or a number of those
   three areas that I just mentioned.  So there are several
   ways to skin the cat, but it seems to me that I've got
   what PBS submitted to us in January, or was it December. 
   They're planning on doing oodles and oodles and oodles of
   classroom learning stuff.  That does not seem to be what's
   missing.  It may be missing now, but it doesn't seem to be
    what's going to be missing in the digital era.
              But what I didn't see any discussion of in PBS
    or ABS materials is increasing programming to underserved
    communities and independently produced programming.
              CO-CHAIR ORNSTEIN:  Well, we'll certainly
    redefine.  I think part of what is going to happen on this
    channel is data transmission to classrooms, which can be a
    very, very useful thing.
              One last comment.
              MR. RUIZ:  Just one more thing.  I would hope
    you would consider with the analog system, if it is given
    to them, a must-carry of ITV on the analog system.
              CO-CHAIR ORNSTEIN:  A must-carry for what?
              MR. RUIZ:  ITV, educational television.  Right
    now educational television has to pay local stations to
    put on the educational programming to simply put it in the

   classroom, and they don't have the money, either.  The
   state department of education has to have the money.  So
   if you're going to get them an analog system then I think
   they must carry that ITV coming down from the state.
             Is that all right, Peggy?
             MS. CHARREN:  Oh, sure.  They need enough money
   to make that whole thing work.
             CO-CHAIR ORNSTEIN:  The last couple of comments,
   Charles and Paul.
              MR. BENTON:  We are at a crucial point here.  In
    my judgment, and this may sound a bit harsh, but there is
    neither the leadership nor the commitment at the national
    level here at PBS, perhaps a little bit more so with CPB
    but certainly not PBS, to do the education job.  But where
    the real challenge lies here is not with the national
    organizations, but with local public television
    broadcasters, public and educational broadcasters.
              The process that you outline at the bottom of
    page 4 and the top of page 5 is exactly right on.  In
    fact, this notion of a local public telecommunications
    cooperative and consortium and reaching out to other
    organizations in a systematic way to infuse, as Jim Yee is
    urging us, new thinking and new talent, to address the
    challenge of education, broadly defined -- and I have no
    problem with a broad definition of education which

   includes, at the top of page, that the FCC "should pay
   particular attention to how these stations would propose
   to serve underprivileged and minority communities that
   have typically less access to the educational
   opportunities present in the information age," I think
   that wording is most appropriate. 
             So the issue here is to create a structure that
   is going to encourage and in fact motivate the leaders at
   the local level in public telecommunications to get
    together with their community leaders and begin to build a
    new infrastructure that can use this extra permanent 6
              This is going to be done, this job will be done,
    at the local level.  Some national leadership would
    certainly be useful, but this is quintessentially a local
    challenge.  And the way this is written reflects that and
    the understanding of that, so I think we've got to be
    clear about this. 
              CO-CHAIR ORNSTEIN:  Paul. 
              MR. LA CAMERA:  I would just add that I would
    really caution you, don't broaden the language so far on
    educational programming that it becomes so burdensome that
    public broadcasting doesn't say, no, thank you, you're
    asking too much and offering too little for us to
    accomplish this.  To me that's very important. 

             MS. CHARREN:  One more thing.  This piece of
   spectrum that causes Congress to think that they don't
   need to fund the other piece of public broadcasting
   spectrum, which is a politically attractive idea to some -
             MR. BENTON:  That's key, that's key.  That's why
   it's got to be defined very specifically.  Don't throw in
   the kitchen sink.
             CO-CHAIR ORNSTEIN:  We'll make that explicit,
              We'll take a 15-minute break and then we will
    come back and move on.  Before you go, I did want to
    mention something that I neglected to mention right at the
    beginning, which is that the breakfast that was provided
    this morning and the lunch are courtesy of Charles Benton.
              (Recess from 11:04 a.m. to 11:41 a.m.)
              CO-CHAIR ORNSTEIN:  Let's reconvene our
    proceedings so we can expedite our procedures in order to
    have lunch on time.
              Let's move on to the next area, which is the
    voluntary standards of conduct.  Now, I don't think we
    need to spend much time on this, in part because at our
    last meeting in Minneapolis we had a full and frank airing
    of views on this subject, to a point where many believed
    that this was the only thing we were considering.  And as

   we can see, it's obviously not, although a significant
             We have here language that basically suggests
   our overall belief that we should start with a voluntary
   set of standards, that we had them in the past, that we
   can satisfy the antitrust objections that resulted
   ultimately in the consent decree that caused the
   withdrawal of a code, and move to something that fits the
   digital age, and we suggest here that we simply include in
    an appendix the model code based on the 1952 code that
    Cass and his subgroup put together, along with, for
    comparison purposes, the statement of principles that had
    been adopted by the board of directors of the NAB to
    replace the old code.
              So that's what we have now and let's open this
    up for any discussion that people have.  Shelby.
              MS. SCOTT:  Because I was not with you in
    Minneapolis and tried to from Switzerland hear you on the
    phone, which kept cutting in and out --
              CO-CHAIR ORNSTEIN:  Yes, we have abject
    apologies for our technical failures, by the way.
              MS. SCOTT:  That's the Swiss telephone company. 
    We can't blame Ma Bell for this one, I guess.
              The funny part is, the meetings I was attending
    in Switzerland, the attorney for the NAB was there.  So I

   talked to him after the telephone call and asked him.  He
   said that they're not in the least interested.  Now,
   that's just one attorney speaking for the NAB.
             But you know, it would be great if we went back
   to that, because it worked in some places and didn't work
   in others, but it worked better than what's happening
   today after the code.  But I just, I can't buy this.  I
   don't think it's enough.
             MS. CHARREN:  You don't think it's enough?
              MS. SCOTT:  I don't think it'll happen.  I don't
    think there will be a voluntary code.  Therefore I think
    we should do something else.  It would be great if it
    would, but from my conversations they're just not
              CO-CHAIR ORNSTEIN:  So when you say there should
    be something more --
              MS. SCOTT:  And I hate stiff regulatory stuff,
    too.  It just, it's horrible, but broadcasters have failed
    to serve the public interest in many areas of our country,
    especially on the local level.  I mean, there are issues
    going on in many cities and towns now that get no coverage
    on the news.  They don't have public service programming
    very often in many stations.  So those issues are not
    brought to the local community.

             I think we're failing local communities all
   across the country.  That's why I'd like to see us do a
   little more than a voluntary code of conduct that probably
   will not be adopted.
             CO-CHAIR ORNSTEIN:  Jim.
             MR. GOODMON:  I'm coming at this from a positive
   point of view, not from a broadcasting is terrible and
   we've got to bring out the police department here to do
   something about it.  We saw from the NAB report about all
    the work all the stations are doing all over the country.
              The proposal that's in the full -- can I talk
    about that now?  Is that okay?  My notion is and has been
    that there should be a minimum level of public interest
    responsibilities for stations, and I have suggested what
    they should be, and this is different from my first
    suggestion in that I took out numbers and things.
              I'm just trying to see if we can agree that
    there should be minimum standards and it should be in
    these areas, and somebody else can work on how many PSA's
    or whatever.  But I think that it makes a lot of sense for
    us to have minimum standards and then on top of that have
    a voluntary code.  
              I also think, Shelby, that if the NAB doesn't
    want the do the code we need to figure out some other
    organization to do the code.  I don't know who that would

   be, but I don't want to give up on the notion of a code
   whether we have minimum standards or not.  I think we
   ought to stay with that and I said that at the first
   meeting.  We passed out the old code.  I mean, I think
   where we're really going to make progress is with the
             The minimum standards that we're proposing most
   folks are doing anyhow.  So I'd like to see us have
   minimum standards minimum standards.  I'd like to see us
    adopt this proposal.  How do I do that?  
              CO-CHAIR ORNSTEIN:  Let's do this.  Let's put
    this on the table now, because certainly the questions of
    minimum standards and the code are related.  Let's discuss
    it further and then we'll figure out what procedure to
              MR. RUIZ:  There is an August 10th letter from
    Charles Benton.  Were any of these points ever confirmed? 
    He asked for some information from the NAB, stuff like
    that.  Where does the NAB stand on this? 
              Are you familiar with the letter?
              CO-CHAIR ORNSTEIN:  Let me go back and see what
    part of the letter you're referring to.
              MR. BENTON:  It was on the first page, code of
    conduct.  I can do it briefly if you like.  I say: 
    "Before we are asked to comment on the code again, I

   request...should receive the following statistics:  number
   one, what percentage of commercial and noncommercial
   broadcasters belong to the NAB; and two, what percentage
   of NAB members subscribe to the old code."
             I just think from a factual point of view we
   need to understand these facts before understanding the
   role of voluntarism versus other means of developing
   minimum standards, and the NAB seems to be very silent on
   these points.  I think we really need to hear from the NAB
    to understand where they are, what their position is on
    all of this, and we really need to understand this. 
              Otherwise, I agree with Jim, if they're not
    going to be responsive then let's try to find some other
    body that will.
              MS. SOHN:  I'll tell you why I support minimum
    standards.  This is very thoughtful, Jim.  I'm glad you
    took out the numbers.  I think the numbers are kind of --
     they're not as relevant as the principle. 
              I'll support a code, but only with some minimum
    standards.  I agree with Jim that the voluntary code
    should be something above and beyond what a minimum
    standard is.  And as I think I've said ad nauseam, the
    reason we have minimum standards is so that the bad
    broadcasters can rise to a level in which they deserve to
    have a license.  All the broadcasters around this table

   and others in this room, the minimum standards are not
   going to hurt them because they already do it.  But
   everybody should have to do something to maintain a
   license.  So that's number one.
             The second reason why I think minimum
   requirements is important is because -- I'm probably
   jumping the gun here, but I think one of the single most
   important things that we may do here in this Advisory
   Committee is put forth this pay or play model, and if you
    don't make it worthwhile to pay everybody will play. 
    Right now you don't have to do a whole heck of a lot to
    play, so nobody's going to pay.
              So if we really, really care about a pay or play
    model and funding good things -- public broadcasting,
    noncommercial programming, blah, blah, blah -- then we
    have to make it meaningful to play, and that's why I think
    you need some sort of mandated minimums.
              MR. DILLER:  Mr. Chairman.
              CO-CHAIR ORNSTEIN:  Yes.
              MR. DILLER:  I agree with Mr. Goodmon.  I think
    that there should be minimum guidelines, minimum
    standards, because there has to be a code of conduct, and
    if the NAB won't do it it should be done astride them. 
    What a horrible thought.
              I also think that it should apply to cable as

   well as broadcast.  I think there should be one code of
   conduct for broadcasters.  There must be minimum
   guidelines for public interest, that are public interest
   responsibilities.  I've always believed that what
   broadcasters should do is to say, to pledge what it is
   they are going to do to acquit those responsibilities,
   because some broadcasters have talents in one area and
   interests in others, and that there should be flexibility
   for that.  They should say, this is what we intend to
    provide to acquit these responsibilities, and then they
    simply should be judged as to whether or not they've met
    them in some simple test or form, and if they haven't why,
    and a process for correcting it.
              That has to be at least the minimum standard for
    a free license to use the airwaves.  And it must be
    coupled with a rational code.  Those two in tandem will
    take care of much, not all -- it can't happen, all, but
    much - of what has been discussed already this morning.
              I would simply say, relative to Mr. Goodmon
    saying, okay, how do I get this done, that we should talk
    about it a bit more and resolve to do it and make it be
    clear in its language and try and take the leadership to
    actually get it done, hopefully with the NAB and, if not,
    then without them.
              CO-CHAIR ORNSTEIN:  Yes, Bill.

             MR. DUHAMEL:  One of the things that Cass had
   stressed is this had to be a voluntary code.  He said if
   there is coercion there are some significant legal
   problems that this would raise, because, remember, he had
   that quite extensive discussion that the key word is
   "voluntary" in this. 
             I recall Gigi and I had an exchange over the
   deal about real teeth in the voluntary code.  I think
   there is a significant legal problem here that we have to
    at least be aware of.
              CO-CHAIR ORNSTEIN:  Yes, Newt Minow.
              MR. MINOW:  I agree with Jim Goodmon and with
    Barry Diller, and I also emphatically, and I've said this
    before and I just want to repeat it, it should apply to
    cable as well.  It's got to be across the board. 
              MR. LA CAMERA:  What's the practicality of
    applying any of this to cable and what does that mean? 
    Who does it apply to in cable?  Is it the national
    channels?  Is it the distribution systems?
              MR. DILLER:  It's to the programmers. 
              MR. LA CAMERA:  So this would apply to HBO? 
              MR. DILLER:  Absolutely. 
              MR. LA CAMERA:  Is that again within our realm
    and responsibility?
              MS. STRAUSS:  It's not within our

   responsibilities, but we could put anything we want into
   the report.  But technically, no, it's not within our
             CO-CHAIR ORNSTEIN:  Our charge is digital
   television broadcasters.  But as a body that can make
   recommendations, we presumably can make any
   recommendations we want and they will be taken into
   account by appropriate bodies accordingly.  So it's
   certainly not outside our authority if we want to suggest
    that anything that we're doing with regard to the public
    interest that applies to broadcasters also apply to cable
    and apply to satellite.  Certainly that's there. 
              But it does raise tricky questions, obviously,
    in terms of implementation.  But that's another issue that
    we don't even have to spend a lot of time on.
              Yes, Frank.
              MR. BLYTHE:  The voluntary code here is well
    written.  I thank Jim for his efforts in this area, too. 
    What jumps out at me in all the documents that I've read
    here in the last couple of weeks is that the issues of
    accountability and enforcement in the code situation,
    everything seems to be that we don't want to place an
    undue burden on broadcasters, we should have some minimum
    standards, it should all be voluntary, and then makes
    recommendations on how that would happen.

             I'm just looking in terms of what Shelby's
   comments are, that some things won't happen if it's
   voluntary and how is the accountability factor and the
   compliance factor or the enforcement factor being
   developed and written into some of the recommendations.
             I think we should see very strong language in
   those areas.
             CO-CHAIR ORNSTEIN:  Frank.
             MR. CRUZ:  I couldn't agree with you more.  I
    quite understand the limitations of our charge here, but
    in many ways to hold public interest obligations solely on
    digital broadcasting does not make for a level playing
    field, and I think if there were recognition that it
    should apply to the cable industry I would wholeheartedly
    endorse that. 
              Kudos here to Jim for the minimum standards
    here.  The only thing that I would like to add to it would
    be that we insert, if at all possible, in his all the way
    A through J, perhaps something that pertains to employment
    opportunities for women and minorities, encouraging that
    as a minimal standard, because if we did away with that it
    seems to me, given the massive amount of explosion that
    can occur in reference to the future of the digital era,
    we would be remiss not to mention that and not to
    encourage those kinds of opportunities.

             Entrepreneurship is another area.  I think
   certainly in terms of employment opportunities it should
   be part and parcel of what broadcasters should consider.
             CO-CHAIR ORNSTEIN:  Karen.
             MS. STRAUSS:  I also want to thank Jim for
   putting together the minimum standards.  As you know, I've
   always since the beginning of this Commission agreed with
   the concept of setting forth some minimum requirements,
   because I do think that that was our charge, not to
    suggest just voluntary requirements.  I don't think that
    Cass indicated that there would be any legal problems with
    setting forth minimum requirements.  There may have been
    some legal issues that arose with respect to some of the
    items that we were putting forth on providing free time or
    providing free political access, et cetera.  But to the
    best of my knowledge, there are no legal restraints to
    putting forth minimum requirements.
              CO-CHAIR MOONVES:  Let me just voice an
    objection here or a concern, and I'm not even dealing with
    the legality.  Obviously, this is a point that, I agree
    with Barry, the NAB will not be part of this.  They will
    not be part of a group of minimum requirements.  We can
    put down all the requirements we want.  The broadcasters,
    unless there is an act of Congress or the FCC, will not
    pay attention to the minimum requirements.

             If there is in fact a voluntary code that we can
   in fact get the broadcasters to embrace, I think we have a
   better opportunity of getting something accomplished here. 
   We can write whatever we want.  We can write you need to
   put one PSA per half hour prime time network television,
   you can do whatever you want, three hours of public
   interest programming, you can write whatever you want. 
   You can make this document as strong and tie it as tight
   as you would like.  The NAB will say they're not going to
    be part of it.
              That may be fine.  You may want to ignore them. 
    But so will many broadcasters.  If in fact we can get
    something where the NAB will in fact embrace it, or some
    other organization, I think we have a better opportunity
    of getting something accomplished that will in fact be
              MS. STRAUSS:  Has there been any indication to
              CO-CHAIR MOONVES:  About what? 
              MS. STRAUSS:  Of how the NAB will receive our
              CO-CHAIR MOONVES:  I do not know.  I do not
    know.  I honestly do not know.
              MR. CRUZ:  It strikes me that the NAB, as
    diligent as they are in sending us information -- I know I

   was the topic if Louis Weinrich on the last one in terms
   of some of the concerns that he had with public
   broadcasting.  If they had been as diligent as they have
   been in the past nigh these many months that we've been
   meeting, why should they have not responded by now?  I'm
   not asking you, but generally speaking.
             CO-CHAIR MOONVES:  I don't know.
             MR. CRUZ:  What is their perspective on this? 
             MR. LA CAMERA:  From what I understand, the
    television board met and discussed this issue of a
    resurrection of the voluntary standards.  There was quite
    substantive and heated discussion on the issue and I
    think, at the urging of the representatives on that board
    of CBS, Belo Broadcasting, and Heart-Argyle Television,
    those three individuals persuaded the board to postpone
    any further discussion or consideration and maintain an
    open mind until they saw the final document.  I think
    that's where it stands.
              CO-CHAIR ORNSTEIN:  Peggy, then Gigi.
              MS. CHARREN:  In the front where it talks about
    must-carry, I agree that's a nice mandatory requirement,
    but it's subject to a lot of concern in the marketplace,
    all these channels.  I would like to -- I mean, you're
    talking about must carry all the signals?
              CO-CHAIR MOONVES:  Right.

             MS. CHARREN:  Should that fail because of
   pressure from cable not to carry all those signals, which
   could be a lot of signals, I'd like to make some reference
   to the idea that at the very least they should be carrying
   public broadcasting signals, which I think are a special
   case.  On the one hand, that might undermine what you're
   trying to say here, but I think that if you do away with
   must-carry and then we don't carry public television,
   we're doing in the needs of the American public.
              MR. DILLER:  If you do not have must-carry, then
    everything you have discussed today is academic.  So you
    either have must-carry for the digital spectrum or all of
    you should go home and forget about any further
    deliberations, because they will be meaningless.
              MS. CHARREN:  Do you think that that's going to
              MR. DILLER:  It either happens or you don't
              MS. CHARREN:  Okay.
              MR. DILLER:  And to split off -- excuse me.  To
    have a concept of splitting off must-carry for public
    television and not for commercial broadcasting is, by the
    way, to send the biggest death knell to commercial
    broadcasting through any other act you could possibly do. 
    It's extraordinarily dangerous.

             MS. CHARREN:  Well, then if it's extraordinarily
   important, if it's extraordinarily important, there should
   be some way to highlight that as extraordinarily
   important, because it's going to be tough.
             MR. DILLER:  I mean, for sure, without must-
   carry it's all toast.
             MS. CHARREN:  Well, then I think we should spend
   a little more time explaining that. 
             MR. DILLER:  Is it not self-evident?
              MS. CHARREN:  Well, defending it --
              MS. SOHN:  It's a little bit more nuanced than
    that.  But I do want to make one point about must-carry,
    is that under no circumstances do I think we should
    support must-carry without minimum standards.  What do you
    think about that, Mr. Diller?
              MR. DILLER:  I think that's fine.
              MS. SOHN:  All right.
              MR. DILLER:  Of course that's fine.
              MS. SOHN:  But it's a little bit more nuanced
    than that.  The big must-carry issue -- and people I'm
    sure will feel free to correct me if they want -- is
    during the transition period, because the law is kind of
    ambiguous.  It's not ambiguous as to whether cable
    operators have to carry broadcasters after the transition,
    though some cable operators probably want to hang me right

   now.  I think the law is quite clear that after the
   transition is over they must be carried. 
             So the difficult period is in the transition
   period between when people start carrying the signals and
   when they give the analog spectrum back.  The question
   there is should broadcasters have to carry both the analog
   and the digital, one or the other, should they let the
   broadcaster choose?
             The FCC has come out with this menu of options,
    and the broadcasters I believe -- again, correct me if I'm
    wrong, but they want both carriage of the analog and the
    digital signal during the transition period.
              MS. CHARREN:  That's what I meant.  That's the
    period I'm talking about.
              MR. CRUMP:  Let's not forget that that is one of
    the most important things that we can do, because what's
    driving all of this when we get to the digital signal that
    we're putting out and we're going to the point where we're
    going to give the analog channel back, we're looking at an
    85 percent penetration of the market.  That is, that we
    must have that many sets sold out there, and if indeed all
    those folks who are on cable cannot get the digital signal
    then it's just going to delay this year after year and
    what we're putting in this report of all the things we
    would like to have done at that particular point is just

   being put off almost forever, but certainly past the
   immediate future.  To me that's counterproductive.
             MR. RUIZ:  I'd like to hear from the
   broadcasters on how to proceed from this point on,
   especially the ones that haven't had any involvement in
   raising this, because two months have passed.  I believe,
   Norm, you made the suggestion that we accept the
   commitment from the NAB, and then there was a question as
   to whether there was any commitment from that leadership,
    and it didn't seem to progress any in this area.
              What do we need to do to move this forward?
              CO-CHAIR ORNSTEIN:  Let me make some -- Newton
    wanted to say something. 
              MR. MINOW:  I think the justification for must-
    carry presumes that what you're carrying serves the public
              MR. GOODMON:  Exactly.
              MR. MINOW:  So I think what you do is tie
    together the Jim Goodmon minimum public interest
    requirement as a condition of must-carry. 
              MR. LA CAMERA:  Absolutely. 
              MR. GOODMON:  That's the whole rationale.
              MR. CRUZ:  Norm.
              CO-CHAIR ORNSTEIN:  Frank.
              MR. CRUZ:  The submission that I sent to all the

   members of the Commission, although it pointed to public
   broadcasting and the reasons why there must be must-carry
   for public broadcasting, we also had in there that the
   committee should endorse must-carry rules for public
   broadcasting, and that should be the core work of this
             We've outlined some of the reasons why.  I think
   many of you have indicated -- the minimum standards I
   think would be very much needed.  I've outlined in my
    presentation to you about four or five or six reasons --
    five reasons -- as to why it is applicable, must-carry, to
    public.  But I'm sure that logic and that thinking is
    applicable mostly to commercial broadcasting.
              CO-CHAIR ORNSTEIN:  Let me raise just a series
    of challenges we have here.  This is obviously difficult. 
    My strong preference as a co-chair of this body is, where
    we can, to avoid issues where we draw a line in the dust
    and we have a lot of broadcasters on one side and a lot of
    other people, including some broadcasters, on the other if
    we can avoid it.
              I'd like to avoid a confrontation with the
    industry if we can, because I think in the end the
    likelihood is that that's not productive.  It may not
    work.  I'd like to see if we can explore these ways in
    which we can achieve these goals without drawing that

   sharp line in the dust, and it may or may not be possible.
             There's also the issue that Bill raised, which
   is a real issue.  If we are talking about a voluntary
   code, it cannot be implicitly coercive coming from a
   governmental body.  So we cannot in our recommendations
   say the NAB should adopt a voluntary code, and we cannot
   say as a body:  And if they don't, then we're going to
   come down hard on them.
             Now, there are ways to get around that or ways
    to deal with that particular issue.  Certainly one thing
    we can suggest is that a set of standards be adopted by
    the NAB and, whether the NAB adopts standards or not, that
    an outside group, the equivalent of a News Council, be
    created through private support to do its own code and to
    do its own monitoring of stations.  If that's not made
    contingent on what any other organization does, that's not
    coercive, and that's one thing we can recommend as a part
    of what we're doing.
              At the same time, we have a question of whether
    we want to have a separate recommendation for minimum
    standards or whether we want to incorporate minimum
    standards into a code and put it out there as something
    that can be adopted by either or both organizations.
              So there may be ways at least of getting around
    some of this obvious disagreement.

             Yes, Peggy.
             MS. CHARREN:  I think that the whole idea of
   minimum requirements is a ruling.  I mean, you have to do
   that.  That's not voluntary.  That's the difference
   between this and the voluntary code.  If this is going to
   work, I think you have to do it --
             CO-CHAIR MOONVES:  You have to do it?  You have
   to do it.  Are you in Congress?  Are you passing a law?
             MS. CHARREN:  Well, I'm saying this is a
              MS. SOHN:  Right, it's a recommendation to the
              MS. CHARREN:  Right.  You could take the
    position that nothing we're going to do is going to happen
    in the real world, and then you don't have to meet at all. 
    The fact is we have to say something that's worth doing,
    and that's worth doing.
              MR. GOODMON:  I've thought a lot about the FCC
    versus the Congress.  You know, many of us used to have
    two or three people and all they did was count the
    percentage we used to have in news, children,
    entertainment, non-entertainment.  I think that a lot of
    broadcasters are worried that, okay, well, wait a minute. 
    All right, we do this, this is okay; but this is the
    beginning of a -- if it's this this year, it will be more

   next year; we're getting something started and we're very
   much against that. 
             And we have talked about whether these minimum
   standards should come from Congress or whether the FCC --
    it changes it every time there's a new FCC as an issue. 
   But I think the main concern is that we're getting
   something started here that will get us back to where we
   used to be.  So how can we work on that problem?  How can
   we work on that? 
              I don't think there's such a thing as the
    broadcasters.  There is big companies, there is little
    companies.  We all have different ideas, we all have
    different views.  There are as many views on the NAB board
    as there are people on the NAB board.
              My notion is that we were charged with the
    responsibility of coming up with a reasonable public
    policy for these digital licenses, and I think it is very
    reasonable to say that every digital station should have
    some minimum standards, not none.
              MS. CHARREN:  For who to say it, Jim?
              MR. GOODMON:  For the Commission or Congress or
    whoever says it.
              MS. CHARREN:  Right.
              MR. GOODMON:  And that we ought to recommend
    that there be minimum standards and a voluntary code on

   top of that, giving the broadcasters as much flexibility
   as possible in how they meet it, recognizing the First
   Amendment rights of everybody involved, including the
   public, and moving ahead.  It seems to me that that makes
   a lot of sense in terms of what's reasonable public
             MR. LA CAMERA:  From my understanding, this is
   exactly what the hierarchy within the National Association
   of Broadcasters was concerned with, that this voluntary
    code would evolve at some point into minimum standards. 
    Well, we seem to be there, to have anticipated that.  Why
    did we put Cass through this exercise?
              MS. SOHN:  Why are we mushing this together? 
    We're talking about two separate things.  I think some
    people are trying to jumble it.  We're talking about a
    voluntary code.  I like this code.  Cass did a great job. 
    But it's worthless in my mind, okay, it's a worthless
    exercise, unless there are some separate minimum standards
    as well.
              It's separate.  They're not together.  I'm not
    talking about any coercive language in the voluntary code.
              MR. DILLER:  Where would they not parallel each
              MS. SOHN:  They could, they very much could. 
    I'm not saying they wouldn't.

             MR. DILLER:  Where would you say they wouldn't?
             MS. SOHN:  I would think the voluntary -- well,
   go ahead.  I'm sorry. 
             MS. STRAUSS:  The voluntary code, if you look at
   what's covered in the voluntary code, it goes way beyond
   these minimum standards.  It covers the treatment of news. 
   it covers responsibilities towards children, covering
   elections.  It's very specific.  It's very specific
   guidance on programming options.  The minimum standards
    are much more global.
              So I think there's room definitely for both. 
    And when I said before that there are no legal issues --
              MR. DILLER:  They're not mutually -- in other
    words, they don't contradict each other?  When one extends
              MS. STRAUSS:  We can make sure that they don't.
              MR. DILLER:  So long as they don't contradict
    each other, and since it's going to be clear that there
    are some things you can mandate and some things you can
    only have by kind of the coercion of voluntarism, why not
    keep them separate, in which case you can end the debate -
              MS. STRAUSS:  Right.
              MR. DILLER:  -- and move on and resolve it.
              MS. STRAUSS:  Right.  I think that they are

   separate.  They're separate now.  I think the question
   here is whether anybody -- whether there's a consensus
   that, in addition to the voluntary code, there should be
   these minimum standards.
             MR. DILLER:  There's no question about that. 
             MS. STRAUSS:  Well, there's no question to you
   and I and to several other people.
             MS. SOHN:  But that's a serious thing.  Looking
    around the table, I'm not hearing a lot of dissent. 
    You're talking about that there's a lot of dissent.  I'm
    hearing more people in favor than against. 
              MS. STRAUSS:  So we can find out if there's a
              MR. DILLER:  What a shocking thought.
              CO-CHAIR MOONVES:  There will be a dissenting
    opinion on this piece.
              MR. DILLER:  So why don't we hear it.  Why don't
    we hear it so that it can be exposed and understood and
              CO-CHAIR MOONVES:  You've heard it.  There are
    people -- 
              MR. LA CAMERA:  Robert Decherd articulated it at
    the last meeting.
              CO-CHAIR MOONVES:  Right. 

             MR. LA CAMERA:  That within the larger
   broadcasting, the contemporary broadcasting community
   today, ascertained through the National Association of
   Broadcasters, there is no interest in the assumption or
   resurrection of minimum standards.
             MR. DILLER:  Any kind of minimum standards? 
             MR. LA CAMERA:  I'm sorry, I don't sit on the
   NAB board.
             MR. DILLER:  I know.  I'm just asking.  I'm
              CO-CHAIR MOONVES:  Barry, there are certain
    broadcasters, there's a large portion of them, there are a
    lot of them --
              MR. DILLER:  No minimum standards?
              CO-CHAIR MOONVES:  -- who feel the word
    "mandatory," anything that is mandatory, is objectionable.
              MR. LA CAMERA:  No matter what it is. 
              MR. DILLER:  Well -- 
              CO-CHAIR MOONVES:  Obviously, you disagree and
    that's fine.  But there are certain people who feel that
              MR. DILLER:  I wonder how they would feel if it
    was coupled with mandatory must-carry. 
              CO-CHAIR MOONVES:  Must-carry, that's a good

             MS. STRAUSS:  That's a great selling point with
   the minimum standards.  Most of the people with
   representations around this table already meet those
   minimum standards.
             CO-CHAIR MOONVES:  I would venture to say
   everybody who is at this table meets these minimums. 
             MS. STRAUSS:  Well, I don't have a station.
             CO-CHAIR MOONVES:  No.  Everybody sitting at
   this table.  But once again, it's the good broadcaster
    versus the bad broadcaster.
              MS. CHARREN:  But we don't have much leverage on
    service and we do have must-carry as leverage, and if we
    don't use that, I mean, what are we doing here?  If you
    say that the reason that we want people to carry channels
    is because that is the way you serve the public, if
    there's no mandatory requirement you could feel that
    that's not true, I mean that they're not going to serve
    the public.
              MR. DILLER:  I can't imagine that in the end
    reasonable minimal standards for broadcasters would be
    objected to by broadcasters. 
              CO-CHAIR MOONVES:  Barry, you should have been
    at the last board meeting.
              MR. DILLER:  I just think it's reasonable --
              CO-CHAIR MOONVES:  Hold it.  Barry, at the last

   board meeting of the NAB they objected to the word
   "voluntary."  I wasn't there, but this is what was
   reported back.
             MR. DILLER:  I don't know.
             MR. GOODMON:  Here's what I'm really trying to
   do.  I keep calling myself a moderate for this reason.  We
   have Mr. Decherd, who makes a very good presentation on
   the free market, that the free market is the best way to
   serve the public because the public will tell you, if they
    watch it or if they don't watch it.  And then we have Mr.
    Minow announcing that he really loves the free market and
    he would like to auction my station off, and I'm saying,
    hold it a minute.
              Do we really want to have this argument?  The
    government is issuing to us a license that is very
    valuable.  For the government to suggest to us that we
    have some responsibilities in terms of getting that
    license is very reasonable.  As a matter of fact, I would
    suggest they are negligent of they give away this very
    valuable public resource and tell us to go out and do
    whatever the hell we want to do.
              What I'm trying to do is come up with some
    minimum standards to give stations all the flexibility in
    the world in terms of what they do, and then for the rest
    of this stuff we put a code on it, and then we'll move on

   and argue about important stuff like must-carry, because
   with 65 percent of the homes on cable, Peggy, you're never
   going to get your public interest channel on cable -- 67
             MS. CHARREN:  I agree.  I'm not arguing with
             MR. GOODMON:  If we don't get on cable, we can
   do all the public interest stuff we want and nobody's
   going to see it.
              MS. CHARREN:  I agree with that 100 percent.
              MR. GOODMON:  I'm trying to take a middle
    position, not a pro-regulatory, anti-First Amendment.  I'm
    just trying to be pragmatic about the reality.
              MS. CHARREN:  I'm not arguing about --
              MS. SOHN:  You're very reasonable.
              MS. CHARREN:  I think you're very reasonable. 
    You misunderstood what I was saying.
              MS. SOHN:  Maybe it's line-drawing time.  I
    don't know. 
              MR. DILLER:  It's a rational minimum.
              MS. SOHN:  Right.
              MS. CHARREN:  I want that to happen.
              MR. DILLER:  It's a rational minimum.
              MR. LA CAMERA:  That's fine, but then be totally
    realistic and understand that this effort on a voluntary

   code of conduct with the National Association of
   Broadcasters is never going to happen --
             MS. SOHN:  Well, we didn't think it was going to
   happen anyways. 
             MS. CHARREN:  I agree with that. 
             MR. LA CAMERA:  If you also include with that
   minimum mandatory standards, there is just no hope for it. 
   And that's fine if that's the direction you want to go in. 
   But don't expect both.
              CO-CHAIR MOONVES:  Accepting the fact that there
    probably will be dissent on this issue, which I think is
    clear, and that's okay, are there further suggestions on
    the mandatory requirements that you have?  In other words,
    should a station in New York City have the same
    requirements as the station that Bill Duhamel has?  I
    mean, are we going to go that far?  I mean, how far do you
    want to go with this? 
              MR. DUHAMEL:  There's one point that we talk
    about --
              CO-CHAIR MOONVES:  Wait, wait.  Yes? 
              MR. GOODMON:  I took out of here numbers for
    that very reason.  Basically, I said, first of all,
    whether we have minimum standards or not, we've got to
    work on accountability and reporting.  It's very difficult
    to tell what a TV station is doing, and I don't have

   specifically what that is.
             CO-CHAIR MOONVES:  That rolls right into
             MR. GOODMON:  Then we did the ascertainment,
   public service announcements.  It didn't say how many, but
   the emphasis on public service announcements and public
   affairs programming is local.  The reason we have these
   stations is to serve the local community.  And then the
   multicasting and must-carry.  I put political time in
    here.  I'm sorry I did because that's --
              CO-CHAIR MOONVES:  That's a separate issue.
              MR. GOODMON:  But the point I've made is it
    seems reasonable to me to require stations to provide
    program time for the discussion of candidates, but it
    doesn't seem reasonable to require stations to give free
    commercial time.  And I tried to define that so it would
    include your 5-minute idea or 30-minute idea or whatever
    minutes anybody had in terms of programming.  But I said
    stay away from giving candidates free commercial time to
    any extent, and I also suggested we try to make the lowest
    unit rate so it's understandable.
              I just tried to stay really --
              CO-CHAIR MOONVES:  General.
              MR. GOODMON:  Yes.
              CO-CHAIR ORNSTEIN:  Bill?

             MR. DUHAMEL:  The only thing that bugs me -- and
   Jim's right, he did take the deal out.  It was Gigi's that
   I was thinking of.  
             But there still is the problem in the small
   markets that I raised before, that we had a news show, a
   public affairs show, we had it on for 30 years and it was
   dying.  And by changing it to a news program with two 5-
   minute public affairs interviews daily in that, we have
   increased the audience five times.
              I mean, to come out and just say you've got to
    have a half-hour show that nobody's going to watch --
              MR. GOODMON:  I don't think anybody's suggesting
    that.  I don't think that was contained in the suggestion.
              MR. DILLER:  So that the debate is onto the
    point, and it often goes awry on those kinds of
    differentiations, Mr. Goodmon's suggestions do not have
    that kind of specificity, and I think you must allow
    broadcasters flexibility to provide their public interest
    obligations in these varying parts in ways that are full
    but flexible, because some, as you say, some have much
    better ideas to do things that have more of a tuning fork
    frequency with the public than any written series of
    obligations which probably won't.  It's not that hard to
    judge whether or not in fact you're meeting minimum
    requirements.  It's not a hard test.

             CO-CHAIR ORNSTEIN:  Newt had a comment, and then
   Peggy and then Gigi.
             MR. MINOW:  This might not be helpful, but if
   the NAB says we don't even want a voluntary code, maybe we
   don't want to have a voluntary exclusive license for
   channels.  Maybe we don't want to have must-carry.  Think
   about that. 
             MS. CHARREN:  You don't mean this, you don't
   mean this to do in legislative mandates like three hours
    of children's television? 
              MS. STRAUSS:  No, that's separate.
              MS. CHARREN:  But if somebody raised this they
    could think that.
              CO-CHAIR MOONVES:  That's already in the books. 
    That's there. 
              MS. STRAUSS:  Closed captioning and children's
    programming is separate.  That's already there.
              MS. CHARREN:  You ought to say that and have a
    sentence that there are some things that are already
              CO-CHAIR ORNSTEIN:  It's very easy to make clear
    that this is not to the exclusion of anything else. 
              MS. SOHN:  Let me defend myself against Bill.  I
    don't care that much about the numbers and I'm perfectly
    happy to make a recommendation to the FCC for them to use

   their expertise as the expert agency to determine what the
   numbers are.  And I'm very, very, very, very for giving
   broadcasters flexibility in determining how they should
   meet the requirements.  So we don't even have to discuss
   this part of my proposal if we indeed decide that some
   minimum requirements are a good thing.
             CO-CHAIR ORNSTEIN:  Let me make a suggestion
   here.  It seems to me the best way for us to proceed is
   that when we're done here that we'll pull together a small
    sub-group that can go over Jim's language, see if it fits,
    if it ought to be massaged a little bit, and that we pull
    together a recommendation that basically couples minimum
    standards with the must-carry, and that we have a separate
    recommendation along the lines of what we have here for a
              If you want, we can include a couple of
    sentences saying, whatever the NAB does, we encourage
    other organizations to draft their own standards, and that
    we then put it out to the members and see what reaction we
    get, recognizing that we will get a strong dissent and
    that it's going to have broader repercussions, but that
    that's the best way for us to go forward, and that we take
    members who represent a range of perspectives to try and
    go through this and make sure we have the best possible

             I would also suggest that as you do this,
   instead of just saying Congress or the FCC, that we ought
   to work through who ought to be doing this, rather than
   just throwing it up in the air and just saying "jump
   ball."  I don't have an answer to that, but I think that
   ought to be a consideration.
             CO-CHAIR MOONVES:  You mean who we're turning
   this paper in to? 
             CO-CHAIR ORNSTEIN:  We ought to have a
    recommendation that says the FCC should adopt minimum
              MS. STRAUSS:  Congress already said there are
    public interest obligations.
              CO-CHAIR MOONVES:  I think we should give it to
    whoever will read it.
              MR. DILLER:  How about mandatory reading?
              CO-CHAIR ORNSTEIN:  In the few minutes we have
    remaining before we break, there's another element of this
    that we really ought to discuss which we have done, which
    we set out as a separate one, and that is the question of
    additional disclosure of information.  My own judgment has
    been that no voluntary set of standards works unless you
    have a requirement that there's public disclosure of the

   activities that stations are engaging in, and it ought to
   be disclosure parallel to what in fact the NAB asked in
   its survey of stations of the kinds of activities that
   they were doing.
             So let's throw that issue out there. 
             MR. GOODMON:  Is that what we call
             CO-CHAIR ORNSTEIN:  That's the disclosure of
   public interest activities by broadcasters.  That's the
    next element in this draft of ours.
              MR. DILLER:  A simple clear checkoff once a year
    -- simple, clean. 
              MR. LA CAMERA:  I think this section is well
    done.  I think one component notion is missing here and
    that's the role that this reporting plays as an important
    self-audit for broadcasters.  That concluding sentence on
    page 7, "Greater availability of relevant information,"
    "includes awareness, promote continuing dialogue between
    digital television broadcaster and community," "and
    provide an important self-audit to the broadcasters
              CO-CHAIR MOONVES:  Okay. 
              MR. LA CAMERA:  Because I think it does do that.
              I think in many ways this is as important, this
    section, as anything else that's in this document.

             CO-CHAIR MOONVES:  I agree with that. 
             MS. SOHN:  If you recall, I submitted, working
   actually with Barry's colleague Julius Jankowski, I
   developed a certification, a checkout, exactly what he was
   talking about, that would serve the purpose of disclosure. 
   Might I suggest, if people want to fix that, play with it,
   we have maybe another subcommittee to work on that.
             CO-CHAIR ORNSTEIN:  Yes.  We have here, if you
    notice the language, it says "One possible form using a
    checkoff approach is included in the index."  That
    presumably was to work off of what you have been doing,
    and I think it would make sense to refine that and keep
    it, as Barry said, simple.
              We want to get full information, but we want to
    make it as un-onerous as possible for all stations. 
              MR. DUHAMEL:  Why wasn't the appendix included?
              CO-CHAIR ORNSTEIN:  We'll work that out. 
    Basically, because we had our hands full coming up with
    this language. 
              CO-CHAIR MOONVES:  It's also because you can't
    have a checkoff until you know what you're checking off.
              MR. DUHAMEL:  Oh, okay.  So there isn't one.
              CO-CHAIR ORNSTEIN:  No.  We had a draft of one,
    but we haven't finalized that. 

             MS. SOHN:  Would you like me to work on that?
             CO-CHAIR ORNSTEIN:  Yes.
             MS. SOHN:  And maybe if anybody wants to --
             CO-CHAIR ORNSTEIN:  Anybody else who wants to
   participate, and obviously that includes in particular the
             MS. SOHN:  Do you want to volunteer Julius?
             MR. DILLER:  He can volunteer himself.  He's
   sitting back there.  Or he can say no.
              CO-CHAIR ORNSTEIN:  In his spare time.
              MR. CRUMP:  I think we need to keep in mind the
    fact that this group is making recommendations.  It's a
    recommendation of what this group thinks should be done. 
    We're going to have people that will disagree with us,
    organizations that will disagree with us, both in the
    public service area and in the broadcasting area.
              What we're supposed to be doing is creating a
    situation whereby we're saying there are some standards
    that we feel should be met by people who have these
    licenses, and when we get down to something like how we're
    going to report and so forth, I think we have to realize
    again how the recommendation is received by the
    individuals involved.
              In this instance, they'll be all broadcasters. 
    A great deal of that will have to do with what their mind

   set is at the time.  I think the fact that the NAB board
   meeting previously held, where there was a great deal of
   discussion and a great deal if dissent, that we were
   asking them to some degree to say:  Okay, yes, we're going
   to be for this new code -- they didn't know what the
   details were.  Yes, we can be for this, and all of a
   sudden here we've slipped them some things maybe they
   didn't like.
             Once we have put something out in writing and
    say, we think you should consider this, we may find that
    there are a large number of broadcasters and broadcasting
    groups who will assume positions of leadership and say: 
    My God, there's nothing wrong with this; this is what we
    should do. 
              Not only that.  Depending upon the mind set that
    you have, you can say:  You know, I've been doing this for
    all these years; maybe I haven't been getting the credit
    for it that I should have had; and now they're saying I
    should disclose this more to the public so I'm not in a
    guilty position perhaps of patting myself on the back, I
    am merely doing what they have suggested again in going
              What I felt was good about the code in the old
    days was the fact that broadcasters were really proud of
    the fact that they did these things and they could talk

   about them, and they would say, yes.  You've got critics
   and we're going to have critics no matter what we do,
   because I have never met people -- I have this trite
   thinking in my own head.  Not everyone is a lawyer, not
   everyone is a doctor, but I've never met anyone who wasn't
   a television producer, never in my life.  They all know
   what should be there, they all know what's wrong.
             And hell, yes, we make a lot of mistakes, like
   everybody else does.  But if you're trying to do the right
    thing and you're pushing along, then this is going to come
    back to help you.
              I really think what we're trying to do here or
    what I would like to see us do is to tickle the
    imagination of the broadcasters out there who are saying
    that we're already doing it, but yes, we need to do more,
    here we go, and give them some encouragement to go
    forward, not batter them over the head and tell them, hey,
    you know, you're in a bunch of bad guys and you're going
    to have to take your lumps with the rest of them because
    you haven't policed yourself.
              We're not in a policing situation.  We're
    individual companies.  I think we have an opportunity
    here, if things are worded right, we put it out that what
    we do is we provide some incentive and some encouragement
    to the good guys to lead the way again.

             CO-CHAIR ORNSTEIN:  That's a very good point. 
   Certainly the specifics of recommendations and the
   language used to frame those recommendations are both
   extraordinarily important.  I hope at every turn that we
   try to avoid the kind of language that would be
   provocative where it would be unnecessary.
             Given that, Harold, I hope you will help to
   participate in the drafting of these recommendations if
   possible, to keep us from doing that, recognizing that
    anything is going to be inflammatory, that we do, will be
    inflammatory to some.  But we can try and minimize that. 
              MR. LA CAMERA:  I think that's what you've
    achieved, minimize that kind of language.  And as we
    advance this and alter this, I think you've got to be very
    cautious not to cross that line.
              MR. DILLER:  But don't be unclear.
              CO-CHAIR ORNSTEIN:  Absolutely.  As we go
    forward, the shape of the report that you're going to have
    is first going to emphasize, I hope, the areas in which we
    have an overall and almost complete consensus, which will
    be a very significant number of areas, I think, in quite
    far-reaching ways.
              Then we will, it seems clear, have an area or
    two where there will be some significant dissent, and then
    we will have other places where people can offer

   additional opinions and views, and that's probably an
   appropriate way to go.
             This may be a good break point.  We can move on
   this afternoon after our lunch period to the additional
   areas of political discourse and a new approach, and then
   also to consider Karen's proposal and the other things
   that we have out there on the proposal that we haven't
   gotten to yet.
             (Whereupon, at 12:33 p.m., the committee was
    recessed, to reconvene at 1:45 p.m. the same day.)

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