FCC Commissioners Michael Copps & Jonathan Adelstein

Moderator, former FCC Commissioner Gloria Tristani (GT): They cannot do what they’re doing without help from you.

Media ownership: What can we do to keep media ownership rules that protect America and support a diverse media

Copps (MC): At the FCC, the recipe for media disaster that Michael Powell tried to foist upon us in 2003 was responsible for a huge outcry, and Congress voted to overturn, and after the DeLay house voted it, the courts overturned it.

Now we’re starting over again with those rules the court sent back. We know that Big Media is still very interested in loosening the ownership rules. I’ve looked at all their pleadings and they are still following that pied piper of consolidation, in the duopoly, triopoly, swap [same ownership of TV, radio, print].

Politically, it will be a harder time to loosen the rules, but without your participation [to oppose it], it could still happen.

Where is the country in this issue? Increasingly aware that they have to stop bad new rules, but also to revisit the bad old rules and reinfuse broadcasting with public interest. And you’ve got people like Trent Lott, Olympia Snowe—it’s a bipartisan issue.

Adelstein (JA):The timing: The Chairman has enormous power, and his greatest power is scheduling and setting the agenda. We do not know his plan; we have to divine it. My best guess: We wont even have the studies until April. He has promised us that we’ll do localism first. The earliest, realistically, will not be until May or June (2007). We should demand an opportunity for comment, at least 60 days, that means into June or July at the earliest. He might be looking strategically at 2007 not 2008, as it will not be politically popular. We’ll have as little time to respond as possible; we need to be prepared with substantive research, with organizing, with Congress—knowing that we’re not going to be told the agenda until we have very little time to organize. If we do our work properly, there may never be a horrible [rule set], if they know it will be mowed down in Congress, we can send I to the dustbin of history where it belongs.

Minority Ownership:

GT: Minorities own less than 3% of all broadcast properties

JA: First thing, no more consolidation, which makes it further out of reach for minority entrepreneurs. This is a central element in the fight against media consolidation. This is an issue they’re going to butt right into. Any time they allow further consolidation undercuts minority ownership. You should make it a primary concern because of its potency. On the positive side, we had a diversity committee, the one thing Michael Powell did on this issue. To his credit, he put together great minds, leading thinkers, and they put together a whole pie of recommendations that have been sitting on the shelf. They’re there on the FCC’s website. Why don’t we act on this raft of good ideas?

MC: It’s not been a priority for the Chairman. If we’re going down that road, we’ll have another generation of equal opportunity sham and shame. Consolidation is a national embarrassment. It comes down to a public interest responsibility to reflect and nourish that diversity. Is it any wonder that minorities are so caricatured when they own 3% of the media? That their advertisers don’t have access to the airwaves?

We are going to bar discrimination on race or gender in broadcast transactions. One good thing: if a station group was selling a cluster of stations, minorities would have consideration. But most can’t afford a whole cluster, why don’t we say one station. And we ought to give a little more time for the minority to put their business plan and the money together.

And all of us can go around and talk about it.

GT: FCC has 180 day timeline for mergers, and they mostly meet it. I don’t know if they have a shot clock for anything else. By my count, by the end of this year, the proceeding on public interest obligations will have run 2081 days without being acted on. I am concerned that every year, there is less and less local news about elections and public policy. What can we do to move this proceeding?

MC: We looked at the Telecom Act of 1996. Public Interest is 112 times in the statute, and we need to pay attention to it. You’re talking about localism, competition, diversity, minority ownership, getting broadband out and affordable to the American people. The best thing we can do is to play offense. We have this golden opportunity to take this issue and run with it. The American people understand. The people are in the mood to change that and I think Congress is beginning to hear it. In 2003, Congressmen came back in September and said people were asking about media consolidation at my summer Town Meetings. That’s what we’ve got to have now, and it’s a better environment. Relgious, diversity communities agricultural interests are involved. They can’t get the hog belly futures on the radio anymore. You have the whole world of the Internet as potential allies. Two years ago, a lot of those people weren’t interested in talking about consolidation. Last year, people stood at hearings uncoached and said that all those ills are coming to our Internet, and that’s why the Net Neutrality crusade got legs so fast.

JA: We’ve done everything we can on the public interest issue, almost 3000 days, eight years. We just told last month all local governments they’ve got 90 days to work out a deal before we give your franchise to a corporation, whether or not you’ve worked out a deal on access, buildout, minority communities. And we can’t get [public interest regulation] this done in 3000 days! Mike [Copps] and I tried to seize an opportunity to get public interest through in the multicast regulations. The broadcasters wanted this desperately, and they were thrilled. Mike and I said if you do public interest obligations, we’ll see if we could make it happen. They wouldn’t even come to the table. The result was you could have had a broadcaster forcing 24-hour infomercials, nothing local, nothing public interest, and in return, they didn’t think they should have to do anything. This is what they are dealing with. They’ve got a couple of votes riding on multicast must-carry and I haven’t even gotten a call. We’re also gong to try on the radio front, where they want in-band channel, to use additional spectrum and do three, four, or five channels. It’s telling, how little the public is getting in return for free use of the public airwaves.

MC: Look at that old media contract the broadcasters got. That has been a contract that kept on giving for the broadcasters, year after year. In the last decade or two, postcard license renewal, they got rid of fairness doctrine, personal attack, editorial rules, the codes of conduct. They had voluntary codes of conduct through the 1980s. There were limitations on the depiction of violence, limitations on advertising to children. Now they say give us more we want the must-carry without any public obligations.

GT: Good things happening within this bleak picture. What about payola?

JA: When I got to the commission, there were all these rumors, but no hard evidence until [then-New York State Attorney General, now Govenor] Elliot Spitzer came to us. He did an incredible job of arraying an arsenal of smoking guns. I demanded an investigation and we got an agreement that we would investigate. We’re looking into it, slowly, and we’re looking at whether we can get the major companies to agree to policies that would enhance the ability of local artists to get heard, and provide free air for local artists. Payola deprives local artists of the opportunity to get heard. Increasingly, we see the homogenization of radio into a coast-to-coast PA system. Payola is just one element of this. Homogenization is good for milk but bad for radio. We need to change the culture so this is seen as the anathema that it is.

MC: These are serious and flagrant misuses, if the allegations are true. We need to make sure that if we get commitments from these folks that they are really meaningful and they can’t buy their way out, and someone is watching carefully that these commitments are kept.

GT: Children and the media—back to the bleak picture. Nowhere is the plantation mentality better evidenced than in the way the media is subjugating our children. Each year, the average child views 40,000 ads, and it’s still the dominant media, 2-18. 70% are for candy cereal, junk food, and those ads are beginning to migrate to interactive platforms. FCC in 2004 came to the tentative conclusion that interactive advertising should be banned. How long before that is implemented?

JA: We should be doing that immediately. The industry says let us develop the business models, but I don’t see how interactive advertising against children is EVER acceptable.

The founder of Power Rangers said it is obviously not appropriate; they don’t have the ability to distinguish between advertising and programming. They spend billions to find out how to get into their little minds and twist them. It’s an assault, and it’s extending across all platforms. [Kids] know how to get onto these websites and play the little games that are filled with advertisements. This is something that we’ve got to figure out how to get a grip on. Right-wing, left-wing, it doesn’t matter—we’re all parents and we’re all alarmed by the assault on the minds of our children. We can get broad bipartisan support and I think it’s something the FCC needs to focus on.

MC: We don’t even realize the pernicious effects. My 5-year-old kid says, “I like commercials.” We made some initial steps and we’ve got to go farther. The more I deal with children’s topics, the more I become committed to the cause of media literacy for children in America. Primary school through secondary school, every year, media literacy training for our kids. I think you can craft programs that make this really interesting for kids as they mature. Goals are twofold: 1. To teach them how to make use of all the new technologies; 2. Help them understand how media makes use of them, so they can look at it with a skeptical eye.

GT: Children 8-18 spent an average of 6.5 hours/day with media, including 3.1 with TV, 1 with computer. If you add that they multitask, it’s 8.5 hours. Onvideo franchising—you both dissented, and when will we see the order?

JA: the FCC went far beyond their authority. I think it’s fantastic that giant telecommunications companies want to get into the video business. Any kind of competition in that space is good; you’ll have new options for content, not just cable and satellite. Verizon has this enormous space for new content, so this is a welcome development. I hope they succeed in providing vigorous competition. Do we need to reform the local franchise process? It’s an amazing thing. At the FCC you’re not supposed to ask any questions; it’s considered impolite. It’s so frustrating. I love a good debate. So I decide I’m gong to ask a question of the staff, who gave me this sanitized presentation. Supposedly we’re moving because local communities are dragging their heals and not giving out a franchise. So I asked for one example, name a community. There are hundreds, blah blah blah. She couldn’t name one community. We haven’t looked at any single local community to say there’s an actual problem. They want to award these franchises, and they have an obligation under the law to try to protect. The law says local franchise authorities give out these licenses, it’s their option, and it’s not the option of the FCC to take away these rights from local authorities. And how can we take that power if we can’t even look at one community to say there’s really a problem?

MC: It’s upending generations of carefully balanced federalism. We don’t have a regulatory philosophy in the U.S. to deal with utilities. It’s good to have competition, but it’s big guy vs. big guy. And that’s why it’s so important to talk about buildout, getting broadband to the inner city, to rural America. When this started, I asked, show me the granular record. They said, oh, Montgomery County, MD; but the telecommunications company hadn’t even submitted the application, and when it did, they went through quickly.

GT: Digital divide: When we are utterly dependent on broadband for access to health care, federal agencies, communicating with loved ones abroad—how come we don’t have every American connected?

MC: We don’t have a plan, we don’t have a strategy. We are the only country without a strategy. We had a campaign promise in 2004. There’s two digital divides [ational and international]. The rest of the world is cleaning our clock. U.S. is #15 in broadband penetration. Amore nuanced index has us at 21, right after Estonia and tied with Slovenia. Because we don’t have a plan. But we do have a glaring digital divide within this country. When you see these wonders of IP television, you see it in the big markets where they can skim the affluent—how’s it gong to get out to rural America, to the inner city? We haven’t taken that to heart at the FCC at all. We treat it as an information service, w ith no regulatory obligations. We’re saying none of the old obligations—privacy, buildout, public safety, universal service—applies to this new stuff. That is a recipe for disaster.

JA: I come from rural America, South Dakota, and one of the excuses that we’re real rural. But even if that is the case, that argues better than anything else that we should deal with this. We need to transition universal service from just voice to broadband.

Audience questions:

Why are search engines moving toward only indexing their own video sites?

JA: In the broader question of keeping the Net accessible, we got net neutrality for two years in the ATT/Bellsouth merger. If you don’t like what Google’s doing, you can go to ask.com. We hope that there’s sufficient competition that even if individual sites bias in favor of their own or paid content, you’re free to move around.

Why [was the merger approved on]Friday, December 29?—it gives the appearance of sneaking the merger through

MC: I think we had an opportunity to deal with it in front. The problem was it sailed through the Commerce Department, and they thought there was no need for consent decree, divestiture, etc. We wondered if the FCC would step into the void and attach conditions. They sent it to us with absolutely no conditions. We could have made progress if we’d known the lay of the land, but we went through two months of uncertainty whether a new commissioner would be recused. That decision wasn’t made until the middle of December. When it was clear that it was 2 by 2 and that Jonathan and I would have some influence, with the underbrush clear, we managed to get from here to there. Had we voted on October 3, I would have voted no. It was a huge merger. You have to look at each item and say is there an opportunity to make this serve the public interest? We’d been pushing for an enforceable fifth principle of net neutrality to augment the four we got through, and we got that commitment—only for two years, but it allows Congress time to deal with it. Lots of consumer benefits in it, on DSL and other issues. That they wanted to close by the end of December gave us more leverage.

Satellite could double the spectrum and cannot be auctioned. How will the FCC distribute them? What should the public get in return? Would you support allowing satellite to provide local free TV?

MC: That would require a statutory change. I don’t know what the valuation would be. Conservative, over $500 billion. It’s not at all easy to apply public interest requirements under current law.

How have the two of you survived?

JA: It’s been an amazing privilege to serve with Michael Copps: We were under enormous pressure. With the ATT merger, $80 billion was at stake. Mike and I stuck together on it with some heavy, heavy pressure. They were always trying to divide us, and they only needed one of us. It was remarkably brave on both of our parts, but I feel fortunate to have a colleague with the courage of Commissioner Copps.

MC: I feel the same way about Jonathan and the vision and courage he has brought. Both of us are historians, and I like to feel that maybe we bring some feel for the tapestry of the past and try to look a little more broadly and put the issues in some historical context.