The Digital Beat

Vol. 1, No. 1, 18 February 1999

The Future of Television in the Balance

• Administration Proposes Spectrum Fees for Commercial Television Broadcasters
• Broadcasters: "That's Sheer Folly"
• Advocates Debunk Broadcasters' Claims
• Response from Congress: It's Dead On Arrival
• The Action Agenda: Time to Hear From You

Without much coverage in the mainstream press, but meeting much rancor in the trade press, the Administration's Federal budget for fiscal year 2000 (FY2000) includes a proposal to set a lease fee on commercial television broadcasters' use of spectrum for analog broadcasting. Starting in 1999 many television stations will begin use a dual license to provide both analog and digital television broadcasts. In April 1997, the Federal Communications Commission adopted the plan to convert to digital television without charging broadcasters for the use of additional spectrum as prescribed by the Telecommunications Act of 1996.

The lease fee is projected to raise $200 million annually in the years 2000 through 2004. Analog television broadcasts could end as early as 2006. The fees would apply for as long as broadcasters hold on to the analog portion of their license. The $1 billion or more in fees would fund programs in the Department of Justice, the Department of the Treasury, and the Department of the Interior to expand and upgrade public safety wireless communications across Indian reservations and to ensure the interoperability of State and local public safety communications systems.

Although many users have paid for the right to use spectrum through auctions, the Administration's proposal would mark the first time television station owners would have to pay any spectrum fees. And, although the Administration targets the revenues for wireless communications, the recommendations of the President's Advisory Committee on Public Interest Obligations of Digital Television Broadcasters (PIAC) highlighted many funding needs that relate to television: supporting public broadcasters, noncommercial programming, and independent producers. In each viewing market, new channels would be set aside for cradle-to-the-grave educational programming. This programming would be developed by coalitions of community organizations like schools, libraries and universities. Its particular focus would be the unmet needs and underserved communities of the market.

Broadcasters: "That's Sheer Folly"

In response, National Association of Broadcasters President and CEO Eddie Fritts said, "The Clinton administration proposal would jeopardize a public-private partnership between government and free, over-the-air local broadcasters that dates back to the 1934 Communications Act. The deal is this: that broadcasters provide community interest and public service programming in exchange for a small slice of the spectrum.

"Last year alone, NAB documented that broadcasters voluntarily provided $6.8 billion in annual public service programming and fundraising for local charities, making broadcasters the nation's Number One provider of public service. To suggest that $6.8 billion in public service is somehow inadequate for use of a sliver of the spectrum is nothing short of sheer folly."

The NAB's report Bringing Community Service Home: A National Report on the Broadcast Industry's Community Service, however, totals $6.8 billion as the contribution of all radio and television broadcasters and broadcast networks. Local television stations deliver just a fraction of the total -- projected at $2 billion at most. (This from an industry that has profit margins of 20-40%) And not all of this total is in programming -- just $1.12 billion is projected in public service announcements (the majority of which run between midnight and 6am); and perhaps $20 million per year is free time for candidates.

"Bringing Community Service Home" was presented to PIAC at a meeting in April 1998 and assailed by a Committee member as being statistically biased. University Chicago Professor Cass Sunstein suggested the survey results would not be publishable in a peer review journal.

A report released at the same time by the Benton Foundation and the Media Access Project, What's Local About Local Television?, found that many stations were not delivering basic public interest programming like local news and local public affairs. The survey of five television markets over a two week period found the following:

• In the five markets combined, 40 commercial broadcasters provided 13,250 total hours of programming -- just 0.35% (46.5 hours) were devoted to local public affairs.
• In three markets -- Nashville, Tennessee, Spokane, Washington, and Bangor, Maine -- not one commercial station aired any local public affairs programming.
• 35% of the stations surveyed provide no local news; 25% offer neither local public affairs programming or local news.
• A total of two hours of local public affairs programming was available between 6:00pm and midnight, when viewership numbers are highest. Just two stations aired any local public affairs during this time period.

Public interest advocates favor strong obligations for broadcasters -- like those proposed by PIAC -- that address the educational needs of the communities that broadcasters are licensed to serve. If broadcasters don't deliver the programming, advocates argue they should pay others -- like public television -- to do so. A recent poll by the Benton Foundation and the Project on Media Ownership (PROMO) found that Americans overwhelming support such requirements on commercial television station owners:

• 71% of Americans have no idea that broadcasters receive free access to the airwaves to provide digital television.
• 54% of Americans who are informed that broadcasters receive free access to the airwaves, support charging broadcasters for additional airwaves they may need -- especially if the money is used for more educational programming.
• 80% of those polled favor requiring broadcasters to meet additional public service obligations such as more children's educational programming and more local programming.

At this time, it is uncertain what exactly Congress expects from broadcasters. To the Administration's proposal, a spokesperson for House Telecommunications Subcommittee Chairman Billy Tauzin (R-LA) said, "When that proposal reaches us, we're gonna shovel dirt on it and give it a decent burial, since it's already D.O.A." In a February 8 article, MediaWeek asserted: This proposal is aimed at the heart of the most basic broadcasting right - the right to the spectrum without a tax or fee.

Of course, this depends on whose rights you are considering. In a landmark, unanimous ruling of the Supreme Court, Justice Byron White wrote, "the people as a whole retain their interest in free speech by radio and their collective right to have the medium function consistently with the ends and purposes of the First Amendment. It is the right of the viewers and listeners ... which is paramount."

No matter the staying power of the Administration's proposal, a review of television station owners' obligations will begin in coming months using the recommendations of PIAC as a baseline. At stake is the definition of "in the public interest, convenience, and necessity" in the digital age. We invite you to prepare your own answer to this definition and to ask what we expect from the most powerful medium of the 20th century as we embark on the 21st. Our answers -- and our ability to let the Administration, the Congress, and the Federal Communications Commission know what they are -- will determine the future of television.

In March, the Federal Communications Commission is expected to begin a formal proceeding to define the compact between television stations and the communities they are licensed to serve. Using the PIAC recommendations as a baseline, the FCC will be asking the public if broadcasters should provide additional educational programming on the increased capacity that digital television offers them, should broadcasters provide more coverage of elections and local public affairs, should they work with local communities before to determine what issues should be addressed in the programming, can programming be made accessible to the disabled community and can the viewpoints of minorities and independent producers be aired? In addressing all these questions, the FCC will also ask, can broadcasters be trusted to meet this obligation voluntarily or will there be a need for regulation?

The decision makers in this process are:

• Chairman William Kennard
• Commissioner Susan Ness
• Commissioner Michael Powell
• Commissioner Gloria Tristani
• Commissioner Harold Furchtgott-Roth

Each provides the opportunity to share your views through their webpages. Don't hesitate to let them know what you expect from their proceeding and what you believe is a fair exchange for broadcasters free use of spectrum.

Congress is also expected to review PIAC's recommendations in the coming months -- most likely through hearings in the:

• Senate Commerce Committee, chaired by Sen John McCain (R-AZ), and
• House Telecommunications Subcommittee, chaired by Rep Billy Tauzin (R-LA).

The ranking members of these committees are:

• Sen Ernest Hollings (D-SC) and
• Rep Edward Markey (D-MA).

The tone of their reception of PIAC's recommendations will signal Congress' support for FCC action.

©Benton Foundation, 1999
Redistribution of this email publication -- both internally and externally -- is encouraged if it includes this message.

The Benton Foundation's Communications Policy and Practice Project is a nonpartisan initiative to strengthen public interest efforts in shaping the emerging National Information Infrastructure (NII). It is Benton's conviction that the vigorous participation of the nonprofit sector in policy debates and demonstration projects will help realize the public interest potential of the NII.

Media Access Project (MAP), is the only freestanding public interest law firm which is primarily devoted to representing the public's interest on electronic media issues through policy advocacy at the Federal Communications Commission and the Courts, advocacy in the media and other public fora, and day-to-day counseling of civic organizations and individuals.

The Center for Media Education (CME) is a national non-profit organization dedicated to improving the quality of electronic media, especially on the behalf of children and families.