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The Trickle-Down Theory:
Read the thoughts of a now-former FCC Commissioner to understand why American radio has become the proverbial 800-pound gorilla
Remarks of Commissioner Rachelle Chong
National Association of Broadcasters 1997 Radio Convention
New Orleans
September 19, 1997Content Regulation Heats Up: A Word to the Wise
Good afternoon. This may be my swan song, my friends. After 3½ memorable years at the FCC, I am soon to bid you adieu, probably some time next month. Assuming the Senate confirms the four new Commissioners, I will be stepping off the Commission, along with Chairman Hundt and Commissioner Quello.
I first wanted to express my appreciation to each of you for your cooperation and support during my tenure. You have been a wonderful industry to work with. In particular, thank you for your service above and beyond the call of duty during major disasters -- when you give so much back to the community.
I also have enjoyed a smooth working relationship with your association, NAB. I would like to give my personal thanks to Eddie Fritts and all of his fine crew, for their cooperation, advocacy and friendship during my term. We have shared some exciting times indeed, and I will miss them.
In looking back at my time at the Commission, I'm proud that I've made my mark as a deregulator. I've opposed overregulation, and instead, urged more marketplace- friendly approaches.
I'm also known as a Commissioner who asked you all to "think outside of the box" -- to stop thinking in terms of outdated regulatory schemes. Instead, I urged you to accept new competition and to branch out to consider new opportunities in the Information Age.
And finally, you all know that I've been on the hot seat because of my stance on the First Amendment. I didn't expect to become a poster child for free speech, but my convictions run deep. Quite simply, I believe that freedom of speech is the most important guarantee in our democracy, and that broadcasters play a special role in safeguarding our freedom of speech. And because of this core belief, I have consistently opposed unnecessary government encroachment on program content. I am going to talk more about the First Amendment in a moment.
As I head out the FCC exit, four new Commissioners are entering. I'm told that's more turnover among the Commissioners than ever before. Commissioner Susan Ness is the only current commissioner who will soldier onward. I am glad that she will be at the FCC to be the "voice of experience" during this important transition.
Frankly, I think some new blood is a good idea, given how weary the current Commissioners are. We shouldered a very heavy load during our tenure. Among other things, we implemented the historic Telecommunications Act of 1996, we relaxed the radio ownership rules, we survived the onslaught of radio transfers and we got dazzling digital TV on its way.
We've had a few disappointments too. We couldn't agree to repeal our personal attack and political editorial rules and we did not fix the comparative hearing process. Nor did we act to repeal the newspaper-broadcast cross-ownership rule. But overall, I look back with pride at a productive tenure at the Commission during a historic time.
Today, I will discuss two issues -- ownership and content regulation. When you are thinking about themes to communicate to the new Commissioners, one theme ought to be the importance of your freedom to compete in an increasingly competitive media marketplace.
A second theme ought to be the defense of your press freedom in order to ensure a truly democratic society.
Let me start with the topic of radio and television ownership. The current Commission intended to take up the issue of broadcast ownership rules. I'm disappointed to report that, due to philosophical differences between the four Commissioners, this hot potato will end up in the laps of the new Commission.
Knowing the importance of this issue to you, I urge you to take the time to come to Washington and to educate the new Commissioners about the realities of your business. You see, there are some in government who think that consolidation in your industry spells the end for localism -- and that it will negatively impact diversity. I know that some broadcasters agree with this; others do not.
I urge you to dispel any myths. Get the new commissioners out on a tour of a working station. Let them talk frankly to your business people and financiers. Spend the time to give them your perspective on the realities of station ownership in the competitive radio world of the Nineties.
Armed with this knowledge, I hope that the new Commission will establish sensible rules that will allow you to realize some economies of scale and respond to the actual competition you face. I think this can be done without sacrificing localism and diversity.
In my view, Congress signaled through the Telecom Act that the rules must be liberalized. After all, it eliminated national limits on the number of radio and TV stations a broadcaster can own. Congress also relaxed the local radio ownership rules so that one entity can now own up to eight radio stations in the largest markets. And, it directed the Commission to relax our one-to-a-market rules and eliminate the cable/broadcast ownership rule. In my view, all of this liberalization delivers a clear message.
But despite this clear message, there are still some who don't seem to be listening to Congress. Again, they argue that liberalization will lead to the loss of localism and diversity. Now, some of these folks have an ulterior motive that I will get to in a few minutes, but first, let's focus on localism.
Some argue that localism will be lost if there is industry consolidation. They claim big companies will turn their backs on serving local needs. But as you and I know, successful broadcasters would as soon abandon localism as put hemlock in their coffee!
I'll tell you -- I've learned a few things in my tenure as a Commissioner, and one of those things is that terrestrial radio broadcasters, regardless of the size of their parent company, know that localism is what makes them successful. It's what differentiates you from your new competitors -- competitors like cable-provided audio, DARs, Internet radio, and CD players.
Another thing that I have learned is that permitting one entity to own multiple stations in a market doesn't necessarily harm diversity. Quite the contrary, a single owner of multiple stations might be in a position to counter-program, using a format that could not be sustained on a stand-alone station. When that happens, listeners get morechoice, not less.
In short, I believe the radio industry -- not government -- should decide how to deal with the new competitive realities that you face. Thus, I urge you to stand up for the liberalization that Congress clearly intended.
This leads me to my favorite topic, the First Amendment. Last July, in a speech to the California Broadcasters Association, I called for an end to increased government intrusion into program content decisions. This speech got a surprising amount of press coverage, given that I have been singing that song for many years.
Let me cut to the chase. During my term, I have witnessed an insidious trend toward limiting the First Amendment freedom of broadcasters. If you will forgive a rather graphic example, particularly during lunch, what we have here is a "frog boiling" issue. You see, if you try to put a live frog in a pot of boiling water, that poor froggie will jump out. But if you put that live frog in a nice pot of cool water, and gradually turn up the heat, the frog will paddle about in the water until it is, well, frog legs.
So it has gone with the intrusions in the past four years into the programming decisions of the broadcast industry. Time and time again, broadcasters have been asked to acquiesce to the government's wishes on programming issues. It didn't start with too much heat, but over time, the heat has continued to be turned up one notch at a time, as one demand after the next came from the powers that be. "Do it for the children, do it for family values, do it as part of your public interest obligating, do it for public safety, do it in exchange for a digital TV licenses, do it for a waiver of an ownership rule. . . " (The latter was the ulterior motive that I alluded to before.)
From my catbird seat at the FCC, I've watched with increasing alarm as the heat has gradually risen. In retrospect, it didn't happen without warning. In a September 1995 speech, Chairman Reed Hundt said that he wanted to transform our general public interest obligation into "concrete" and "quantifiable" programming commitments enforceable through fines or possibly non-renewal of broadcast licenses. With the clarity of hindsight, one can see that this concept of converting the public interest into specific programming commitments was his springboard into intrusive government content regulation.
For example, quantification of programming commitments was the most hard fought issue in our children's educational television proceeding. Although three commissioners strongly opposed the strict quantitative approach advocated by the Chairman, the FCC and television industry -- after a "turning up of the heat" via a White House summit -- eventually accepted a staff processing guideline of three hours a week. The guideline approach has a quantification aspect, but it also provides a measure of flexibility that to some degree protects a broadcaster's discretion. So, I guess that was just a little heat under the frog pot.
But the heat went up with the TV rating controversy. Again, some Congress members, aided by the White House, helped "convince" the video programming industry that they should "voluntarily" develop a TV rating system with particular content indicators. I think Producer Dick Wolf put it best when he said the rating system was "about as 'voluntary' as somebody handing over their wallet when there's a .45 pointed between their eyes." And it was Ted Turner who said, in a Yogi Berra-esque way, "We are voluntarily doing a rating system because we have been required to."
Recently, there have been more attempts to turn up the heat at the FCC. These included the FCC's very public dispute over the need for a Notice of Inquiry on distilled spirits advertisements. There, Chairman Hundt argued that he only wanted to start a "neutral inquiry," to provide a forum for debate of an important social issue. Well, just like there was nothing truly "voluntary" about the ratings system, there would have been nothing truly "neutral" about this inquiry. This is one reason why Commissioner Quello and I refused to support it.
In sum, we have opposed efforts to launch inquiries that are really thinly- disguised efforts to dictate program content. I believe that Congress, as our elected representatives, should decide by statute what content issues the FCC should address. And the courts agree with me. You see, they recognize that it is just too dangerous to let unelected government officials dictate program content without specific Congressional direction.
It is for this same reason that I vehemently disagree with Chairman Hundt's inflammatory suggestion that there ought to be governmental policies to "assure that news is broadly and in some sense fairly communicated through the electronic media." Hundt's approach is particularly offensive to the First Amendment's guarantee of a free press, because in no way does the First Amendment countenance government deciding whether news is being presented "fairly" or setting government policies to ensure balanced news.
So, broadcasters, let me ask you: Is the water getting uncomfortably warm for you yet? If so, beware because more heat is on the way. . . Look next for more heat in relation to public interest obligations in the digital era. One of the key issues is the call for mandated free air time for political candidates.
The free time debate is being staged in several forums. It is on the agenda of a new presidential commission. There are also a number of bills pending in Congress. Last year, at the Chairman's request, it was a topic at the FCC too. The Chairman asked us to hold an en banc hearing on political broadcasting, where numerous speakers said that broadcasters, as part of their public interest obligation, should give candidates free television time.
The argument goes as follows: "Broadcasters use the public airwaves for free and free air time would defray the costs of campaigning. So why shouldn't the FCC do a 'neutral inquiry' and perhaps order broadcasters to donate air time as part of their public interest obligation?" If you follow this line of reasoning, maybe we should ask airlines to give free airplane seats to political candidates -- airlines also use the public airways, and with the cost of flying, free seats surely would defray campaign costs too!
In the last two weeks, the Chairman argued that free time for political candidates was necessary to "save the democracy." And he asked why we couldn't have a "neutral inquiry" on the topic. Showing the true neutrality of his intentions, however, he went on to say, "I assure you that if I had the votes [the FCC] would long since have defined the public interest to include free time." Needless to say, the departing Chairman did not have the votes to work his will.
As I complete my watch at the FCC, I would like to emphasize that our First Amendment tradition mandates that broadcasters must be free to present whatever programming they believe will best suit the needs of their local audience. Except when there is a compelling government interest and it has chosen the most narrowly tailored way, government is forbidden from censoring your content or otherwise dictating categories of programming you must or must not show.
Having said that, I recognize that there are some limits on broadcast content that are part of the Communications Act, and have been upheld by the courts. These limits include obscenity, indecency, kids' educational programming, and some political broadcasting rules. Although the FCC must enforce such laws, it ought not expand the law to suit the whim of individual regulators. Our freedom as a nation is too important for that.
And so, I have come to New Orleans today to urge each of you to speak out. Oppose government intrusion into your programming decisions. Don't sit quietly in your frog pot -- assuming that you must take the heat for business reasons. Leap out of the pot, and voice your opposition to content regulation.
Speak out in any way you can, including through written and on-air editorials, and your public affairs programming.
Do it by lending support only to candidates and politicians who are sensitive to First Amendment issues.
Do it by using the combined strength of your association. I applaud NAB's decision to relaunch its education foundation with a focus on First Amendment issues. I think it wise that NAB has asked you to keep careful records of all the public service you do. NAB is in an excellent position to gather this data, marshall your arguments, and lead the fight for free speech.
Get off your duffs and fly to Washington to lobby legislators, White House and FCC Commissioners.
And finally, most importantly, strengthen your arguments for free speech by being responsible and responsive broadcasters. By this, I mean be responsible in your programming decisions and be responsive to the concerns of parents about violence, sex and adult language during hours when children are likely to hear it.
In sum, having found yourself in some very regrettable hot water, you can choose to jump out of the pot and to vigorously object while there's still life in you. But if you don't choose to fight but to take the heat passively, you will have no one but yourself to blame if you find yourself "dead in the water" on First Amendment issues. It's not easy being green.
Thank you very much.