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ADVISORY COMMITTEE ON PUBLIC INTEREST OBLIGATIONS OF

DIGITAL TELEVISION BROADCASTERS

CO-CHAIRS: Norman Ornstein; Leslie Moonves

SUMMARY MINUTES

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

TIME and PLACE: June 8, 1998, 9:38 a.m to 5:20 p.m., at the Marquette Hotel and IDS Tower, Minneapolis, MN

PURPOSE: Sixth meeting held to deliberate on the Committee's recommendations.

ESTIMATED SIZE OF AUDIENCE: 30 in the Universe Room.

COMMITTEE MEMBERS PRESENT:

Leslie Moonves, Co-Chair
President and CEO
CBS Television

Norman J. Ornstein, Co-Chair
Resident Scholar
American Enterprise Institute

Charles Benton
Chairman and CEO
Benton Foundation
Public Media, Inc.

Peggy Charren
Visiting Scholar
Harvard University Graduate School of Education
Founder, Action for Children's Television

Harold C. Crump
Vice President
Hubbard Broadcasting, Inc.

Frank H. Cruz
Vice Chairman
Corporation for Public Broadcasting

Robert W. Decherd
CEO, Chairman of the Board, and President
A. H. Belo Corporation

William F. Duhamel, Ph.D.
President
Duhamel Broadcasting Enterprises

Robert D. Glaser
Chairman and CEO
RealNetworks, Inc.

James Fletcher Goodmon
President and CEO
Capitol Broadcasting Company, Inc.

Paul A. La Camera
President and General Manager
WCVB-TV

Newton N. Minow
Professor, Communications Policy and Law
Northwestern University
Counsel, Sidley & Austin

Jose Luis Ruiz
Executive Director
National Latino Communications Center

Gigi B. Sohn
Executive Director
Media Access Project

Karen Peltz Strauss
Legal Counsel for Telecommunications Policy
National Association of the Deaf

Cass R. Sunstein
Karl N. Llewellyn Distinguished Service Professor
University of Chicago Law School

Lois Jean White
President
National Parent Teacher Association

James Yee
Executive Director
Independent Television Service

Present during the meeting via conference call:

Barry Diller
Chairman and CEO
USA Networks

Richard Masur
President
Screen Actors Guild

Shelby Schuck Scott
President
American Federation of Television and Radio Artists

Karen M. Edwards, Designated Federal Officer

Anne Stauffer, Committee Liaison Officer

The following brief summary of the meeting may be supplemented by the official meeting transcript.

SUMMARY OF GENERAL MEETING

The sixth meeting of the Advisory Committee on Public Interest Obligations of Digital Television Broadcasters (Advisory Committee or PIAC) began at 9:38 a.m. on Monday, June 8, 1998, with brief remarks from the Co-Chairs, Leslie Moonves, President and CEO of CBS Television, and Norman Ornstein, Resident Scholar at the American Enterprise Institute.

Mr. Moonves and Mr. Ornstein outlined their workplan for the meeting. They explained that the Committee would try to identify and focus on the areas that would comprise its core recommendations. During the morning session, the Committee received and considered reports from its Broadcaster Code of Conduct Taskforce and Educational Programming Taskforce.

Before beginning its substantive deliberations, the Committee discussed the possibility of future meetings and agreed to tentatively hold August 10 for its next meeting.

Broadcaster Code of Conduct

The Broadcaster Code of Conduct Taskforce (BCCT) was formed to develop the details of recommending a voluntary code of conduct for broadcasters. The BCCT members are Cass Sunstein, Harold Crump, Jim Goodmon, Paul La Camera, Karen Peltz Strauss, and Newton Minow.

Cass Sunstein, chair of the BCCT, placed the concept of an industry-adopted code in historical context and described how the Committee could avoid antitrust and First Amendment problems. Mr. Sunstein indicated that the antitrust issues were not insurmountable, citing a 1993 opinion letter from Sheila F. Anthony, Assistant Attorney General at the Department of Justice (DOJ), to Senator Paul Simon. Senator Simon had queried whether broadcasters' adoption of a voluntary code on television violence would violate antitrust law. The DOJ indicated that the proposed code on violence would likely not raise antitrust problems.

Mr. Sunstein explained that the previous NAB code had been struck down on narrow grounds because it had sought to control advertising time and manipulate advertising revenue. By contrast, Mr. Sunstein concluded that the Committee's plans for a voluntary code were no different from the Simon plan.

Mr. Sunstein cautioned that identifying an enforcement mechanism that could withstand First Amendment constraints would be difficult. He confirmed that the First Amendment likely would be implicated if the government mandated the adoption of a code or imposed it on threat of coercion. Therefore, the code would have to be truly voluntary.

The Committee then discussed and refined a rough draft of the voluntary code. The draft was based heavily on the former code of the National Association of Broadcasters and included sections on general principles and rationale, broadcasters' responsibility toward children, election coverage, and enforcement.

The Committee explored broadcasters' obligation to serve children of varying ages and to provide access for political candidates. Some members were particularly concerned about avoiding blanket bans on covering particular races or parties. The Committee also clarified the code's language about news and public affairs programming; the new language emphasized broadcasters' responsibility to air programs for diverse audience and include local groups. On the recommendation of Karen Strauss, language about closed captioning of political debates, public service announcements, and local newscasts was also added to the draft code.

Other members also proposed specific amendments to the draft code. Co-chair Ornstein suggested that the Federal Communications Commission (FCC) require broadcasters who did not meet the Code standard to justify their failure. Jim Goodmon proposed that the Code, which should only apply to members of the NAB, would serve as a complement to a minimum standard of public interest requirements that all broadcasters should meet. Newton Minow countered that NAB membership should be mandatory. He compared broadcasting regulation to the Securities Act where every broker/dealer is required to belong to the National Association of Broker/Dealers, which can discipline its members for violating its code.

The BCCT agreed to revise the Code and recirculate it to the Committee.

Educational Programming

The Educational Programming Taskforce (EPT) was formed to discuss educational programming in the digital age, including the proposals by Robert Decherd and Gigi Sohn recommending the creation of an educational channel sponsored by public broadcasting. The EPT is chaired by Lois Jean White and the members are Peggy Charren, Frank Cruz, Robert Decherd, Richard Masur, and Gigi Sohn.

Lois Jean White summarized the discussions and recommendations of the EPT. The Taskforce primarily discussed the concept of an educational channel to be administered by public broadcasting (PTV). First, the EPT agreed that educational programming needs to go beyond classroom learning, but differed sharply on a definition of "educational." Some members proposed a broad definition of "educational" that would include all public interest and public affairs programming. Other members would limit educational programming to curriculum instruction for K-12, as well as preschool and lifelong learning programs.

Second, the EPT drew a clear distinction between funding for educational channels managed by public broadcasting and recommending the creation of a permanent trust fund for public broadcasters' current spectrum allocation. Few members favored recommending a permanent trust fund for PTV's existing channel, and others questioned PTV's financial ability to program an educational channel. Robert Decherd proposed to fund the educational channel from the proceeds of the auction of the reclaimed analog spectrum. Other members suggested that universities or other public interest entities should be able to manage the channel if public broadcasting were insufficiently funded.

As a possible compromise, Mr. Ornstein proposed to give public broadcasting a right of first refusal on managing the educational channel. Under this approach, the local public broadcaster would submit a plan for programming the educational channel to the FCC, including information on its ties to local community organizations and a description of how the second channel would be distinct from its other offerings. If the FCC could not approve the plan, it would allow other qualified entities to submit plans for the channel. The funding for the channel could come from the analog spectrum auctions and be administered by the Corporation for Public Broadcasting.

The Committee then discussed a variety of related issues, related to administering an educational channel:

  1. the importance of clarifying the definition of educational programming;
  2. the method for identifying which public broadcaster would retain its analog spectrum in communities with several public broadcast stations;
  3. the process for allocating the retained analog spectrum to a public broadcaster or other qualified entity within a community;
  4. the possibility of allowing commercial broadcasters to compete in open bidding for 15 to 20 percent of the funds set aside for educational programming as an incentive to air public interest programs that might not otherwise be commercially viable; and
  5. the concern that creating an educational channel administered by public broadcasting would not provide sufficient access for minorities or adequately level the playing field.

Public Comment, Questions and Answers

Mr. Ornstein opened the floor to public comment. Sue Frenzel, a resident of Minneapolis, reminded the Committee that the public owns the airwaves and deserves some payment for their use. She recommended that the government lease the airwaves to broadcasters as an effective way of ensuring that they serve their local communities. Ms. Frenzel also argued that broadcasters do not adequately represent the interests of women and provide insufficient coverage of local political issues. She concluded that voluntary commitments by broadcasters would be insufficient.

Steve Volari, a resident of St. Paul, also addressed the Committee. He urged the Committee to recommend leasing the airwaves to broadcasters and proposed a review of broadcasters' performance every five years. Mr. Volari suggested that broadcasters who do not meet the public interest standard should return one-third of their profits to Congress for funding public television. Mr. Volari also proposed that the Committee hold evening meetings to promote public participation.

Mike Cashman of Minnesota's Department of Human Services for the Deaf and Hard of Hearing outlined his concerns about the lack of real time captioning during emergencies. Mr. Cashman explained that current captioning techniques do not convey to deaf and hard of hearing people detailed information about potentially life threatening events such as tornadoes and thunderstorms. The Committee briefly discussed the technical requirements for real-time captioning and agreed to include provisions for improved captioning in the draft Broadcaster Code of Conduct.

Finally, Steven Clift, an independent consultant and former coordinator of Minnesota's government on-line project, asked the Committee to consider digital broadcasting as a one-way Internet service that can provide valuable information such as government services, police reports and neighborhood events to communities. Mr. Clift suggested that this form of "community information syndication" could help broadcasters fulfill their public interest obligations.

Public Interest Obligations and Mulitcasting

During the afternoon session, Mr. Ornstein led a discussion on crafting public interest obligations for broadcasters who use the digital spectrum to transmit multiple channels. He proposed that broadcasters who transmit three or more channels be required to set aside one channel for public interest programming. The set-aside requirement would only be triggered if multicasting resulted in higher revenues for broadcasters as compared to a single standard or high definition broadcast.

The Committee then addressed several other questions related to public interest obligations in a multiplexed environment:

  1. how to ensure robust programming for a public interest channel;
  2. whether broadcasters would have to provide all the programming for the channel or whether they could contract with another broadcaster or organization to program the channel;
  3. whether directing all public interest programming to one channel is beneficial for viewers;
  4. whether the set-aside requirement would create a disincentive for broadcasters to experiment with multicasting;
  5. whether public interest obligations should apply only to a broadcaster's primary channel and a fee assessed on subsequent multiplexed channels;
  6. whether the public interest channel would obviate the need for public interest programming on the broadcaster's other multiplexed channels; and
  7. whether proposing both a set-aside by commercial broadcasters for public interest channels and encouraging public broadcasting to program a second digital channel is reasonable.

At the close of the discussion, many members agreed that the proposal for applying public interest obligations to multicasting should be revised to reflect a menu of options that would allow broadcasters flexibility in fulfilling their public interest obligations.

Political Discourse

The discussion then turned to political discourse. Mr. Ornstein presented three suggestions. First, he suggested that the Committee investigate the offer by Eddie Fritts, President and CEO of the NAB, to grant two hours of free air time to congressional candidates. Several members explained that Mr. Fritts' statement had been misconstrued and was not official NAB policy.

The Committee then focused on the proposal to encourage broadcasters to provide five minutes of candidate-centered discourse daily for 30 days prior to an election. Broadcasters would have editorial control of the programming and the segments would be exempt from the equal time provisions of broadcast regulation. In addition, the five-minute segment could be split among different types of programming, so long as one segment was three consecutive minutes in length.

Several members expressed concern about ensuring that the five-minute segments provide balanced coverage of elections. Mr. Ornstein explained that the equal-time exemption was an attempt to ensure that challengers had an opportunity to be heard even if the incumbent refused to debate or appear in a similar forum for political discourse. In addition, Mr. Sunstein reminded the Committee that the draft voluntary code had a provision requiring balanced coverage. Therefore, the five-minute slots would be in addition to the regular civic programming and campaign coverage provided by broadcasters.

Some broadcasters on the Committee viewed the proposal favorably because of the flexibility allowed in programming the five-minute slots. However, there was some concern about whether this provision would replace the lowest unit rate (LUR) and whether the LUR was less burdensome than a free time requirement.

The Committee then focused on the third proposal that would require broadcasters to provide one minute of free time for every two minutes purchased by a candidate (termed the "two-for-one model"). Under this proposal, the free minute would be allocated to the major political parties according to the same formula used to allocate federal funds for presidential campaigns, not given to the candidate. The LUR would be repealed and candidates would pay market rates for their broadcast advertisements.

Since applying such a system to primaries would be difficult, some members suggested only applying the two-for-one model to general elections. The Committee agreed to consider a variation of the two-for-one proposal as it moved forward in its deliberations.

Public interest obligations in the digital age

The Committee next examined the "pay or play" model under which a broadcaster, instead of meeting their public interest obligations, could choose to pay a fee to the federal government or pay another broadcaster to air its share of public interest programming. Some members were concerned that the pay or play model could result in only one channel in a market providing public interest programming. Others argued that it would be difficult to price the "pay" option fairly because public interest obligations are difficult to value.

Jim Goodmon then reviewed his alternative proposal for mandatory minimum public interest standards. He suggested including an ascertainment requirement, a requirement that broadcasters air a minimum of 150 public service announcements within specified dayparts, and a minimum amount of public affairs programming in addition to regular news coverage. Broadcasters would also be obligated to file quarterly reports on their efforts to fulfill these requirements in a file accessible to the public and discuss these efforts on the air. A voluntary code would set standards beyond the minimum obligations proposed by Mr. Goodmon.

The discussion then focused on whether minimum standards should be incorporated into the proposed Broadcaster Code of Conduct. Several members expressed a concern that the Code remain a voluntary code. Other members queried whether there could be any meaningful enforcement of a purely voluntary code. There was some discussion that the debate over minimum standards was related to the license renewal process which had substantially changed over the years.

As a complement to a minimum public interest standard, Gigi Sohn introduced a proposed public interest programming certification form that broadcasters would complete quarterly. She explained that the programming certification was based on her understanding of what most broadcasters are currently providing. One member vehemently opposed a certification requirement as overly burdensome.

Public Comment, Questions and Answers

Mr. Ornstein opened the floor for a second round of public comment. Debra Wilken of the Salvation Army described the successful partnership the Salvation Army has had with Minnesota broadcasters in sponsoring charitable drives and in providing disaster relief. Ms. Wilken reported that the approach used by the Salvation Army and the Minnesota media during the flooding of 1997 has become a model for the Salvation Army's Emergency Disaster Services. Ms. Wilken thanked the broadcasters for their support.

Dian Mack, Executive Director of the Minnesota Food Bank Network, described the activities of broadcasters on behalf of her organization. Ms. Mack explained that by providing public service announcements, coordinating coverage and hosting a telethon for flood relief, Twin Cities broadcasters helped the non-profit community spread its message.

Closing Discussion

The Committee returned to the question of whether the proposed minimum standards for public interest obligations should be mandatory or part of the voluntary code of conduct since the Committee's mandate was to determine obligations not voluntary measures. Some members reemphasized their concern about the enforceability of voluntary standards. They argued that, as the broadcast industry increasingly moved from local to group station ownership, broadcasters would be less responsive to local community needs. Others argued that broadcasters serve the public well and that regulation in the form of mandatory minimum standards was unnecessary. The Committee did not reach consensus on this subject.

However, there seemed to be consensus that broadcasters should be fully accountable to their local communities. One proposal that received significant support would require broadcasters to report more information on their public interest activities than is currently required, but not in as much detail as the program logs of years ago.

In concluding the meeting, Mr. Ornstein stated that he saw a real opportunity to come to a broad agreement on the recommendations although one or two members might dissent on specific issues. He also confirmed that developing a voluntary code is only one component of the Committee's work.

Mr. Ornstein thanked the members and adjourned the meeting at 5:20 p.m.

Meeting Materials (available separately)

Executive Order 13038 (3/97)
White House Press Release announcing the establishment of the Committee (4/97)
Charter of the Advisory Committee (4/97)
Radio Address by the President announcing the Co-Chairs (6/97)
Amendment to Executive Order 13038 (9/97)
Amendment to Executive Order 13038 (10/97)
White House Press Release announcing the members of the Committee (10/22/97)
White House Press Release announcing the appointment of Jose Luis Ruiz (12/4/97)
Amendment to Executive Order 13038 (4/98)
List of members of the Committee
Biographies of members of the Committee
Secretariat contact information
Guidelines for public comment

Meeting agenda
Meeting transcript

CERTIFICATION:

(signed)
Leslie Moonves, Co-Chair

(signed)
Norman Ornstein, Co-Chair