Statement of Barry Diller

Since its invention, local broadcast television has performed the powerfully important service of delivering public interest programming, at no charge, to all Americans. If we mangle the transition to digital broadcasting, we will lose that unique public service.

I support the Advisory Committee's recommendations because, on the whole, they will help rather than hinder the preservation of free local broadcast television and its benefits as broadcasting enters the digital age.

One proposal will accomplish the opposite: the idea of taxing the provision of multiple free television signals. I disagree with it.

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Free local broadcast television is the only video programming service that has provided everyone in the country, at no cost, with national and local news and information; public affairs and other programming serving the local community; public service announcements; programming for diverse and underserved audiences, such as shows for minority audiences and educational programs for children; and other public interest programming. Nothing on the horizon will change that fact.

It follows, in my view, that recommendations concerning the public interest obligations of digital broadcasters should flow from the following two principles.

1. Broadcasters have unique public interest obligations because broadcasting is our only free and ubiquitous video programming service.

2. Public interest obligations on broadcasters are meaningless unless broadcasting remains a free and ubiquitous video programming service.

The Advisory Committee's recommendation that broadcasters have minimum public interest requirements stems from the first principle. As trustees of the public airwaves, broadcasters must serve the public interest. In an ideal world, voluntary guidelines would suffice. In the real world of commerce and competition, where economic incentives run counter to the provision of public interest programming, it is appropriate for the Government to insist on enforceable minimum public interest standards.

Some disagree with the notion that the Government should adopt clear, minimum standards for broadcasters. Especially in an increasingly competitive television world, that position, if accepted, would inevitably diminish the amount of public interest programming broadcasting provides and seriously weaken the public trustee concept, which has for so long provided enormous benefits to the country. For similar reasons, I disagree with the notion that broadcasters should be able to shunt their public interest obligations on to others -- the notion of "pay or "play," which the Report discusses but rightly declines to endorse.

Minimum public interest standards should be reasonable, flexible, and limited to areas appropriately subject to Government enforcement. Other areas should be handled through a voluntary industry code of conduct, and I agree with the Report's recommendation that the television industry adopt such a code.

Because television is available so widely, and because it is the country's main source of news and information, it is not surprising that television has become the main way that candidates reach voters. The problem, of course, is that it is an expensive way for candidates to reach voters. There is no question that this country's scheme for financing elections is a dirty mess and that the high cost of advertising is part of -- though certainly not all of -- the problem. Broadcasters should participate in the solution, and I support the proposal that broadcasters issue a challenge to Congress on campaign finance reform. If Congress adopts real and comprehensive campaign finance reform, broadcasters should, can and, I expect, will ensure that candidates have enough free television time to reach voters.

Minimum standards, free time and other public interest efforts of broadcasters are ultimately meaningless if broadcasting does not continue to reach everyone in the country -- the second principle I mentioned above. Broadcast channels that are not universally received cannot remain a free service; the advertising base would be too small to support a competitive product. The reality is that most viewers receive broadcast television through wires controlled by the local cable operator, and as Congress and the Supreme Court have found, it is appropriate to ensure that all broadcasters can reach everyone in their audience. I support the Advisory Committee on must-carry for digital broadcasters.

There is another regulatory issue that must be addressed if broadcasters are to continue to have the wherewithal to create and distribute public interest programming. Many of the Federal Communication Commission's outdated limits on television ownership no longer serve their purpose. In fact, in the current highly competitive television landscape those rules hinder their purposes of competition, diversity, and localism. FCC rules wrongly prevent broadcasters from entering arrangements that would make it economically sensible to provide significant amounts of local programming, news, and other public interest programming. Although the topic of ownership goes beyond what the Advisory Committee was asked to address, we should not kid ourselves: current ownership rules seriously threaten broadcasters' ability to serve their local communities.

Finally, I wish to state my opposition to the Report's treatment of multiplexing by digital broadcasters. The Report suggests that a fee be imposed on broadcasters that provide multiple streams of programming. If broadcasters charge a subscription for such programming there are separate rules requiring fees on broadcasters, as the Report acknowledges. Thus, this proposal is solely about the provision by broadcasters of multiple free signals. The notion of taxing or otherwise penalizing free broadcasting defies logic. For decades, it has been Government policy to encourage the provision of free over-the-air television. There is nothing about digital technology that warrants the replacement of that policy with one that will discourage free television.

Many of the Report's other proposals can and should be refined as we learn more about the technology and economics of digital broadcasting. But in the pre-dawn of the digital television era, it was appropriate to bring this group together to consider the public interest obligations of digital broadcasters, and it is right to reaffirm the status of the broadcast industry as trustee of the public airwaves with real obligations to serve its audience.