SPEECH BY REED HUNDT   

                                 CHAIRMAN                  
                     FEDERAL COMMUNICATIONS COMMISSION

                           WOODROW WILSON SCHOOL
                           PRINCETON UNIVERSITY
                           PRINCETON, NEW JERSEY

                        (AS PREPARED FOR DELIVERY)

                             DECEMBER 8, 1995

               REVITALIZING DEMOCRACY IN THE INFORMATION AGE

     I am pleased to be with you today.  I want to thank several
people for putting together, and inviting me to participate in,
this symposium.  They are: Ruth Miller, Assistant Dean for
Public Affairs of the Woodrow Wilson School, Richard Leone,
President, and John Shure, Vice President of Programs, both of
the Twentieth Century Fund, and my old college friend Paul
Taylor, of the Washington Post, who this semester is visiting
professor at the Woodrow Wilson School. 

     I was last at Princeton when the college football team Paul
and I rooted for whipped the Tiger eleven in 1968.  It's great
to revisit this great university and that halcyon (if slightly
obnoxious) memory.

     This speech is one of a series of speeches in which I am
discussing how the Federal Communications Commission can craft a
new paradigm for the use of the public's airwaves to serve the
public interest.

     In the first speech, at Pittsburgh Law School in September,
I discussed the constitutional and policy shortcomings of
relying on vague rules to implement broadcasters' statutory
obligation to serve the public interest, and the ways
broadcasters can use the public's airwaves to do more to educate
children.  

     Earlier this week, at the Brooklyn Law School, I discussed
how a deregulatory, market-oriented, and First Amendment-
friendly approach to the Children's TV Act of 1990 requires that
the FCC replace its current vague rules with a clear statement
of the minimum number of hours of children's educational
television each broadcaster owes the public in return for
renewing its license.

     Today I would like to take the FCC's discussion of the
public interest in a new direction: the use of modern
communications to reform and, arguably, to save the campaign
process as our democracy is swept into the information age.

     As everyone acknowledges, broadcasters are granted
commercial use of the public's airwaves as long as they serve
the "public interest."  Since the beginning of modern
broadcasting after World War II, the FCC has regarded that
"public interest" as including the use of TV to develop "an
informed public opinion through the dissemination of news and
ideas concerning the vital public issues of the day." 

     As it has turned out, however, a principal way that
broadcasters help develop "an informed public opinion" about
candidates for political office is by selling them huge amounts
of advertising time. 

     It's fair to ask ourselves whether the current system is
the best way to ensure that the wonderful and ubiquitous medium
of television informs the public about candidates and their
views on the issues.

     The cost of TV time-buys makes fundraising an enormous
entry barrier for candidates for public office, an oppressive
burden for incumbents who seek reelection, a continuous threat
to the integrity of our political institutions, and a principal
cause of the erosion of public respect for public service. 

     According to the Committee for the Study of the American
Electorate, in 1992 the average Senate candidate in a contested
election spent $2.4 million on media expenses.  Like all
averages even this big number conceals the magnitude of the
problem.  Recall the recent California Senate race where two
candidates together spent more than $50 million on electronic
media.

     The average House candidate in a contested election spent
$250,000 on media expenses.  That translates to needing to raise
$2,500 a week every week for the two years between elections. 
The figure for Senators is a whopping $7,500 per week over six
years.  These targets typically must be met with lots of
relatively small contributions obtained in days and nights of
wearisome pleading.  

     In the aggregate, in 1992, candidates spent $300 million on
media advertising.  In 1994, the amount was $355 million.  In
1996, it is expected to top $500 million.

     And there's no end in sight.
     
     Norm Ornstein of the American Enterprise Institute has
studied this issue and concluded that "the largest and fastest
growing expense in House and Senate campaigns is TV
advertising."

     It is impossible to overestimate the harm to the
legislative process caused by the sheer amount of time required
to raise funds for TV time-buys.

     Former Congressman Bob Edgar, a Pennsylvania Democrat,
wrote that during an election year, "Eighty percent of my time,
80 percent of my staff's time, 80 percent of my events and
meetings were fundraisers."  As an aide to a Senator told the
National Journal in 1990, "During hearings of Senate committees,
you can watch Senators go to phone booths in the committee rooms
to dial for dollars."

     This system visits immeasurable frustration on our finest
public servants.  It's no coincidence that as the fundraising
needs soar incumbents in record numbers decline to seek
reelection.

     TV was supposed to revitalize democracy by bringing us all
into the electronic forum for debates and discussion of the
issues by candidates.  Instead numerous commentators have
concluded that TV has enslaved politicians and degraded the
electoral process.

     Broadcasters themselves are interested in reforming the
political process.  In April, Fox Chairman Rupert Murdoch said
the time politicians must spend raising money is a "cancer we
have to face up to."  He added that "we have to look at systems
in other countries where time is given to candidates." 

     Some suggest that caps should be placed on the amount of
money spent on campaigns.  Even if constitutional, such caps are
misguided.  We are all bombarded by a blizzard of media every
day.  Candidates need to compete with sales pitches for soap and
software to get attention.  They need more time to win that
competition for the eyes and ears of voters.  Limiting
candidates' access to the audience will only limit the
information voters get about candidates and issues.

     And we certainly can't ignore the potential of the
electronic media as the source of information about political
issues.  Our country is far too big for candidates to reach most
voters by personal contact.  In any event, 70% of the people get
100% of their news from television. We have to use tv to improve
campaigns, instead of turning away from the defects of today's
process.

     To reform the campaign process, we need to embrace the
communications revolution, not shun it.  We need to find ways to
make it easier for candidates to get their messages across and
to challenge other candidates' messages, as opposed to limiting
their ability to do so.  The heart of a democratic society is an
electorate that is provided with sufficient information to make
informed choices.

     Indeed, enhancing the ability of candidates to communicate
their messages over television and radio is the policy that
underlies the handful of obligations that the Communications Act
of 1934 already places on broadcasters with respect to campaign
advertising.  For example, when a broadcaster sells time to
candidates during specified periods preceding primary and
general elections, the rate must be set at the "lowest unit
charge" of the station for the same class and amount of time for
the same period.

     This rule takes a lot of work to apply and doesn't work
well in practice.

     The problem is that the rules require the candidates, the
station and often the FCC to identify for each of 1,500 TV
stations and 10,000 radio stations the "lowest unit charge." 
Not surprisingly, in each month, in each market, for each
station that charge can be difficult to calculate -- especially
because stations do not typically offer a commercial rate
equivalent to the government-defined "lowest unit charge."  The
result is doubly bad: the FCC has to get intimately involved in
the commercial activities of broadcasters and the legal regime
still makes media access extremely expensive for candidates.  

     Some broadcasters have found the lowest unit charge rule so
difficult a way to meet their public interest obligations that
they have tried to give free time to political candidates.  But
-- believe it or not -- the current system actually discourages
broadcasters from providing candidates with free time.  This
problem lies in federal election laws.

     In 1992, EZ Communications, the owner of 8 radio stations,
offered free and equal time to federal candidates in each state
in which it had stations.  It asked the Federal Election
Commission to approve the offer.  Because of uncertainty in the
law, three years later the FEC has still not issued a ruling. 
     
     So EZ Radio found out it was not at all easy to help
further political debate.

     The same story is being repeated on the Internet. 
CompuServe recently offered free on-line services to candidates
but an FEC spokesperson said the offer could be considered a
prohibited in-kind contribution.

     The FEC may well be right in its reading of the election
law.  But as Dickens wrote in Oliver Twist, there are times when
"the law is an ass and an idiot." 

     Shouldn't Congress consider clarifying current laws to
permit communications companies to give candidates free access
to the public? 

     Whether or not Congress takes this step, campaigns
inevitably will spread to all the lanes of the information
highway: cable, broadcast, telephone, wireless, and satellite. 
Broadcasters, however, will undoubtedly remain the major source
of campaign information for some time.

     In 1968, Senator Al Gore, Sr., stated: "The public owns the
airwaves which we give the television and radio stations
permission to use, and...we could reserve a certain percentage
of time for civic purposes."

     In 1988, his son -- now our Vice President -- introduced a
bill to require broadcasters to provide a total of 6 1/2 hours
of free airtime in the weeks before a presidential election. 
The Center for Responsive Politics, Common Cause, Henry Geller,
Delmer Dunn, John Ellis, Paul Taylor, Newton Minow and others
have all made wise proposals and recommendations to provide free
air time for political campaigns.

     As the communications revolution makes American an
information society, it's high time and the right time to apply
these good old ideas to the new media scene.  The many fine
Americans trying to do the right thing in seeking and holding
public office need to be given a break from the ceaseless round
of fundraisers.  Better use of the airwaves and the other lanes
of the info highway can give them more time to serve the country
instead of feeding the insatiable beast of time-buys.

     At the FCC we have already raised $9 billion in spectrum
auctions.  Wouldn't it be nice if we could recycle even a modest
part of that money, place it in a trust fund, and use the
interest to provide matching funds to candidates?  The annual
interest on $9 billion, if we had put it in a trust fund, would
easily be enough to fund the current rate of federal
congressional media spending.

     It's possible Congress will send all auction revenues to
the Treasury for deficit reduction.  But income tax returns have
a box for contributing matching funds for Presidential races. 
Why then don't we build a trust fund for time buys by checking
off other boxes for taxpayers to contribute to a fund that could
help reform the political process?

     Another technique would be to establish a time bank from
which candidates could draw down during their campaigns.
Broadcasters and all other media providers would make deposits
into the time bank.  Donations of time with a market value of,
say, $500 million a year would greatly lighten the burden on
candidates to raise money.

     I recognize that time certainly is money for broadcasters. 
Congress could also recognize that by giving broadcasters and
other donors tax deductions for their contributions to the
political process.
  
     At the FCC we could consider giving ownership waivers to
stations that donate time to be used by candidates for debates
or other public-issue programming.  Wouldn't that further the
underlying purpose of our ownership rules: to promote the
presentation of diverse programming?  To put it another way,
what could more clearly be in the public interest -- and that is
the fundamental standard for such waivers. 

     Of course, even if access to electronic media were cheaper
and easier, many candidates would still raise money for many
other legitimate campaign purposes.  But if candidates could be
guaranteed access to a reasonable amount of air time, they could
certainly cut back on their fundraising efforts and pick up
extra time for doing the work for which the public hired them. 
I doubt that there's an elected official who wouldn't prefer
that.

     How would we divide the time contributed to a time bank? 
That would be relatively straightforward for Senate races or
other statewide races such as gubernatorial elections. 
Generally, candidates would be entitled to time on stations
licensed to their states.

     House races would be more problematic.  But it would be
possible to require broadcasters to devote some amount of time
to candidates whose districts are substantially in that
broadcast area.

     Whether candidates have access to time or to monies in a
trust fund, it will be necessary to let the candidates use the
time or cash to use whatever means of communication they deem
best.  They should have the freedom to select the means of
access to their voters -- whether it's cable, Internet,
satellite, telephony, radio, or broadcast TV.

     Some think that if a candidate got time from a time bank or
bought it with monies from a public trust, then the candidate
should be restricted in how the time could be used -- such as
requiring that there be no 30-second attack ads.  Candidates,
like it or not, compete for attention against the most creative
people in the world: those who invent broadcast TV shows and
ads.  We have to give candidates and their advisers the room to
use their own ingenuity to attract an audience and to get their
message across. 

     But at a minimum, wouldn't it be a good idea for the FCC to
give candidates a clear right to buy time in longer blocks than
the much maligned 30-second ads.  Shouldn't we write rules that
give broadcasters a real incentive to grant candidates requests
to buy, say, 5-minute blocks?

     Some claim that such proposals as time banks and trust
funds infringe on free speech. 

     In my view, time banks and trust funds are clearly
constitutional.  There would be no viewpoint discrimination and
no attempt to suppress speech on any particular topic.  To the
contrary, the goal -- reforming our political system to better
inform and motivate the electorate to participate in our
democratic system, and to reduce the pressure on candidates to
spend the majority of their time raising money -- is of the
highest order and requires Constitutional support, not
rejection.

     As Professor Cass Sunstein of the University of Chicago Law
School has shown, the original and enduring purpose of the First
Amendment is to ensure an educated citizenry able to participate
in our great continuing experiment of democratic self-
governance.

     In the 1981 CBS decision the Supreme Court upheld the
Commission's authority to revoke the license of any broadcast
station "for...failure to allow...access to...time" by a federal
candidate.

     The Court held that "'[t]here is nothing in the First
Amendment which prevents the Government from requiring a
licensee to share his frequency with others'" because -- and the
Court emphasized this portion of its decision -- "'[i]t is the
right of the viewers and listeners, not the right of the
broadcasters, which is paramount.'" 

     For that reason, the Court explained, the free speech
interests at issue in that case were on the government's side,
not on the broadcasters' side.  The Court's decision was
squarely in line with the views of James Madison, who drafted
the First Amendment.  He said that "The right of electing the
members of the government constitutes...the essence of a free
and responsible government," and "[t]he value and efficacy of
this right depends on the knowledge of the comparative merits
and demerits of the candidates for the public trust."

     A time bank would differ from the proposal at issue in CBS
in that some broadcasters would provide a substantial portion of
time to candidates for free.  But if broadcasters were not paid
that would not implicate the takings clause of the Fifth
Amendment.  Under the Communications Act of 1934, broadcast
licensees have no property claim to the airwaves or to a
particular frequency.  

     There are, of course, questions of equity implicated by the
idea that time would be taken away from the one channel a
broadcast licensee operates in a given town.  But relying on
incentives for broadcasters to contribute that time would
certainly address any equitable claims. 

     And again technology gives us new solutions.  Digital
broadcast has just been invented.  Within one or two years,
digitally broadcast programs will be offered on currently unused
spectrum.  Digital broadcasters will have thousands of hours of
capacity to fill with entertainment, news, educational TV and --
if we take the right steps -- enhanced access to candidates,
issues, and public debate.

     Suppose the assignees of the new spectrum used for digital
broadcast were asked to deposit time into a time bank for
campaign advertising?  The service is new.  No patterns or
practices are set.  This is the right time and digital broadcast
could be the right place to stake out a claim for free and fair
political debate.

      Whatever obligations Congress or the FCC imposes on analog
or digital broadcasters regarding free time for political
candidates, these duties should be clear, specific, and
concrete.  In addition, Congress should find ways to lift
restrictions in existing law that prevent communications media
from voluntarily contributing their time to candidates and that
constrain the length of campaign ads.  

     The arrival of digital broadcast television and a host of
other new communications technologies gives us all a chance to
redefine the problem of how candidates reach audiences in the
information age.  The new communications technologies give us a
chance to put right a system that all agree desperately needs
fixing. 

     Too much is at stake for us to give up on finding
solutions.  I believe the communications media -- and in
particular broadcasting -- can lead the way to a better system
for citizens and public servants to reshape and revitalize
democracy in the information age.

                                   -FCC-