Endnotes
1. "Hundt's New Deal," Broadcasting & Cable Magazine, August 1, 1994, 6. The editorial in the same issue (page 66) agreed with Chairman Hundt that "this is the right time to have the debate," but urged that for First Amendment reasons, the social compact should be ended, even with a spectrum fee in its place.
2. Communications Daily, October 20, 1994, 9.
3. John Markham, "I Wonder What's on the PC Tonight," The New York Times, May 8, 1994, 1.
4. Robert Pepper, "Broadcasting Policies in a Multichannel Marketplace," in Television for the 21st Century: The Next Wave, ed. Charles M. Firestone (Washington, D.C.: The Aspen Institute Communications and Society Program, 1993) 120.
5. Pepper, "Broadcasting Policies in a Multichannel Marketplace," 3. See also W. Russell Neuman, The Technological Convergence: Television Networks and Telephone Networks.
6. For a description of the "futuristic," switched, interactive television network, see Ken Auletta, "The Magic Box," The New Yorker, April 11, 1994, 40.
7. See Metro Broadcasting, Inc. v FCC, 497 U.S. 547, 566-67 (1990), quoting Associated Press v U.S., 326 U.S. 1, 20 (1945) ("widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public"). See also FCC v National Citizens Committee for Broadcasting, 436 U.S. 775, 795 (1978).
8. DBS and wireless cable have, of course, posed regulatory problems, some of which were dealt with in the 1992 Cable Act. Questions of regulatory parity may arise if these new video delivery systems expand beyond niche service. This article does not cover these issues.
9. The present uncertainties lead to strategic alliances, joint ventures, or mergers involving multimedia companies chiefly to share financial risk, gain implementing know-how or technology, or enhance opportunities for faster and more assured entry to new markets. See "Legal Issues Raised by Strategic Alliances Involving Multimedia," Corporate Lawyer, (November 1993).
10. See Administration White Paper on Communications Act Reforms (1994) 9.
11. See 47 U.S.C. 301, 303, 307-309.
12. In the interview referred to in footnote one, Hundt indicated that the public trustee obligations "include a commitment to women and minorities, to children, to localism, and to a diversity of programs."
13. 395 U.S. 367, 390-391 (1969).
14. There were roughly 7,000 radio stations in 1969 when Red Lion, a radio broadcast case, was issued; today there are more than 11,000. One cannot seriously argue that the public trustee scheme is constitutional at 7,000 but not at 11,000.
15. NBC v FCC, 319 U.S. 190, 226 (1943).
16. In the large markets where most people live, no frequencies are open. An open frequency in such a market would attract a multitude of applicants. U.S. Senate, 100th Cong., 1st sess., 1987, S. Rept. 100-34 on S.742, 21-23; U.S. House, 100th Cong., 1st sess., 1987, H. Rept. 100-108, 13-19.
17. In addition to Red Lion and NBC, see, for example, FCC v League of Women Voters, 468 U.S. 364, 377, 381 (1984): CBS, Inc. v FCC, 453 U.S. 367, 395, 397 (1981); FCC v NCCB, 436 U.S. 775, 779 (1978); CBS v DNC, 412 U.S. 94, 111 (1973). See also Metro Broadcasting, Inc. v FCC, 497 U.S. 547, 566-67 (1990); Turner Broadcasting System, Inc. v FCC, 114 S.Ct. 2445, 2457 (1994), where the Court noted that "courts and commentators have criticized the scarcity rationale since its inception . . . (but) we have declined to question its continuing validity as support for our broadcast jurisprudence. . . ." If the court were to apply strict scrutiny to this content-regulated area and overrule Red Lion, it would spur the policy review here sought. The point of the above discussion is that such a step cannot be counted upon as a means of obtaining sound policy in this area. The Court is more likely to await congressional action brought on by sweeping change.
18. CBS v DNC, 117. See also 117-18:
A broadcaster has a large measure of journalistic freedom but not as large as that exercised by a newspaper. A licensee must balance what it might prefer to do as a private entrepreneur with what it is required to do as a "public trustee." To perform its statutory duties, the Commission must oversee without censoring. This suggests something of the difficulty and delicacy of administering the Communications Act.
19. Greater Boston Television Corp. v FCC, 444 F.2d 841, 854 (D.C. Cir. 1970), cert. denied, 402 U.S. 1007 (1970).
20. See FCC v WNCN Listeners Guild, 450 U.S. 582 (1981).
21. See UCC v FCC, 707 F.2d 1413, 1426-32 (D.C. Cir. 1983); NAITPD v FCC, 516 F.2d 526, 537, 539-41 (2d Cir. 1975).
22. See CBS v DNC, 110 ("Congress intended to permit private broadcasting to develop with the widest journalistic freedom consistent with its public obligations").
23. For a full discussion of this proposition, see H. Geller, "Broadcasting," in New Directions in Telecommunications Policy, ed. P. Newberg (Duke University Press, 1989) 125-54.
24. See National Black Media Coalition v FCC, 589 F.2d 578 (D.C. Cir. 1978). From 1973 to the early 1980s, the FCC had processing guidelines governing nonentertainment programming and local programming for television for its renewal staff, so that the staff could grant renewal under delegated authority. See UCC v FCC, 707 F.2d, 1420-21.
25. Public Service Responsibility of Broadcast Licensees (1946); En Banc Programming Inquiry, 44 FCC 2303 (1960); Ascertainment of Community Problems by Broadcast Applicants, 57 FCC 2d 418 (1976); Revision of FCC Form 303, 54 FCC 2d 750 (1976).
26. Dean Burch, address to the International Radio and Television Society, (September 14, 1973) (FCC Memo 06608, 3).
27. See, e.g., Lamar Life Broadcasting Co., 38 FCC 1143 (1965), reversed; UCC v FCC, 359 F.2d 994 (D.C. Cir. 1965); 425 F.2d 543 (D.C. Cir. 1969); KORD, Inc., 31 FCC 85 (1961); Moline Television Corp., 31 FCC 2d 263 (1971); Herman Hall, 11 FCC 2d 344 (1968).
28. 84 FCC 2d 969 (1981); 87 FCC 2d 797 (1981); 96 FCC 2d 1076 (1984); 104 FCC 2d 358 (1986).
29. UCC v FCC, 779 F.2d 702, 710 (D.C. Cir. 1985).
30. 84 FCC 2d at 991; 98 FCC 2d at 1095, par.39
31. James M. Landis, Report on Regulatory Agencies to the President-Elect, (Washington, D.C.: Government Printing Office, 1960) 53.
32. Cowles Florida Broadcasting, Inc., 60 FCC2d 371, 439 (1976).
33. Report and Order, 52 R.R. 2d (P&F) 1081, 1087 (1982).
34. Crowder v FCC, 399 F.2d 569, 571-72 (D.C. Cir. 1968), cert. denied, 393 U.S. 962 (1968).
35. See "Station Flipping: Looking for a Smoking Gun," Broadcasting Magazine, June 30, 1986, 27-30.
36. U.S. House, 99th Cong., 2nd sess., Representative Al Swift, Congressional Record (June 19, 1986) E2190.
37. See, e.g., Landis, Report on Regulatory Agencies, "Alice in Wonderland Procedures," 53-54; Henry Friendly, The Federal Administrative Agencies (Cambridge, Massachusetts: Harvard University Press, 1962) 53-73; H. Geller, A Modest Proposal to Reform the FCC (Washington, D.C.: Rand Corporation, P-5209, 1974) 22-28.
38. 10 F.3d 875 (1993).
39. See, e.g., C. Sterling, "Comparative Renewal and the RKO Mess," Gannett Center Journal 2 (Winter 1988): 43-53.
40. Cowles Broadcasting, Inc., 86 FCC2d 993, 1015 (1981), aff'd sub nom. Central Florida Enterprises, Inc. v FCC, 683 F.2d 503 (D.C. Cir. 1982), cert. denied, 460 U.S. 1084 (1983).
41. Central Florida Enterprises, Inc. v FCC, 598 F.2d 37, 49 (D.C. Cir. 1978); see H. Geller, "The Comparative Renewal Process in Television," Virginia Law Review 61 (1975): 471.
42. Syracuse Peace Council, 2 FCC Rcd 5043 (1987), aff'd, Syracuse Peace Council v FCC, 867 F.2d 654 (D.C. Cir. 1989), cert. denied, 110 S.Ct. 717 (1989).
43. See H. Geller, The Fairness Doctrine in Broadcasting (Washington, D.C.: Rand Corporation, R-1412-FF, 1973). This process would then be akin to the New York Times Co. v Sullivan, 376 U.S. 254 (1964), standard, that is, deliberate violation of the doctrine, as established by independent extrinsic evidence or reckless disregard of the doctrine.
44. See H. Geller, "Broadcasting."
45. See U.S. Senate, 101st Cong., 1st sess., 1989, S. Rept. 101-277, 22-23.
46. The author acknowledges that he strongly advocated the legislation and now actively participates in efforts before the FCC to obtain more effective implementation of the act. The purpose of this discussion is not to detail the complex controversies that have arisen during implementation of the CTA, but to highlight some of the issues and build a case for a new structural approach.
47. 8 FCC Rcd 1841.
48. 8 FCC Rcd 1842, paragraph 6.
49. 8 FCC Rcd 1842, paragraph 9.
50. 8 FCC Rcd 1842, paragraph 10.
51. See also statement by Sheila Tate, Chairman of the Corporation for Public Broadcasting, in MM Docket No. 93-48, June 28, 1994.
52. See statement in above docket by Johnathan Rodgers, president of CBS Television Stations Division, on pages 4-6, "the FCC's regulatory scheme [must be] implemented in a way that takes into account the economic realities of the broadcast business, [namely,] . . . reaching as large a number of people with our programming as possible . . . [otherwise we] will wither and die." He urged that requiring an hour a day of educational program would "inexorably [drive us] to find a way to spread our programming dollars around more thinly," thus working against high quality shows like "Beakman's World."
53. Action for Children's Television, 50 FCC2d 1, 19 (1974).
54. See, for example, H. Geller, "The FCC Under Mark Fowler," COMM/ENT, Hastings Journal of Communications and Entertainment Law 10 (1988): 521, 530-31. Chairman Fowler asserted that at renewal the broadcaster had no obligation to children for which the FCC would hold it responsible.
55. This is true even if the new compact is embodied in a rule or policy (processing guideline). History shows that rules and policies (for example, the anti-trafficking rule; the 1970s processing guidelines; the fairness policy) have been sloughed aside depending on the policy bent of particular chairmen and their associates.
56. Commendably, Congress has created the Ready to Learn channel to which parents can reliably turn for children's programming (and for parenting advice during evening hours), but because of the budget crunch, the channel has been allocated only $7 million. The National Endowment for Children's Educational Television at the U.S. Department of Commerce suffers from even greater financial deprivation, with an appropriation of $2 million.
57. I recognize, of course, the continuing controversy about the amount of violence on commercial television, including children's programming. Broadcasters are now voluntarily proceeding with independent evaluations of their efforts. In view of the increasing sophistication of TV set chips, parents will and should be able to program their sets in the way they believe is best for their children.
58. Administrations have become hostile to the electronic media because of what they regarded as too critical a press attitude. See H. Geller, "The Comparative Renewal Process," 498; Broadcasting Magazine, May 10, 1974, 25 (a discussion of the Nixon administration's threats concerning renewal of The Washington Post stations); Friendly, "Politicizing TV," Columbia Journalism Review, March-April, 1973, 9. The long term contract would obviate any questions under Minneapolis Star & Tribune v Minnesota Commissioner of Revenue, 460 U.S. 575 (1983), barring singling out the media for a special tax, absent special characteristic of the media justifying the action (which would, in any event, be applicable here).
59. Quality Time?: The Report of the Twentieth Century Fund Task Force on Public Television (New York: The Twentieth Century Fund Press, 1993) 152. As a member of that task force, the author fully agreed with the report and its recommendations, especially with respect to new governance for public television.
60. The possible FCC revision of rules that may no longer be consistent with the multichannel environment is not addressed. In the legislation in the 103rd Congress, Congress has directed the FCC to review such rules; however, the FCC cannot reach the heart of the problem, the efficacy of the public trustee scheme. Only Congress can do that.
61. The legislation would allow television broadcasters to engage in ancillary telecommunications operations, but with appropriate payment and with assurance that the advanced television operation would be undertaken on the conversion channel and the old channel would revert to the public domain. However, Congress should also have required the broadcasters to achieve 100 percent duplication of the two channels, conversion and reversion, as soon as possible, to ensure that they give up the reversion channel. Otherwise, they will improperly acquire 12 MHz instead of the single 6 MHz conversion channel to which they are entitled.
62. Both would be subject to government regulation as to obscene broadcasts, and broadcasters will continue to face the problem of indecency, because this is not based on the public trustee concept. See FCC v Pacifica Co., 438 U.S. 726 (1978). But enforcement would no longer involve denial or revocation of license, only forfeiture.
Furthermore, broadcasters would still have to follow sponsorship identification provisions, multiple ownership rules (revised to reflect the new environment), rigged quiz or payola restrictions, etc. These too would be enforced by forfeitures or cease and desist rulings. Finally, the equal opportunities provision (including no censorship), lowest unit rate, and the reasonable access provision might well continue, again under the above enforcement scheme. In my view, the equal opportunities provision of section 315 of the Communications Act should apply only to paid time. I do not discuss these points further, because however important or difficult a particular aspect may be, the primary focus must be the need to revise the public trustee concept. The devil may be in the details, but without agreement on the major point, we shall never arrive at the details.
63. In my view, the present approach is flawed under the third element of O'Brien (see discussion on page 25) because it is not aimed at the real problem, carriage of weak stations; however, see majority opinion in Turner v FCC.
64. K. McAvoy, "Dingell May Be Set to Derail Onerous Spectrum Tax," Broadcasting & Cable Magazine, June 13, 1994, 42-43; Multichannel News, May 23, 1994, 130, (where an industry spokesman warned that if the fee were implemented, the public service obligation would have to be removed).
65. See Communications Daily, July 22, 1994, 6; Broadcasting & Cable Magazine, July 25, 1994, 104.
66. In a speech on October 19, 1994, FCC Chairman Hundt stated that "America is about to watch the FCC raise billions of dollars from auctioning a spectrum that the broadcasters receive for free." Communications Daily, October 20, 1994, 9. It has been pointed out that a majority of today's broadcasters paid large sums to purchase stations (and the underlying valuable spectrum permit) from a licensee who originally obtained the free permit. In acquiring the station, this latter-day purchaser assumed the same obligation to render public service and not to maximize profits at the expense of such service. It is this obligation for which the spectrum usage fee is to be substituted. The funds so obtained could be used to much more effectively obtain such public service.
67. Unfortunately, the act also permits the franchising authority to enforce franchise requirements "for broad categories of video programming or other services." See Sec. 624 (b)(2)(6). This should be eliminated.
68. An amendment in the 1992 Cable Act would allow cable operators to ban "indecent" or "obscene" material, or "material soliciting or promoting unlawful conduct." This provision will be reviewed by the full court of appeals in Alliance for Communications Democracy v FCC, 93-1169, (D.C. Cir.).
69. U.S. House, 98th Cong., 2nd sess., 1984, H. Rept. 934, 30.
70. See 47 U.S.C. secs. 521(2),(4) (1984).
71. Miami Herald Publishing Co. v Tornillo, 418 U.S. 241 (1974).
72. See 114 S.Ct., 2468-69.
73. See, for example, Patricia Aufderheide, "Cable Television and the Public Interest," Journal of Communication 42 (1992): 52, 59.
74. See Turner Broadcasting System, Inc. v FCC, 819 F. Supp. 32, 57, 61-65 (D.C.D.C. 1993). The district court found both the leased channel and PEG provisions to be constitutional. Daniels Cablevision, Inc. v United States, 835 F. Supp. 1, 4-7 (D.D.C. 1993), appeal pending.
75. See dissenting opinion in Turner v FCC, 114 S.Ct., 2480.
76. Aufderheide, "Cable Television and the Public Interest," citing Television and Cable Factbook (Washington, D.C.: Warren Publishing, 1990).
77. Cable Television Report and Order, 36 FCC 2d 143, 210 (1972).
78. Aufderheide, "Cable Television and the Public Interest," 58. She notes that "access programs often have been, in the words of one tired access director, 'programmed to fail.'"
79. See H. Geller, A. Ciamporcero, and D. Lampert, "The Cable Franchise Fee," Federal Communications Law Journal 39 (1987), 1,16.
80. Every utility usually pays cities a fee or assessment in connection with the use of the streets, and so should cable. See section 622(g)(2)(A) (1984). The five percent cable franchise fee would represent an additional assessment, subject to the national cap (and perhaps to the condition suggested above).
81. U.S. Senate, 101st Cong., 2nd sess., 1993, S. Rept. 103-381, 26-27, 29. These provisions are discussed at length in D. Lampert, Cable Television Leased Access (Washington, D.C.: The Annenberg Washington Program, 1991) 3.
82. In last-offer arbitration, the arbitrator chooses between the final offers of the two parties, forcing them to be realistic and virtually simulating the market or bargaining process.
83. See Ithiel Pool, Technologies of Freedom (Cambridge, Massachusetts: Harvard University Press, 1983) 186-87. The author acknowledges that he is participating in proceedings before the FCC to deal more equitably with the nonprofit lessees.
84. In the September 1993 American Enterprise Institute study, Vertical Integration in Cable Television, David H. Waterman and Andrew A. Weiss conclude that "using regulation as a means to prevent integrated cable systems from disadvantaging unaffiliated networks is not practical. Whatever its motives, such behavior can be carried out in a variety of different ways beyond any realistic control by regulators. . . . " (page 89). Perhaps a powerful media company like a major network, afforded widespread distribution, including billing, could use its own marketing strengths and be quite successful, whatever the actions of the cable operator; only actual experience would give the answer. The authors' conclusion that the "issue upon which policymakers must focus . . . is not vertical integration but the sources of market power at the facilities level" (page 94) is unassailable.
85. If cable does obtain access to the telco's local loop bottleneck, there will be some question as to whether cable must afford corresponding access to its bottleneck inside wiring and coaxial drop for its video competitors (the telcos), if shown to be reasonably, technically, and economically feasible.
86. Significantly, the 1974 Report to the President, The Cabinet Committee on Cable Communications (Washington, D.C.: Government Printing Office, 1974) proposed that content and conduit be separated when cable reached 50-percent penetration (with the possible exception of two channels) and that cable become a lessor of channel capacity.
87. FCC 90-276, July 31, 1990.
88. See Chesapeake & Potomac Telephone Co. v U.S., 830 F.Supp. 909 (E.D. Va. 1993), aff'd, November 21, 1994, Case No. 93-2340, 4th Cir.; Telecommunications Reports, June 20, 1994, 14, and October 3, 1994, 18-19.
89. U.S. House, 103rd Cong., 2nd sess., 1993, H. Rept. 3636, section 301(b)(3); U.S. Senate, 1993, 103rd Cong., 2nd sess., S. Rept. 1822, section 613(b)(1)(A).
90. FCC 90-276, July 31, 1990, paragraph 120.
91. J. Flint, "Summit Sees Bright Future For Information Highway," Broadcasting & Cable Magazine, January 17, 1994, 8.
92. "The Wonder's Still in the Wireless," Broadcasting & Cable Magazine, January 24, 1994, 22.
93. Some contend that the common carrier model is doomed because of the ability of rivals like cable television operators to cut deals in the marketplace as to both transmission and content. See Eli Noam, The Impending Doom of Common Carriage (Washington, D.C.: The Aspen Institute Program on Communications and Society, 1993). Only experience can test the soundness of this assertion. Some also believe that transmission will become very cheap¾a commodity¾and that content will be "king"; therefore, the telco and other entrants will deprive cable of its bottleneck and make transmission a factor of slight leverage. Although this speculation is interesting, we would be wrong to base present policy on such shifting and uncertain grounds.
94. J.J. Keller, L. Cauley, "Mad Scramble: Telecommunications Giants Hurry to Partner Up to Share the Costs of Wireless Future," Wall Street Journal, October, 25, 1994, A8.
95. Senate Commerce Committee, 103rd Cong., 2nd sess., May 25, 1994.
96. U.S. House, 103rd Cong., 2nd sess., 1994, H.R. 3636, section 103; U.S. Senate, 103rd Cong., 2nd sess., 1994, S. 1822, sections 201B, 201C.
97. "Educational Access to Information Infrastructure Requires Funding," Telecommunications Reports, October 17, 1994, 15.
98. There have been proposals in the pending FCC Price Cap Performance Review for Local Exchange Carriers (LECs), CC Docket 94-1, that might generate such funds. The Computer and Communications Industry Association (CCIA) has proposed that the productivity offset in the price cap, which is designed to limit price increases by incorporating the efficiencies the LECs have traditionally achieved into their price changes, would be set at two levels: one level based on traditional productivity for LECs in general and a lower level for those LECs that agreed to invest in education. An alliance of education and library groups advanced the proposal that the consumer productivity dividend (CPD) in the price cap formula (one-half of one percent of the access revenues or as much as $300 million a year) be used by LECs to connect schools and libraries to the NII, starting with the most needy. These schemes do not have any detriments as far as telecommunications regulation is concerned, but the monies so obtained should be determined by the congressional committees involved in education (taxation with accountability) and should be used, state by state, according to plans of the education community (the Endowment), in consultation with the LECs.