The area that most needs revision in the near term is broadcasting policy. The public trustee policy has become an increasing oddity in view of multichannel trends and, more important, has failed to accomplish its goal of public service. The time has come to consider an obvious solution that effectively achieves the public service goal and simultaneously advances other sound policies before this option is lost to us.
The Public Trustee Model
The Communications Act of 1934, like its predecessor, the Radio Act of 1927, is based on the public trustee concept. Radio is inherently not open to all. Congress decided that the government should allocate the radio spectrum for specific uses and award permits to prevent engineering chaos because the number of people who want to use the spectrum, and in particular to broadcast, exceeds the number of available frequencies or channels. Congress decreed a system of short-term broadcast licenses to be awarded to private entities who volunteer to serve the public interest-to be a fiduciary for all those who were kept off the air by the government. These licensees must later demonstrate to the FCC that they have met the public-interest standard, thus warranting renewal for another term. At the time of renewal, the public has the right to participate by filing informal complaints or formal petitions to deny renewal, and new parties can seek to displace incumbent licensees on the grounds that they will do a better job of serving the public interest. This latter process is termed comparative renewal.11 The FCC was given broad rulemaking powers to deal with this dynamic industry.
The Communications Act itself imposes minimal public service requirements. First, the allocation scheme calls for a system of local outlets (section 307(b)), and the broadcaster, therefore, must be attuned to local needs and interests. Second, the licensee must devote a reasonable amount of time to informational programming because broadcasting can contribute to an informed electorate (section 315(a); 312(a)(7)). The FCC's allocation scheme includes a generous allotment to broadcasting, compared to other uses, specifically for this purpose. Third, because children are so important to the nation and watch so much television, television broadcasters are required to serve the educational and informational needs of this audience with programming specifically designed for that purpose (see section 303b(a); 104 Stat. 997 (1990)).12
Constitutionality of the Public Trustee Model
Some have questioned the constitutionality of the public trustee model. Because television service, over the air and by cable, has expanded, some claim that scarcity, the basis of the scheme, no longer exists. This altered state of affairs is very relevant to the debate about the best policy, but it does not render unconstitutional the present scheme, which is based on allocational scarcity. As the Court stated in 1969 in Red Lion Broadcasting Co. v FCC,13 the government could have required each frequency to be shared on a daily, weekly, or other basis. Instead, it bestows the short-term use of the frequency on a single entity that must then act as a fiduciary for those whom the government has denied the right to use the scarce resource.
This scarcity--defined not by the number of outlets or comparisons with other media,14 but by comparing the number of requests for broadcast frequencies with the number of frequencies available--is the unique characteristic of radio that justifies its regulatory scheme.15 Indisputably, this same scarcity exists today.16
Supreme Court cases affirming the constitutionality of the public trustee scheme have continued into this decade.17 The Court has consistently acknowledged that this scheme necessarily entails First Amendment strains--that the role of the government as "guardian of the public interest" and the role of the licensee as a "journalistic 'free agent' call for a delicate balancing of competing interests. . . . The maintenance of this balance for more than 40 years has called on both the regulators and the licensees to walk a 'tightrope' to preserve the First Amendment values written into the . . . Communications Act."18
This balancing act is most delicate and difficult at renewal. As the court stated in the Greater Boston case, administrative discretion to deny renewal must be "reasonably confined by ground rules and standards." 19 The ground rules may define by excluding consideration of quality or entertainment formats,20 but they must also delineate programming categories that involve required public service. Whatever programming categories are used, for example, "local," "informational," "non-entertainment," "community issue-oriented," "controversial issues of public importance," or "specifically designed to [educate or inform children]," definitional problems arise, particularly at the margins.21 Programming categories must be reasonably related to the public interest standard and reasonably implemented, taking into account the broad programming discretion afforded the licensee.22
Soundness of the Public Trustee Model from a Policy Standpoint
Although allocational scarcity still controls the constitutional issue, the explosion of broadcast service impinges on the policy question of whether the public trustee scheme should be retained. In broadcast radio, for example, does continuing the public interest scheme, with its renewals, comparative hearings, or comparative renewals for 11,647 stations, make sense? The number of television stations has increased to 1,519, and a large number of cable channels are now available to 62 percent of TV households. Is it not anomalous to continue regulating television broadcasting pursuant to the public trustee scheme, in the face of the trend toward a multichannel television universe? Should the regulatory scheme not encompass greater parity, so that all video media, regardless of the means of distribution, receive similar treatment?
On the other hand, television broadcasting will be an important segment of the video industry for the rest of the decade and the early part of the next century. At this point, it is the video medium for almost 40 percent of TV households. Therefore, one could argue that policymakers should simply await further development of the multichannel television universe before taking action.
If this were the end of the policy analysis, a moderately compelling case might be made for immediate action to replace the public trustee model. But it is not the end. On the contrary, drastic reform is required now because the public trustee model has been and is a failure. It does little or nothing to ensure public service, and it has become a mere charade.23
As noted, public service, without further definition, is an extremely nebulous concept. With the exception of the noncommercial (public) broadcasting sector, broadcasting is a private commercial enterprise, a business of fierce and ever-increasing competition. Under these circumstances, it is perfectly understandable that the commercial broadcaster generally focuses on the bottom lineľon maximizing profit. The situation is similar to the issue of pollution: some businesses will always be good citizens and not pollute the surrounding water, land, or air, but many others, driven by fierce competition, will take the profit maximizing route. To prevent a Gresham's Law pattern from taking over the situation, the government adopts specific regulations applicable to an entire industry. It does not say to the industry, do right and avoid undue pollution. However, despite the FCC's insistence that licensees must render public service in areas of local and informational programming, including programming for children, it has never adopted effective, objective standards, that is, quantitative standards, for these categories during prescribed times (six a.m. to midnight and during prime time).24
Instead, the FCC has gone from its 1946 Blue Book, which set forth its reliance on a random composite week of station operation, to its 1960 Programming Statement, which listed 14 general areas of interest, and then to renewal form and ascertainment prescriptions that require licensees to make local contacts and surveys of area problems, needs, and interests.25 Inevitably, these vague approaches were poorly implemented. In 1973, FCC Chairman Dean Burch told a broadcast industry group:
If I were to pose the question, what are the FCC's renewal policies, and what are the controlling guidelines, everyone in the room would be on equal footing. You couldn't tell me. I couldn't tell you--and no one else at the Commission could do any better (least of all the long-suffering renewal staff).26
This statement holds true for every year since the adoption of the Communications Act.
If the FCC were proceeding vigorously on an ad hoc basis, its failure to adopt more effective standards would not be so serious. After all, an action taken against one station can serve as an example to the entire industry, with an effect comparable to that of a general regulation. The FCC, however, has shirked this responsibility, even when confronted with the most serious violations.27
When the FCC adopted deregulatory policies for radio in 1981 and for television in 1984 and 1986, it eliminated the ascertainment requirements and examination of programming categories (for example, local news, public affairs, and other nonentertainment) to focus exclusively on community issue-oriented programming, broadly defined.28 Moreover, in its evaluation of community-responsive programming, the FCC intended to emphasize "the quality of a broadcaster's efforts, not the quantity of its non-entertainment programming."29 Thus, in its Radio and Television Deregulation reports, the FCC stated:
A station with good programs addressing public issues and aired during high listenership times but amounting to only 3 percent of its weekly programming may be doing a superior job to a station airing 6 percent nonentertainment programming little of which deals in a meaningful fashion with public issues. The focus of our inquiry in the petition to deny context can be expected to be whether the challenged licensee acted reasonably in choosing the issues it addressed in its programming. Assessing the reasonableness of a licensee's decision will necessitate an ad hoc review to examine the circumstances in which the programming decision was made.30
Nothing is more chilling or inappropriate than the FCC casting itself as the national watchdog for broadcasters' decisions on issues, examining programming quality to determine whether a given program is good or bad because it fails to address issues in a meaningful way. This amounts to little more than a smoke screen for inaction. Implementing such a regime would be impossible, and any effort to do so would flagrantly violate both the First Amendment and section 326 of the Communications Act, which prohibits censorship.
The FCC has never implemented this bizarre scenario. On the contrary, it has effectively deregulated broadcasting. With one statutory exception, the 1990 Children's Television Act (CTA) discussed below, the FCC itself receives no programming information from which it might assess the public service efforts of its licensees nor does it monitor the industry generally or through specific random inspections that evaluate public service operations. Although the FCC requires broadcasters to maintain files indicating significant treatment of community issues, along with illustrative programs, broadcasters do not have to submit this material to the FCC. Instead, they send the FCC postcards stating that the relevant material may be found in the public file at the station. As a result, the FCC must rely solely upon the public to bring to its attention stations that are not fulfilling their public service obligation. This reliance is wholly misplaced, as the 10-year experience with postcard renewal demonstrates: even though people may send letters complaining about the disappearance of a favorite show or some content feature (all disposed of by the FCC with a form letter), they can hardly be expected to go to a station, examine its files, analyze the data, and then file a petition to deny. Postcard renewal simply permits the FCC to avoid consideration of public service issues. Most surprising, Congress has never held a hearing on postcard renewal.
In 1960, James Landis, Dean of Harvard Law School, reviewed the FCC's performance and severely criticized the agency for drifting "without effective plans for implementing its broadcast responsibilities."31 In 1976, Commissioner Glen Robinson, echoing Ronald Coase, a University of Chicago economist and earlier critic of the FCC, described FCC regulation of broadcasting as a charade--a wrestling match full of fake grunts and groans but signifying nothing.32 Today, with postcard renewal, the charade continues.
This is not to say that commercial broadcasters render no public service, especially in view of the commendable efforts of broadcasters like Post-Newsweek, the Westinghouse stations, and WCVB-TV (Boston Broadcasters). Rather, the point is that the FCC public trustee regulatory regime for renewal is, and has long been, a failure.
Other indications of this failure are evident. In 1982 the FCC ended its anti-trafficking rule (which requires that a station be held by its owners for at least three years), ostensibly because permitting transfer of the station to the "higher valued use" automatically served the public interest.33 By definition, traffickers seek to increase the financial value of a station in order to sell it at a higher price.34 Traffickers present mere entertainment cartoons, not public service children's programming. They may slash the news staff to create a profit and facilitate quick resale of the station.35 Asserting that trafficking serves the public interest for nonentertainment public service programming is absurd. As a result of the agency's decision, public trusts have been sold like "hog bellies."36
The FCC's comparative hearing process, which ostensibly enables the agency to choose the applicant that will best serve the public interest in the case of conflicting claims to the same frequency or channel, has been harshly criticized by scholars.37 Recently, it has even been halted by the court's decision in Bechtel v FCC,38 which invalidated the FCC's reliance on integration of ownership and management in the absence of any demonstrable nexus to the public interest. The court also found comparative criteria meaningless, because the winning applicant can always sell the license to the highest bidder after just a year.
The comparative renewal process itself is a sham.39 Newcomers may seek the frequency or channel of incumbent licensees at renewal, but incumbents have legitimate renewal expectancies if they have rendered substantial or meritorious service.40 The outcome of the comparative renewal process should therefore be based on incumbents' records. The FCC, however, rejecting quantitative standards, has never developed explicit standards in this area, and its handling of this important process has garnered severe judicial criticism.41 In practice, incumbents always win, regardless of their record, and the purpose of the Communications Act, to promote meritorious performance, is thus thwarted.
The FCC has also abandoned the fairness doctrine, which required broadcasters to devote a reasonable amount of time to discussion of controversial issues of public importance and to do so fairly by affording the opportunity for contrasting viewpoints on such issues.42 Whether this doctrine hindered or promoted controversy is irrelevant in this context, but its abandonment was another clear indication that the public trustee scheme has failed. The FCC's present position is that the broadcaster's principal public service obligation is to present issue-oriented programming, and in presenting such programming it can behave as if it were a wholly private entity instead of a public fiduciary. However, nothing remains of the public trustee scheme if broadcasters can present only those views with which they agree or that they are paid to express. In the seminal case, Lamar Life Broadcasting Company, the Jackson, Mississippi, broadcaster presented only segregationist views even though integration was a raging issue there at the time. Because of court rulings that fairness was the sine qua non for license renewal, the broadcaster lost its license (see footnote 27). Today the broadcaster would obtain renewal as a public trustee even though it clearly had not acted as a fiduciary of its community, 45 percent of which is black.
Perhaps many of the deficiencies listed above could be remedied by congressional action to restore and strengthen the public trustee concept, for example, by eliminating postcard renewal; adopting quantitative guidelines in the local and informational (including children's) categories and enforcing them through the use of a random composite week; and restoring both the anti-trafficking rule, expanded to five years, and the fairness doctrine, with action taken at renewal only if an egregious pattern of violation is shown.43 However, Congress is unlikely to undertake such action. All these propositions have been put forth for years--some, indeed, for decades--yet have never been implemented, and as we move toward greater abundance in video, with new services fractionating the television audience, it is most doubtful whether closer government scrutiny of the public trustee concept can be effected.
However, in the unlikely event that the reforms outlined above were undertaken (and they should be if the public trustee scheme is retained), the result would still be poor policy.44 Although the heart of public service is high quality programming in the noted categories, quality is an aspect of programming that the government cannot review under the First Amendment. The government should adopt a regulatory structure consistent with the First Amendment that achieves public service goals, including the crucial element of high-quality programming. Achieving that structure is feasible, as outlined below. The experience with the CTA proves that trying to enforce the public trustee concept with behavioral regulation is futile.