roundtable: Digital Television En Banc Hearing
roundtable: Digital Television En Banc Hearing
Digital Television En Banc Hearing
Faye M. Anderson (fmanders@CapAccess.org)
Thu, 30 Nov 1995 15:54:24 -0500
Date: Thu, 30 Nov 1995 15:54:24 -0500
Message-Id: <199511302054.PAA21544@cap1.CapAccess.org>
From: fmanders@CapAccess.org (Faye M. Anderson)
To: roundtable@cni.org
Subject: Digital Television En Banc Hearing
Dear Colleague,
Attached is my statement in the FCC's Dec. 12 *en banc* hearing on
digital TV. I will appear on the panel focusing on public interest
obligations of digital broadcasters. Other panelists include
David Honig of Minority Media and Telecommunications Council;
Gigi Sohn of Media Access Project; and Barry Diller.
Please drop me a line if you have any questions or comments or would
like a hard-copy of the statement (I've deleted the footnotes).
Faye M. Anderson
President
Douglass Policy Institute
Before the
Federal Communications Commission
Washington, D.C. 20054
In the Matter of )
)
Advanced Television Systems ) MM Docket No. 87-268
and Their Impact Upon the )
Existing Television Broadcast )
Service )
STATEMENT OF FAYE M. ANDERSON
I am pleased to have the opportunity to participate in the Federal
Communications Commission's *en banc* hearing on digital television, and
in particular, the panel focusing on "the public interest, convenience
and necessity." The Commission is to be commended for initiating an
open and coherent public dialogue about the most efficient uses of
spectrum after a nearly decade-long "all-industry" pursuit of a
misguided industrial policy to promote high definition television (HDTV).
For too long, the debate about spectrum policy has been the
exclusive province of special interest groups--broadcasters and
consumer electronics manufacturers and their legions of lawyers and
lobbyists--with no input from the American public. Although the
Commission's original plan to set aside spectrum for HDTV has been
rendered obsolete by advances in digital compression technology, the
prohibitive cost of HDTV sets and the sale of the last American-owned
television set manufacturer, these special interests still proclaim
that the public interest will nevertheless be served by giving existing
broadcasters 6 MHz of new spectrum which they will use to provide new
digital broadcast and non-broadcast subscription services. If the
current channeling scheme is implemented, broadcasters will gain an
unfair competitive advantage, and reap an unearned and unconscionable
windfall at the expense of American taxpayers who will unwittingly
subsidize their transition to digital technology.
The clear and unambiguous mandate of the Commission is to safeguard
the public interest and promote competition. It is not the role of the
Commission to tweak the rules to "stimulate the market for ATV," "drive
the market for new digital sets" or "assure a fair marketplace test of
the public acceptance of HDTV as the cornerstone of the next generation
of broadcast service." Thus, a discussion of digital broadcasters'
obligation to serve the public interest begs the threshold question:
What public interest is being served by a government-mandated transition
to digital transmission that doubles the amount of spectrum assigned to
existing broadcasters, forces consumers to spend billions of dollars to
receive "free TV," widens the trade deficit, and disenfranchises
millions of Americans, who depend on free, over-the-air television as
their primary source for news, information and entertainment, but who
are unwilling or unable to make the investment in digital television sets?
Or, as Commission Chairman Reed Hundt has asked: "Is there any
evidence of market failure? Any evidence that government action is
necessary to provide public benefits that would otherwise be denied?"
Fortunately, Congress has included a provision in the Omnibus
Budget Reconciliation Act ordering the Commission to re-evaluate its ATV
licensing plan in light of changed circumstances in digital technology,
the competitive environment, federal budget priorities, and the
Commission's authority to auction licenses for new services. I
respectfully submit that at the end of its review, the Commission will
conclude that the public interest in digital broadcasting will be served
by auctioning the spectrum to the highest bidder. Consistent with the
Commission's long-standing policy to promote diversity of ownership and
viewpoints, bidding should be open to all qualified applicants with no
special preferences given to existing broadcasters.
The public benefits that will accrue from auctioning digital
broadcast spectrum are manifold. First, an auction will ensure that the
American people get a fair return for the commercial exploitation of a
scarce and valuable public resource. The spectrum will be assigned to
those who value it the most, thereby, stimulating economic growth and
job creation.
Second, auction proceeds can be used to address public concerns
about balancing the budget and improving the educational system. Indeed,
the Commission has estimated that an auction would raise between $11 and
$70 billion. One Wall Street analyst has estimated a digital broadcast
spectrum auction would raise $44 billion; other estimates range as high
as *$500 billion*.
Chairman Hundt has appropriately given high priority to ensuring
that America's children share in the benefits of the communications
revolution. Accordingly, a portion of the auction proceeds should be
earmarked to connect the nation's public schools and libraries to the
information superhighway. There is a compelling public interest in
using a public resource to strengthen the nation's public education
system: By 2000, 60 percent of the new jobs will require information
technology and computer-related skills that are held by only 20 percent
of the population.
The historical precedent for an education technology earmark is
the Morrill Act, signed into law by President Abraham Lincoln on July 2,
1862. The goal of the Act was to ensure the availability of a skilled
work force as the nation was transforming from an agrarian to an
industrial economy. Under the terms of the Act, public land was granted
to the states and territories for the express purpose of establishing
a public institution of higher education to provide educational
opportunities that would prepare a broad segment of the population for
the industrial age. Today, there is at least one land-grant institution
in every state, one of which--Massachusetts Institute of Technology--is
a member of the Digital HDTV Grand Alliance.
In its report to Congress, the Commission should recommend that a
portion of the auction proceeds be earmarked as education technology
block grants to the states for the express purpose of funding schools'
and libraries' connection to the information superhighway. The
education technology block grants would be the information age
equivalent of the Morrill Act.
The public interest will be ill-served by limiting initial
eligibility for ATV licenses to existing broadcasters and contravenes
long-standing Commission policy to encourage the participation of women
and minority-owned businesses in the broadcast industry. At the dawn
of the digital age, the proposed ATV licensing plan closes off one lane
of the information superhighway to new entrants, limits competition for
digital broadcast and non-broadcast services, and grants special
preferences to existing broadcasters. The characterization of the ATV
licensing scheme as a mere "reallocation" of spectrum is a transparent
and disingenuous 'fig leaf' to avoid the restrictions of Ashbacker Radio
Corp. v. FCC, 326 U.S. 327 (1945). As a matter of law and policy,
eligibility to compete for ATV licenses should be open to all qualified
bidders.
As to whether a 15-year transition period is ground for limiting
initial eligibility to existing broadcasters, consider this: The
American Association for Retired Persons estimates that in the next 18
years, 76 million Americans will be age 50 and over. The vision for
ATV penetration is that advertiser-supported programming will drive
consumers to invest in digital television sets. The consumers (read:
"eyeballs") that advertisers are most interested in are in the 18 to 49
age cohort. With digital broadcast and non-broadcast services targeted
at consumers under age 50, what incentive, if any, will aging baby
boomers have to invest part of their retirement savings in digital
television sets?
Senate Commerce Committee Chairman Larry Pressler has observed
that "spectrum issues are very political." As a matter of policy and
real politics, the transition period from analog to digital transmission
will be substantially longer than 15 years and will not end until there
is *100 percent* penetration of digital television sets because neither
Congress nor the President of the United States will allow broadcasters
to pull the plug on their analog transmission and disenfranchise millions
of senior citizens, along with millions of low-income Americans.
Finally, I too applaud Congress' decision ordering the Commission
to step back and rethink the ATV licensing scheme. Digital broadcasters'
public interest obligations will perforce be determined by the manner in
which digital broadcast licenses are assigned, the amount of spectrum
assigned, and whether broadcasters will have the flexibility to use the
spectrum for broadcast and non-broadcast subscription services. In any
case, no further study is required to conclude that the proposed ATV
licensing plan serves the special interests of those who have controlled
the debate since 1987 and "is the biggest corporate welfare giveaway of
the decade."
The German philosopher Hegel noted that historic facts appear twice:
the first time as tragedy, the second time as farce. The Commission is
at an historic moment; there should be no rush to judgment. In the
original assignment of analog television licenses, the Commission made
a "colossal mistake" in failing to secure quantifiable, measurable and
concrete commitments from broadcasters to serve the public interest.
That was indeed a tragedy. The tragic consequences of that policy
failure are reflected in survey findings that a whopping 80 percent of
Americans believe television "is harmful to society, and especially to
children. The proposed ATV licensing plan presents a farcical notion
that the public interest will be served by giving existing broadcasters
12 MHz of spectrum for an indefinite period of time, and gives rise to
the "national scandal" about which Henry Geller, former FCC general
counsel, has warned.
I look forward to working with the Commission as it prepares its
report to Congress to ensure that history does not repeat itself and
that the "public interest, convenience and necessity" will inform
Commission policies and decisions in the digital age.
Respectfully submitted,
Faye M. Anderson
President
Douglass Policy Institute
2025 "Eye" Street, N.W.
Suite 1122
Washington, DC 20006
(202) 488-8458
Date: November 28, 1995
/////////////////////////////////////////////////////////////////////////////
ABOUT THE DOUGLASS POLICY INSTITUTE
The Douglass Policy Institute is a nonprofit, 501(c)(3) public interest
policy and research organization founded in the District of Columbia in
1993.
The mission of the Douglass Policy Institute is to promote public
awareness of major public policy issues in the areas of communications,
economic development, civil rights, affirmative action, education and
technology, education reform, and black voter participation.
--
Faye M. Anderson
P.O. Box 65164
Washington, DC 20035-5164
(202) 775-5496 ~~ (202) 484-7029 fax
<fmanders@CapAccess.org>
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