**STATEMENT OF**

**FCC MICHAEL J. COPPS, COMMISSIONER**

**USC MEDIA CONSOLIDATION FORUM**

**LOS ANGELES, CALIFORNIA**

**APRIL 28, 2003**

Thank you for inviting me to participate in this important forum. The
Annenberg School is once again demonstrating its leadership by convening
this event, but, then again, we always expect great things from
Annenberg. I know the organizers had to do some heavy lifting to make
this a reality, even having to contend with the President's Day blizzard
that tied up the East Coast the day on which the forum was originally to
be held. So I am pleased and grateful that the School, its dean, Geoff
Cowan, and Sandra Ortiz persevered and planned this alternate date. I
want to extend very special gratitude, as should we all, to Sandra, who
did such an excellent job in bringing this about. I also want to
recognize the presence here this morning of my friend, and a great
public servant, Representative Xavier Becerra who represents the 31st
District of California and who has been a champion on so many issues,
including media ownership and media diversity. Thank you, Congressman,
for being here with us and for everything that you do. You know, I'm not
a person much given to hyperbole, but I believe that, apart from the
matters of war and peace that are at the forefront of our national
concern right now, no meeting taking place anywhere in America today is
tackling issues as important to the future of our country as you are
doing here.

At the Federal Communications Commission, we are racing toward a
critically important vote on whether to keep, modify, or scrap many of
our media concentration protections. The rules at issue limit, among
other things, a single corporation from dominating local TV markets;
from merging a community's TV stations, radio stations, and newspaper;
from merging two of the major TV networks; and from controlling more
than 35% of all TV households in the nation.

Some will say: "Well, OK, but what's so earth-shaking about that?" What
is important about it is that there is the potential here to remake our
entire communications landscape, for better or for worse, for many years
to come. The stakes are enormous, there's no way around it. We are
talking about fundamental values and democratic virtues -- things like
localism, diversity, competition and maintaining the multiplicity of
voices and choices that undergird our precious marketplace of ideas and
that sustain American democracy. Abstractions? I don't think so. These
concepts go to the core of what kinds of entertainment and information
we and our children will be watching and hearing. This is about
everything we hear and see and read through the media, because at stake
is how TV, radio, newspapers and even the Internet are going to look,
what role they are going to be playing in each and every one of our
lives, and who is going to be controlling them and for what purposes.
That's pretty important stuff!

Here is my concern: we are on the verge of dramatically altering our
nation's media landscape without the kind of national dialogue and
debate these issues so clearly merit. Thirty-five days are all that's
left, if FCC Chairman Powell continues to insist that the roll be called
on June 2. So in just over a month, the FCC will have voted on this,
changed the rules, reconfigured the media landscape, and told the world
that, sorry, there's no opportunity or time for public comment on what
has been voted into place. Right after that, prepare to see a veritable
gold rush of media company buying and selling. That's what the Wall
Street Journal referenced just the other day, and it told of one merger
and acquisition firm that's calling media companies saying, "We would
like to be your broker." Well, maybe that's what merger and acquisition
firms are supposed to do. I just wonder who is going to be America's
broker in all this? Somehow I had the quaint idea that maybe the FCC was
supposed to pay some attention to that.

And three-quarters of the American people haven't been told that this is
even taking place -- not told by the Commission, not told by the media!
It's like a state secret. It's amazing. We will have a new or
substantially changed system in place before most people even know it's
up for grabs. And "up for grabs" is the right term, because as I travel
around the country holding my own hearings and attending forums like
these, I hear about deals in the making, like newspaper-broadcast cross
ownership agreements, where the terms are already decided, the deal is
done, and all that remains is to fill in the signature blocks after the
Commission votes on June 2.

One problem with all this is that, just 35 days out, we have yet to see
a draft proposal. We don't know what we'll be voting on yet. At least I
don't. We don't have the details, or even the broad configuration, of
what the new system will be. And when the proposal is finally put on the
table, it will be "Eyes Only," not permitted to circulate outside the
Commission for comment. So we will not tee it up for public comment or
expert analysis before we vote. This is the way the Commission usually
does business, we are told. Well, I submit this is too important to be
treated on a business as usual basis.

Thirty-five days out, we still lack understanding of what the
consequences -- intended and unintended -- of the new regime will be. So
we don't know where we're going \-- and we haven't studied very well
where we've been. If that's not a prescription for disaster, then you
tell me what is.

So, let me lay out a few principles for this proceeding over the next 35
days.

First, let's start with the premise that it's the people's property
we're dealing with. We're not talking about airwaves that a broadcaster
or a company owns. We're talking about public airwaves and how they
should be used to advance the interests of our citizens. No one has a
God-given right to use these airwaves for strictly commercial purposes.
Yes, they can be run as a business, but it's a very special business
because the licensees granted to right temporarily to use these airwaves
are using public property for primarily public purposes in behalf of the
public interest.

The Supreme Court laid out the direction for us long ago when it wrote,
"(I)t is the purpose of the First Amendment to preserve an uninhibited
marketplace of ideas in which truth will ultimately prevail, rather than
to countenance monopolization of that market, whether it be by the
Government itself or a private licensee." If we began each debate within
that context, I think we would do a much better job as a Commission.

Second, we need to address all of the broad range of issues that have
been raised in this proceeding. Some say that this is just an ordinary
examination of our rules that we conduct every two years and it's
primarily about numbers. Let's not kid ourselves. This is the granddaddy
of all reviews and it goes to the heart and soul of how the media will
look for years to come. We have opened up virtually all of our rules
that shape the media landscape. So when the item comes our way, I hope
it will deal with these issues expansively, answer all the questions
initially raised, and respond to many questions that the item itself did
not ask, but which commenters have brought to us, because some of these
questions are profoundly important.

So certainly we should not limit ourselves to the narrow question of
whether to scrap or significantly modify existing limits. Some parties
have addressed the need to require more independent programming on our
airwaves so that a few conglomerates do not control all of the creative
entertainment that we see. These proposals should receive the serious
attention they deserve in our decision. For years, the Commission
limited both horizontal (distributional) concentration ***and***
vertical (production) concentration. Then we loosened the vertical
safeguards. Now we seem intent on loosening the horizontal. Let's look
instead at an arrangement with some balance in it.

Others have suggested the need for an effective license renewal process
under which the Commission would once again actually consider the manner
in which a station has served the public interest when it comes time to
renew its license. We used to do that. But the system has evolved, I
think unfortunately, into one of basically post-card license renewal.
Unless there is a major complaint pending against a station, the license
is almost automatically renewed. A real, honest-to-goodness license
renewal process, predicated on advancing the public interest, might do
more for broadcasting than all these other rules put together. If it is
properly designed, it could avoid micro-management on a day-to-day basis
in favor of a comprehensive look at how a station has discharged its
public responsibilities over the term of its license. I hope that we
will at least talk about it.

On a little different level, another issue I hope the item addresses is
the so-called UHF Discount. In this modern TV world, with digital coming
our way, is there still good reason to count an UHF station as only half
a VHF station in terms of audience reach? Any audience reach cap is
immediately breached when a station can reach 100,000 people but only
has to count 50,000 of them. That can make something of a mockery of the
cap.

My point is that this is the time to look and focus broadly and
comprehensively. That's where we were told we were going. Now I want to
see an item proving it. I will be disappointed if, when we see the
proposals, these kinds of issues are not addressed and this decision
becomes a narrow construct or litmus test that reflects only a rush to
eliminate the existing constraints on excess media consolidation. If, on
the other hand, we take a balanced, measured approach, engage in
fact-finding and open-minded discussion, I believe the Commission could
reach something resembling a consensus. How much better it would be to
have a 5-0 vote on such a great question rather than a 3-2 vote that
encourages litigation and confusion more than it brings clarity and
direction. That is a result that would be good for the Commission and,
more importantly, good for the country. When the issues go to the very
heart of our American democracy, the American people deserve no less.

Third, if we change our rules, we should do so in a manner that affords
us the opportunity to analyze the impact of increasing consolidation
before the genie is completely out of the bottle. Radical reform of the
current system could produce negative consequences that would be
difficult to fix. I've already mentioned the feeding frenzy of
consolidation that will follow significant relaxation of the rules.
Suppose for a moment that the Commission votes to remove or
significantly modify the ownership limits on June 2. And suppose, just
suppose, that it turns out to be a mistake. How would we ever put that
genie back in the bottle? The answer is that we could not.

Before we plunge ahead to remake the media landscape, we need to better
understand the current media landscape and the implications of
eliminating concentration protections. We do have some experience to
learn from -- and that is what happened to radio after Congress and the
Commission changed the rules of the game seven years ago. Many believe
that the loosening of ownership caps and limits that took place then
created real problems in radio. Arguably, consolidation also created
some economies and efficiencies that allowed broadcast media companies
to operate more profitably and may even have kept some stations from
going dark and depriving communities of service. But the consolidation
went far beyond what anyone expected. Conglomerates now own dozens, even
hundreds -- and, in one case, more than a thousand -- stations all
across the country. More and more of their programming seems to
originate hundreds of miles removed from listeners and their
communities. And we know there are one-third fewer radio station owners
in 2003 than there were before these protections were eliminated. The
majority of radio markets are at best oligopolies.

It raises serious questions. Some media watchers like the Media Access
Project, Consumers Union, and Professor Robert McChesney argue that this
concentration has led to less coverage of news and public interest
programming. The Future of Music Coalition in its multi-year study finds
an homogenization of music that gets air play and that radio serves now
more to advertise the products of vertically integrated conglomerates
than to entertain Americans with the best and most original programming.

So, should we eliminate, or substantially change, the protections that
remain for television, cable, and newspapers? And should we provide
additional stimulus for even more radio consolidation? These questions
raise profound questions of public policy. How far should such
combinations be allowed to go? What is their impact on localism,
diversity and the availability of choices to consumers? Does
consolidation serve the public interest? How do we judge these things?

There are so many answers that we just don't have. Indeed, we haven't
even teed up all the questions that should be asked before we speed down
the road. What are the likely effects of further consolidation going
forward? What are the effects on small businesses and on advertisers,
particularly small, local advertisers? What are the possible effects on
our children? Some have suggested that perhaps there is a correlation
between the rising tide of indecent and violent programming and the
rising tide of media consolidation. I don't know the answer to that
question, but it needs to be asked and at least ***some*** record
compiled before we vote. What effects do technological changes have on
the ownership debate? We are in the midst of a transition to digital
television, giving stations the ability to multicast many different
channels. Might not the reality of a station having six or seven
channels instead of just one have ***some*** effects on the competitive
landscape in a particular media market? Shouldn't we be looking at this?
Why aren't we?

What does further consolidation mean in terms of providing Hispanic
Americans and African Americans and Asian-Pacific Americans and Native
Americans and other groups the kinds of programs and access and
viewpoint diversity and career opportunities and even advertising
information about products and services that they need? America's
strength is, after all, its diversity. America will succeed in the
Twenty-first century not in spite of our diversity, but ***because*** of
our diversity. Diversity is not a problem to be overcome. It is our
greatest strength. And our media need to reflect this diversity and to
nourish it. It takes no rocket science to understand that changing the
rules of media consolidation is likely to have far-reaching effects on
different groups. Why not ask these questions ***before*** we change the
rules instead of creating the potential for even more harm?

So we need to get this right. If we do not have an adequate record \--
and we don't \-- we should not hesitate to get more evidence. Why let
some artificial deadline prevent us from obtaining adequate evidence to
make an informed decision that will avoid unintended consequences and
will allow us to withstand court scrutiny? For example, if we are going
to adopt some complicated new formula for measuring diversity, we should
provide the public an opportunity to comment before it is adopted. It
seems to me that if we took a couple of months to circulate such ideas
and get public comment, they would have a much better chance of standing
up in court than some set of numbers that has never seen the light of
day.

Some accuse me of delay. I reject that charge. I went into this last
year believing that if the Commission really worked at it, got around
the country looking at various markets, talking to people, collecting
data and really reached out, we had a shot at building an adequate
record for a timely vote this year. I have tried to do that.
Commissioner Adelstein has tried to do that. That is why we have been
traveling across the country to hold hearings and to attend forums such
as this one today, from Los Angeles and Los Angeles to Burlington,
Vermont, from Chicago to Durham, North Carolina. This past Saturday,
Commissioner Adelstein was in San Francisco for a forum there, and I
understand it was very productive.

Everywhere we have been, we have learned new facts, received new
perspectives, and come to understand how important this issue is to our
fellow citizens. We have seen a truly sobering outpouring of concern in
all these places. People don't have any trouble understanding this
issue. The principles at stake are fundamental and part of most people's
approach to democracy. So they quickly appreciate what is at stake. If
more people knew this decision was imminent -- if the Commission did its
outreach job and told them, and if big media, particularly the networks,
met their public interest responsibility and told them -- this would be
a truly major grassroots issue all across America. That's what it should
be. Must be. Let me add that the major networks' refusal to cover this
issue has been just absolutely dreadful.

I know this forum will add to our knowledge and provide us with
additional perspective. But you cannot let it end here. You can't allow
that. Take what you learn today, share it with others, and do your part
\-- and even more \-- to encourage the fullest possible national
discussion of these issues in the very few weeks that remain \-- 35 days
and counting down \-- before Chairman Powell closes the discussion and
forces the vote. As an FCC Commissioner, I have a duty to encourage this
kind of discussion and to help build the record. But so do we all as
concerned citizens.

Thank you.