NEWS                                              April 16, 1996

HUNDT SPEECH TO NATIONAL ASSOCIATION OF BROAD CASTERS
"AMERICA NEEDS QUALITY FREE TV"

     Addressing the National Association of Broadcasters annual convention in Las Vegas
today, FCC Chairman Reed Hundt expressed concern at recent reports regarding the
accuracy of information provided by the Nielsen media research company and also expressed
his support for a bipartisan proposal for an FCC hearing on the subject of free air-time for
Presidential candidates.

     In remarks prepared for delivery, Hundt stated, "We ought to make sure that
broadcasters can compete fairly.  I am aware that many broadcasters believe that Nielsen
media research, the only company of its kind, undercounts younger viewers and is otherwise,
in the word of NBC's chief audience researcher, "measurably deficient in reliability,
accuracy and utility." I don't know if the charges are true, but the FCC shouldn't be
indifferent to the possibility that they are.  Miscounting audiences distorts what appears and
doesn't appear on free TV and we should all be concerned about that.  For its own good and
for the good of its viewers, free TV has a right to know who is watching.  I think this is
something the FCC should look into."

     Hundt also said he favors the idea of an FCC hearing on the subject of television
networks providing free air-time to the major Presidential candidates.  Hundt's remarks
followed the receipt at the FCC today of a letter from the "Free TV for Straight Talk
Coalition" urging the FCC to hold an en banc hearing as a "timely and appropriate forum to
explore the range of free television time proposals being considered."

     In remarks prepared for delivery this afternoon, Hundt said, "I'm delighted that the
members of this bipartisan coalition are asking for public discussion of ideas to better use the
broadcast media to improve our country's Presidential election dialogue.  I believe the FCC
can provide a public service by holding the informational hearing suggested, and I hope we
convene it at an early date."

  -FCC-

                           SPEECH BY REED HUNDT             
                                 CHAIRMAN
                     FEDERAL COMMUNICATIONS COMMISSION

                   NATIONAL ASSOCIATION OF BROADCASTERS
                             ANNUAL CONVENTION
                             LAS VEGAS, NEVADA

                        (AS PREPARED FOR DELIVERY)

                              APRIL 16, 1996

                       AMERICA NEEDS QUALITY FREE TV

      Thanks, Phil, for your kind introduction.

      I'm here straight from the entertainment capital of the world: 
Washington, D.C.

      I'm so relieved to be in Vegas.  It's much safer than Washington.

      In Washington, I, as Chairman of the FCC, nearly ignited a scandal when
I walked out on the now-notorious Don Imus speech at the TV and Radio
Correspondents' Dinner.

      The real reason I left was not to protest his remarks.  It was because I
didn't want to miss E.R.

      As long as I'm on this subject:  the main weekday reasons my wife and I
try to stay up later than the kids are Chicago Hope on Monday, NYPD Blue on
Tuesday, E.R. on Thursday, and Homicide on Friday. 

      My oldest son and I are crazy about the X Files, not that I understand the
show.  What does the X stand for?  Why are Mulder and Scully wearing coats
when they investigate things in San Diego? 

       My middle son likes NBA Inside Stuff.  (Incidentally, if any of you think
I'm overdoing the compliments, this is a twofer because Bob Iger's wife helps
produce the show).  And my daughter Sara is eagerly awaiting the souped-up
educational shows on Animaniacs.

      And, of course, all five of us in the Hundt family like the Star Trek
clones.

      That covers all the networks, doesn't it?

       Don't these plugs make up for insisting on quantitative public interest
requirements?

      But it's the truth that prime time shows today are the video versions of
the classic 20th century short stories of Hemingway, Hammett, Pritchett, Carver,
and Ford.  And they aren't read by thousands; they're watched by millions.

      No artists have ever reached so many people so often as the artists of
prime time TV do every night.

      And these shows have punch.

      Did any of you see the NYPD Blue episodes about racism or date rape? 
Smits, Franz, and Lawrence were scary swift in their characterizations.  The
writing was lyric, edgy, sharp.  And the topics were controversial.

      I'm not exaggerating when I say the whole country is bettered by TV art
that exposes millions to the implicit vestiges of racism hidden in habit and slang
or to the different attitudes of men and women over the nature of sexual
consent.

      When I got my job two and a half years ago there was a controversy
about whether NYPD Blue was appropriate for TV.  The late hour and the
parental advisories settled this issue -- as I hope the industry's ratings system
will do for all TV.  And now, without the risk of censorship, Steve Bochco and
his cohorts can turn out one great adult show after the other.
      
      The terrific content of such broadcast programming builds communities of
interest among Americans.  It is at the core of why we value free TV. 

      Obviously if TV weren't attracting big crowds, we wouldn't care whether
it was free or not.   As Rupert Murdoch said in a great speech here yesterday,
we need the free television networks to "remain the great engine of original
programming and events."        
 
      Free TV has these characteristics:  it is popular, it is universal, it informs,
and it influences our society.  Everybody wants to be on it.  And everybody
loves to talk about it.

      Free TV is a wildly successful information-age version of the old town
square. 

      A town square is a place where everyone can come and go freely.  It has
entertainment and sports.  The library and the proverbial soap box are there. 
Ads, flea markets, concession stands are permitted.

      But if the town square is fenced off and you have to buy a ticket to get
in, then it's an amusement park.

      That's the traditional differerence between free TV and cable:  the town
square vs. the amusement park.

      Now of course your cable competitors also have news and educational
shows.  They give free time to political candidates and offer first-rate children's
programming, and I applaud them for it.  But they are not substitutes for free
and universal TV.

      Preserving the TV town square is crucial to the success of our continuing
experiment in democracy.

       Universal, free, and popular broadcasting sends through the air a
continuous message that we're all in this experiment together.  It is crucially
important that we don't have to buy a cable subscription to watch the Super
Bowl or Sesame Street, the Clinton-Dole debates or the Olympics. 

      If each of us had to subscribe to participate in these events, they'd no
longer be public goods.  They would be just more rides in the electronic
amusement park. America's already shaky sense of shared community would
suffer another serious blow.  And of course broadcasters would lose their
singular distinction of being the media's fiduciaries to the American people.

      Some people say that a free society deserves free TV.  I say that in the
information age a free society needs free TV, and that free TV needs both to
entertain and to edify.

      After all, the town square of free TV would not be complete without a
soapbox and a newsstand and an ethic of free, open, diverse discussion and
debate.

      In my view, the most fundamentally anti-broadcast era in the history of
the FCC was the period from 1981 to 1993.  That's when the Commission said
that broadcasters served the public interest simply by delivering whatever the
market decided the public was interested in.  In other words, broadcasting was
just another commercial video business, no different from movies or Blockbuster
Video or cable or satellite channels.  If you believe that, then you believe
broadcasters should pay to use the airwaves, the way MCI and Fox had to win
an auction to get a satellite slot a few months ago. 

      You have to compete against cable and others for audience.  And we need
you  both to succeed commercially and to give us the  public interest
programming that is not necessarily the first choice of advertisers and is not
always commercially rewarding.  It's not easy for you to deliver this product in
a commercial market, but you can do it.  And delivering specific amounts of
real public interest programming gives you a special claim on our national
loyalty, the people's trust, and favorable treatment in the law, from free
spectrum to must-carry.  

      Yesterday Bob Wright acknowledged that digital technology provides an
"opportunity to expand broadcasters' public interest service."   But he
complained that it is difficult for broadcasters to agree to do that in the absence
of a "comprehensive regulatory framework for the future of broadcasting."

      Bob Wright is correct.  I urge broadcasters to lay out a comprehensive
framework for digital and analog TV that would further the goals we all share: 
competition and the public interest.  But isn't the FCC making this harder for
you?  Isn't  the FCC's traditional practice of defining the public interest in
vague, ambiguous and infinitely flexible terms an obstacle to any
comprehensive, clear and reliable description of the combination of commercial
success and public interest that makes broadcasting especially valuable to a free
society? And isn't it simply a logical necessity to talk about quantified public
interest obligations as broadcasters begin to operate in a digital, multichannel
world of dynamic bandwidth and admixtures of voice, video and data?

      Only clear, specific and quantifiable duties can end the debate over
whether broadcasters are serving the public interest; can allow you to take the
credit you deserve for what you do; and can help you guard against the
industry's outliers, the bad apples that spoil the bunch.

      As Bob Wright implied, the time to clarify our social compact is now, on
the eve of broadcasters' conversion to digital.  Now is the time for broadcasters
to work with the Commission to write clear, specific, simple, and tradeable
public interest duties that run with digital licenses.

      But quite apart from the Commission's rules, the 21st century social
compact between broadcasters and the American people will succeed if and only
if broadcasters develop a tough and meaningful code of voluntary ethical
behavior.

      As Jim Quello and  Howard Stringer have said, broadcasters need to
redefine and recommit to ethical standards so as to serve the public interest.  As
Rich Frank and Barry Diller have said, those standards ought to be measurable
and real.  And as Rupert Murdoch said just yesterday, "[i]n news, education and
politics, as well as every other aspect of public service, we must continue, and
even strengthen, our commitment and thereby solidify our very special place in
American culture." 

      These new ethical standards should not revive the out-of-date NAB Code
discarded in the 70s.  Our country is different; our problems are different; the
public interest conduct that we need is different.

      But it can still be clearly stated. 

      It starts with focusing on the needs of kids.

      Broadcasters took a big step in the right direction by agreeing to rate their
shows.

      As Vice President Gore said in his terrific speech this morning, the V-chip
is pro-child, pro-parent, pro-information, and pro-First Amendment.  It is
fundamentally pro-public interest and pro-broadcaster.

      The V-chip is about giving parents the power to choose.  But we also
need to give them something to choose.  And that brings us to educational
children's television. 

      Why can't we find a way to guarantee a minimum amount of free
educational TV for kids?  

      Most of you do three hours -- and wouldn't want to short-change your
communities by doing less.  Three hours a week is truly a modest amount, as
over 100 Members of Congress observed in a letter endorsing that minimum. 
So wouldn't it be good ethics and good business for broadcasters to ask for -- or
at least accept -- a floor of three hours of truly educational TV?  

      On that floor you could stand in front of America and brag with justice
about what you're doing to teach our children.

      And I'd be there holding up the applause sign. 

      I'm encouraged by the vision, creativity, and courage on this issue
displayed by Ralph Gabbard, whom I know you respect as much as I do; and by
the editorial pages of Broadcasting and Cable and Electronic Media.  And I'm
happy to report that I've had a constructive conversation with Eddie Fritts.

      I also take heart from broadcaster initiatives outside the beltway.  I
recently got a letter I from Steve Sandlove, general manager of KSAS in
Wichita, Kansas.  He said he would try to convince broadcasters voluntarily to
"road block" an hour of educational programming every Saturday morning so
that strictly entertainment shows wouldn't peel children away from educational
shows.  What a terrific  idea.

      Another impressive initiative for the public interest is Fox's proposal to
give free time to the presidential candidates this fall.   The need for candidates
to raise millions to sell themselves over the air like soap or software is
threatening the viability of American democracy in the information age.  
      
      Earlier today, I received a letter from a distinguished bipartisan coalition,
led by (among others) Senators McCain and Bradley, and the former heads of
the Republican and Democratic Parties.  They urge the Commission to hold a
hearing on the need for broadcasters to donate free airtime to political
candidates, and on the legal issues arising from such voluntary donations.

      I think the Commission should hold this hearing as quickly as possible. 
This initiative presents an unparalleled opportunity for broadcasters to justify the
special place of free TV in our hearts and laws.

      But to serve the public interest, your programming also needs to follow an
ethic of honesty and evenhandedness.  Inconsistent with this ethic were the
NAB-funded ads broadcast over the public's airwaves that argued against digital
auction legislation..

      There is a line here.  It can't be written down and shouldn't be in a rule. 
As Republicans and Democrats have both said, the NAB ads crossed that line,
both because they were inaccurate and because they shouldn't have been run
even if they were accurate, unless and until the opposing point of view was
represented.

      For broadcasters to serve the public interest, we need to make sure our
rules and our deregulation improves the industry's competitiveness.  To this end,
we will work closely with the Justice Department to preserve the must-carry
rules against legal challenge in the Supreme Court.

      We should give the green light to broadcasters who want to transmit
digital data on their analog channels.

      And we should do what we can to help broadcasters show advertisers how
many people they really serve.  In this connection, I'm aware that many
broadcasters believe that Nielsen Media Research, the only company of its kind,
undercounts younger viewers and is otherwise, in the words of NBC's chief
audience researcher, "measurably deficient in reliability, accuracy and utility."  If
this is true, it harms free TV, harms competition, and harms the public interest. 
I think the FCC should look into it.

      And most important for broadcasters' competitive success, at the FCC we
should move forward on digital television so that if Congress agrees with the
Clinton administration that broadcasters should be given the digital spectrum, the
FCC can distribute the licenses quickly.

      We're going to get out notices on the digital television standard in May
and on allocating digital licenses in June or July.

      As a lawyer I rely, like Blanche Dubois, on the charity of others when it
comes to the details of the digital standard.   But from what I'm told, the
Advisory Committee standard is a remarkable achievement.  It has both
headroom for evolution and flexibility for innovation.  I can't imagine any
reason why broadcasters shouldn't be authorized to use this standard.
 
      In the notice we ought to ask for your input on at least two important
questions.  First, how can we avoid writing more than 200 pages of technical
details into the Code of Federal Regulations?  Second,  how can we balance the
need for certainty about the standard with the goal of encouraging further
advances in such areas as compression technology?  The relevant industries will,
I hope, give us a consensus solution in the comment period.  Then we will make
a prompt decision this year.

      Ultimately, however, the success of digital television -- and your future as
an industry -- hinges not on what the government does, but on what you do, and
the degree to which you craft your own principles of professional ethics.  Only
you can keep your programming distinctive and popular enough to persuade the
nation that it should continue to protect and watch you.  

      Only you can persuade the public that you are truly serving the public
interest.  Only by providing universal, free, popular, and civic-spirited
programming can you continue to hold the trust and loyalty of the country.

      I'm cheering you on.  And I believe in your success.  Even as competition
intensifies from the amusement park down the information  highway, I think the
town square of broadcasting will remain forever the biggest draw in town.
      
      Thank you.