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 Remarks  of  Michael  K.  Powell 
 Chairman  Federal  Communications  Commission 
 At  the  Media  Institute 
 March  27,  2003  [as  prepared  for  delivery] 


 I.  INTRODUCTION 
 Good  afternoon,  I  want  to  thank  The  Media  Institute  for  having  me  here  today,  it  is  always  a  great  pleasure  to  be  among  fellow  unapologetic 
 defenders  of  the  First  Amendment.  I  cannot  imagine  a  more  appropriate  time  in  history  than  now  to  discuss  the  media  as  an  avenue  to  inform  our 
 citizenry  and  the  FCCs  appropriate  role  in  promoting  that  end.  Over  the  course  of  the  last  year  and  a  half,  the  media  has  brought  the  world 
 unprecedented  sights,  sounds  and  information  from  the  tragedy  and  heroism  of  September  11  th  to  the  current  war  in  Iraq. 


 During  this  time  of  War,  the  images  over  our  televisions,  the  sounds  over  our  radios,  the  ink  on  our  newsprint  and  the  words  and  images  over  the 
 internet  are  testaments  to  many  of  the  core  values  of  our  great  nation  and  any  true  open  democracy.  Indeed,  by  embedding  over  500  reporters 
 around  the  world  with  military  units,  we  are  seeing  a  degree  of  media  coverage  never  before  experienced  in  any  previous  war.  The  real-  time 
 pictures  and  reports  are  a  result  of  remarkable  developments  in  communications  technology  and  the  breadth  of  media  platforms.  It  is 
 both  thrilling  to  see  the  power  of  the  medium  and  its  reach  as  well  as  shocking  to  be  brought  so  close  to  the  horrors  of  war. 


 It  is  in  times  like  these  that  we  are  reminded  of  the  importance  and  vibrancy  of  a  well-  equipped  free  press  and  the  cherished  values  we  seek 
 to  promote  in  our  electronic  media  policies.  Preserving  a  diverse  media  that  is  competitive  and  serves  our  global  and  local  community  remains  as 
 vital  today  as  it  has  ever  been. 
 Broadcast  ownership  policies  have  long  been  an  important  tool  in  promoting  these  goals.  Rules  governing  ownership  structure  as  a  means 
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 for  promoting  diverse  output  is  preferred  to  regulating  that  content  directly.  The  First  Amendment  makes  that  an  uncomfortable  indeed 
 unauthorized  place  for  government  officials  to  tread.  For  the  most  cherished  of  our  constitutional  protections  frowns  heavily  on  government 
 controlling  the  messages  we  see  and  hear. 
 Ownership  restraints  serve  as  a  useful,  though  not  precise,  proxy  for  promoting  diverse  viewpoints  among  the  electronic  media.  Preserving  an 
 adequate  number  of  independent  owners/  editors  increases  the  probability  of  a  wider  range  of  viewpoints  in  the  coverage  and  treatment  of  issues  of 
 significant  public  importance. 
 II.  BROADCAST  OWNERSHIP  RESTRAINTS  ARE  AT  RISK 
 This  ownership  approach  to  promoting  diverse  viewpoint  is  at  serious  risk,  however,  for  the  FCC  has  repeatedly  failed  to  adapt  its  approaches 
 to  market  reality,  technological  change,  consumer  preferences,  or  the  law. 
 Most  broadcast  ownership  rules  in  effect  today  in  2003,  were  promulgated  between  1940  and  1975.  In  this  earlier  era,  the  FCC  was 
 successful  in  crafting  limiting  rules  based  primarily  on  reasonable  assumptions  and  assertions  about  the  nexus  between  ownership  and 
 content  viewpoint.  These  rational  explanations  were  generally  accepted  as  adequate  by  the  judiciary  without  much  empirical  proof. 


 The  success  of  this  approach  was  due  to  the  nature  of  the  media  at  the  time.  In  those  days,  electronic  media  was  limited  to  broadcast  television 
 and  radio.  The  medium  was  heavily  concentrated,  with  just  three  networks  dominating  the  television  airwaves.  News  was  vital,  but 
 offered  by  appointment  and  in  small  doses.  In  1960,  the  so  called  Golden  Age  of  Television,  broadcasters  aired  a  total  of  3    hours  of 
 local  and  national  news  in  snippets  throughout  the  day.  This  was  in  New  York  City,  the  largest  media  market  in  the  country.  Under  such 
 circumstances,  it  was  quite  easy  to  accept  as  an  act  of  faith  the  alleged  harms  of  further  consolidation  among  the  already  scarce  sources  of  news 
 and  information. 
 As  time  passed,  however,  changes  in  the  media  landscape  rendered  many  of  these  premises  for  regulation  and  the  alleged  dangers  of  further 
 consolidation  substantially  less  obvious  or  certain. 
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 The  continuing  proliferation  of  more  outlets  and  new  media  platforms  was  accompanied  by  a  virtual  explosion  of  diverse  and  varied  content.  In 
 the  last  40  years  the  number  of  media  outlets  has  swollen  nearly  195%  and  the  number  of  media  outlet  owners  has  increased  by  139%.  There 
 are  more  broadcast  networks  and  new  cable  and  satellite  networks  with  an  abundant  range  of  programs.  It  simply  has  become  more  difficult  to 
 just  assert  that  an  ownership  restriction  is  essential  to  promoting  diverse  viewpoints,  where  so  many  outlets  and  owners  thrive. 


 Yet,  despite  these  massive  changes,  the  FCC  has  continued  to  hue  close  to  its  original  line  in  justifying  the  continuation  of  its  rules.  It  failed  to 
 recognize  (as  did  many  advocates  of  strong  media  regulation)  that  these  changes  would  require  more  compelling  explanations  than  the  standard 
 off-  the-  shelf  ones  and  would  demand  more  rigorous  proof  of  its  assertions  in  the  face  of  so  varied  a  media  landscape. 


 As  the  years  passed  occasionally  a  rule  was  repealed  or  killed  off  by  the  court,  but  the  ownership  rules  continued  to  glide  along  more  out  of 
 inertia  than  propulsion. 
 The  1996  Telecom  Act  was  a  sea  change.  Congress  significantly  relaxed  many  of  the  existing  broadcast  ownership  rules,  expressing  skepticism 
 about  their  continued  importance.  More  importantly,  however,  Congress  directed  the  Commission  to  review  its  rules  every  two  years.  The  FCC 
 would  no  longer  have  the  discretion  to  preserve  rules  based  on  airy  claims  or  inaction.  It  would  now  be  forced  to  justify  its  policies  based  on 
 contemporary  reality  and  marketplace  change. 
 The  real  bombshell,  however,  was  the  standard  the  Commission  is  required  to  use  in  examining  its  venerable  rules.  Congress  shifted  the 
 burden  to  the  FCC,  rather  than  the  industry,  to  demonstrate  the  need  for  a  rule.  If  we  cannot  conclude  a  rule  is  necessary,  we  are  commanded  to 
 modify  or  eliminate  it.  And,  we  will  have  to  do  this  exercise  every  two  years. 


 This  was  a  momentous  departure.  For  decades  the  Commission  had  in  essence  required  proponents  of  deregulation  to  prove  why  the  rule  was 
 no  longer  necessary.  Now,  the  FCC  has  the  obligation  to  prove  a  rule  is  in  fact  necessary  indeed  one  of  my  colleagues  interprets  the  law  to 
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 mean  we  must  prove  a  rule  is  indispensable  to  the  public  interest.  The  congressional  bias  is  for  deregulation  and  the  standard  for  maintaining  a 
 rule  is  an  enormous  hill  to  climb. 
 There  has  been  only  one  biennial  review  to  date  and  it  did  not  fair  well.  The  Commission  made  an  effort  to  keep  the  burden  on  those  seeking 
 repeal  of  a  rule.  It  also  interpreted  the  statute  to  give  the  FCC  discretion  not  to  review  a  rule  at  all,  or  to  continue  its  operation  with  only  cursory 
 assertions  of  its  continued  value. 
 When  the  review  hit  the  court,  the  result  was  sobering.  The  court  roundly  rejected  the  FCCs  view  of  Congress  intent,  holding  Congress 
 clearly  expressed  a  preference  for  deregulation  and  placed  the  burden  on  the  Commission  to  prove  a  restrictions  worth.  It  wielded  its  sword  most 
 violently  at  the  Commissions  failure  to  offer  much  explanation  at  all  for  retaining  some  rules,  striking  dead  the  cable/  TV  cross  ownership  rule  to 
 leave  no  doubt  as  to  the  seriousness  of  our  obligation. 
 The  stark  result  is  this:  Any  hope  we  have  of  preserving  the  use  of  ownership  rules  as  a  way  of  promoting  our  diversity  goals,  will  rest  on 
 the  FCCs  ability  to  offer  significantly  more  compelling  explanations  of  the  rules  it  employs.  If  we  fail,  the  rules  will  be  gone  in  a  year.  In 
 making  our  choices,  we  cannot  ignore  the  new  breadth  and  depth  of  the  media  marketplace  when  placing  limits  on  broadcast  owners.  Ignoring 
 other  sources  of  viewpoints  in  a  market  is  hazardous  to  the  health  of  a  reasonable  broadcast  regulatory  regime. 


 If  we  resort  to  passion,  histrionics,  intuition  and  the  cries  of  Chicken  Little  to  keep  the  current  regime  as  it  is,  the  rules  will  not  stand  for  long. 
 The  noise-  makers  must  join  in  a  commitment  to  finding  solutions.  We  need  compelling  proposals  and  defenses  of  those  proposals,  not  the  usual 
 alarmist  political  attacks  employed  to  prevent  change.  If  no  changes  are  made,  we  will  have  given  over  the  choice  to  the  courts. 


 I  have  seen  this  bad  movie  too  often.  The  plot  is  the  same.  Having  been  warned  by  Congress  and  warned  by  the  Courts,  some  nonetheless  press 
 stubbornly  against  the  grain  overplaying  their  legal  hand,  leaving  the  public  interest  without  a  dime. 
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 Choosing  to  ignore  the  more  plausible  readings  of  the  statute,  the  Commissions  inconsistencies  and  lack  of  proper  analysis  doomed  the 
 last  biennial  review,  and  perhaps  raised  the  bar  higher  than  it  needed  to  be. 


 The  Commission  overreached  twice  in  setting  EEO  obligations.  Twice  the  rules  were  overturned  as  unconstitutional.  Thus,  for  years,  employees 
 did  not  enjoy  the  fruits  of  these  rules  only  the  cold  comfort  of  our  good  intentions.  Worse  yet,  the  damaging  constitutional  precedent  penned  in 
 those  cases  have  further  setback  governmental  efforts  to  promote  race  and  gender  diversity,  in  all  contexts,  not  just  broadcasting.  [Now  we 
 must  look  to  other  ways  to  promote  minority  and  female  opportunity  which  is  why  I  strongly  support  Sen.  McCains  Ownership 
 Diversification  Bill  and  urge  its  passage  and  I  intend  to  initiate  a  new  Commission  effort  to  find  creative  ways  to  promote  opportunity.] 


 Recently,  the  insistent  march  to  push  the  public  interest  standard  bar  dramatically  higher  in  reviewing  mergers,  resulted  in  a  court  decision 
 finding  that  the  mere  approval  of  a  broadcast  application  subsumes  any  affirmative  public  interest  inquiry  for  a  license  transfer.  Many--  zealous 
 to  the  end--  lay  blame  with  overreaching  courts.  But  the  blame  rests  squarely  too  with  those  irresponsibly  pushing  too  hard  against  the  law. 


 Against  this  backdrop,  we  will  wrestle  once  again  with  the  graying  broadcast  ownership  rules  in  the  current  biennial  review.  Our  concerted 
 goal  is  to  learn  from  our  mistakes  and  embrace  the  necessary  changes  that  will  preserve  a  reasonable  broadcast  ownership  structure  that  is 
 contemporary  and  is  faithful  to  Congressional  intent. 
 We  are  working  very  hard  to  provide  more  rigorous  evidence  and  rationales  for  the  choices  we  make.  We  have  commissioned  a  dozen 
 academic  studies  to  offer  strength  to  our  decisions.  What  is  truly  unique  about  this  undertaking  is  that  for  the  first  time,  the  Commission  is 
 looking  at  these  issues  through  the  eyes  and  ears  of  the  American  public,  and  not  the  personal  tastes  of  appointed  government  officials.  We  are 
 taking  greater  account  of  the  breadth  of  voices  and  viewpoints,  so  as  not  to  be  vulnerable  to  the  accusation  we  have  ignored  genuine  sources  of 
 information.  We  are  working  to  bring  greater  coherence  and  consistency  to  our  rules  and  we  hope  to  clarify  our  goals  and  our  methods  through  a 
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 simpler  regime  that  still  protects  our  essential  ideals.  This  is  a  tall  order,  but  we  have  what  we  need  and  are  committed  to  success. 
 III.  THE  PUBLIC  INTEREST  CASE  FOR  CHANGE 
 The  case  for  change,  however,  is  not  merely  a  response  to  an  unfavorable  court  ruling  or  two.  There  are  compelling  public  interest  reasons  to 
 change  as  well. 
 First,  It  is  important  for  us  to  rebuild  our  media  regulatory  regime  in  order  to  get  a  coherent  and  internally  consistent  set  of  rules  that  more 
 correctly  reflect  the  media  landscape  and  the  rich  and  varied  ways  consumers  and  citizens  get  there  information.  If  we  adopt  rules  that  do 
 not  peer  through  the  eyes  and  listen  through  the  ears  of  consumers  and  see  how  they  obtain  news  and  information,  then  it  is  questionable 
 whether  we  are  truly  acting  in  their  stead,  or  merely  using  their  name  in  vein  to  promote  some  other  agenda. 


 Second,  change  may  be  imperative  if  we  want  to  preserve  free  over  the  air  television.  Free  television  itself  serves  a  very  important  public 
 interest,  yet  its  future  is  not  guaranteed.  Broadcast  TV  offers  important  content  to  citizens  without  charge.  It  can  be  accessed  from  virtually  any 
 location.  And,  it  is  vital  in  emergency  situations  be  it  weather  or  terrorist  attack. 


 Yet  the  market  trends  are  against  free  TV.  By  our  last  cable  competition  report,  over  85%  of  households  subscribe  to  cable  or  DBS  opting  to  pay 
 for  television.  Pay  TV  has  enormous  market  advantages.  It  has  access  to  two  sources  of  income  advertising  and  subscription.  Cable  and  DBS 
 have  much  more  channel  capacity,  allowing  them  to  offer  greater  quantity  and  variety  of  content  at  all  times  of  the  day.  And,  multi-channel 
 platforms  are  closer  to  offering  the  personalization  and  interactivity  that  consumers  are  coming  to  expect  in  the  internet  age. 
 Changes  in  our  rules  may  give  TV  a  fighting  chance  to  adapt,  respond  and  survive. 


 Third,  while  many  view  big  as  always  antithetical  to  the  public  interest,  scale  and  efficiency  are  becoming  more  vital  to  delivering  quality  news 
 and  public  affairs.  The  world  is  getting  smaller.  We  are  all  part  of  a  global  community  as  well  as  a  local  community.  It  is  increasingly 
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 imperative  to  have  a  larger  perspective  on  matters  of  public  interest,  whether  it  be  health  issues  (as  in  the  recent  case  of  a  deadly  pneumonia 
 from  Asia),  political  issues  (the  fate  of  Tony  Blair),  economic  matters  (oil  prices  and  the  effect  at  the  pump),  or  terrorism  and  military  threats. 
 And,  news  events  now  move  at  a  sweeping  pace,  breaking  faster  and  spreading  farther  than  ever  before.  This  complex  world  requires  ever 
 more  sophisticated  news  gathering  and  delivery  capability.  The  scale  and  resources  necessary  to  do  it  are  increasing. 


 At  the  same  time  events  in  our  local  community  remain  essential.  As  the  cost  and  sophistication  of  news  and  public  affairs  rises  it  is  important  to 
 bring  new  assets  to  ensuring  the  local  community  is  covered.  It  may  be  that  allowing  newspapers  to  enter  the  local  TV  market  will  bring  the  local 
 classifieds,  the  Metro  section,  the  local  movie  schedule,  and  editorial  opinion  to  television,  enhancing  the  local  character  of  that  medium  and 
 stimulating  its  vibrancy.  One  of  our  studies  found  that  newspaper  owned  broadcast  stations  produced  almost  50%  more  local  news,  and  received 
 significantly  more  awards  for  local  news  excellence  than  other  affiliates.  In  light  of  this  data,  it  is  hard  to  see  how  a  complete  ban  on  newspapers 
 owning  TV  stations  serves  the  public  interest. 
 Fourth,  Digital  Migration.  Media  is  itself  changing  as  a  new  digital  world  unfolds.  Voice,  video  and  data  can  now  travel  effectively  on  many 
 more  platforms  and  will  begin  to  accelerate  the  proliferation  of  information.  As  this  becomes  possible  the  consumer  is  demanding 
 greater  personalization  and  control  of  his  programming  choices,  using  the  computer  tools  integrated  in  his  watching  and  listening  devices.  We  see 
 the  internet  itself  becoming  an  essential  source  of  important  content.  ABC  news  has  just  launched  the  first  24  hour  broadband  broadcast. 
 Satellite  radio  is  in  the  market  offering  hundreds  of  channels  of  diverse  (ad  free)  content.  Indeed,  my  colleague  Jonathan  Adelstein,  a  music 
 lover,  just  got  the  system  and  raves  about  it.  MP3  players  like  the  Ipod  are  rapidly  becoming  the  critical  source  for  music  and  audio  applications. 
 And  personal  video  recorders  are  revolutionizing  the  way  we  watch  TV. 
 Opponents  of  change  often  want  to  dismiss  these  new  sources  as  less  effective  or  immature.  I  say  rather  than  reject  them  we  should  be  trying 
 to  drive  them,  in  order  to  unleash  new  sources  of  media  content  and  information  and  give  greater  access  to  mass  communication.  These  tools 
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 have  made  their  weight  felt.  War  protestors  and  supporter  alike  have  used  the  medium  to  organize  and  convey  messages  as  never  before  seen. 
 We  should  allow  sufficient  flexibility  for  providers  to  bundle  assets  and  products  to  distribute  new  applications  that  consumers  may  desire,  rather 
 than  pre-  configuring  the  media  ownership  model  solely  for  a  traditional  broadcast  world. 


 Fifth,  Diversity  itself.  More  capacity  may  allow  producers  to  respond  to  increased  customer  fragmentation  and  competition  for  viewers  and 
 listeners.  More  capacity  increases  the  ability  to  program  more  choices  and  more  niches  that  appeal  to  an  increasingly  diverse  population. 


 IV.  CONTENT  AND  A  FIRST  AMENDMENT  WARNING 
 Whenever  media  ownership  debates  unfold,  it  isnt  long  before  every  perceived  ill  and  every  dissatisfaction  with  what  we  see  and  hear  on 
 television  and  radio  is  paraded  out  as  a  consequence  of  too  much  concentration. 


 If  you  listen  you  can  hear  it  now.  It  is  suggested  that  concentration  is  to  blame  for  indecent  or  course  television  programs  ignoring  that  the 
 media  was  substantially  more  concentrated  in  the  supposedly  clean  1950s.  It  is  argued  that  TV  has  become  too  violent.  It  is  argued  that 
 quality  of  television  has  declined  and  that  TV  is  too  bland  and  homogenized  because  of  corporate  conglomeration. 


 I  do  not  doubt  at  all  that  there  are  pitfalls  to  big  media,  nor  do  I  doubt  that  there  are  benefits.  But,  I  do  not  think  concentration  itself  is  the  root 
 cause  of  the  quality  of  content  we  see  today,  I  think  that  fierce  competition  is. 


 A  monopolist  has  the  luxury  occasionally  of  putting  aside  what  sells  in  order  to  air  content  that  might  be  less  appetizing  (even  if  nutritious) 
 because  its  audience  is  captive.  Such  was  undoubtedly  the  case  in  the  era  of  Cronkite  and  Murrow.  But,  where  choice  abounds  in  a  competitive 
 market,  one  can  ill-  afford  not  to  give  em  what  they  want.  Today,  if  you  do  not  capture  a  viewers  attention  and  hold  it,  he  simply  clicks  his 
 remote  control  to  find  something  that  does.  Or,  he  turns  off  the  TV  and  turns  on  the  Playstation  or  Xbox.  Or,  he  strays  to  the  computer  to  surf  the 
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 net.  Or,  he  picks  up  a  paper,  book  or  magazine.  Or,  he  listens  to  music  on  his  MP3,  radio  or  stereo.  Or  puts  a  DVD  in  to  watch  a  movie.  Or, 
 god  forbid,  unplugs  entirely  and  goes  out  to  take  a  walk  with  his  kids. 
 My  warning  is  this,  while  we  are  right  to  concern  ourselves  with  Citizen  Kane,  we  should  not  use  that  concern  to  justify  the  resurrection  of  King 
 George.  Our  founding  fathers  said  little  about  commercial  owners  of  news  and  print,  but  they  reserved  the  top  spot  on  the  bill  of  rights  to 
 condemn  the  government  from  foisting  its  values,  preferences,  viewpoints  or  tastes  on  a  free  people.  This  is  where  the  gravest 
 constitutional  danger  lies. 
 It  is  said  that  the  public  interest  is  not  just  what  interests  the  public.  I  respect  and  share  the  sentiment.  But,  the  danger  of  this  aspiration,  when 
 invoked  in  regulatory  policy,  is  that  it  implies  a  justification  to  require  that  the  public  accept  by  law,  what  it  is  uninterested  in  accepting  by 
 choice.  Such  a  view  surely  keeps  Mr.  Jefferson  from  a  restful  slumber.  Those  committed  to  his  cherished  commandment  should  remain  vigilant 
 watchman  in  the  current  battle  over  broadcast  ownership. 
 I  thank  you,  again  for  inviting  me  to  be  with  you  today. 
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