Geller
to FCC: scrap the rules, try a spectrum fee
More than three years after promising digital
channels to broadcasters, the FCC held a hearing Oct. 16, 2000, about
what the broadcasters should do in exchange for the spectrum. Most of
the testimony was about possible FCC rules requiring political and children’s
programming, but former FCC general counsel Henry Geller suggested, as
he and others have said before, that the public interest would be served
more effectively by assessing spectrum fees and paying pubcasters to do
the public-interest programming. This article was adapted from Geller’s
statement.
Published in Current, Oct. 30, 2000
The broadcast regulatory scheme, adopted in 1927 and continued to the
present time in the 1996 amendments to the Communications Act, is one
of short-term licensing, with the licensee committed to serving the public
interest — of being a public trustee or fiduciary for its service area.
The constitutional basis for this unique scheme is set forth in the seminal
1969 Supreme Court decision in Red Lion Broadcasting v. FCC: More
people want to broadcast than there are available frequencies (a situation
that exists today). The government could have required each frequency
to be shared on a daily, weekly or other basis; instead, the government
bestows the short-term use of the frequency on a single entity that then
must act as a fiduciary for all those whom the government has denied the
right to use the scarce resource. As shown by the Supreme Court’s
1994 decision in the Turner cable company’s must-carry case, it is
still valid today
There are two initial observations. First, there is not much utility
in the Commission’s spending time on the validity of the basic public
trustee scheme. A court (really only the Supreme Court, in the circumstances)
can declare it unconstitutional. The Commission cannot. Second, Congress
can replace this scheme with an entirely different approach, taking into
account the great changes that have occurred since its adoption over 70
years ago. The Commission cannot abandon the basic scheme, especially
in light of the 1996 Telecom Act stating specifically its applicability
in the digital era (Sec. 336(d)).
The Commission can, however, make recommendations to the Congress. I
urge you to consider the following: Scrap the public trustee content scheme,
and treat broadcasting like its main rival, cable, which pays up to 5
percent of gross revenues for use of the public streets for cable rights-of-way
(significantly, the public makes little or no distinction between cable
and broadcast channels).
By taking some modest fee from commercial broadcasters for their use
of the public spectrum in lieu of the public trustee obligation, noncommercial
television could be adequately funded to deliver high-quality public service
programming. The objective is to obtain such programming, but since the
government soundly cannot review for quality, we are dependent upon the
broadcaster to present the high-quality public service programs. The noncommercial
system has demonstrated that it will strive to do so; the commercial system,
under fierce and growing competition, has no such history or incentive.
For example, in the multichannel digital era, it is greatly desirable
to have a channel for pre-school children, one for school-aged, and another
for adults, literacy, or training, especially for teachers in the use
of high technology. The noncommercial system, if properly funded, would
seize such a multichannel opportunity; the commercial system would not,
and should not be expected to do so. In short, use of the spectrum fee
in lieu of the public trustee content obligation makes sense out of the
exploding video distribution field, removes First Amendment strains due
to the content regulation, and is much more effective in achieving the
goal of high-quality public service programming.
I suggest that Congress could take a modest initial step along the above
lines: it could relieve the commercial broadcasters of the FCC’s
1996 mandate that they serve the educational needs of children (Section
303b), including the obligation to present programs specifically designed
to do so, and instead impose a 1 percent spectrum fee on gross advertising
revenues. This would net roughly $250 million, which would go to public
television solely for its use in the educational field. A provision of
the 1996 law, Section 303b(b)(2), already gives a station the alternative
of supporting children’s programming on another station in the market.
This proposal would, in effect, make the provision mandatory instead of
voluntary. Before proceeding further along this approach —such as
wholly deregulating the content area in radio broadcasting, and then in
television—Congress could evaluate its experience with this partial
deregulation.
There is one other recommendation to Congress—affording free time
to candidates as an important part of campaign finance reform. The details
of such an effort are of course to be fashioned by Congress. Since it
would obligate broadcasters to allocate a relatively large amount of air
time every two years (or perhaps issue vouchers for purchase of that air
time), the free time provision, along with the above 1 percent figure
in the educational field, would constitute the full broadcaster contribution
in lieu of its present public trustee obligation. This would be a meritorious
conclusion, because an educated and informed electorate is so vital to
the proper functioning of our democracy.
It will be argued that I am being naïve—that the broadcasters
have so much "clout" that the above recommendations have no chance of
success in Congress. I acknowledge that in the near term there is little
likelihood. But it is important to argue for the approach that markedly
advances the public interest—to get it out before the Congress. It
took a long time to correct the situation in the transportation field,
but eventually the Congress completely deregulated shipping by plane,
train and truck. Here, time and the continuing technological explosion,
including on the Internet, are on the side of drastic overhaul of the
public-trustee content approach.
I turn now to the public interest obligations in the digital era under
the existing law. First, it is important to note that there is no way
now to describe how the broadcasters will operate. The digital television
bitstream of 19.4 megabits per second could be used for an HDTV operation
or a single channel standard-definition channel with the remainder of
the capacity going to ancillary data services. If so, the DTV broadcast
situation would not differ from the present analog one. I have sought
revised policies as to the analog operation—for example, a policy
requiring broadcasters to give candidates a modest amount of free air
time in the 30-day period before election. Since the focus here is on
the digital future, and not re-fighting past battles, I will not expand
on these matters.
As stated, there is no way to tell if the broadcasters will use the 19.4
mbps for extensive multichannel broadcast operations. It can therefore
be argued with some force to simply await future developments.
The counterargument is that once the multichannel operation becomes established,
it can be disruptive to impose the substantial new public service obligations
upon it, such as requiring that one of the channels (3-4 mbps) be devoted
on a sustaining basis to public service, such service to be wholly within
the discretion of the licensee; in accordance with 303b(b)(2), the licensee
could "buy" its way out of this obligation by paying some fixed proportion
of the revenue represented by this 3-4 mbps stream (ascertained by taking
the average of the revenues of the other channels) to public broadcasting,
locally or nationally.
In my view, this "play or pay" approach is flawed administrative policy,
because the Commission would still be forcing unwanted programming obligations
on commercial broadcasters and then find itself unable to effectively
evaluate their performance because of the First Amendment. I believe it
would be wiser to stick with the legislative recommendation noted above—the
1 percent solution.
Finally, assuming that the 1 percent solution is not implemented, modest
expansion of the three-hour core educational children’s TV guideline,
and imposition of the five-minute fix for election campaign free time
could be readily accommodated in the multichannel environment without
undue disruption, and therefore should be considered when that situation
does in fact arise.
I hope that the foregoing is helpful to the Commission in its consideration
of this important issue.
Henry Geller is a former FCC general counsel
who has continued to work on Commission issues as a private citizen. In
recent years he has served as a communications fellow with the Markle
Foundation, as a senior fellow with the Annenberg Washington Program,
and, before that, as director of Duke University’s Washington Center
for Public Policy Research, 1982-89. He lawyered for the FCC for many
years, rising to general counsel in 1964-70, and later served as head
of the National Telecommunications and Information Administration, 1978-81.
Web page created Nov. 1, 2000
Copyright 2000 Current Publishing Committee
