REMARKS OF COMMISSIONER MICHAEL J. COPPS
TO
COMMONWEALTH NORTH POLICY GROUP
Thank
you for the great turn-out this morning!
Let me first thank you for the tremendous hospitality you are showing up
during this visit to
My
colleague, Commissioner Kevin Martin, asked that I express his regrets because
he could not be here this morning due to one of those last-minute command
performance meetings we all sometimes get involved in. That forced him to delay his trip by one day,
but he is due in later this afternoon and I look forward to our joint hearing
and other activities this week. I must
note, however, that Kevin’s absence gives me a few extra moments to speak, so
while I regret his absence, I am not completely crestfallen.
I had
the chance last week-end to read an excellent book called Airwaves Over
Alaska which, as I’m sure most of you know, is a biography of the great
Augie Heibert, the pioneering
It was half a century ago that television first changed
the lives of the people of this great state.
Today, other “new technologies” also have the potential to bridge the
geographic distances in this state and other rural areas of the
I just wrapped up my first
year at the Commission last month, and what a year it was. It started with the economy
performing sub-par, and the wholesale demolition of the dot.coms and many of
the competitive phone companies. And
then came September 11 and the fundamental reorientation of U.S. Government
policies, agency priorities and your and my personal and family
lifestyles. Finally, in the last few
weeks we have witnessed another round of unprecedented economic distress in the
broader communications industries, including the possibility of service cut
backs in certain critical services. It was
not a year any of us would like to relive.
Let’s begin with the biggest event – September 11. The horrific events of that day added a whole
new dimension to everything we were doing.
Suddenly, not only were we dealing with the problems of a depressed
advertising market, a burst internet bubble, and the demise of many telecom
companies that had seemed like the worst possible crises themselves only months
ago – but we faced a huge and totally unprecedented threat to our country’s very
safety and security.
A major unfinished task before the Commission this year is to strengthen
homeland security in the wake of the terrorist attacks of September 11 and in
preparation for what is likely more to come.
Before I go any farther, I want to say to all of you what I have already
said to some of you about the performance of
The Commission responded to the events of September 11
by establishing a Homeland Security Policy Council and, just recently, we
chartered a new Media Security and Reliability Council with membership from
media companies and related industries.
This builds upon our already-existing Network Reliability and
Interoperability Council for telecom. I
was pleased to see so many media company CEOs at the first meeting of this new group
last month. So these are good steps and
I applaud them, but I’d like to see us do even more. I want the FCC to be as
aggressive as we can possibly be on homeland security. I have a real sense of urgency about this. Upgrading network reliability, building in
systems redundancy, and deploying all available technologies in the war against
terror are second-to-none national priorities and the FCC has the legislative
mandate to not only be there, but to be out-front, leading the way. I don’t believe we can afford to wait for a
new department of government to be approved, organized and up-and-running. We need to be out-front now. When terror bears its murderous face again, I
don’t want the tiniest opening for anyone to say that the Commission or the industry
was timid in any of its efforts.
The sad plight of so many telecom
and dot.com companies is the other great event I have been watching from the
Commission. It hasn’t been
pleasant. But I must tell you that I am,
in spite of it all, and without qualm or doubt, an optimist about the future of
communications technologies. Right now,
in the world of business analysts and pundits and the handicappers of the stock
market, that puts me in a pretty tiny minority.
But I am used to being in the minority – I’m a minority of one at the
FCC, so you just have to call them like you see them and get on with the job. Most of the pundits and analysts of telecom are
still mired in doom and gloom. But, you
know, tracking great technological change -- historical change, really -- is
different than tracking stocks.
Two years ago, the guys and gals supposedly in the
know were in high orbit, extolling the end of the business cycle, prosperity
forever, with telecom leading the way into a brave new world. Then recession hit, and they went from
irrational exuberance to doomsday pessimism on the turn of a dime. I think they were wrong both times. Sure, the business plans of many of the
dot.coms and start-ups were often faulty, but the technologies behind them not
only remain – they are proliferating. The
“boom-bust-and-boom-again” cycle has accompanied other great technology and
infrastructure roll-outs throughout history, canals and railroads being two
examples. In those cases there was
excess enthusiasm and risky investment at the outset and the bubbles burst, but
the infrastructure need endured, the technology was viable, and growth
returned. I think the same will happen
here. It won’t be tomorrow, but I think
it will be sooner than many of the pundits predict.
There’s another factor at work here: we’re not
adequately differentiating the forces that are slowing today’s market – the
real culprits. I’m no economist, but I
do believe a good case can be made that the shake-out in telecoms, insofar as
factors strictly internal to telecom are concerned, has about run its
course. It is difficult to see how they
could be discounted much more at this late date. Driving the market’s decline now -- and the
sector’s -- are corporate governance problems, accounting depredations, and a
fundamental disconnect between the stock market and the basic good health of
the American economy. We shouldn’t blame
all this on telecom technology.
I do believe that the Commission has some
responsibility in this area of corporate and accounting excesses. We need to rely less on the reporting
conclusions the companies supply and rely more on our own independent analysis
of that data for companies in the industries that we regulate. Unfortunately, we have been heading in
exactly the wrong direction. We have cut
back our accou8nting rules and put out a formal notice to see how many more of
them we can jettison. We have indicated
to the states that we may only collect data for our FCC purposes in the future,
so that state regulators would then have to go get what they need on their
own. I warned against this at the time
and voted against that notice, and I will be pressing the Commission to revisit
this policy direction in light of the clamorous events of recent weeks. The fact is that we must make full use of our
existing authority to reduce the chance that accounting irregularities and
corporate mismanagement will injure American consumers. Additionally, we need to let everyone know
exactly what happens if there is a threat of service cut-backs or
cut-offs. Finally, the Commission must
evaluate whether it has sufficient authority to do what needs to be done or
whether we need to ask Congress for additional authority. I don’t think we should be bashful about any
of this.
Let me tell you what we should not do. What we should not do is use the current
situation as an excuse to back away from competition. It is during recessions and tough economic
times when the calls increase for less competition and increased consolidation. We are hearing again that old siren song – that
the way out of economic trouble is to get bigger, enjoy the economies of scale
and reduce competition. I just don’t buy
that line of reasoning. Re-monopolization
is not the cure for telecom’s problems.
That is exactly the wrong prescription for the industry, and the wrong
medicine for the American consumer.
Another important challenge
related to the current difficulties being faced by communications industries is
consolidation. The
Nineties brought new rules permitting increased consolidation in the broadcasting
industry, on the premise that broadcasters needed more flexibility in order to
compete effectively. These rules paved the way for tremendous consolidation in
the industry -- going far beyond, I think, what anyone expected at the time. These changes sometimes do create
efficiencies that allow companies to operate more profitably and on a scale
unimaginable just a few years ago. I recognize that without a measure of
mergers and acquisitions, some stations would have gone dark and their
communities would have been deprived of service. But consolidation
also raises profound questions of public policy as the Federal Communications
Commission reviews such mergers. How far
should such combinations be allowed to go?
How much debt can companies safely assume given the vagaries of the
market? How do we protect localism,
diversity, multiplicity of voices and choices, and the great marketplace of
ideas that nourishes and sustains our democracy if we allow consolidation to
run its course? How do we judge these
things? Who should judge these things?
We all
realize that the world has changed. That
bigness is not necessarily badness. That
we live in a global economy where the pressures of competition are extreme. Goodness knows,
That being said, however, the American people have always harbored a deep
distrust of excessive industrial consolidation, and they have always posted
sentinels at the gate to guard against it.
That skepticism persists. As I
talk to Members of Congress, I hear widespread, and surprisingly bipartisan,
concern about consolidation. There is
concern about too much economic power and concern about the loss of localism
and diversity. So it strikes me as
bedrock that our review of proposed consolidations must venture beyond economic
efficiencies if we are to ensure that combinations serve the public
interest.
We
need a national dialogue about all this.
At the Commission we have teed up questions of seismic importance
concerning
And
speaking of the public interest, I never miss an opportunity as I move around
to talk with my fellow citizens about another matter that is important to me: protecting
against indecency in the media. I know this is
controversial, but it goes right to heart of the public interest
responsibility. Every
day I hear from Americans who are fed up with the patently offensive
programming coming their way so much of the time. I hear from parents
frustrated with the lack of choices available for their children. I even hear
from broadcast station owners that something needs to be done about the quality
of some of the programming they are running. I had a high-powered TV executive
in my office a few months ago who told me he doesn’t let his children watch
television unless he’s there to man the remote. I found that kind of sad.
I’ve referred to a “race to the bottom,” but recently I’m beginning to
wonder if there even is a bottom to it. I’m reminded of Charles Dickens’ Tale of
Two Cities. It is the best of times; it is the worst of times. On our TV screens today we have some of the
best television ever. And we have
undoubtedly -- undoubtedly -- the worst.
I believe that, as a society, we have a responsibility to protect
children from content that is inappropriate for them. And when it comes to the
broadcast media, the Federal Communications Commission has the statutory
obligation -- the legal mandate -- to protect children from obscene and
indecent programming. I take this responsibility with utmost seriousness. Our nation has enacted laws --
Constitutionally sanctioned laws -- to protect young people from these
excesses. But the process by which the
FCC has enforced these laws places inordinate responsibility upon the
complaining citizen. When someone sends in a complaint, he or she is usually
told to supply a recording of the program or a transcript of the offending
statement before the Commission can even proceed. That’s just wrong. It is the Commission’s responsibility
to investigate complaints that the law has been violated, not the citizen’s
responsibility to prove the violations. I have suggested that broadcasters voluntarily
keep tapes or transcripts for a reasonable period of time, like 60 or 90 days. Many already do this. I am not suggesting that broadcasters forward
those tapes to Washington or Big brother FCC so we can while away the hours
pouring over everything going out on the airwaves. I just think that when there is a complaint,
there ought to be a record available on how those airwaves were used – or
abused.
The
problem goes far beyond tapes and transcripts, however, and so do broadcaster
responsibilities. I believe that if they
took more responsibility for what is broadcast, particularly when children are
likely to be watching, broadcast and cable companies could make a huge
contribution to our children and to our society. I am suggesting that they
adopt – you adopt -- a voluntary Code of Conduct. Actually “readopt” would be a more accurate
term, because such a code was in place for radio from the 1920s and for
television from the 1950s until 1983 when
it was struck down on narrow antitrust grounds.
Through enlightened self-regulation, the industry clamped restrictions
on the presentations of sexual material, violence, liquor, drug addiction, even
on excessive advertising. The Code also affirmed broadcaster responsibilities
toward children, community issues, and public affairs. It didn’t always work
perfectly, but it was a serious effort premised on the idea that we can be well
entertained at levels several cuts above the lowest common denominator that now
dictates so much programming.
It
would be infinitely preferable, and far quicker, to go the voluntary route
rather than to have to travel down the usual
I’ve mentioned only a few of
the matters of common interest that I hope we can work on together. There are many others. I look at all these challenges and I see a
lot of work to be done. But I believe –
I really do – that we can and we will get it done. Together. As I said before, I am an optimist.
I am an optimist about our
country. How could anyone be otherwise
after September 11 when you look at the unity, the compassion and the
patriotism that have poured forth from every city, town and hamlet in this
country from the North Slope of Alaska to Key West, Florida.
I am an optimist about our
communications industries because I know we can use these stunning new
technologies as tools to pry open the doors of economic opportunity for all our
citizens and to power our economy through the 21st century.
And I am an optimist about
or ability to work together to get the job done. Each of us has a role to play, whether as
citizen, businessperson or public servant.
Those of you who know me know the high value I place upon the public
sector and the private sector working together to overcome the many challenges
we face. I have spent most of my 30-plus
years in
Thank you.