ADVISORY COMMITTEE ON PUBLIC INTEREST OBLIGATIONS OF

DIGITAL TELEVISION BROADCASTERS

CO-CHAIRS: Leslie Moonves • Norman Ornstein

SUMMARY MINUTES

(Meeting transcript available on Committee website, www.ntia.doc.gov/pubintadvcom/pubint.htm)

TIME and PLACE: December 5, 1997, at the Export-Import Bank of the United States, Washington, D.C.

PURPOSE: Second meeting held to gather and explore perspectives on the public interest obligations of digital broadcasters from representatives of the public interest community and the broadcast industry.

ESTIMATED SIZE OF AUDIENCE: 60 in the Eleventh Floor Lounge

COMMITTEE MEMBERS PRESENT:

SUMMARY OF GENERAL MEETING

The second meeting of the Advisory Committee on Public Interest Obligations of Digital Television Broadcasters (Advisory Committee or PIAC) began at 9:20 a.m. on Friday, December 5, 1997.

Mr. Leslie Moonves, President of CBS Television and Co-Chair of the Advisory Committee, convened the meeting and welcomed the members. He also introduced Jose Luis Ruiz, Executive Director of the National Latino Communications Center, who was appointed to the Advisory Committee on December 4, 1997.

Mr. Moonves explained that the meeting would consist of two panel discussions designed to provide the Committee with perspectives from the public interest community and the broadcast industry on the public interest obligations of digital broadcasters.

Committee Business

The Committee then entered a brief business session. Mr. Moonves announced the dates for the next four meetings of the Committee: Friday, January 16; Monday, March 2; Tuesday, April 14; and Monday, June 8, 1998. He also confirmed that the Committee will seek an extension of its June 1998 deadline.

Co-chair Norman Ornstein then proposed a three-part substantive agenda for the Committee's next several meetings: (a) the broad question of education, including children; (b) the issue of free broadcast time for political candidates and civic discourse in the public square; and (c) an array of other issues, including closed captioning, public service announcements, and emergency broadcasts. The Committee clarified the parameters of these topics and agreed to the following tentative agenda:

• January 12 Technology/Education

• March 2 Free broadcast time

• April 14 Other issues

The Committee also agreed to hold the January meeting in Washington, D.C. and, with the assistance of Mr. Glaser, to broadcast future meetings on the Committee website.

PANEL: Perspectives from the Public Interest Community

The public interest panel was organized by Committee member Gigi Sohn and comprised Paul Taylor, Executive Director of the Free TV for Straight Talk Coalition; Mark Lloyd, Executive Director of the Civil Rights Telecommunications Forum; and Andrew Schwartzman, President and CEO of Media Access Project.

Free Broadcast Time for Political Candidates

Paul Taylor presented the legal and policy arguments in favor of free time for political candidates. He began by posing and answering the question of how digital broadcasting can enhance democratic processes. Mr. Taylor argued that free air time remains the most promising, most potentially transforming way to fix what ails our electoral system for four reasons:

(i) free air time offers a way to change campaign finance reform from an approach based on limiting the supply of money to an approach based on relieving the demand for money;

(ii) free air time would make political campaigns more competitive;

(iii) providing free air time to candidates would lead to more substantive political discourse; and

(iv) free air time would help ensure that candidates remain the most robust communicators in their own campaigns.

Mr. Taylor then proposed a free air time model, under which all broadcasters, as part of their public interest obligation, would contribute to a special fund for democratic discourse. This contribution could be assessed on each broadcaster as a small percentage of revenues and the payment made in money or minutes. The fund would then distribute air time to the major, and qualifying minor, political parties in the form of vouchers. The parties would then determine which candidates would receive time and in which media markets.

Mr. Taylor challenged the Committee to think about innovative ways to capture the political dropouts, the information-poor. He urged the Committee to think about democratic discourse in the digital future in terms of creating a "shared national experience, a unification ceremony where we affirm and celebrate our core democratic values."

Localism and Broadcasting

Mark Lloyd presented the case for digital broadcasters to provide greater opportunities for discussion of critical issues of importance to their local communities. Mr. Lloyd first posited that the public interest obligations of broadcasters are primarily about the fact that television can be a powerful tool for democracy and civil society. He reminded the Committee that the principle that local stations had to serve the entire community, including African-Americans, Latinos, Asians, women and the disabled, had been hard won.

Mr. Lloyd urged the Committee to recommend that broadcast licenses be conditioned on at least two obligations: (i) meaningful ascertainment of community needs and interests, and (ii) a requirement that local stations give authentic community voices a platform to speak about issues of concern to the local community.

Mr. Lloyd recommended that local broadcasters be required to identify, record, and report to the Federal Communications Commission which issues interest all segments of the local community. He reminded the Committee that the burden of ascertainment and program log requirements had generated creative programs and loyal and engaged viewers. He argued, for example, that the national dialogue on race will not succeed if it is not first a local dialogue.

Finally, Mr. Lloyd claimed that the free speech rights of viewers are harmed if the Government continues to leave diversity of expression to the prerogative of broadcasters. He reasoned that if spectrum is no longer scarce, there is room for local community voices; conversely, if spectrum remains scarce then broadcasters should be obligated to help create a vital place for public discussion.

Legal framework for public interest obligations

Andrew Schwartzman discussed the legal and policy arguments for imposing new and different public interest obligations on digital television broadcasters. He framed his remarks by asking the question, what kind of expectation should the public have of an industry that is receiving vast new opportunities to use public spectrum. He argued that broadcasters are temporary fiduciaries of a great public resource and must meet the highest standard which embraces the public interest concept.

Mr. Schwartzman maintained that the broadcast industry is profitable, with both revenue and cash flow up in 1996. He also described the "special privileges" broadcasters receive and concluded that free access to twice as much spectrum and other new benefits justify commensurate increases in public service.

Finally, Mr. Schwartzman shared his vision of broadcasters' public interest obligations in the digital era. He recommended that broadcasters be required to:

• discuss local issues,
• share publicly owned spectrum with members of the public, and
• meet the needs of children, the disabled and those who are too old, too poor, or too young to be demographically attractive.

A question and answer period followed these presentations. The major issues raised during that session include the impact of the Telecommunications Act of 1996 on diversity of ownership and public service requirements, and the contours and validity of Mr. Taylor's free time bank proposal.

PANEL: Perspectives from the Broadcast Industry

The broadcast industry panel was organized by Committee member Robert Decherd and comprised W. Don Cornwell, CEO, Granite Broadcasting Corporation; Bob Wright, President and CEO, NBC; and Robert T. Coonrod, President and CEO, Corporation for Public Broadcasting. Mr. Decherd gave brief opening and background remarks.

Testimony of W. Don Cornwell, CEO, Granite Broadcasting

Mr. Cornwell told the Committee that Granite Broadcasting is the largest minority-controlled owner of major market television stations and the eighth largest non-network television station group in the United States. Mr. Cornwell addressed three main issues: the public interest obligations of television broadcasters in the digital era, political broadcasting, and the implementation of digital broadcasting.

Mr. Cornwell first acknowledged that broadcasters are trustees of a powerful public resource and have a responsibility to use the airwaves in the public interest. He then explained that because free-over-the-air television is under siege from a variety of highly competitive mass media sources, broadcasting in the public interest is not only governmentally-mandated, but also good business. Therefore, Mr. Cornwell suggested that broadcasters have all the incentives they need to serve the public interest. Mr. Cornwell urged the Committee to work toward reinforcing the vital importance of the public interest in a digital world, but to avoid quantifying those obligations.

Mr. Cornwell further argued that requiring broadcasters to provide free air time to political candidates is unwarranted because it will not fix the campaign finance system or lead to a better informed electorate. He noted that mandating free time would also deprive broadcasters of an important source of badly needed revenue. As an alternative, Mr. Cornwell described Granite's philosophy of responding to the needs of candidates and voters by broadcasting special coverage, candidate debates, town hall meetings and public affairs programs.

Mr. Cornwell then addressed the implementation of digital broadcasting and expressed Granite's willingness to take part in the spectrum conversion. However, he characterized the transition to digital transmission and reception as one of the most comprehensive, and privately-funded experiments in history, which will require the complete rebuilding of America's terrestrial television infrastructure within a compressed time frame at a cost estimated to exceed $16 billion. Mr. Cornwell also expressed concern that the cost of conversion would affect small stations disproportionately since those costs are unrelated to station revenue or market size.

Testimony of Bob Wright, CEO, NBC

Mr. Wright presented NBC's views on the public interest obligations of digital television broadcasters. He urged the Committee to delve into the business and technological realities of digital broadcasting and suggested that the principles of breadth, inclusiveness, flexibility, and innovation should guide the Committee's recommendations.

Mr. Wright stated that service to the national and local community is the essence of broadcasters' public interest obligation. However, he explained that because digital broadcast technology is in its infancy, it is imperative that broadcasters are not hamstrung by new, narrow, quantitative, one-size-fits-all public interest obligations.

Mr. Wright also described three possible business models in the digital broadcasting world: the simulcast model, pay services model, and multiple free over-the-air broadcast services model. He claimed that only the latter might support additional public interest obligations.

Mr. Wright stressed the uncertainties of the digital future, claiming that the Committee's current discussion is five years early. He estimated that each broadcast station will spend a minimum of $2 million simply to pass through a digital feed and up to $10 million to achieve full digital transmission capability, with no immediate prospect for increased revenues to offset these costs.

Mr. Wright predicted that while some broadcasters might choose to experiment with more than one free over-the-air service, they would want the flexibility to switch to high definition television if the market moved in that direction. Therefore, he concluded that it would be premature for the Committee to consider reserving specific amounts of spectrum for public interest uses.

Finally, Mr. Wright challenged the Committee not to limit public interest obligations to currently popular subjects, such as free broadcast time or more children's programming, but instead to consider a broad public interest mandate that encourages innovative and creative approaches to meeting the needs of the viewing public.

Testimony of Robert Coonrod, CEO, CPB

Mr. Coonrod first described the scope and commitment of public broadcasters to public service. He stressed that any vision of the digital future must include a strong and robust public radio and television system. Mr. Coonrod argued that "only public television has as its core a mission to assure that all Americans have access to high-quality educational and cultural services, regardless of their appeal to the commercial marketplace. With the potential of increasing the number of available channels exponentially, it is imperative that public television's unique noncommercial voice does not become diluted."

Mr. Coonrod confirmed that CPB is committed to high definition television, but is also very interested in multicasting, because it would allow stations to offer the multiple educational services that current technology does not support.

Mr. Coonrod urged the Committee to keep public broadcasting on its agenda and suggested four principles to guide its deliberations: (i) any recommendations should reflect the fact that public broadcasters already provide public service; (ii) prescriptive regulation often leads to unintended consequences; (iii) the needs of local communities are paramount; and (iv) digital television offers the opportunity to narrow the gap between the information-rich and the information-poor.

A question and answer period followed these presentations. The major issues raised during that session include the level of competition in the television and broadcast industry, regulatory parity for mass media competitors, community ascertainment, educational programming, the feasibility of free air time proposals, and the cost of the conversion to digital.

Public Comment, Questions, and Answers

Mr. Ornstein opened the floor to public comment. Sarah Kayson, Director for Public Policy at the National Council on Alcoholism and Drug Dependence addressed the Committee. Ms. Kayson urged the Committee to recommend that digital broadcasters be required to air counter-advertisements that provide information and challenge the messages that young people receive about alcohol on television and radio. She argued that broadcasters' public interest obligations now and in the future should include protecting young people from messages that glamorize and normalize a product that is illegal and harmful for them to use.

Jim Dingeman, of the Coalition for Missing and Abducted Children in New York City, addressed the Committee. Mr. Dingeman argued that the marketplace cannot completely solve the problem of the two million children missing in the United States each year. He challenged the Committee to require all broadcasters, as part of their public interest obligation, to show the faces of missing children daily. Mr. Dingeman also asked the Committee to hold meetings in different communities around the United States.

Maureen Dabbagh, founder of parent, an international organization supporting the advocacy of parents whose children have been internationally kidnaped, also addressed the Committee. Ms. Dabbagh also urged the Committee to require broadcasters to show the faces of missing children on television.

David Kaut, a reporter from the Bureau of National Affairs, Inc., addressed the Committee. Mr. Kaut questioned whether there was a link between free air time proposals and broader campaign finance reform.

Discussion of future agenda

The Committee refined the morning's discussion about its substantive agenda for the next several meetings and agreed to:

• Discuss digital technology and education, broadly defined, at the January 16 meeting. Rob Glaser and Jim Goodmon agreed to organize the panel on technology; Peggy Charren, Charles Benton, and Lois Jean White agreed to organize the education panel.

The technology panel will discuss the potential of digital technology, convergence issues, and compression technology. The education panel will address children's educational programming and the Children's Television Act, learning in the classroom, distance learning, and public television;

• Explore the specifics of free broadcast time at the March 2 meeting, including the larger issues of diversity of discourse in the public marketplace. The Committee decided to determine the contours, format and length of this discussion at the January 16 meeting.

Mr. Ornstein adjourned the meeting at 4:53 p.m.

Meeting Materials (available separately)

Meeting agenda

Future meeting dates

White House press release announcing the appointment of Jose Luis Ruiz

Executive Order 13038, March 11, 1997

Charter of the Advisory Committee

Secretariat contact information

Guidelines for public comment

List of members of the Committee (updated)

Biographies of members of the Committee

Biographies of the panelists

Remarks of Paul Taylor, Executive Director, Free TV for Straight Talk Coalition

Proposal for a National Political Time Bank, Brennan Center for Justice, NYU School of Law (submitted by Paul Taylor, Free TV for Straight Talk Coalition)

Remarks of Mark Lloyd, Executive Director, Civil Rights Telecommunications Forum

Remarks of Andrew Jay Schwartzman, President and CEO, Media Access Project

Supplemental reading materials, Panel on "Perspectives from the Public Interest Community" (submitted by Gigi Sohn, Media Access Project)

Introductory Remarks, Panel on "Perspectives from the Broadcast Industry," Robert W. Decherd, President and CEO, A.H. Belo Corporation

Testimony of W. Don Cornwell, CEO, Granite Broadcasting Corporation

Testimony of Bob Wright, CEO, NBC

Testimony of Rita Ray, Executive Director, West Virginia Public Broadcasting (written testimony submitted for the record)

Testimony of America's Public Television Stations (written testimony submitted for the record)

Public Comment

Electronic mail (10/8/97 -- 12/4/97)

Coalition for Missing and Abducted Children

Skywriter Communications Inc.

ABC, Inc.

CERTIFICATION:

(signed)
Norman Ornstein, Co-Chair

(signed)
Leslie Moonves, Co-Chair