In this guest blog, Henry Geller, former General Counsel of the FCC in 1964-1970 and Assistant Secretary of Commerce for Communications and Information (NTIA) in the Carter Administration, says it is time to consider a new form of pay-for-(public service) play.
In the late 1970’s, I, as head of NTIA, proposed to Congress and the NAB that commercial broadcast radio be relieved of its public trustee responsibility (with the exception of political broadcasts rules like equal opportunities and access) and in its place, the commercial broadcast station would pay a modest fee–say, 1% of its gross revenues–fixed in a long term contract. The sums so obtained would go to public broadcasting for its public-service programming. The proposal had the support of a small commercial radio group (the National Radio Broadcasters Association, absorbed by the NAB in 1986). The NAB, however, never supported it.
I am reminded of this ancient history because of the very recent report “The Reconstruction of American Journalism,” by Leonard Downie, Jr. and Michael Schudson (click here to view a PDF of the report). In this broad sweeping effort, there are sections describing the dismal failure of both commercial and public radio to adequately present local journalistic programming, and recommending remedial actions as to both groups. (See, e.g., Report, at pp. 27-29, recommendations 3 and 5.) Of particular interest in light of the above history is the recommendation that fees be imposed on commercial radio in order to remedy the failure by supplying some support to proposed “state Local News Fund Councils” (p.91; other recommendations, some quite controversial, are of no concern to this blog). There may thus be a second opportunity of the NAB to get it right, in light of difficult considerations confronting the commercial radio field.
The first and crucial consideration is that commercial radio remains under a local public trustee obligation. The 1996 Telecom Act was a great gift to broadcasters (e.g., renewal at eight year periods; no comparative renewal; and for radio, relief from multiple ownership restrictions), but it explicitly states that the public interest obligation remains. That obligation remains local to a significant degree in light of Section 307(b) of the Communications Act, and the resultant allocations scheme. Because each community has its own needs and interests, the scheme called for thousands of radio stations assigned to the many communities, instead of just powerful regional stations (or later satellite statons).
The second consideration is that unlike the situation in the period 1927-1950 when radio was the dominant medium, commercial radio broadcasting today has great difficulty meeting this local public-service requirement. This is especially the case with the large, multiply-owned chains of stations. Commercial radio faces fierce and increasing competition from other radio and video operations, including now the Internet. Financial considerations thus militate against the provision of local public-service programming, and account for its absence. The NAB continues to assert that there is a “social compact” whereby the industry recognizes its obligation to put public service first and profits second, but this is a most dubious proposition, especially in provision of local public service programming by commercial radio.
Bottom line: The current commercial radio scheme faces great difficulties meeting its local public-service programming obligation; those difficulties will increase; and finally the scheme might implode if it faces increased scrutiny (petitions to deny) from public interest groups or from a more activist FCC.
The NAB should seize the opportunity posed by the Report. It should study and document what fee could be reasonably met by commercial radio–an issue that would also be considered by public comment, the agency, and Congress. That is the appropriate issue, not what fee is needed to accomplish the goal of the Report to have a sufficient “Fund for Local News.” If the Fund were established, its finances might well be a continuing process, including from many sources (see Report). Commercial radio would be called upon simply to make its proper contribution. If no Fund were established, that contribution could go to public radio, to join the sums provided by the Corporation for Public Broadcasting.
Commercial radio was born in the early part of the 20th Century. It makes sense to shape a policy that conforms to the circumstances of this new century. That policy can be win-win for both the commercial radio industry and the public interest. The industry will no longer face the burden of local public-service programming and may gain an extended license term. The public interest will be promoted by significant sums directed to entities that are committed to public-service programming. In my view, it has been a continuing policy mistake to attempt to achieve public-service programming by behavioral content regulation that seeks to make the commercial system act against its driving economic thrust.
Henry Geller was former General Counsel of the FCC in 1964-1970 and Assistant Secretary of Commerce for Communications and Information (NTIA) in the Carter Administration.