WPCmM 2B'T Z #|x)Courier New (TT)CG Times (WN) (Bold)) (TT)WP MultinationalA Roman (TT)HP LaserJet IIISiL2 244HPLAIISI.WRSx  @,,, BsX@2 @/H5'#|xCourier New (TT)Times New Roman (Bold) (TT)RSx  @,\,%X@03-09-92 03:05p SEC TITLE & INDEX FORM FORMAT  Courier New (TT)CG Times (WN) (Bold)CG Times (WN)t! !! 777 y!77! !!!! oooM!XdC!!!!!!!    oooo!7777!!!!!!!77!!!!!!!!   77777777 o !!7!!!Ndx,,x++,xxtdmI>I333YC!!!1!>37777777777777777777777777777777dModdot! !! 777 y!77! !!!! oooM!X7777777!77!dX+x+xxdx,,,!!!!!!!    !!777777!!!!!!oooo!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!    7!o7 z! 7! ! !7! 77!!!7!!!2"LG e ^mCourier New (TT)CG Times (WN) (Bold)CG Times (WN)CG Times (WN) (Italic)Scalable)Courier 10cpi (Bold)Courier New (TT)CG Times (WN) (Bold)CG Times (WN)CG Times (WN) (Italic)Courier New (Bold) (TT) _ p Q%KYN,'q  PjQ PD&JYN, _ p Q wJJJhwYYY/                                                NYwmm^^YEE    YA^"               #YY      Y   Yw                                    r         wwYYYYwhwwwYJwwwwwYwYYYwY"H^^ucLccc     555 x 55       ooL ,uuB           oooo 5555    u  55           55555555 o   5uu  uuNu,ucccuuuuuuuuuuuuutcccdcmJ>J333ZC   2 >3 ucLccc     555 x 55       ooL uuuuuuuuuuuuuuuuuuuuuuuuuuuuuuucc,ccc             55555c5      oooocYYYYwhwwwhJwwwwwhwYYYwYCourier New (TT)Times New Roman (Bold) (TT)WP MultinationalA Roman (TT)BookmanITC Lt BT (Italic) (TT)"5@^;C\ccCCCcCCCCccccccccccCCDZY}}vCM}rk}CCCcccYcYcYCcc77c7ccccJM7ccccYYcYc;;!cccRcccYYYYYY}Y}Y}Y}YC7C7C7C7ccccccccc;cYcccccrccccYYc}c}c}cccccccccccccMc}7}Rccc;;JRkM;;N;ccCYQQcc;cccFcccFCC;;;;;;;;;;;;;CFtCnnyy2co6cQQnCzohbnonvyXzXshn~|yxxxxxxxxxxxxxxxxxxx;C\ccCCCcCCCCccccccccccCCDZY}}vCM}rk}CCCcccYcYcYCcc77c7ccccJM7ccccYYcYc;;;;;;;;;;;;;;;;;CC;;;;;;;;;;;;;;CcccccccccQCcccFFcoc\cFcQY}}}}CCCCrcYYYYYYYYYYY7777cccccccccccccczzzozoYzNoYYYC8YooYdYzzdzddoYoYzzozzzzzCdoozYzzzzCCddddzdddooozCzdYC2*ZH"@$v*)p)?xxx,>Xx6X@DQX@D&"n u, _ p Q%KYN,'q  PjQ PD&JYN, _ p Q & 6zC;,5 dddy~   \\ y %\dddy  kK # _ p^7 #HERITAGE REPORTING CORPORATION  W-!#Xu&_ x$&70*H&H&@@-" channel, but many will not, and many will begin channel surfing and then return to the networks. The data shows that the vast majority of television viewers watch the four major networks and that's not going to change because of this experiment as much as some might believe this proposal will not result in CSPAN becoming a top rated network. ` `  Mr. Chairman, I had the privilege of observing the Russian elections. It was the second Russian election that I have observed, I was incredibly impressed at the zeal, the dedication, and the commitment that the Russian people made to a free and fair election. In fact, their election turnout was 70 percent, which is something that all of us would welcome as a great improvement in the way that our system works. ` `  One of the factors is that their candidates, as other European countries had free television time to get their message across. Now, Mr. Chairman, I don't want to take too much of your time, but there was one candidate that surprised everybody. A General Lebid (phonetic). General Lebid was generally regarded to have about two or three percent of the vote. He got 15 percent of the vote, is now viewed as Mr. Yeltsin's successor, and everyone will attest to the fact that Mr. Lebid's performance on television, which was free, was what convinced the people of Russia that he was the kind of man they wanted to lead their country"%?0*H&H&@@-" through the difficult times that they have. ` `  Finally, I am certainly grateful for Senator Bradley and efforts he's made. And we've sent letters to both the Dole and Clinton campaigns. And as you know, the Dole campaign responded yesterday in the affirmative. I hope that the Clinton campaign will follow suit very shortly. ` `  And finally, finally, Mr. Chairman, I worry about politics in America today, as one who has sought and obtained office on several occasions. I worry, as Senator Bradley does, about the level of debate, about the ventilation of the issues, and the information that we provide to the voters of America. I do not think that western civilization as we know it is going to collapse, but I do believe that we are on a trend which is demeaning and debasing to the kind of political activity in the electoral system that our forefathers envision. And I think you very much for having this hearing today and considering this very important proposal. ` `  Thank you, Mr. Chairman. ` `  CHAIRMAN HUNDT: Thank you very much. You have honored us by your presence and you leadership on this and other issues in our area, it's very, very welcome. ` `  Senator Bradley, we are equally as ` `  SENATOR MCCAIN: I look forward to our next"%@0*H&H&@@-" hearing on spectrum auction. Thank you. ` `  (Laughter.) ` `  CHAIRMAN HUNDT: You bet. ` `  Senator Bradley, we are absolutely delighted to hear form you also today. ` `  SENATOR BRADLEY: Thank you very much. Chairman Reed Hundt. I was very struck by what Senator McCain said about the Russian elections, and maybe there is a precedent there that some highly decorated veteran who is good on TV moves from out of nowhere to a significant position of leadership in many other countries. ` `  I mean, we all tend to see what we want to see in an election and I think that that clearly was a very interesting observation. ` `  I am very pleased to be here today with you, even though I lament that it comes just minutes after the Senate rejected the campaign finance reform bill of this year. I think that if the year passes without any other action taken, then clearly the most significant action that could be taken is the idea of free TV time in the presidential debate, similar to the proposal that Paul Taylor has offered. ` `  I think that it is a remarkable opportunity for the country, if we could block two to three to four to five minutes on sequential nights, the last 21 or 22 days of a"%A0*H&H&@@-" campaign, and alternate from one candidate to the other. I think that it is the first time that we will have the opportunity to have a presidential campaign similar to the one fought in 1912, when Woodrow Wilson one day would make a rather significant speech and two or three days later Teddy Roosevelt would make a speech. And even Taft was forced to comment because of the seriousness with which these candidates took their charge of seeking the presidency and sharing their vision with the people in the course of the campaign. ` `  I believe that in modern times, probably an hour speech a night would not be appropriate, but the roadblock of three or four minutes used by each candidate with only that candidate on the air at the time would, I think, be a significant step forward. ` `  I think that Fox and ABC and those others who have stepped forward with their own innovations on Paul Taylor's original idea, should be complimented. We hope that others will come forward also. ` `  But I hope we don't lose site of the original purpose, which was to create a debate over time to engage the public in a discussion of the serious issues by the individual who would chose to be President of the United States. Not through negative ads on television, not through surrogates, but the candidate himself or herself, directly"%B0*H&H&@@-" to the American people in their living room. The roadblock is enormously important because that means you couldn't escape unless you really wanted to escape. And you would have to confront what the candidates were saying. ` `  Now, I think that this is an important idea, but I think if we have to build on this victory, if we manage to get it, we have to undertake a new effort to truly reclaim our democracy from the power of money. I think that today's set back on the floor of the Senate only proves that there is nothing to be gained by aiming low. The proposal on the floor of the Senate today was rather modest. ` `  Free broadcast time is important, but if it is just a decoration on top of the current system, it won't be enough to repair democracy. So while I think it's very important to take this step, it is also very important to do a few other things that I think qualify for comprehensive campaign reform. Such as, giving voters control over how much money is spent. ` `  Equalizing spending and confronting the Supreme Court's 20 year old misunderstanding that a rich man's wallet deserves the same protection as a poor man's soapbox, in free speech terms. ` `  I've introduced a package of legislation that would deal with that, and all of these areas. That package also contains a proposal that would provide for Senate"%C0*H&H&@@-" candidates two hours of free time, one hour in primetime, in units of at least one minute in the last 60 days or so of the campaign. And I think the issue in the proposal that I put forward, and frankly, the issue in the proposal that Paul Taylor has put forward. And I think the spirit behind the various networks coming forward with their own variations on the Taylor proposal, is the recognition that the airwaves are truly public property. ` `  They now offer, I think, the closest thing we have to shared cultural, and a common forum for the discussion of ideas. That forum should not be available, only to the highest bidder. We have not only a right to insist that broadcasters provide this space, but a responsibility to ensure that the public's air space is used in the interest of rebuilding democracy. ` `  Now, I can understand that these proposals might be a little frightening to broadcasters, but I found that broadcasters understand what's going on as well as anyone. I think that occasions the proposals that have been made in the Taylor variation. And that broadcasters understand that they have been granted a very special privilege to use a limited resource. And that broadcasters want to be a part of rebuilding democracy. ` `  And, frankly, many broadcasters that I've talked to are tired of selling dozens of hours every other fall at"%D0*H&H&@@-" the lowest unit cost. In thirty second units for harsh, negative ads. Those ads, I think, make people change the channel and you could very well, if you were redoing the whole system, eliminate some of the lowest unit cost rates, in exchange for a commit on free TV time. ` `  I am convinced that that is the direction that we have to take. I think that openair space for public discussion is enormously central to rebuilding our democracy, and the step that you can take this year and that I hope the country will take by the fall is to make in block, say, three to five minutes available on alternative nights for the respective presidential candidates. ` `  That would begin the process of rebuilding our democracy so that people might feel that the people who are running for president have talked to them directly about their plans before they took office. So if they have a bold proposal, they will share it in the course of these television appearances. It won't emerge after the election to the surprise of many of the candidates' supporters. ` `  Or, contrarily, if the person has no bold proposal, it will become obvious that there is no intent to move the country forward. Or, if the candidate simply attacks his opponent in these ads, directly looking into the camera and calling his opponent whatever he chooses to call him in that moment, that also would tell us something about"%E0*H&H&@@-" the person who would choose to be President of the United States. ` `  So I think you very much for the opportunity to testify. I urge you to take action in this area. I compliment those who have come forward to offer their variations. And in particular, I compliment Paul Taylor who has the tenacity to push this forward against great odds. And I share with him, having been on the other side of the political process than he, that this would be a step that would be applauded in the longrun, not only by members of the press, but also by politicians themselves. ` `  CHAIRMAN HUNDT: Thank you very, very much Senator. We are immensely grateful for your comments. You made many trenchant remarks. I particularly note your comments about the lowest unit cost system. I think that it's broke, it needs fixing. It's probably a song for another day, but it is, I think, one of a number of different ways that we currently fail to create the kind of atmosphere in the immediate world that we would all like to see for our process. ` `  If I can, I will return to our previous sequence. And the question and answer mantel will now pass to Commissioner Chong. ` `  COMMISSIONER CHONG: Thank you. Let's talk about this notion of roadblocking for a minute, if we could. Why"%F0*H&H&@@-" is roadblocking so important? I assume from the conversation that we are talking about roadblocking on the free, overtheair broadcast. And so, if people turn it off, or they turn to cable, I mean, I'm just trying to understand whether this is something that Mr. Taylor wants us to mandate? That all free overtheair broadcasters roadblock at the same time, or whether you are talking about a voluntary effort by the broadcasters? ` `  MR. TAYLOR: Yes, I'm talking about a voluntary effort. Everything that I have proposed in this coalition is proposed this year envisions voluntary action by broadcasters. Roadblocks are important. I think they are a statement by, in this case, the broadcasters of the unique and importance of certain events in our national life. ` `  We roadblock StateOfTheUnion speeches, we roadblock the presidential debates. We accept the fact, not because anybody has mandated it, not because there is a law that requires, that we accept the fact that these are very important moments in our national life. ` `  It seems to me that the last few weeks of a presidential campaign is such a moment. This is a new kind of format, and giving it a roadblock isn't an announcement from the broadcasters, an investment in the importance of the event, that I think would be taken seriously by the viewers."%G0*H&H&@@-"Ԍ` `  Interestingly, I will also tell you, that as I went around over these last several months and talked to some of the broadcasters about their feelings of whether they would be willing to give us a few minutes in primetime, they all had competitive worries, as one could understand that they would, but a number of them said that a roadblock would actually make them feel more rather than less comfortable because at least all of their competitors would be showing the same political speech, and no one would, therefore, be at a disadvantage. ` `  COMMISSIONER CHONG: Thank you. ` `  MR. TAYLOR: But I would see the roadblock as something that ultimately the broadcasters would have to sit around the table and agree among themselves. ` `  COMMISSIONER CHONG: Thank you, Mr. Murdoch? ` `  MR. MURDOCH: I think we have to face the fact that politicians are pretty boring people. And they drive the viewers away. And the reason to do this, and to do this seriously, and to have roadblocks if you are going to have programs of more than one minute or more than two minutes, is to hold people and not give them an alternative. ` `  And I think they should be done with great care and only very seldom, and only on matters of great national significance, like national elections. But if you are going to give 10 minute or 20 minute segments of your time, you"%H0*H&H&@@-" are going to be killed as a commercial broadcaster by your opposition. And we are all too competitive to do that. And it won't get off the ground unless you people can jawbone all the broadcasters into roadblocking. ` `  COMMISSIONER CHONG: Mr. Fahrenkopf? ` `  MR. FAHRENKOPF: Well, I think the evidence of what happened four years ago in the debates reflects the importance, I think, of roadblocking. Historically, if you go back over presidential debates, starting back in 1960, then jumping all the way to 1976, because we had an absence of 16 years of presidential debates, from 1960 to 1976. ` `  But since then, historically, what would happen would be that the first debate would probably be the one most watched. And then watched viewership went down. That changed dramatically in 1992. The first presidential debate was the highest watched political program in American political history, and they went up from there. ` `  The final debate at Michigan State University was watched by 96 million Americans. And I think what has happened is there is such a proliferation of other sources out there of political information, whether it's on daily talk shows, or nightly talk shows on some networks, that the American people really are hungry for focused roadblocked attention to the issues and the individuals who would be President of the United States."%I0*H&H&@@-"Ԍ` `  COMMISSION CHONG: I wanted to ask Mr. Dyk about his Constitutional analysis of a roadblock? Do you wish you are anyone else would like to share on that topic? ` `  MR. DYK: Well, I think that there is no First Amendment problem to encouraging broadcasters to do that. Or for broadcasters to agree to do it. I think the problem comes in connection with a mandated free time proposal. If you put on top of that a roadblock requirement, I think you do have substantial First Amendment questions. ` `  I just don't think it's the business of government to force people to watch things that they may not want to watch. And to the extent that the government gets in that business, I think it's a very dangerous thing, and very, very hard to support. ` `  COMMISSION CHONG: Mr. McCarter, you are a broadcaster, how do you feel about roadblocking? Do you think the broadcasters are amenable to it on a voluntary basis? ` `  MR. MCCARTER: I would agree with what Mr. Taylor said a few minutes ago. I think if the roadblocking option came up and was available for all, that many would join it willingly and it would encourage the whole process in that direction. ` `  COMMISSION CHONG: Mr. Schwartzman? ` `  MR. SCHWARTZMAN: Commissioner, I think Congress"%J0*H&H&@@-" could enact a roadblocking measure that would withstand constitutional scrutiny, but I don't think that that's really what it ought to come to. ` `  The former Chairman of this Commission used to refer to eat your vegetables programming with great disdain. But I think the Commission does, in fact, have a role to lead. And to bring viewers who may not watch the news into the political process. ` `  And I now will refer to something that has been one of the less pleasant aspects of your job in the last few months. The only reason you are having an extremely difficult, unpleasant, time consuming exercise over children's television programming, is because the industry in the past failed to head repeated requests from Chairman and Republican and Democrat, going back over 20 years, to do more about children's programming. ` `  COMMISSION CHONG: Mr. Schwartzman, this is not the topic of this hearing. ` `  MR. SCHWARTZMAN: I think that is this Commission were to lead by coming out, Republicans and Democrats alike, as Mr. Fahrenkopf and Mr. Manatt have done, and encourage the networks to come forward and join together in a roadblocking plan, it would go a long way toward achieving the right result without legislation or without regulation. ` `  COMMISSION CHONG: Thank you. How much time do I"%K0*H&H&@@-" have? ` `  UNIDENTIFIED FEMALE SPEAKER: One minute. ` `  COMMISSION CHONG: That's it for now. Thank you, Mr. Chairman. ` `  CHAIRMAN HUNDT: I think we can all agree that there is behind Section 315 an important point, which is that television should not be used to distort the political process. Specifically, it should not distort the process by selecting for the public's appreciation specific candidates and excluding others. ` `  Can I ask you, Mr. Ornstein, to comment on this particular purpose of Section 315 and what importance you would attach to that particular goal? ` `  MR. ORNSTEIN: It's a tough one for you. I do think that the earlier comments were accurate. If you go back through the Congressional history of this provision, you didn't have members of Congress particularly excited about the problems of fourth, fifth, sixth, seventh or eighth parties here. They had something else in mind. ` `  It's difficult, nevertheless. You don't want to do something, or even step aside to allow something to happen that's necessarily going to quash debate or gong to distort a political process. ` `  But I'd mention two things. The first is that Paul Taylor was absolutely right. We have a process that"%L0*H&H&@@-" already through a whole host of provisions, legal and otherwise, statutory and otherwise, basically provides an almost special role for major parties in the system. ` `  Mr. Murdoch had mentioned the Israelis and they do have a different process for television. They also have a very different political process. One that is built on proportional representation, where the representation in the system comes to any party that gets two and a half percent of the votes nationwide. It used to be one percent. ` `  We have no proportional representation. We have a system in which the Congress has single member districts and only those who get the most votes end up getting elected. So it's perfectly reasonable in our traditions, in our laws, and in the intent here, to focus on a set of reasonable criteria to limit which voices get heard. ` `  And as long as there are some reasonable limits placed here, and those that use whether you are on the ballot and the majority of electoral vote states where you could actually win. Other criteria that suggests whether you are a viable candidate, which are perfectly allowable, if they are done in a reasonable way, it seems to me it is perfectly reasonable to do so. ` `  More generally, I think, clearly your role is to step aside where you can to allow robust debate to take place. This seems to me to be one of those where you ought"%M0*H&H&@@-" to be bending over backwards to let the broadcasters, the organizations like Paul's represents, to try and work things out unless there is a compelling interest to step in. ` `  There may be other instances, when we move to the question of the digital spectrum and what requirements broadcasters should have to get access to that where your role may end up being a more proactive one. ` `  CHAIRMAN HUNDT: And while we can stipulate that TV broadcasters should not distort the political process, it's also the case, isn't it, that TV in fact, facilitates the political process in America? You can't run for office without being on TV as a practical matter, isn't that right? ` `  MR. ORNSTEIN: Precisely so. And it seems to me what we hope will happen here is that the nature of the TV dialogue, which tends to be now particularly focused around the campaign commercials, which get into, as I said earlier, the your ugly, your uglier kind of dialogue. ` `  The debates are wonderful, but the fact is, when you have a couple of hours, and they are roadblocked, you are not going to capture the attention broadly of the widest swath of Americans into the dialogue of the campaign. If we can find ways in which television can more positively facilitate a dialogue, and in this case, having a couple of minutes, or a few minutes a night, where candidates speak directly to the camera, where the voice over, the negative"%N0*H&H&@@-" quality is going to be much harder to maintain. ` `  And if it is there, there will be ample opportunity for the press and it's analysis and for the other candidate to play a role there in bringing it back within the bounds, is almost a necessary direction we need to go in to try and recapture the notion of a campaign that really is a part of a deliberative process. ` `  CHAIRMAN HUNDT: I think it would be fair to say also, that the current system of running for office, the one in which you have to raise money to buy the time to get the access also distorts the political process. ` `  Paul Taylor, you are one of the most respected commentators on the political process in the print medium. If you don't mind telling us a little bit about your views on how the TV and radio medium distort or effect the political process, I would appreciate to hear those views. ` `  MR. TAYLOR: Well, I covered a number of presidential campaigns, and one of the reasons I got disillusioned with it let me describe the 8:00 a.m. meeting that each campaign in the last weeks has. The brain thrust of the presidential campaign. They all sit around with coffee and donuts at 8:00 a.m. and the got two things on their mind. And the two things are, what are the seven second that we want to get on Brokaw and Jennings and Rather tonight, and where do we want the candidate standing when he"%O0*H&H&@@-" says it. That's question number one. ` `  So that will be our line of the day. We will build the whole day around that. And question number two is, we just got back, we have three attack ads we are thinking of running this week. To reenforce that line, we just got back the focus group results on them, we've tested them, should be choose version A, B or C? ` `  If that's what drives candidacies, if that is the coin of realm in campaign communication, that is going to be what drives journalism. And the political journalism is very much about that. We write a lot about the Spin Doctors, the polls, the focus groups, the sound bites. ` `  America, it seems to me, understands this. We have been doing business this way in presidential campaigns for a couple of decades now. The voters, I think get it. I will quote Todd Gidlyn, some of you may remember, an author said the voters have become cognizant of their own bammoozlement. ` `  (Laughter.) ` `  MR. TAYLOR: In some ways, the packaging, the artifices, the fakery, is discounted in advance, but it becomes again, it becomes what carries the conversation. So it's like a prowrestling match. And some people tune in just for the sheer interest of the prowrestling match. ` `  What I hope you can get to is a boxing match. "%P0*H&H&@@-" Where you have the two candidates engaged in honest combat. Does that eliminate the negativity from the campaigns? Frankly, I hope not because negativity is a part of politics. But I hope that a format such as the one we have been talking about allows for honest engagement, honest dialogue, played out in front of the biggest audience America assembles every night, which are sitting down to watch Mr. Murdoch's programming and the programming at ABC, NBC, and CBS. ` `  And so, in other words, I think with a fairly small format change, you have the potential to improve discourse, to change campaign strategy, to change campaign journalism, and I think ultimately, to do what's the most important thing, to engage citizens. ` `  The last point I would make. People say attack ads work. And they do work. But understand how they work. They don't work by persuading your supporters to vote for you. They work by persuading people who might have been inclined to vote for your opponent not to vote at all. ` `  And I think that it is no accident that in the last 20 or 25 years, where we have been engaging in political communication this way, we have seen our voter turnout drop to among the lowest of all democracies. ` `  CHAIRMAN HUNDT: So, on the one hand, we don't want broadcasters in an individual market, or a network to"%Q0*H&H&@@-" distort the political process by choosing who ought to be on the TV. Of course, you are saying that, in effect, that's happening through the news anyhow, so we already have some of that. But we certainly don't want to enhance that. That's the purpose of 315. ` `  On the other hand, forcing all the candidates to have to buy the time has it's own negative distortion area effects on the political process. So, aren't we focusing here or ought we not be focusing on making sure that we don't make the best of the enemy of the good? If we have an idea that's been launched that might help us get a better process, isn't it worth of experimenting and aren't we best off trying to identify the singledefined purpose of 315 that ought to be preserved? Making sure that individual broadcasters don't exercise in their own right the power to select who ought to be using the free time. ` `  Now, Mr. Murdoch, has suggested the ways in which Fox would not exercise that discretion. The way that he would farm it out to others. Could I get comment on his specific proposal. Dr. Hagelin, you probably are the best person armed to disagree since you have only this particular forum for free time. ` `  MR. HAGELIN: Right. Well, you correctly pointed out that television access is crucial to participate in the democratic process. You should also bear in mind that the"%R0*H&H&@@-" Republican and Democratic candidates have granted themselves $60 million in taxpayer funding to buy TV time. Thirdparty candidates can't do that. ` `  I would like to have asked Senator McCain how General Lebid would have done in the Russian election if the Russian television had been closed to Yeltsin and Zuigonof only? Or whether 70 percent of the Russians would have turned out to vote in that election if only Yeltsin and Zuigonof had been given free TV time? ` `  CHAIRMAN HUNDT: But if I can, I would like to ask you to focus very directly and, if I can, very, very briefly. Is there anything wrong with the suggestions Mr. Murdoch has made about the way in which Fox would not, as a network, select who would be on, but rather the way they would ask that that be outsourced or delegated to a thirdparty so as to protect the fundamental purpose of 315? ` `  MR. HAGELIN: That is genuinely a good suggestion. It is clearly a step forward. I think it's very important that the FEC, perhaps, be consulted as to what objective and fair democratic criteria would be. I think that's a great step forward for democracy. And I don't think the 96 million viewers that we saw in 1992 would have tuned in if Perot, for example, had not participated in that debate. ` `  CHAIRMAN HUNDT: Let me switch briefly to my last topic for questioning. It is said that cash donations to"%S0*H&H&@@-" political campaigns are the gift that never stops taking. That may or may not be true, and I certainly don't want to run the risk of the same accusation when I get to my next favorite topic after free time for presidential elections. But that is the topic of free time for other elections. Specifically, Congressional and statewide elections. ` `  Mr. Murdoch, my ears perked up when you mentioned that topic and I thought I heard you indicate that that's also in your vision. If I could get you to expand on that, I would appreciate it. ` `  MR. MURDOCH: Yes, we have been hearing a lot today about the content and the style of the elections and of advertising. I'm not so concerned about that as I am about the money behind it. And I think that's where the damage is done, and I don't really believe that the national party fundraising for the presidential elections is doing a lot of harm. ` `  It is the Congressmen and the Senators and, particularly, the unfair advantage that the incumbents have in this process which I think does a great deal of damage to the whole democratic process in this country. ` `  If you are an elected member of the Congress it is 10 times as easy to raise money as if you are a challenger. And that in itself, I think, is bad for this country and against change."%T0*H&H&@@-"Ԍ` `  And we've got to find a way. I think as for television, it's easy enough to extend this to statewide races. In some areas, it's difficult when you get into Congressional districts, because we could have nothing else on the air in a place like Los Angeles, where there are two or three dozen districts, Congressional Districts. And the same in New York. ` `  But there must be a way through it, I think, in which we can, if we can agree on some process for this, that we can take it down to these other races. And give people time to get their point of view across and not cheapen, as Senator McCain wants, the time which would simply double the amount they buy. ` `  I'd almost put the rates up so that they couldn't buy any and you keep the rich candidates out that way by giving free time to all the candidates with no advantage to the incumbent. ` `  CHAIRMAN HUNDT: Excuse me just one second. I don't want to me remiss here in not acknowledging the gratitude, the contributions that TCI has made to this merging debate about free time. And if I could ask you, Mr. Andrews, to just comment on what Mr. Murdoch has just said. I'd like to hear TCI's views or your personal views about free time being extended to a Congressional or statewide candidates."%U0*H&H&@@-"Ԍ` `  MR. ANDREWS: Well, thank you Mr. Chairman for  ?<your kind words. And we intend on, Race for the Presidency in the final 12 to 15 weeks before election day to showcase in those markets where our program is best distributed to showcase Senate races. In some cases, if there is not a Senate race being contested in that state, it would be a race for Governor. Perhaps, even in some cases, Congressional Districts, simply as a way of sampling the idea for the benefit of not just viewers in that state or that market, but for viewers in our national audience on the  ?<Race for the Presidency program. ` `  We intend this as a way of getting our feet wet toward a more diversified effort in many states in 1998. ` `  CHAIRMAN HUNDT: And, Chuck, did you want to make one comment? ` `  MR. MANATT: Yes, Mr. Chairman, I would just underscore, I guess, the discussion of both of the last two gentlemen. How important it is we head in this direction. In almost all cases, presidential or statewide, which is to say Governor or Senator, where the real cost of the campaigning is way overburdened on the media, Congressional Districts and others are not quite burdened the same way on the media. ` `  But this step, this direction, which we have to work with campaigns are terribly important."%V0*H&H&@@-"Ԍ` `  CHAIRMAN HUNDT: I don't have any other questions at this time. We will now have followup questions and, hopefully, followup answers from Commissioner Ness and Commissioner Chong. ` `  COMMISSIONER NESS: Thank you very much, Mr. Chairman. I would like to talk a little bit about the safeguards that are in place or that ought to be in place, or that ought to be removed. ` `  What safeguards are absolutely necessary to delineate what would be a bona fide news event? Does anyone want to address that specifically? What safeguards ought to be in place? For example, need it be backtoback programming? Need it be independent candidate selection? Need it be independent question formulation? Newsworthiness? No evidence of broadcaster favoritism? ` `  What is useful, what is unnecessary to ensure that the goals of 315 are maintained? Mr. Dyk? ` `  MR. DYK: The answer, I think, with respect to the first three is no, they are not necessary. And as to the second two, the answer is yes, they are necessary. I think that the question of whether they have to be backtoback should be made irrelevant as approval of the Fox proposal would. Newsworthiness remains an important criterion and lack of individual candidate favoritism remains an important criterion."%W0*H&H&@@-"Ԍ` `  But I think essentially, in the (A)(4) exemption, those should be the only two criterion. ` `  COMMISSIONER NESS: Yes, Mr. Meyerson? ` `  MR. MEYERSON: If you talk about multiparty races, I think I can I would like to see people also talk about a lack of hostility to candidates as well. It's certainly possible to have two people and you don't care who wins as long as one of them doesn't, a third person. So I would like to add, as sort of understanding that you don't want to be hostile, especially, to a third outside voice. ` `  And when you talk about third parties, historically, their addition has not been because they could win, but because they could alter the debate. And I would like to make sure that if you look from Ross Perot to John Anderson to George Wallace on back, it's not the chance of victory that "will effect their political process." You want to let those who could effect the debate be included in the debate. ` `  COMMISSIONER NESS: Any other views from anyone else? Mr. Ornstein? ` `  MR. ORNSTEIN: It seems to me that defining a bona fide news event is something that is the subject of substantial public and press attention that is going to be discussed substantially afterwards. And that you simply want some reasonable and objective criteria that are put in"%X0*H&H&@@-" place by, I think, an independent group and I think the Murdoch proposal is a very reasonable one in that regard. ` `  There are others that could be followed to make sure there is a fairness in terms of who is brought in. The one thing I would say, just simply in terms of this particular set of proposals, we want a dialogue here. It isn't just about raising new issues. It's getting a dialogue among those who have a chance of winning and getting a sense for voters who aren't going to pay a whole lot of attention looking at candidates to assess them. Their leadership qualities, not just where they stand on the issues. ` `  And you don't want to muddy the waters too much. If you have five or six candidates so that the dialogue between the major ones isn't going to come right one after the other, but with a substantial interlude in between, you are going to lose a major part of this. And that ought to be a criterion as well. ` `  COMMISSIONER NESS: But if the presentations are prerecorded, not edited, but prerecorded, the two and a half minutes, or whatever, presentations. ` `  MR. ORNSTEIN: Yes. ` `  COMMISSIONER NESS: Do you really have a dialogue? ` `  MR. ORNSTEIN: I think you do get a dialogue. Because what will end up happening is, and I believe this"%Y0*H&H&@@-" would happen if we manage to get some variation of this. This is going to become a very important focal point of the campaign. And a candidate is going to say something, and for the next 24 hours, it's going to be hashed out and reviewed and discussed. The other candidate is going to react to it. There is going to be some question of what you want to do the next day. ` `  And then you are going to get the similar sort of thing happening. So that once this becomes a focal point, people are going to pay more attention to it than they would otherwise and the discussion will go on, wellbeyond the two and a half minutes itself. ` `  COMMISSIONER NESS: Is it critical that there be no intervention or editing by the candidate, for example? Is that an important piece of the puzzle? ` `  Mr. Schwartzman? ` `  MR. SCHWARTZMAN: Yes, this is the critical legal point. The difference, and Mr. Dyk and I vehemently disagree on this, the difference between onthespot coverage of a bona fine news event, is that a news event reflects the absence of broadcaster control over the content of the programming and what is said. And that was what Mr. Murdoch clarified in connection with Fox's plan, that in my mind, qualified it as coverage of a news event. ` `  What Congress had in mind in 1959, was covering"%Z0*H&H&@@-" conventions. You put a camera up and you broadcast what happens, and the absence of a broadcaster's ability to effect it, is what qualifies for the exemption. ` `  A news interview is quite the opposite. So, yes, I think that critical to this, and critical to the kind of virtual debate inherent in Paul Taylor's concept is that the broadcasters have no role in effecting, conditioning the content requiring that specific questions be addressed or answered, giving over the time to the candidate. ` `  MR. MURDOCH: Commissioner, can I? ` `  COMMISSIONER NESS: Please. ` `  MR. DYK: I find that a somewhat astonishing construction of Section 315, where the central Congressional purpose was to restore broadcaster discretion. And I'm not aware that in any of the court decisions or any of the Commission decisions that there is any suggestion that broadcaster control or broadcaster influence is going to render the program nonexempt. ` `  And I don't think there should be any such criteria and I think it would be directly contrary to the central Congressional purpose. ` `  COMMISSIONER NESS: What about candidate editing of the presentation? ` `  MR. DYK: Well, I think we are talking here about the (A)(4) exemption."%[0*H&H&@@-"Ԍ` `  COMMISSIONER NESS: Correct. ` `  MR. DYK: I don't think that candidate editing of the presentation is inconsistent with that. I think what's going to happen here is that broadcasters will experiment with different formats and the beauty of broadcaster editorial judgment is if the formats don't work and, for example, the candidate editing results in a format that doesn't work, the broadcaster is going to abandon it and it's not going to happen again. ` `  COMMISSIONER NESS: Okay. Does anyone else have any thoughts in terms of safeguards? What works, what doesn't work? Dean Jamieson? ` `  DEAN JAMIESON: The only thing I would say is (inaudible). ` `  COMMISSIONER NESS: Okay. Cable television is playing an increasing role in the political debate. There are a number of programs that are now found on cable television. A lot of candidates have used the local inserts in cable television to provide an opportunity to be on the air at lower prices. ` `  I was wondering, Mr. Andrews, you commented about your programs and the desire to have clarification on the part of the Commission with respect to 315. Can you elaborate a little bit about how you see 315 effecting what is done on cable, specifically, as TCI? I assume you are"%\0*H&H&@@-" saying TCI is an operator? ` `  MR. ANDREWS: Yes, TCI is an operator, but also IntroTelevision, TCI's channel which serves most of our 13 million subscribers across the country, is the homebase of  ?@<Race for the Presidency. And as we read 315, cable programming services are not spoken to, cable operators are spoken to. And this was the threshold at which we began  ? <designing Race for the Presidency a year ago, thinking that we had considerable leeway as a cable programming service. ` `  We wanted to enlist a broad coalition of other cable programmers and cable operators, which we have been able to do over 20 members of that coalition that give us our reach of 50 million homes for the show every week. And we also hope that we could begin enlisting public television stations, like Mr. McCarter's WTTW, not yet one of our partners. But we have about 15 public television stations across the country. ` `  So we went further beyond the silence of the law about cable programming services and scrutinized the  ?<definition of bona fide news program and designed Race for  ?@<the Presidency so that 20 to 25 minutes of free candidate material in a 50 minute programming hour has wrapped around it the news analysis, the bipartisan political analysis from Republican and Democratic voices with a sprinkling of participation of thirdparty voices, as well as reports from"%]0*H&H&@@-" the campaign trail that is anchored by a wellrespected credential journalist. ` `  We did everything we could to make it a bona fide news program almost an analogy to what NBC has offered for inclusion of presentations by candidates within it's  ?<Dateline programs in October, or what CNN, a cable service by the way, has offered with its inside politics, five minutes a week, I believe is there offer in the last four weeks of the campaign. ` `  So we tried to be as safe as we could in designing  ?<Race for the Presidency under the legal advice that we had received in order to push farther and offer Senate candidates, House candidates, Gubernatorial candidates free air time in the closing weeks of this campaign in many parts of the country. It would be helpful to us if the clarification that has been requested by Fox does broaden the reading of the Section so that we don't have to tiptoe as much as we have to date. ` `  COMMISSIONER NESS: Would you say that a vertically integrated programmer MSO, such as TCI, would all of your cable networks that you run on your own systems be subject to 315 requirements? ` `  MR. ANDREWS: I'm not a lawyer, I am not experienced in communications law. Prior to receiving the assignment to conduct this particular experiment for my CEO,"%^0*H&H&@@-" John Malone, and I really couldn't possibly speak to that question, Commissioner. ` `  COMMISSIONER NESS: Does anyone else have any thoughts about the inclusion of cable programming within the purview of 315? ` `  Okay, my time is up. Thank you very much. ` `  CHAIRMAN HUNDT: Commissioner Chong? ` `  COMMISSIONER CHONG: Thank you. I talked a little bit in my opening statement about how we have many more mass media outlets today than certainly at the time the rule was implemented, 315, which I believe was back in the 20s. I don't even think we had TV back then. ` `  In 1959, Congress put the exemptions in for the news programming. That was the year I was born, let me note. And so things have changed since then too. We have cable, we have satellite DBS, we have OVS systems, hopefully, being put in soon. ` `  I wanted to know if any panelists would like to speak about whether the fact that there are many more mass media outlets available to consumers, whether that ought to impact the way that we interpret the Section 315 and also any of the exemptions. Anyone want to take a stab at that? ` `  MR. DYK: Well, Commissioner, I think it is relevant and I think it ought to be that the Commission could be less concerned about broadening the exemptions and"%_0*H&H&@@-" as the Commission has ruled in the past in the fairness proceeding, these new outlets, these new competitive media entities really do have a bearing directly on the First Amendment question, and suggest that some of the concerns  ?@<that the Supreme Court addressed in Red Lion, based on the technology at that time, are somewhat outmoded now. And that it's appropriate to recognize greater First Amendment rights and broadcasters and in greater freedom from broadcasters in order to serve their audiences.  ?<` `  COMMISSIONER CHONG: Now, in the Red Lion case, they talked a lot about scarcity being the basis for broadcast public interest obligations. Are you arguing that as we move into a digital age with more outlets that this argument has somehow diminished? ` `  MR. DYK: I think it is diminished and I think  ?p<that the Red Lion case itself recognized that that day might come and that subsequent cases have suggested that that day has arrived. And I do think it has arrived. What your people are arguing about now is Henry Geller said, well, not today, but 10 years from now. Well, that's a wholly  ?@<different debate than we had at the time of Red Lion, where I think you had to be somewhat visionary to see the changes in the technology. ` `  But the competition is there. The notion of the First Amendment is that people benefit from private choice"%`0*H&H&@@-" in these areas rather than governmental choice, that the real danger is governmental choice and I think whatever countervailing considerations might have existed at the time  ?<of Red Lion don't exist any more. ` `  COMMISSIONER CHONG: Mr. Ornstein? ` `  MR. ORNSTEIN: I see good news and bad news in the expansion of outlets. The good news is that candidates who otherwise couldn't afford to buy television network time, are going to have a lot of outlets and places where they can actually get messages across to different audiences and maybe expand dialogue in some ways. But that dialogue is going to be a narrower and narrower one. ` `  And we are already finding candidates strategically focusing and trying to get a message through to a smaller group of people, but we might not even have an opportunity if you were an opponent to know what kind of dialogue is going on out there. ` `  It seems to me to increase even more, the compelling need to have at least some place where we have a national dialogue as we fragment further and further. And that's where these ideas become even more compelling. That if in fact we are going to have all kinds of political dialogue going on over the fishing channel, or the dance channel, or the internet, in different places, smaller groups of people, it's going to be harder to have a national"%a0*H&H&@@-" dialogue which is important as a unifying force in the country. ` `  And if we can find ways to do that and cement it in now, it will be very, very good for the country and you ought to give some consideration to that as you consider what the legal ramifications are. ` `  COMMISSIONER CHONG: I'm glad you raised the internet. It seems to me that that's I mean, this is not the topic of our panel, but it's clear that internet is a growing service. I note that most political candidates and most Congressional members have web sites, where people can access information about the candidate and position papers on a daily basis. I would think that that would foster positive information flowing to the voter. ` `  I saw some hands up. Mr. Manatt? ` `  MR. MANATT: Madame Commissioner, it would foster more information, I'm not sure if it's positive. In some ways, it will get out I would just add to what Norm was saying. The two Senators tried to underscore it. ` `  For the closest thing to a national culture, a way in which we can be pulled together at least once every four years in a presidential dialogue and a presidential debate, is exactly the free TV time format we are talking about with a plethora now of different other mediums that people get their information. They are not getting the same"%b0*H&H&@@-" information and they are just not coming together. It's something where with a country as diverse as ours, we need to be concerned about. ` `  COMMISSIONER CHONG: At the end, Ms. ` `  DEAN JAMIESON: Jamieson, Kathleen. ` `  COMMISSIONER CHONG: Thank you. ` `  DEAN JAMIESON: I think as you talk about multiplication of channels, it's important to remember that we are dealing here with television. And for the onethird of the families who don't have cable, they don't really have the kind of multiplication of channels that many people envision when they make this kind of argument. ` `  And to the extent that it is cable that is bringing us CSPAN and cable that brings Inside Politics, and candidates increasingly are using Larry King as a conduit, that onethird of the families are being closed out of the political dialogue. ` `  And I don't know exactly how that bears on your technical legal question, but I think from a larger standpoint, which is how do we create more access to the dialogue democracy, it means that the broadcast channels have an obligation that is very real and needs to be made real until we have 100 percent cable penetration. ` `  COMMISSIONER CHONG: What about radio? I mean, radio is broadcasting. That falls within the purview of"%c0*H&H&@@-" 315. Has that been a problem, is it effective as a conduit? Anyone have thoughts? ` `  DEAN JAMIESON: I think one of the most important things that has happened in the last decade has been the expansion of talk radio in politics. Which has provided many voices that otherwise would not have had access to the political system. A means of talking back to the political system. ` `  The program, for example, that talks about disability issues for its entire programming time is, I think, a very innovative use of the nation's airwaves. And so, much of the talk publicly about talk radio suggests that it hurts democracy. I think talk radio is an exciting alternative way of creating interaction in politics. And it deserves our applause. And there, I think, the multiplication of channels has produced multiplication of voices. ` `  COMMISSIONER CHONG: I have had some commentators say that if the free time proposals are not exempt as news events, it's possible that the networks might run afoul of the campaign contribution laws. Does anyone have any comments on that issue? Mr. Schwartzman? ` `  MR. SCHWARTZMAN: As I said in my opening statement, it's the public's time. So the broadcasters are giving time that they own as a contribution, rather they are"%d0*H&H&@@-" exercising their responsibility as trustees of the public's time in exercising their programming judgment as to what will best serve their audience. ` `  So it's not a contribution at all. The Commission staff addressed this in 1989 and that's, basically, the position they took. And I think it was right then, and it's right now. ` `  COMMISSIONER CHONG: Anybody agree, disagree? ` `  MR. DYK: Commissioner? ` `  COMMISSIONER CHONG: Mr. Dyk? ` `  MR. DYK: I do think there is a potential problem with nonexempt programming being a contribution under the FEC regulations. The FEC has never been able to rule on this and it does have difficulty in getting these rulings out. But I think there is a danger there. ` `  But, if the Commission were to rule that programs are exempt, there would not be a problem under the FEC regulations. And that's one of the important reasons for the exemptions. ` `  COMMISSIONER CHONG: Anyone else? Mr. Andrews? ` `  MR. ANDREWS: That was an important consideration  ? <in resigning Race for the Presidency, Commissioner. As we studied the FEC law, it appeared that qualifying as a bona fide news program, hence exempt, was critical for our company to stay on the right side of the FEC."%e0*H&H&@@-"Ԍ` `  COMMISSIONER CHONG: Thank you. I note that since 1975, the Commission has been steadily expanding the exemptions to allow for more kinds of news programming. Particularly, with respect to news interviews and onthespot coverage of news events. It seems like it's a good trend, at least in my view at this point. I'm wondering if anyone disagrees that this is a good trend? ` `  MR. HAGELIN: I would have to disagree with the way it's been done. It seems as though we have had an erosion over the past well, since 1959, of the spirit in the letter of the Equal Provisions Act set by Congress for the purpose of being sure that a diversity and a plurality of ideas were heard. ` `  I think the strength of our democracy depends upon the plurality and diversity and vitality of the discussion. And I think, given the forces that are involved in the decision here today, the FCC is going to have to work doubly hard to be sure and maintain a diversity and the vitality of a democratic process by being sure that the spirit of the Congressional equal access provision is upheld. ` `  And I don't think it's a good thing that the FCC, I think, has allowed a steady erosion of that beginning with a 1959 exemption. Which was really fostered by McCarthystyle era attempt to keep certain parties out of the discussion, which may have been motivated for legitimate"%f0*H&H&@@-" reasons at the time. But to see a further erosion of those equal access provisions in the ensuing years, where there is no fundamental basis and no danger to our democracy through the fertility of new ideas. I can't see that that erosion is a good thing. ` `  COMMISSIONER CHONG: That's all I have, Mr. Chairman. ` `  CHAIRMAN HUNDT: Thank you very much. I doubt that we have ever had a more important hearing here at the FCC. We certainly have never had a more distinguished list of witnesses, and I want to thank all of you very, very much. ` `  Our country is moving to an information economy and our competition policy is supposed to drive that. We are moving to an information society, our networking of classrooms and other policies are supposed to drive that. We need to move to an information democracy. And the effort that you all are discussing today is an effort that will help us achieve that vision. ` `  I think that Paul Taylor and the other members of the Free Time Coalition have demonstrated that if wishers are beggars, then beggars are going to ride on the information highway at least. ` `  And I congratulate you on your success. I want to thank those who requested the time, I want to thank those"%g0*H&H&@@-" who gave the time, and I also want to thank all of you who have given us the free advice to go with that free time. Your free advice is invaluable for us. ` `  We need it to make sure that we do protect the legitimate purposes of Section 315, while at the same time, recognizing that it would be wrong to have an overly strict crabbed reading of 315 that, in fact, denied us the opportunity to improve the other effects on the political process that we currently see. And that is the need to raise virtually infinite amounts of money to get access to the American people. ` `  None of us in this country want that to continue to be the case, and I think we ought to be able to find our way to a reading of 315 that will allow these donations to be received without empowering broadcasters to distort the process and in an inappropriate manner by selecting the recipients of the donation. So I think you have helped us enormously in all of these respects, and I want to thank you again. ` `  I also would like to acknowledge the continuing extraordinarily able contributions of our staff, Roy Stewart has done magnificent job on this hearing and on many, many other issues. In his particular office, Bobby Baker and Ray White, and Anthony Mastando have all contributed to the briefing of the Commissioners and to the preparation of this"%h0*H&H&@@-" process. And I'm sure many of the panelist here join me in thanking them. ` `  Jonathan Cohen, John Nuechterlein, Marsha McBride, Christ Wright, all deserve thanks for their contribution to our legal analysis and I hope the other Commissioners will indulge me as I thank specifically someone on my staff, Julius Genachowski, who is a brilliant lawyer and a very, very indefatigable individual, has helped guide my own thinking through this process. ` `  Thank you all very, very much. This particular hearing is adjourned. ` `  (Whereupon, at 4:32 p.m., the hearing was adjourned.) // // // // // // // // // // // //"%i0*H&H&@@-"  ?<(! i   ` X W Heritage Reporting Corporation 0(202) 6284888W REPORTER'S CERTIFICATE ă  ?<  ?X< FCC DOCKET NO. :  ?< CASE TITLE :EN BANC HEARING ON NETWORK PROPOSALS TO  PROVIDEHH TIME TO PRESIDENTIAL CANDIDATES  ?@< HEARING DATE :June 25, 1996  ?< LOCATION : Washington, D. C.  I hereby certify that the proceedings and evidence are contained fully and accurately on the tapes and notes reported by me at the hearing in the above case before the Federal Communications Commission. Date: 06/25/96 _____________________________ Official Reporter Heritage Reporting Corporation 1220 "L" Street, N.W. Washington, D.C. 20005 Peter Shonerd  ?<< TRANSCRIBER'S CERTIFICATE ă  I hereby certify that the proceedings and evidence were fully and accurately transcribed from the tapes and notes provided by the above named reporter in the above case before the Federal Communications Commission. Date: 06/27/96 ______________________________ Official Transcriber Heritage Reporting Corporation Christine Perkins  ?x< <PROOFREADER'S CERTIFICATE ă  I hereby certify that the transcript of the proceedings and evidence in the above referenced case that was held before the Federal Communications Commission was proofread on the date specified below. Date: 07/05/96 ______________________________ Official Proofreader Heritage Reporting Corporation Barbara Blossom"'j0*''."Ԍ