# Comments of Harold Furchtgott-Roth {#comments-of-harold-furchtgott-roth .unnumbered}

# Commissioner {#commissioner .unnumbered}

# Federal Communications Commission {#federal-communications-commission .unnumbered}

#  {#section .unnumbered}

##### before the Wisconsin Broadcast Association {#before-the-wisconsin-broadcast-association .unnumbered}

Madison, Wisconsin

January 18, 2000

I would like to speak today about four topics: the scariest words at the
FCC, the transition to digital television, and low-powered FM radio.

**The Scariest words at the FCC**

Some people have asked me: "What is your scariest experience at the
FCC?" There is a simple answer to that question. It is when an FCC staff
member asked me the following question: "Commissioner, would you like to
review the video tapes before making your decision?"

The issue did not involve obscenity. It did not involve technical
standards for digital broadcasting. It involved whether the Commission
should approve the transfer of license from one company to another. And
in this case, the FCC staff had spent a lot of time reviewing
programming for content.

I did not come to the FCC to be a censor. I came to implement the law.
And it is very difficult for me to find in federal law where a
microscopic review of program content should determine whether a license
should be transferred from one party to another.

Tin-horned dictators and repressive regimes have government officials
review program content so that political opponents are not heard.

Not in America.

Culturally insecure countries have culture police who review program
content.

Not in America.

We value our independence. As a Nation. As individuals. As responsible
members of the media. No government can tell us what we can say or not
say.

Or can they?

Three recent events have made this question all too real.

The recent revelation that the White House had prescreened certain
network programs to assess their "propriety" is only the most dramatic
example. Similarly dangerous are recent efforts by the Federal
Communications Commission to require free political advertising and to
judge which religious programming is sufficiently "educational."

The White House Office of National Drug Control Policy (ONDCP) reviewed
network programming and made decisions affecting the financial value of
the programming. If the network programming contained a sufficiently
anti-drug message, ONDCP offered to reduce the financial and programming
obligation of the networks to provide free time for anti-drug public
service announcements. Awarding government subsidies for certain kinds
of scripts and programming undercuts the very core of broadcasters'
independence and blurs the line between programming and propaganda.
Perhaps most significantly, it reflects a certain governmental arrogance
about what is the best type of programming for American viewers -- and
an apparent willingness to be less than forthright about that government
role.

When government agencies have discretion to affect the profitability of
a business based on subjective criteria and a secret process, how can
the public have any confidence in the resulting decisions? Such a
process has the appearance if not the actuality of impropriety. Yet the
Administration's reaction to the unmasking of this hidden process has
been brazen pride, stressing the importance of the anti-drug message. No
doubt, we are to believe, the ends do justify the means. Constitutional
rights to freedom of speech, speech, and other activities can be eroded
in the name of an anti-drug campaign or other popular policy.

Recently the FCC announced a decision that reveals a similar willingness
to cast government in the role of programmer in an effort to advance
"good" messages. In a license transfer proceeding, the FCC -- never shy
to intervene into a commercial transaction if there is a chance to do
"good" -- became concerned that the religious broadcaster in the
transaction may not provide sufficiently "educational' programming to
qualify for a noncommercial educational license. In an alleged effort to
provide guidance to all noncommercial television licensees, the FCC
ruled that at least 50% of an educational station's programming must be
"educational, cultural or instructional" and found that many types of
religious programming would not "count."

For example, the FCC found that programming "devoted to religious
exhortation, proselytizing, or statements of personally held religious
views and beliefs" would not generally qualify as educational. On the
other hand, the FCC would regard shows that explore religion from a
literary or historical perspective generally as sufficiently
educational.

How is any licensee going to have any confidence about the results of
such a subjective and vague test? Perhaps educational licensees will be
advised to send in their taped shows in advance to assess whether the
shows are "overly" focused on personal religious beliefs?

The problem with government advancement of "good" speech is that by
necessity it must define "good" and reject "bad" speech. Moreover,
licensees under this approach have no choice but to seek government
approval for their programming \-- an approval process that seems to
inevitably lead to government involvement in content of private
programming.

Ultimately the specter of this additional guidance led to the demise of
the transaction. The Commission itself ultimately abandoned the specific
additional guidance but did not entirely abandon the notion that
government evaluation of speech is inherently wrong.

Similarly misguided is a recent FCC proceeding to assess whether
government should require broadcasters to offer "free" airtime to
candidates. According to its advocates, the program is designed to
improve political discourse and "better educat\[e\] the voting public."
Besides the dubious constitutionality of such a program, it too creates
a dangerous opportunity for government to control and approve certain
media messages -- and could well lead to replication of the invidious
approach of the White House Drug Control Office. For example, would
guest appearances by John McCain or Bill Bradley on "Saturday Night
Live" be screened by the FCC in order to award NBC credit under such a
free time obligation? Would the government end up judging which
candidates could participate? Or perhaps which broadcast programs
actually "improve" the nation's political discourse?

The broadcast industry, more than most, should be alarmed by the
willingness of Washington to hijack the media, particularly the
broadcast medium, to put forth the government's view of the world. It is
arguably the scariest activity in a city full of horrors.

# **Lobbying of Specialness**

Broadcasting is an important industry, an important part of America.
Some would even say, a *special* industry. "Special" can mean different
things. Some good. Some not so good. But always, *special* means
*different*. Different from everyone else.

In the world of regulation, special is not always good. Consider the
FCC. Lobbyists for different companies and industries come to the FCC
every day.

They come to me and say: "regulate less." They don't say they are
special. Indeed they say that they are no different from anyone else,
and everyone should be regulated less.

To the extent a lobbyist claims "specialness," it is that a claim that
they are less privileged if anything. Someone to be pitied. Someone in
need of help. Someone in need of less regulation than everyone else.

These lobbyists don't come in and brag about all of their good deeds.
They do not come to tell me about how much community service they have
done. They don't have fancy reports telling about all of the community
service sponsored by their business or industry. They don't have video
cassettes describing their good deeds.

Have these businesses done good deeds? Of course they have. They just
don't wear it on their sleeve. They would find it offensive and
insulting to be asked about it. They would fear it egotistical and
self-aggrandizing if they bragged about it.

Unless, of course, they were broadcasters.

Is there something different about how the broadcast industry lobbies
the FCC from other industries?

Some people say that broadcasters are different because you have FCC
licenses. It is true that you have FCC licenses.

Practically everyone before FCC receives FCC licenses. We have hundreds
of thousands of licensees. We transfer tens of thousands every year.

Count 'em. Hundreds of thousands of licensees. They are subject to the
same public interest obligations of broadcasters. Do you think the FCC
asks hundreds of thousands of licensees about each of their good deeds?
Do you think we review hundreds of thousands of video casettes?

Having an FCC license is not special. Your local Kiwanis Club or othr
civic organization may have a license. They have a license not because
they do good deeds, but simply because they applied.

Who has an FCC license? Consider the following:

a.  local church

b.  local school

c.  local taxi cab company

d.  cable operator

e.  DBS operator

f.  Telephone company

No one asks these people to list their good deeds.

Broadcasters are treated differently.

You say you are different, and the FCC says you are different.

## Broadcasting is different. So too is cablecasting, or running a DBS system, or running a church.  {#broadcasting-is-different.-so-too-is-cablecasting-or-running-a-dbs-system-or-running-a-church. .unnumbered}

## All right, you are different. So what?  {#all-right-you-are-different.-so-what .unnumbered}

##  {#section-1 .unnumbered}

## The FCC says that you need more regulations. Special regulations just for broadcasters. Not for anyone else. {#the-fcc-says-that-you-need-more-regulations.-special-regulations-just-for-broadcasters.-not-for-anyone-else. .unnumbered}

Federal labor laws, that apply to every business in America and that are
enforced vigorously, are not enough. You need special ones, additional
ones that apply just to broadcasters.

Federal antitrust laws, that apply to every business in America and that
are enforced vigorously, are not enough. Just ask Bill Gates. You need
special ones, additional ones that apply just to broadcasters.

Federal EEOC rules, that apply to every business in America and that are
enforced vigorously, are not enough. You need special ones.

Look around your community. Talk to other business owners, managers, and
employees. Ask them if they have to comply with federal laws and
regulations. They will give you an earful. They have plenty of federal
laws and regulations to deal with. And they do. And they probably can't
even tell you how many FCC licenses they hold.

You know what? You have to comply with every law and rule that other
businesses in your community have to comply with, plus you have to
comply with special FCC rules that just apply to you, the broadcaster.

Moreover, the FCC says we need to know about your community service as
broadcasters.

a.  FCC seems to think you are innately bad.

b.  But for FCC, you would do bad deeds.

c.  The only reason you do anything good is because FCC makes you.

d.  American communities would die without FCC intervention.

Oddly, we don't ask the local bank or hardware store about their good
deeds. Or the local Rotary Club or the local church, or any of the
hundreds of other FCC licensees in your community. We don't even ask
cable operators or DBS about their good deeds. Most of these licensees
do lots of good deeds. They support local charity drives, sponsor local
little league teams, listen to the needs of their community and respond
accordingly.

They do all of this not because the FCC, or any else in Washington,
pretends to be Santa Claus and keeps a list of who has been naughty and
who has been nice. Good citizens, individual or corporate, do good deeds
because that what it means to be a good citizen.

I believe FCC treatment of broadcasters is insulting.

You do good deeds because you are good, and good citizens, not because
FCC coerces you.

Listing good deeds is demeaning.

Your licenses are fundamentally no different from anyone else's.

You should be treated the same as everyone else -- less FCC regulation.

Some people may believe that we have all of these special rules for
broadcasters because that is what the law requires.

Wrong. The Commission has simply made up these rules, and broadcasters
have played along with these special rules for generations. It is time
that the broadcast industry stands up for itself and says "No more." It
is time for the FCC to do the job we were hired to do: follow the law as
it is written and not reinvent it.

# **Digital Television**

There are other problems with being labeled "special." In the case of
the broadcast industry, you are perceived not only as special, but also
as especially rich. Filthy rich.

In Washington, DC, it is intellectually respectable to say that
broadcasters received tens of billions of dollars in windfall benefits
when Congress mandated the transition to digital television.

If you don't believe the Washington politicians, just ask *the New York
Times* and the *Wall Street Journal*. They say the same thing. You can't
think of a value that is bigger than the amount some people think you
all have been enriched at taxpayer expense.

Yup. You are filthy rich at taxpayer expense. There are only a couple of
thousand television licenses in the country, so each of you must have
raked in tens of millions of dollars in windfall profits. Maybe more.
That is what people in Washington believe.

Yesterday you were mere paupers. Today you are filthy rich. Rich at
taxpayer expense. Consequently, it is only appropriate for the FCC to
impose any and all conceivable burdens and expenses on you.

You want to convert to digital television? Go ahead and buy the
equipment. It will only cost ten or twenty million dollars. Pocket
change compared to how much you were enriched.

And while you are at it, buy the new tower, buy the new land, get the
environmental clearances, and deal with countless government agencies.
What a few year's delay to you? Or what difference does it make how many
tens of millions dollars all of this will cost?

And how about some new programming. Digital programming. It is free,
isn't it? That's what everyone in Washington tells me.

Oh, and I am sure that all of your good friends at the networks will be
generating lots of free programming for you. They'll just give it away.

You may have to pay for it? Oh, well.

You're rich! Aren't you?

In all seriousness, the costs of the transition to digital broadcasting
are substantial, while there are limited, if any, opportunities for
additional revenue. These substantial costs are roughly the same for
large market broadcasters and for small market broadcasters. Large
market broadcasters, naturally, can absorb these costs more easily than
can small market broadcasters.

Make no mistake: the transition to digital broadcasting is happening.
Large market broadcasters are on track. I am concerned, however, about
what happens in smaller markets. I also am concerned about what happens
to broadcast operations that rely extensively on translator services
that are not directly covered in the digital transition plan.

### Public interest obligations {#public-interest-obligations .unnumbered}

Some people think that you are so rich that the FCC is thinking about
asking for a little help with some of our social and political programs.
We will call it "new public interest obligations for digital
television."

It sounds nice, doesn't it? If you thought the old public interest
obligations were fun, wait until you see these. They are not actually in
the law, but who cares? You are rich!

Of course, these new public interest obligations will apply just to you.
Not to cable. Not to satellite. Not the to the Internet. Because you are
so special.

We may even ask you to provide some free air time for politicians. You
will like that. Air time is free for you, isn't it? So why not share
some of it with some politicians?

Sure, you won't be able to sell as many paid advertisements, but you
don't really need the money\--do you?

And I am sure that your viewing audience will be delighted to listen to
free political advertisements. Why, all of those viewers who are
watching ESPN and CNN will suddenly switch over to watching your local
broadcast signal just for the opportunity to see the free political ads.
Of course, ESPN and other cable channels won't be required to have any
free political ads.

There is a fundamental principle in economics that if something that
used to be costly suddenly becomes free, demand will go up. Such will be
the case for political ads.

Today, you can sell an advertisement to Bob's car dealership. "Hi, My
name is Bob. I am honest and own a car dealership. Come buy a car from
me."

Tomorrow, you can give away the same advertisement to Bob the candidate:
"Hi, My name is Bob. I am honest and own a car dealership. Come vote for
me in the next election, and perhaps buy a car as well."

# **LPFM**

The Commission spent a decade studying and preparing for the transition
to digital television broadcasting. It was one of the most studied and
prepared issues in recent memories.

With all of that studying and preparing, the FCC got the transition to
digital television exactly right. Didn't we?

I am not suggesting that the Commission should have spent even more time
preparing for the transition. The Telecommunications Act of 1996
required us to move relatively quickly. There is an underlying
likelihood that some things will go wrong when major changes are made.

So what about low-power FM radio?

The Commission has spent perhaps 10 months rather than 10 years thinking
about it.

Have we solved all of the problems? Sure...

There is a simple description of Low Power FM radio: rush to judgment.

It is a rush to judgment about interference.

It is a rush to judgment about how the program will be administered.

It is a rush to judgment about whether there even needs to be a program.

Who will suffer? The American listening public.

There are many myths about low-power radio.

1.  *There are countless voices in America that cannot be heard.*

During the war in the former Yugoslavia, the Kosovo Liberation Army
could not get its message out in the war zone. But it could and did get
its message out to millions of people---and every imaginable broadcast
outlet\--around the world through the Internet. Yet, we are to believe
that there are people in America who have less access to disseminating
their message than did the Kosovo Liberation Army.

There are rebellious political groups in every corner of the world.
Practically every one of them has a Web site. Practically every
organized group in the world\--legitimate, nutcase, and somewhere in
between---has a web site.

And these groups get their message out the old-fashioned way too,
through meetings, newsletters, and word of mouth.

1.  2\. *There is an enormous pent-up demand to become legitimate radio
    broadcasters.* Every year, the Commission issues new licenses, and
    transfers hundreds of existing licenses. There are countless audio
    sites on the Internet that are neither licensed by the FCC nor
    costly to establish.

*3. Radio broadcasting is costless.*

a.  Equipment

b.  Personnel

c.  Programming

d.  Regulation

4\. *Any problems in concentration in Class A licenses can be cured with
LPFM*. I hear much about concentration of full-power radio licenses.
Whether one believes this is an issue, it will not change with the
issuance of low-power licenses. They are not the same.

5\. *Problems of minority ownership can be cured with LPFM.*

6.  *Pirates want to be legitimate.*

```{=html}
<!-- -->
```
7.  *Interference is not an issue.* Interference is the primary issue.

a\. 3^RD^ Adjacent channel interference?

gone.

2^nd^ Adjacent channel interference?

probably gone.

1^st^ Adjacent channel interference?

threatened so that you will feel grateful when it is not

taken away.

b\. How do radio listeners react to interference?

They tune out; they have many alternatives.

c\. How do advertisers react to interference?

They stop advertising; they have many alternatives too.

d\. What will be the result of interference in each market?

No one knows.

e\. What is the net effect nationwide?

No one knows.

e.  Keep in mind, there is interference not just from new licensees to
    incumbents, but vice versa as well.

Interference is the central issue in this proceeding. If there were no
change in interference standards, this proceeding would be about nothing
more than reducing the power floor for FM transmission and restricting
ownership of low-power to certain entities. Instead, the Commission
plans to change interference limitations.

8.  *1000 watt stations are low power.*

9.  *LPFM licenses will be available in all markets.*

In practice, LPFM licenses will not be available in large markets,
regardless of the change in interference standards. Any LPFM licenses
will be issued in small and medium-sized markets.

#### Process {#process .unnumbered}

We have had a process that can only be described as a rush to judgment.

a.  NPRM issued without engineering study

b.  Little time given for comment

c.  Request for more time only given a few weeks

d.  Quickly prepared engineering studies

The entire process has taken weeks instead of years for digital
television.

We got everything right on digital TV, didn't we?

# In the process, the FCC has raised expectations about LPFM that simply cannot be met. {#in-the-process-the-fcc-has-raised-expectations-about-lpfm-that-simply-cannot-be-met. .unnumbered}

1.  People expecting to get licenses won't get them.

2.  Licenses cannot be kept out of "wrong" hands

3.  Interference will go up

4\. Pirates won't go away.