REMARKS OF CHAIRMAN REED HUNDT TO NATIONAL ASSOCIATION OF BROADCASTERS CONVENTION FOR DELIVERY BY SATELLITE ON MARCH 23, 1994 Buenos Dias. I am very pleased to have the opportunity to address the National Association of Broadcasters in this banner year for broadcasters. I am able to speak to you from Buenos Aires, Argentina, across two continents and thousands of miles, because of the wizardry of your technology, and the can-do attitude of Eddie Fritts and the NAB staff. I want to thank Eddie and his team, including Jeff Baumann, Karen Fullum and especially Kelly Williams for accommodating me so graciously. I had very much looked forward to attending NAB and meeting with those of you who have not yet had a chance to visit me in Washington. The good news here in Buenos Aires is that the very first development conference of the International Telecommunication Union is off to a great start. The ITU is the United Nations organization for world telecommunications. I am here with my counterparts from 180 nations to set an agenda for economic growth all over the world through communications and broadcast development. Unfortunately, my own speech at this conference was scheduled so as to conflict with my planned appearance at NAB. There are hard choices in my new job, as I have been repeatedly discovering, but I know you recognize that I had a patriotic duty to represent our country and our American business interests here in Buenos Aires. In any event, this development conference will not reconvene until 1998, so that gives me time to persuade the ITU never again to schedule its meetings during the NAB Convention. In his appearance here on Monday, the Vice President gave the most important speech in the history of international communications. He called for all nations to build a Global Information Infrastructure based on the model of our National Information Infrastructure to international communications. This will generate tremendous economic opportunities for business. Meanwhile, you have in Las Vegas some of the most important FCC policymakers -- in fact I saw a memo from my chief of staff Blair Levin that says the FCC was sending ALL its most important policymakers to Las Vegas. I am especially glad that you have with you my good friends and colleagues Jim Quello and Andy Barrett. We have worked wonderfully well together, and if I can speak for them, we are eager to welcome Rachelle Chong and Susan Ness to complete our team. Jim, Andy and I very much admire Rachelle and Susan. We think that you also will be grateful for their astute contributions to our cordial and collegial process, once they are confirmed. I am also pleased that you have with you the members of my broadcasting team: Roy Stewart, a wise and experienced counsellor who fortunately was willing to continue as Mass Media Bureau Chief; our brilliant General Counsel Bill Kennard, who used to work for NAB; Merrill Spiegel, who joined us from the Hill where she handled your issues for the very able Congressman Boucher on Ed Markey's Committee, and of course Blair, el jefe de la FCC. There is an important message for NAB from this ITU development conference. It is that there is a huge foreign market for American products and services made by many of you at NAB -- literally billions of dollars in new exports are possible. For example, one of the top-rated shows here in Argentina is "The Simpsons." The 42 television stations, 175 radio stations, and the cable systems here are hungry for U.S. programming. Incidentally, the Buenos Aires ADI has 11 million people -- and the best steak in the world. Broadcasters are fortunate that the NAB has long recognized the benefits to our country of international commerce. Through sister organizations throughout the world, including the Association of Private Broadcasters here in Argentina, NAB will be offering you many insights into international opportunities, starting with a program following my speech. Despite the significance of this conference, international affairs have been only a part of the fascinating work that's been on my desk in my first 100 days as chairman. Even my first day in the office was busy. To begin with we got a new flag, replacing the one with 48 stars. Then I met with Eddie Fritts, Dick Wiley and Roy Stewart to get advice on some broadcast issues. Then Dick brought in some of his clients. Finally, I met with some industry leaders who said they only had a little time for me because they were on their way to get Roy, Eddie and Dick to okay some items. Now those were guys who knew the system at the FCC. But seriously, from day one we worked on our three themes: economic growth, access and reinventing Government. I want to talk to you today about the application of these three themes to broadcaster issues. First, access. I understand that Ray Smith praised you Monday for the important public services you provide to the local community. I agree with Ray. Your role can be vitally important: During the recent Los Angeles earthquake, broadcasters stayed on the air 24 hours a day to inform local residents about disaster relief. The public needs that access to local news. Similarly, children need access to quality educational television. Congress is working on visionary legislation that will, among other things, ensure that we bring the information superhighway to every classroom, library and clinic by the year 2000. The connection of every classroom in the country to the National Information Infrastructure will revolutionize learning and create huge demand for educational programming -- and a great business opportunity for broadcasters. Children also need access to quality programming at the home. In bringing our inquiry on the Children's Television Act to a conclusion in the near future, we will balance the children's need for access to educational programming with practical economic considerations. Broadcasters' responsibility to provide access to information, local news and programming, different voices, and children's TV, is based on the fact that, as House Energy and Commerce Committee Chairman John Dingell often say, broadcasters are "public trustees." In this respect, you are distinguished from all other media. Congress recognized this in passing the must-carry provisions of the 1992 Cable Act. I personally worked with the Solicitor General of the United States to make sure that the government presented its best case in defense of the must-carry provisions in the United States Supreme Court. As Jim Quello, my distinguished predecessor whom you quite justly honored on Monday, has said, "Broadcasting is the place where all of us get together to share experience -- where we get news, where we learn, where we get information, sports and entertainment . . . in many ways (it) is the glue that helps hold America together." This is an eloquent way to say that broadcast gives America access to each other. On my watch the Commission will work hard to preserve everywhere in our country strong, diverse, creative, free, over-the-air broadcast service. A second aspect of our three point agenda at the FCC is called Reinventing Government. In the 1980's, Chairman Mark Fowler, my friend and colleague at my former law firm, launched the broadcast "underbrush" proceeding to eliminate unnecessary broadcast regulations. We are going to take another whack at the regulatory underbrush. Commission veteran Mary Beth Richards is heading up an agency-wide effort to revamp our operations according to the principles of the Administration's National Performance Review. We want to deliver good service to our customers and that includes you. So call Mary Beth at (202) 418-1000 to tell her how we can do better. I mean it. Already, Roy Stewart and employees in the Audio Services Division of the Mass Media Bureau have reorganized into teams to re-engineer our processes, including FM licensing and AM/FM licensing renewal. I want you to know that some broadcasters have told me that the FCC is making a mistake by penalizing broadcasters with monetary forfeitures instead of encouraging compliance through warnings and non-monetary penalties. I have asked Roy Stewart and Bill Kennard to report to me on this question within 60 days. Let them have your views. Broadcasters who make good faith efforts to comply with the Commission's regulations should not have their licenses jeopardized by immaterial, unintentional violations of our rules. Finally, I'd like to talk to you about economic growth. Today, broadcasting is a strong, thriving business. In 1993, ad revenues for local television stations increased an average of 6% over the previous year's revenues. If current trends continue, this will be the first year the broadcaster advertising revenues exceed newspaper advertising revenues. This is another sign that we live in an age of visual and oral communication - that's good for broadcasters. But the FCC can help broadcasters do even better. First, we can act more quickly on certain matters. I'm happy that we recently completed the process of ranking 688 AM stations eligible to migrate from the current AM Band to the expanded AM Band. Second, we can examine our ownership rules to balance considerations of efficiency, competition and diversity. Bill Kennard and Roy Stewart will report to me on this issue shortly after your convention. Third, we analyze new technologies such as digital audio broadcasting, and we will pay studious attention to the competitive realities for terrestrial broadcasters. Finally, a key to our country's economic growth is development of the information highway and ultimately the Global Information Infrastructure we are discussing here in Buenos Aires. Broadcasters will help build and broadcasters will travel on that highway. The Highway is intimately related to what may be the most important economic issue for broadcasters between now and the next NAB -- which I will certainly attend, if invited. I am referring to HDTV. In the earliest days of research about television, more than 80 years ago, television was seen primarily as an aid to scientific research and industrial management. But the great leaders of television had a broader vision. As the legendary David Sarnoff stated in 1931, "the potential audience of television in its ultimate development may reasonably be expected to be limited only by the population of the earth itself." His words were echoed by one of my predecessors from the Federal Radio Commission, Harold LaFount, who said "television is destined to become the greatest force in the world [with] more influence over the lives of individual than any single force." But while Sarnoff and LaFount had the right vision, they were talking about the wrong technology. Their comments were about what was called "mechanical" television. By 1933, this start-up business had totally collapsed. By the end of the decade, a new technology -- electronic television -- emerged. This became the great industry you operate today. The new technology of electronic television was known in the 1930's as high definition television. They say history repeats itself. I don't know if that's so. And I don't know if this decade's high definition television will ultimately replace our current broadcast technology. I do know this -- if the great David Sarnoff couldn't pick the correct technology in 1931, we at the FCC are well advised to approach the HDTV issues cautiously, taking advice from NAB, Dick Wiley's Grand Alliance and others. With their guidance and the input of others, I believe the FCC will successfully balance the difficult and complex technological and economic considerations involved questions of spectrum allocation and licensing related to HDTV. But I want to draw one lesson from TV history. Mechanical television didn't fail in the 1930's because of the Depression or technological limitations. It failed because the programming for the early mechanical television stations didn't attract views. The future of digitized, modern high definition television depends more on your creativity and business drive than on engineering genius, as impressive as that is. That's good news for the country and policymakers like me. The energy, experience and creativity of the members of NAB will see the country through this year of rapid technological change. And we at the FCC know that your continued commercial success is the precondition to development of new broadcast technologies. If your proposed innovative techniques for exploiting scarce spectrum, without jeopardizing your role as "public trustees," we will examine your proposals with eagerness, focusing on the additional benefits to our economy and your businesses of such uses. As Sarnoff said in 1931, "when television has fulfilled its ultimate destiny, man's sense of physical limitation will be swept away and his boundaries of sight and hearing will be the limits of earth itself. With this may come a new horizon, a new philosophy, a new sense of freedom, and greatest of all . . . a finer and broader understanding between all the peoples of the world." My new friends, only miles separate you and me. And over those miles, I hope you sense the sincerity of my belief that broadcasting has not even begun to reach the limits of the contribution it can make to America and the world. During the exciting tumultuous eventful journey you and I will take together in future years, we should be able finally to fulfill David Sarnoff's great dream: to use broadcast to create "a finer and broader understanding between all the peoples of the world." I thank you for tuning in, and in the words of the great Schwarzenegger himself, Hasta La Vista, baby.