It is great to be with you here in Vegas.
George Carlin is in town, with his routine about the seven dirty words
the FCC won't let anyone say on radio or TV.
Everyone operates under limits. Seven words the FCC won't let you say
on TV; and two words that the FCC can't get anyone to say on TV: spectrum
At last we're beyond that.
Surely you are all feeling good about getting these DTV licenses? I
hope everyone here has one. They really are a ticket to 21st century success.
I read in Broadcasting and Cable that Commissioner Ness and I worked
out a good cop/bad cop routine for the negotiation with NAB over these
They're not supposed to figure these things out. But it is true that
to get the DTV deal done I had to promise that next time she could wear
the black hat.
Actually, Eddie Fritts and I have a pretty decent version of good cop/bad
cop...or at least Laurel and Hardy.
Here's the way it works. I make a reasonable, modest proposal: -- like
why don't broadcasters set aside about half of the new DTV programming
time for Kids TV and the other half for free political ads?
Then Eddie gives reasonable, thoughtful response -- like, no way, the
industry won't do anything you want... even if we were planning to do it
before you asked.
So I double my demands.
Then Eddie goes to less than zero.
Then we talk.
And eventually we get to a good result.
It wasn't always this way... there was the time, only three years ago
when I called Eddie from Argentina to say I was there at an important WTO
meeting and I couldn't make it to Las Vegas for the NAB and by the way
we didn't have an ambitious agenda for broadcast that year.
Eddie wouldn't let me off the hook.
He made me promise three things: I would address the convention that
year by video; I would agree to speak at all future NAB conventions during
the crack of dawn time slot, and I would learn as much as I could about
So folks, in the 3.5 years I've had this job, I've done just what he
Well maybe not everything he asked for...
Eddie was certainly right about this: in the last three years the broadcast
industry has occupied its traditional place at the very heart of the public
and political debates in Washington. The issues have included spectrum
auctions, kidvid, free time, commercial deregulation such as finsyn and
PTAR, procompetition policy, computer/tv convergence, must carry and hard
liquor ads. The debates have been in Congress, the Supreme Court, the White
House and the FCC.
The debates have been fantastically interesting and the results have
been by and large good for the country and positive for this industry.
Of course it's not possible to do my job right and have everyone really
"like" everything we do.
But at least I owe you explanations.
I have a two point policy for broadcasting:
First, as a general rule, promote competition and deregulate.
Second, as a specific rule, where competition does not guarantee certain
public benefits from the use of the public spectrum, then write fair, clear
rules to get those guarantees.
These two points led the Commission to change totally the policies we
inherited back in 1993 for what was then called HDTV.
First, we promoted competition in digital receivers by changing the
name of the proceeding to DTV digital tv -- and expanding the role of the
computer industry into the advisory committee process, the testing, and
the standard setting process. The result was put before your eyes yesterday:
because of our expansion of the standard, you can choose if you wish the
electronics industries' home theater vision as your target audience or
the computer industry scenario pitched by Microsoft, Compaq and Intel.
They describe a convergence of PCs and TVs in which broadcasters become
a gateway to the internet and get to reach almost 20 million DTV receivers
-- also called personal computers -- in the marketplace by Christmas 1998
This contrasts to the consumer electronics' plan of selling at most a few
hundred thousand $5,000 home theaters.
And we promoted competition in programming diversity by repealing the
mandatory high definition requirement. Instead digital broadcast of multiple
channels and other content is the new rule. And we promoted competition
in use of the airwaves when our brilliant engineers designed an allocation
plan that lets us retrieve 60 megahertz: now and 78 megahertz when analog
Second we promoted the public interest by shortening the six year buildout,
so that 1/7th of all TV households by Christrrias 1998 and 1/2 TV households
by Christmas 1999 will have at least three digital signals. The purpose
is to create a free, universal, local digital medium as fast as possible.
And we promoted the public interest by voting as a Commission to a new
proceeding to define the public interest more specifically in a digital
age. This will include consideration of free time for political candidates.
which ought to be part of a fix to our terrible campaign finance system.
I believe that today's broadcasters have the content and the brand names
that are going to drive a significant share of the computer industry's
growth during the next decade.
I also believe that today's broadcasters have the medium that will continue
to help us build a better America. Often broadcast lobbyists ask me how
much do I expect this industry to do. It's not what I expect; it's what
Americans need that we should be talking about. Everyone is aware that
we need a better educated country; and with one fifth of our children growing
up in poverty is crucial that a free universal medium help educate, as
well as entertain, our next generation. That educational TV commitments
that competition would not drive off the airwaves.
And everyone is aware that it is the calling of America, the indispensable
country, always to be trying to form a more perfect union. Increasing voter
cynicism, declining voting rates; constant news about fund-raising; continuing
efforts by both parties to raise more and more money: no one thinks this
system is working well.
In the last election cycle Republicans raised almost $500 million; Democrats,
almost $300 million.
And the overwhelmingly largest reason for the fundraising is the TV
The system is broke and needs fixing.
Of course Washington lobbyists are skeptical that we will have campaign
That's the good news.
They are usually the last to know when something's important to the
rest of the country. The American people want a reduction in the role of
money in politics, an equitable way for candidates to have access to the
public, a massive increase in the number of people who vote and participate
in politics, and broadbased increase in trust in government.
In an information age, TV is part of the solution to every one of these
This is one of the principal reasons why the FCC and the Solicitor General's
Office were proud to win the must carry case in the Supreme Court - and
the government did that, with your help. The must carry win will help us
guarantee free local TV in this country, to help entertain inform, educate,
and obtain the participation of all Americans in our country's affairs.
And that free TV must be digital if it is to survive in the multichannel
video competition that is coming across the pipes and down from the sky.
We want vigorous competition, because it will drive better performance,
bolster diversity of viewpoints, and maximize free speech.
But no amount of competition should be allowed to compete away public
The market place was driving broadcasters away from doing kids educational
television. That's why we needed a fair, clear rules which would ensure
that everyone did a minimal amount instead of vague rules which would allow
some to do none while others carried all the load for the broadcast industry.
Such vague a rules punish those who truly act as public trustees and reward
those who act 100% in response to the market.
The same is true with hard liquor advertising. Most broadcasters don't
want to run these ads not because they wouldn't like the extra money but
because they feel such ads are contrary to their public interest obligations
as public trustees.
But if 50 or 100 broadcasters are running the ads today, the marketplace
is going to drive the situation so that 200 will be doing it 6 months from
now and at some point the wall will collapse and all broadcasters will
be forced to run the ads. Again, the industry position works to protect
the renegades rather than protecting those who want to continue to serve
as public trustees.
The same market forces are at work in the decreasing amount of time
broadcasters are devoting to PSAs. A couple of weeks ago I expressed the
concern that the number and duration of PSAs was going down and suggested
that part of the reason for this was the dramatic rise in self promotional
advertising broadcasters are doing. It seems to me this is a trend that
should worry all of us, but especially those broadcasters that want to
run PSAs to serve their community.
In short the broadcast community should decide whether its strategy
should be to defend the rights of the few who do not want to serve as public
trustees and who in fact want to do nothing other than serve the dictates
of whatever is in the best interest of maximizing profits or whether to
seek solutions in which the market place is safe for the many broadcasters
who choose to act as public trustees.
Very soon, the Commission will issue a Notice that will allow us to
begin to consider these questions regarding the public interest obligations
of broadcasters in an increasingly complex and digital marketplace.
All questions should be raised in the notice; nothing should be foreclosed,
just as the Commission promised unanimously in the DTV item.
The President will appoint a panel of broadcasters, public-interest
advocates, and others to give him recommendations on what form public-interest
obligations should take. The Vice President will chair the Commission.
As Vice President Gore said recently, DTV will afford broadcasters tremendous
new opportunities, and that "public interest obligations should be
clear and commensurate with these new opportunities."
President Clinton and others including Senator John McCain, Barry Diller
and Walter Cronkite and Paul Taylor have all suggested that broadcasters
renew their public interest commitment by providing substantial amounts
of air time for direct access by candidates to voters.
You should and could develop a sensible common industry plan on how
to make this happen. Your proposal could be among those we consider during
the Notice we voted to have in the DTV order. Why don't you write something
up and ask us to include it in the Notice, for open and public debate?
Similarly, why not take the lead in dealing with the issue of liquor
advertising on TV?
For decades, the American people took for granted that hard-liquor advertisements
wouldn't appear on TV. They didn't know that this ban was the result of
responsible policies by broadcasters and the liquor industry. Now, faced
with declining brand awareness among the younger generations, the liquor
industry wants to pitch their products across the open airwaves. I bet
there were a lot of viewers out there that assumed that there was law prohibiting
liquor ads on TV -- like the cigarette law.
The President said last week that, "Liquor has no business with
kids, and kids should have no business with liquor. Liquor ads on television
would provide a message of encouragement to drink that young people simply
don't need. Nothing good can come of it."
Most broadcasters don't want to carry ads for liquor. I have praised,
and I'll praise again, all those who have stood up to the siren call of
cash to just say no to these ads.
Broadcasters should not take seriously the liquor industry's claim that
I and the other FCC Commissioners are threatening anyone's license when
we criticize the airing of liquor ads.
But the fact is that a few profit chasing, renegades are willing to
pour liquor ads across the airwaves. Seagram led the way. Predictably,
Hiram Walker is following, with a bigger, bolder campaign. They plan to
spend the bulk of their national advertising budget on Kahlua. The ads
for the Kahlua "Mudslide," a premixed, sweet drink --just perfect
for those who don't like the taste of hard liquor --are airing on the X-Files
in 22 local markets, I read, and on other channels as well. It is just
not possible that these ads won't reach millions of kids.
As for the X-Files, 15% of its audience is under 18. Some 2.8 million
kids, just under age 18, watch across the entire U.S. (again, this doesn't
include 18-21). And if these kids are in the 22 markets that carry the
Kahlua ads, these kids will also be watching ads for Kahlua.
The decision by some to carry such ads puts pressure on those who don't
want to, by placing em at a competitive disadvantage. That means that there
needs to be an industry-wide solution. Otherwise a few bad apples will
ruin the lot.
Last Friday, the head of DISCUS (Distilled Spirits Council of the U.S.)
wrote to President Clinton in response to the President's statement. He
asked the President to request that distillers, brewers, vintners and broadcasters
all meet together to develop a unified code.
For the liquor industry to try to divert attention from its actions
by talking about beer and wine is sad. But a code is a good idea.
A potential stumbling block to instituting such a code is that broadcasters
right now can reasonably assert that, because of anti-trust concerns, they
can't meet and discuss how to set up an industry-wide standard that would
protect kids from liquor ads.
All industries have health and safety codes that are applied to all
competitors. There is nothing wrong with the same approach to broadcast
ads that threaten the health and well being of young viewers.
So I suggest that the NAB should endorse and expand the Television Improvement
Act of 1997 recently introduced by Senators Brownback and Lieberman. That
bill ought to give a clear legislative exemption to an industry code that
protects kids from ads that are dangerous or unsafe to advertise to them,
because of their potential impact. Then, if you broadcasters voluntarily
decided to turn down liquor ads, you'd have an exemption from any threats
of lawsuits by Seagrarn or anyone else.
This isn't censorship -- it's industry taking responsibility for itself.
These are health and safety issues.
When I return to Washington I will ask my colleagues on the Commission
to join me in writing a unanimous letter to Congress, to ask that the Brownback/Lieberman
bill be expanded to include such an exemption, and be made law.
Why don't you ask them to do this for you?
Meanwhile, the Commission should have a Notice of Inquiry to explore
these issues and to make a report to the President, the Congress, and the
American people. I'm asking each of you here today to ask each of the FCC's
Commissioners to support such a limited and modest proposal.
The reason for a Notice of Inquiry is to let us gather the facts. We
don't know even the basic facts here -- to what extent have hard-liquor
ads aired on television? At what times, during what shows? What are the
numbers of kids that have been exposed to these ads? What do these ads
look like -- are they targeted at kids? What can we expect the effect of
these ads to be?
Why don't you ask us to do this for you?
Keeping liquor ads off TV is the right thing to do. It's also the prudent
thing to do. By keeping such ads off, broadcasters improve your brand name.
Broadcast TV should work to keep its reputation as the family-friendly
and high-quality presence on TV.
Another trend that threatens this reputation is the drop in PSAs. The
networks are branching off into cable. and at the same time they're working
to create their own brand identity.
Part of the strategy in reinforcing that identity has been to increase
the amount of time spent in self-promotion. The Wall Street Journal
reported on April 2 that the big four broadcast networks are each devoting
the equivalent of $500 million a year in air time to pitch themselves and
their programs That is about as much as Procter & Gamble or GM spend
annually on their network TV advertising.
This increase in time has to come from somewhere. One source has been
programming time, which has dropped. Another source for promo time, unfortunately,
has been from PSA's. We know that from the impact of such messages as "Just
Say No" and "this is your brain on drugs" and Smoky the
Bear. And we saw in the 60's what an impact cigarette counter-advertising
had on smoking. So it's clear that PSA's work.
So what sort of industry code could be developed that would keep competitors
from competing away the traditional broadcast commitment to PSAs?
If PSAs cannot be guaranteed in the traditional ways of the past, what
new practices need to be developed that would keep this wonderful medium
on the side of all the public service goals that PSAs have so nobly and
We can't think that denial of a problem about liquor ads or campaign
access or PSAs in any way contributes to a solution.
We can't think individual broadcasters or the whole industry is putting
its best foot forward when its public reaction to any of these issues is
And we can't for a second think that this country can address these
problems effectively in an information age without the active help and
creative energy of the TV business.
Not only do I need your constant help and guidance, so the country needs
your willingness to participate in solving the country's hardest problems.
You have a long history of responding to every call and I know your
future in a digital age will be just as bright and caring.