Thank you, and good morning.

It's no secret that the two most important issues involving your business and the federal government today are tobacco, and alcohol. (When I hear myself say that, I feel like I'm a bartender at the corner saloon.)

It just so happens that both of those issues, and the agencies involved, fall squarely within the jurisdiction of the House Committee on Commerce. We do a few things besides tobacco and alcohol -- such as securities regulation, energy policy, environmental policy, and health care -- but these two issues have aroused a high degree of passion.

It's easy to understand why. They affect clearly delineated segments of our economy, and have a direct and specific impact on particular companies. The consumption of alcohol and tobacco is also a matter of intense, personal concern in virtually every home and to every parent in the country.

Having said that, these are not simple matters. They raise questions of profound Constitutional importance, and they touch on fundamental notions of personal responsibility. Let me offer some observations on both of these topics this morning, and then I'll be happy to answer any of your questions.

The underlying concept and purpose of the FDA tobacco regulations is a good one -- reduce the use of tobacco among young people.

During House floor debate on a tobacco amendment 2 years ago, many tobacco-state Members argued that controlling tobacco use among young people should be a high priority. They argued that Congress ought to take whatever steps might be necessary to accomplish this goal, short of directly penalizing tobacco growers. A number of things were mentioned, including making certain that promotion and advertising of products does not target teen-age audiences.

In other words, there has in the past been at least lip service paid to taking action -- perhaps even dramatic action -- to reduce teen-age smoking.

As you know, FDA's rules are already in effect. Sales to people under 18 are prohibited. Retailers are required to check photo identification for anyone under age 27. And we in Congress already have started hearing about the difficulties stores have dealing with this.

After August 28, I expect to hear from your companies and your clients, because that is the effective date of rules relating to advertising. Between now and then we need to sort out the best approach to dealing with this matter.

I know that you do not want to be in the public limelight as the naysayers who insist on advertising tobacco products to children. But I also know you have legitimate questions and concerns about the way these rules are constructed, and the extent to which they will affect your ability to promote products to adult markets.

FDA makes some appealing arguments about the need for advertising restrictions of the sort dealt with in the rules, such as no billboards near schools; no multi-colored billboards; no promotional items such as t-shirts or baseball caps; and no advertising in magazines with large youth readership. We need to hear your good, solid arguments on these matters as well.

And then, 18 months from now, we are looking at the kicker --restrictions on sponsorship of sporting events. We know such events as auto racing -- near and dear to my Michigan constituents -- tennis tournaments, and major league baseball have great appeal to young people. Does using such venues to make a pitch for products have an impact on kids? If we are doing away with advertising in youth magazines, billboards near schools, and t-shirts depicting Joe Camel or the Marlboro Man, are we undoing that effort by simply focusing instead on sporting events?

It's a tough question, and one worthy of serious discussion.

Another tough question involves whether FDA should be prohibited from tobacco regulation. Is FDA regulation of sales, promotion, and advertising a back-door way of regulating nicotine as a drug, and thus of eventually turning tobacco products into a prescription commodity? These are difficult and complicated questions. They are worthy of honest, open, and fair debate. Let's have the debate. Let's work together to see how best, and most fairly, to achieve a goal I believe all of us share -- reduce the use of tobacco by young people, and reduce illness and early deaths associated with smoking.

Liquor advertising presents us with a different but no less difficult set of issues.

The change in the industry's policy -- their decision to advertise liquor on television -- was based primarily on increased competition from beer and wine industries. They were losing market share; and reacting in an understandable (if not univerally acceptable) way to competitive pressures

Ironically, some of the harshest criticism of the liquor industry comes from some of my Republican colleagues, who see the virtues of the "invisible hand" and the inherent dangers of government intervention in so many other areas.

We can all agree that with freedom comes responsibility. The industry must act responsibly when it comes to vulnerable populations, such as children or teens. In this sense, there are some similarities to tobacco.

I would note that much of the broadcast industry voluntarily has refused to run liquor ads because they believe it is not in the public interest. I am also pleased that liquor industry has adopted a moderate course in light of public concerns.

The key here is that such responsible actions are voluntary. Government intervention should be a last resort.

But for the sake of discussion, what if the industry does not act in a socially responsible manner? Who has the authority to intervene?

The responsibility of the Congress is to discover the facts, weigh the competing interests, and strike the right policy balance between our public policy goals and our constitutional rights.

I am concerned that some FCC Commissioners seem to think that Congress has delegated authority over these issues to that regulatory agency.

Congress originally created the FCC to ensure orderly delivery of broadcast signals, and now relies on it to proffer expert guidance on a broad range of telecommunications issues. But I have grave doubts about the wisdom of the Commission the licenses broadcasters exercising control over content. It is an open question whether the FCC has the expertise to evaluate the validity of claims about the harmful nature of advertisements on a particular segment of society.

Congress has specifically empowered another agency, the FTC, to perform this function. That agency is expert in evaluating whether advertising messages are desceptive, misleading, or unfair, and has the tools at its disposal to remedy situations that it determines are offensive under Federal law.

Having said this, FCC Chairman Hundt should be commended for his deeply expressed concern over the potentially harmful effects of liquor advertising on our nation's children, as should all Americans who speak their conscience on this subject. But does the FCC have the mandate and the knowledge to draw distinctions between beer and wine and liquor advertising?

The distinction made by Chairman Hundt -- that "liquor is quicker"-- bears out the profound danger in regulating commercial speech using a sound byte mentality. Public policies that affect constitutional rights must be made after careful and serious consideration.

You may have guessed from my discussion of these issues that I'm not eager to legislate on either of them. You would be correct -- I would prefer that they be worked out in a voluntary way.

Nevertheless, I'm aware of the stakes, and I'm aware of the difficulties. Should these matters come before the Congress, I would hope that we would be able to sit down and craft some common sense solutions together, and I thank you for your time and attention.

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