CHAIRMAN REED E. HUNDT FEDERAL COMMUNICATIONS COMMISSION CONFERENCE FOR THE SECOND CENTURY OF THE UNIVERSITY OF PITTSBURGH SCHOOL OF LAW A NEW PARADIGM FOR BROADCAST REGULATION September 21, 1995 (As Prepared for Delivery) It is a great pleasure to be with you today to help celebrate the centennial of the University of Pittsburgh School of Law, and to help inaugurate its second century. It is no small accomplishment for a school to have survived and thrived for one full century. To have done so is a special tribute to how well the University of Pittsburgh School of Law has fulfilled its mandate to educate the future lawyers of our nation. Under the continued leadership of Dean Peter Shane, I know this venerable institution will help lead the country into the twenty-first century. In eighteen-ninety-five, the year the University of Pittsburgh School of Law was founded, a boundary dispute between Great Britain and Venezuela drew England and the U.S. to the verge of war. The revolt of Cuba against Spain broke out. The Red Badge of Courage was published. The first professional football game was played in Latrobe, Pennsylvania, and the first U.S. Open golf tournament was held in Newport, Rhode Island. The first U.S. patent for a gasoline-driven automobile by a U.S. inventor was issued, and the first gasoline-powered automobile race in the U.S. was held. X-rays were discovered. Utah amended its constitution to recognize the right of women to vote, and women's skirts were shortened for bicycling wear. They were shortened an inch or two above the ankle, and the hems were weighted with lead. We've all come a long way. And, oh yes, 1895 was also the year Marconi began the experimental work that led him to develop the radio. We've come a long way in the world of technology, as well. But, no matter how forward-thinking Marconi was, could he have imagined satellites and fiber optics and computers and digitization, and a thing as fantastic as the very idea of an Information Superhighway? Surely even the most futuristic thinkers and inventors would be stunned by the progress of truly gargantuan proportions that human beings have made in the area of communications technology. These are inventions that fairly leave one in awe of the seemingly infinite understanding human beings can achieve, and of the inventions we can create. Communications has taken forms and meanings that no one could have predicted, and their benefits far outweigh their drawbacks. However, the pace of advances in communication technology has far outstripped the capacity of the legal community to formulate laws and procedures to deal with the varied and complex issues that have arisen at a faster and faster pace. In fact, there are serious deficiencies in current theory and practice of communications law. My speech today is the first in a series of three in which I will explore the source of these deficiencies and possible ways to address them. The theme of this conference is "The Adequacy of Current Legal Paradigms to Meet Future Challenges." In line with that theme, I will speak today about the legal paradigms related to the theory of broadcast policy, and about a subject of vital importance to our Nation's future: the promise of television to educate and inspire our children. I will focus particularly on the need to impose only concrete and enforceable obligations on broadcasters to make this promise a reality. The vague standards that the Commission has imposed in the past are not only ineffective in addressing these and other public interest concerns, but -- if they are anything more than a charade -- are also extremely difficult to reconcile with the free speech concerns of the First Amendment that must guide our broadcast policy. In fact, as I will demonstrate to you in a few moments, these vague standards have been ineffective in ensuring that broadcasters provide programming that market forces would not otherwise generate -- such as programming that is beneficial to our children. In two subsequent speeches I will turn to the implications that our vague standards have had for political discourse and to our rules for protecting children from violent and indecent programming. THE THEORY OF BROADCAST POLICY The theory of broadcast policy has its origins in the Communications Act of 1934, which adopted a uniquely American approach to regulating the new technology of broadcasting. Broadcasters would be private, Congress decided, but the scarce spectrum would remain public and its use would be limited to those who served the "public interest." Ever since, implementation of that theory has been an effort to find a balance between permitting commercial use of the public airwaves by the private sector and ensuring that this private use accords with the public's view on the desirable use of this very public resource. In my view, the balance has swung too far in the direction of private commercial use. Certainly "entertainment" is a public good, but it is not the only good the public desires or deserves. Just as the University of Pittsburgh School of Law is reflecting on its own history and role in the world, so is the FCC. It is particularly appropriate that we do so at this moment in our own history as we prepare to bring to a close the analog era of television, and to launch the next era: that of digital broadcast television. Now, as the Commission considers various critical issues relating to the new spectrum set aside for digital broadcast television, we have a rare opportunity. We have a second chance to get TV regulation right, to put real meaning into the public interest. If we are not to squander our good fortune, we must temper our look at the future with a look back, to assess and to revise as necessary the theory and practice that have informed our regulation of broadcast television over the past six decades. As I look forward I see two possibilities. The Commission can take what I call the "low road," by getting out of the business of granting and renewing licenses based on whether the broadcaster is serving and will serve the public interest. Under this approach, the FCC's ongoing role would be that of traffic cop, policing the airwaves to prevent interference and to identify prohibited uses of the spectrum, such as indecent broadcasting. Inevitably, this paradigm would support the proposition that the FCC should auction the digital broadcast spectrum, just as we have recently auctioned other portions of the spectrum for use by competitors to cellular telephone operators. After all, we would not give a portion of one of our national forests to a logging company for free. To be clear, I am not taking a position on whether the digital spectrum should be auctioned. I'm simply saying that, if broadcasters are not obligated to provide public interest programming that the market fails to generate, then it will be exceedingly difficult to explain to the American people why digital spectrum worth billions of dollars should be given to broadcasters and not auctioned to the highest bidder. It would be similarly difficult to justify special measures for broadcasters such as laws requiring cable operators to carry broadcast signals and to give them favorable channel placement. Free digital spectrum, must carry, channel placement -- these are all easy to justify, it seems to me, if broadcasters give something to kids and communities in return for use of the public's spectrum. In any event, the low road is not a legal option for the Commission. The Communications Act requires us to enforce the public interest mandate. Important portions of that law -- such as the Children's Television Act, which was added in 1990 -- and decades of FCC decisionmaking establish that enforcement is largely to be accomplished through requirements relating to broadcasters' programming. That leaves the "high road," which involves translating broadcasters' duty to serve the public interest into a few clear and concrete requirements -- rules that are understandable and enforceable. These could be determined by Congress or, as is currently the case, by an admixture of law and regulation. The 1990 Children's TV Act plainly makes educational TV for children one such requirement. On the high road, as I see it, these few specific public interest requirements would be virtually the only requirements on broadcasters. The Commission would get out of the business of meddling in the strictly commercial aspects of broadcasters' businesses. The Commission, of course, is well on the road to that kind aggressive deregulation. In the last 12 months, we have teed up for review virtually every rule governing broadcasters' commercial practices, rules that have been on the books for a very long time. And we very recently announced the demise of two rules that have needlessly tied the economic hands of broadcasters for more than 15 years: fin/syn and PTAR. I am proud to be the Chairman who presided at those funerals. As between the two roads I've described, you surely suspect which I prefer, but before I spell out what the "high road" would involve generally and for children's programming in particular, let's consider for a moment the fact that the Commission currently subscribes to neither road -- and the intellectual indefensibility of that posture. For 61 years, the Federal Communications Commission has acquiesced in an incoherent compromise with television broadcasters. The rules it has adopted to implement the public interest mandate are vague to the point of meaninglessness. Our rules implementing the Children's Television Act, for example, are so vague that broadcasters can claim -- and have claimed -- that shows like the Jetsons and G.I. Joe are "educational." Our main public interest requirement states only that broadcasters have an "obligation to provide programming that responds to issues of concern to the community" -- a laudable goal but one whose meaning in practice is hopelessly indeterminate. And, under our rules, a broadcaster is entitled to presumptive renewal if its service is "sound, favorable and substantially above a level of mediocre service which might just warrant renewal." What do those rules mean? Who knows? As former FCC Chairman Dean Burch told broadcasters some time ago: "If I were to pose the question, what are the FCC's renewal policies, everyone in the room would be on an equal footing. You couldn't tell me. I couldn't tell you -- and no one else at the Commission could do any better." Unsurprinsgly, the Commission has for at least 15 years not taken away a single one of the approximately 1500 TV licenses or 10,000 radio licenses in this country for failure to serve the public interest. This is not to say that there have been no encouraging moments in the Commission's efforts to give meaning to the public interest standard. Just yesterday, Westinghouse announced that if it acquires the CBS network it would provide three hours per week of educational and informational children's programming. Responding to the announcement yesterday, my friend and fellow Commissioner Jim Quello issued a statement saying that he would "consider long and hard" any transaction that includes an agreement relating to the content of a broadcaster's programming. There is ample Commission precedent for him to consult. In recent years, the Commission has explicitly relied on "concrete" and "quantifiable" programming commitments of broadcasters in granting waivers of its ownership rules to facilitate the acquisition of broadcast stations. Just months ago, for example, a unanimous Commission relied on NBC's pledge to increase locally originated news programming from 14 1/2 hours per week to 27 hours per week, with a substantial part of the increase to be devoted to issues relating to New Jersey. In another case, a unanimous Commission relied on a similar pledge made by Fox, as well as another Fox pledge to launch a weekly, 30 minute program covering issues relating to minorities -- pledges the Commission said it "expect[ed] will be fully executed." And in 1993, when Jim was Chairman, the Commission granted an ownership waiver to the Pulitzer Broadcasting Company, but only after relying on the company's representation that it would "enhance [the station's] programming for children" by producing and airing an informational show targeted to children ages 11 to 15 and hosted by teenagers. The Westinghouse application remains before us, and I am not prejudging it. I will simply say this. If the public interest is served by the concrete, quantifiable promise of one broadcaster to provide educational programming for children, then surely it is served by having a clear rule applicable to all broadcasters. Indeed, without such a rule it is hard to see how one broadcaster, standing alone, can keep its promise. The vigorous competition that characterizes the broadcasting industry will drive even the best intentioned broadcaster to the lowest level, as it does now. Now, no one who watches much television can seriously assert that the Commission has clearly enforced the statutory duty that broadcasters must serve the public interest. Let me try to explain why the Commission's past approach is not only unclear, but incoherent. If our rules actually require something of broadcasters -- that is, if failure to do something would actually result in some government sanction -- but if at the same time our vague rules don't tell broadcasters what that something is, then why aren't those rules profoundly offensive to the First Amendment? Why aren't rules like that be precisely the kind of "unascertainable standard" that the Supreme Court has said chills protected expression and that is neither wise nor constitutionally tolerable? It is ironic to me that the Commission's vague rules are sometimes defended as required by the First Amendment. Evaluating broadcasters by vague standards disserves First Amendment principles, as well as the Due Process principle that the government punish only after giving proper notice. But while vague rules increase the power of government officials over First Amendment speakers, clear rules limit governmental power. While vague rules chill First Amendment expression, clear rules do not. While vague rules force broadcasters to worry about their entire programming schedule, clear rules leave broadcasters free to do as they please after satisfying the minimum requirements. The FCC's own history certainly demonstrates that vague rules create real possibilities for mischief. Two examples can be drawn, one from the McCarthy era, the other from the Nixon Presidency. In the 1950s, Commissioner John C. Doerfer, a Joseph McCarthy protege, instituted an investigation of a broadcaster to test his fitness as a licensee. The apparent genesis of the investigation was that the particular broadcaster was anti-McCarthy. The FCC investigators manufactured evidence that he had attended meetings of Communist sympathizers "where gin was drunk and caviar eaten." Admittedly, this "evidence" seems ludicrous and dated, and even in the 1950s it was flimsy. The FCC's case collapsed. However, the chilling effects of the McCarthy era were serious and long term. Moreover, the experience was nearly repeated in the Nixon Administration. News accounts from 1974 recount a conversation, recorded on the Watergate tapes, in which the President and his top aides discussed using the FCC's license renewal process in order to pay back the Washington Post for its Watergate coverage. On being informed that the Post owned two television stations in Florida that would soon be seeking renewal, President Nixon is reported to have said, "The main thing is the Post is going to have damnable, damnable problems out of this one. They have a television station. . . and they're going to have to get it renewed." Similarly, Bob Haldeman and John Dean informed Nixon that the Post also owned a radio station and that the practice by nonlicensees of filing competing applications at renewal time had increased. Nixon reportedly responded by stating that "its going to be goddamn active here. . . . Well, the game has to be played awfully rough." Three months after this conversation three applications were filed against the renewal application of the Post's Jacksonville station, and one against the renewal application of its Miami station. Participants in one of the Jacksonville applications and in the Miami application included a number of individuals identified as friends and supporters of the President and the Administration. Whether these applications were part of an effort to carry out President Nixon's threats is unclear. Even so, they demonstrate the potential for abuse that resides in vague, ominous, and empty standards that can be manipulated in a pernicious manner by an ill-motivated Commission. Let me return to my earlier point: that the FCC's current implementation of the public interest mandate is intellectually indefensible. Either our rules actually require something -- and something unknowable -- of broadcasters, in which case they should be rejected as constitutionally intolerable. Or they actually require nothing of broadcasters, in which case they are a meaningless hoax on the American public. In fact, the latter statement describes our rules, and the Commission's failure actually to hold broadcasters even to its vague standard has mitigated the potential injury to constitutional principles. But this is certainly not sufficient justification for vague standards that give the public nothing in exchange for the valuable public resource broadcasters are permitted to use. How, then, can we at the Federal Communications Commission fulfill our responsibility to the American public to guard "the public interest?" Following the "high road," we must translate the obligation to serve the public interest into a few specific actions that should be performed to more fully benefit society. These could be determined by Congress or, as is currently the case, by a mixture of law and regulation. The 1990 Children's Television Act plainly makes educational TV for children one such requirement. Such required duties ought to create incentives for broadcasters to produce programming that they are unlikely to produce in response to the competitive market pressures to attract a mass audience, and which are different from those generated by a competitive marketplace. Both children's educational programming and free campaign advertising would fit this criterion. Unless the public interest standard requires broadcasters to take actions other than those that the marketplace generates, there is no meaning to the public interest standard. Specific rules that indeed alter the workings of the marketplace should be clear and concrete enough to ensure that broadcasters understand them and know how to fulfill their responsibilities so as to avoid losing their licenses. But any violation of such rules should be punished by a fine or other appropriate sanction. Yet, the Commission has no coherent policy for punishing even minor transgressions of its public interest standard. This sort of regime -- clear rules; appropriately moderate sanctions; very unusual circumstances justifying nonrenewal -- is especially appropriate if Congress intends to lengthen renewal terms. It is not only appropriate, it is constitutionally superior to the vagueness of the status quo. And while we're on the subject of the Constitution, let me add this about the First Amendment. Subjugation of the First Amendment in our democratic society cannot be tolerated. No matter what requirements the FCC implements, viewpoint discrimination must always be off-limits, as must any effort to suppress speech on any topic. For example, I disagree with much of what Rush Limbaugh and Gordon Liddy have to say on talk radio today. In fact, I believe that the factual inaccuracies and misinformation that we hear today on many talk radio shows is anathema to the very concept of informed self-government. But I would defend to the death Mr. Limbaugh's and Mr. Liddy's right to advance what I may view as their misguided views on any topic they choose. Children's Educational TV So with these principles in mind, how should the FCC develop coherent and meaningful rules for children's educational TV that comport with First Amendment principles? The Commission is currently studying proposals to require broadcasters to improve their record with respect to children's educational television. So important is this issue that for the first time in living memory a President has weighed in on a specific FCC proposal--the FCC's proposal that broadcasters be required to provide at least three hours of quality children's programming per week, and at reasonable times of the day. In a letter to me earlier this week, the President wrote: "I urge you again to review the purpose of the Children's Television Act and the broadcast programming our children are offered today. To paraphrase former FCC Commissioner Newton Minow, if we can't figure out how the public interest standard relates to children, the youngest of whom can't read or write, and all of whom are dependent in every way on adults, then we will never figure out the meaning of the public interest standard." Another recent development further underscores the significance of our efforts to improve television for children. This week, the University of California, Los Angeles, released a network-backed study concluding that television continues to disserve children. Gratuitous violence, the study found, pervades Saturday morning children's cartoons. Earlier studies have found that violence on television harms children. Conversely, other studies have found that educational television helps children -- that it can prepare kids, particularly lower income-kids, for school; that it can mean the difference between whether a child will develop into a full participant in our economy and our democracy. How have broadcasters responded to these studies? Too often by refusing even to discuss them, using the First Amendment as an excuse. Broadcasters have too often wielded the First Amendment to cut off debate about television's affect on kids and society. When, for example, a private group organized a national Turn Off the TV Day to protest television's negative impact on society, the president of the association that represents ABC, CBS, and NBC responded by labeling the effort an infringement of the networks' First Amendment rights -- even though the clause protects only against government action, and even though the group's members were simply exercising their First Amendment rights. That is not right. Broadcasters have an obligation to respond to the growing body of evidence about the social costs of violent programming and the lost benefits of educational programming -- both in words and in deeds. And nothing in the First Amendment forbids government from "promot[ing] programming that helps children and discourag[ing] programming that harms them," as one of our country's renowned experts on the First Amendment, Professor Cass Sunstein of the University of Chicago Law School, recently wrote. In fact, a focus on children's educational programming promotes interests at the core of the First Amendment. James Madison, the father of the First Amendment, viewed the First Amendment as being "about public deliberation and democratic self-government." As Professor Sunstein recently noted, "the First Amendment is associated with public discussion about public issues. It has educational and aspirational functions." And it is not just Professor Sunstein to whom I turn. He has merely summarized the views so elegantly expressed by perhaps our greatest Supreme Court Justice -- Justice Brandeis -- who explained that the First Amendment is about democratic self- governance; that it is about preparing and educating citizens to take their civic duty seriously, to avoid that "greatest menace to freedom" -- "an inert people." Two issues of particular importance in crafting a concrete requirement regarding educational programming for children are the number of hours of educational programming that should be broadcast, and the time of day that the programming is aired. These questions are important because the value of broadcast TV as an educational tool is clear. Studies have proven that watching educational TV increases test scores and encourages children to read more books. Educational TV can be especially important for lower-income children because of the disproportionate number of hours they watch TV. Given these facts, it is crucial that broadcasters be required to fulfill their responsibilities under the Children's Television Act. Former FCC Chairman Newton Minow agrees with that assessment, and I recommend his recent book, Abandoned in the Wasteland: Children, Television, and the First Amendment, in which he argues eloquently and passionately that there is no communications issue more important than fostering children's educational television. The fundamental problem with respect to children's educational TV is that programs focusing on educating children are not what advertisers want to sponsor. Simply put, they just don't think there's any money in it. Moreover, even when advertisers are willing to support a show directed at children, they prefer to have the show develop the impulse to consume, rather than to develop children's minds. And, of course, the market does not provide any incentive to sponsor educational TV. To the contrary, in our advertiser-driven market, the primary motivation of programmers is to develop children's shows that are little more than commercials for toys, because that is what advertisers will support. Under these circumstances, there is every incentive to develop children's programming that will sell toys to children, and little incentive to develop educational programming for children. Such a market cannot further the public interest. Would the requirement that broadcasters devote a specified number of hours per week to children's educational programming be upheld by the courts? I believe it would. With respect to broadcasters, strict scrutiny does not apply under Red Lion and should not apply because the spectrum is scarce. That paradigm governing broadcast regulation is sound. It is true that engineers are devising new ways -- notably, digitization -- to get more use out of the spectrum. But they are figuring out new ways to use the spectrum even more quickly than they are figuring out how to use the spectrum more efficiently. The constraint on the use of spectrum is illustrated by the fact that bidders recently paid $7.7 billion for licenses to use 60 megahertz of spectrum to provide wireless telecommunications services. The losing bidders are shut out of the wireless telecommunications market. If one of them subsequently persuades a winning bidder to sell its license, that winning bidder will have to relinquish its use of the spectrum. In short, at present, it is simply not possible for more than a handful of broadcasters to use the spectrum in any geographic area. The digital revolution will open up about 360 megahertz of spectrum for digital broadcasting parallel to or simultaneously with today's analog broadcast. This could mean that the potential number of channels increases five-fold in terms of today's quality of signals. A higher quality of picture, called high definition, would consume the greater part of the digital bit stream, and thus would add roughly one high-definition signal broadcast digitally for every signal currently broadcast in analog. Even this digital expansion of spectrum plainly would leave many more prospective spectrum users than may be accommodated. Therefore, what Justice Frankfurter said in 1943 and what the unanimous Supreme Court said in 1969 remains true: the radio spectrum is not large enough to accommodate all who wish to use it and, thus, "it is idle to posit an unbridgeable First Amendment right to broadcast comparable to the right of every individual to speak, write, or publish." In addition, and as the Supreme Court has consistently held in similar contexts, a standard less demanding than strict scrutiny should apply to a regulation requiring broadcasters to provide children's programming. The children's programming alternatives I have described should be upheld under that standard because they are clearly no more intrusive than the fairness doctrine was. In short, there is no good reason why government favoritism of educational television ought to be presumptively unconstitutional. All of the Court's tests ask what the government's interest is in regulating speech, and test the relationship between the regulation at issue and the government's interest. Under strict scrutiny, the government interest must be "compelling," and the government must choose the "least restrictive alternative" available to achieve its interest, whereas under lesser standards it is enough for the government interest to be "important" and that the regulation at issue "not burden substantially more speech than is necessary." There is no question that the government interest in promoting the educational development of children is an interest of the highest order and would be found to be "compelling." The Supreme Court has said that the government has an interest of the highest order in "diligently promot[ing]...education and the acquisition of knowledge." This summer the Court of Appeals for the District of Columbia Circuit highlighted the government's compelling interest in promoting the healthy development of children in two important decisions upholding the constitutionality of various methods of protecting children from indecent programming. In the so-called Act III case, the court upheld rules requiring that indecent programming be confined to hours in which children are less likely to be watching. (Action for Children's Television v. FCC 58 F.3d 654 [D.C. Cir. 1995.) Finally, in Alliance, the Court upheld rules requiring cable operators that carry indecent programming on leased access channels to segregate that programming onto one or more such channels and to block their transmission until a subscriber submits a written request for unblocking. Alliance for Community Media v. FCC, 56 F.3d 105 (D.C. Cir. 1995). Consequently, I don't really think that anyone would dispute the proposition that the government has a compelling interest in promoting the education and development of the nation's children or that the courts would find otherwise. Is a requirement that broadcasters devote a modest portion of their time to educational television the least restrictive means of achieving the government's interest? I think it is. After all, television is where the kids are: the typical child watches more than 20 hours of television a week. An alternative to those I have suggested for requiring educational programming would be to charge broadcasters for their spectrum and use the proceeds to fund children's programs on their channels or on government channels. I'm sure that such an alternative is constitutional, but I'm not at all sure that the broadcasters would view it as less restrictive. I hope they will tell us in the comments that are due in October as part of our ongoing rulemaking proceeding. If that is what they prefer, the FCC could oblige. Broadcasters could have the option of paying in kind -- by providing children's educational programming -- or in cash -- by funding it in return for their use of the spectrum. The need for children's educational programming and more generally for a specific and concrete definition of the public interest are two of the issues of great importance to the Federal Communications Commission in our 61st year. We are at a crossroads. New challenges and new opportunities have opened up for us to take a closer look at our own role, and to try to make a difference in the lives of our most important treasure: our children. So new challenges and opportunities open up for the University of Pittsburgh School of Law. As it enters its second century, it undoubtedly will contemplate its course for the next one-hundred years, just as we at the FCC contemplate our own course of action. Both institutions will move forward in an era of unparalleled technological change as we search for new and better legal paradigms. Let us hope we act wisely, and in the public interest. Thank you.