Remarks of FCC Commissioner Rachelle B. Chong to the New York City Chapter of American Women in Radio and Television New York City March 29, 1996 "THE EMPEROR'S NEW CLOTHES AND OTHER STORIES" "The Emperor's New Clothes" Once upon a time, a powerful Emperor fell prey to a clever con artist. "I will make you a very special wardrobe that only the very wise can see," said the trickster. Then he pretended to cut and sew. He challenged all those who watched him to marvel at the beauty of his handiwork. Because there was nothing there, no one saw anything, of course. But, they marveled at his work nonetheless, lest anyone should think that they were not wise and could not see the clothes. After a while, the trickster delivered the "clothes" to the Emperor. Like the others, the Emperor did not want anyone to think he was not wise, so he too loudly praised the beauty and quality of his new "clothing." In fact, he even planned an elaborate parade to show off the clothes to all of his loyal subjects. All along the parade route, his subjects pretended to see the beautiful clothes because they did not wish to be thought of as unwise. At last, one very small child, who did not know any better, asked his mother in a very loud voice: "Why is the Emperor walking around with no clothes on?" With this, all the people and finally even the Emperor began to laugh because they realized how silly they had been. Children's Educational Television Now, you may be wondering why I've begun my speech with a children's story. I would like to apply the moral of this story -- that you ought to have the courage to say what you believe in, regardless of what others may think -- and apply it to our ongoing children's educational television proceeding. As you may know, the Commission is looking at our children's educational TV rules with an eye toward improving them so that they better promote the goals of the Children's Television Act of 1990. The Commission has received complaints that there aren't enough quality children's educational shows, that they are being aired at hours when children aren't watching, and that some broadcasters may have tried to claim as educational, shows that were really entertainment. Last October, I gave a speech to the Women in Cable and Telecommunications in which I talked about concerns I had about whether the FCC should require broadcasters to air a specific amount of children's educational programming each week. Well, I got a reaction to that speech -- my office was inundated with calls and letters contending that a quantitative standard was the only way to achieve the goals of the Children's Television Act. Some told me that unless I supported a quantitative standard, I was "against kids." Others argued that I should support an hourly standard or at least a staff processing guideline that was hourly because broadcasters ought to have clarity and certainty about what is expected of them to meet their obligation under the Act. I have given a great deal of thought to these arguments. I have very carefully read the Children's Television Act, its legislative history and the comments in our children's television proceeding. The conclusion that I have reached is that, like the Emperor's new clothes, quantifying a broadcaster's obligation under the Act just isn't what it's cracked up to be. I have three reasons for not supporting quantification. First, the plain language and the legislative history of the Children's TV Act indicate that Congress specifically considered, but chose not to mandate a quantitative or hourly standard. The Act specifies that at renewal time, the FCC must evaluate the extent to which a broadcaster has served the educational and informational needs of children through its overall programming, including programming specifically designed to meet this purpose. I will be calling this "specifically designed" programming, "core" programming in this speech. Apart from programming, the Act also says the Commission may consider nonbroadcast efforts by the broadcaster which enhance the educational and informational value of the programming to children. We may also consider efforts to produce or support programming broadcast by another station in the broadcaster's market if it is core programming. To me, it is clear that the Act directs the FCC to consider the "total efforts" of the broadcaster relevant to children's educational and informational needs. The legislative history of the CTA supports a total efforts approach. Let me quote from the Senate Report: "[The Act] does not exclude any programming that does in fact serve the educational and informational needs of children; rather the broadcaster has discretion to meet its public service obligation in the way it deems best suited. The provision requires that television broadcasters act in the public interest in this important regard and that the FCC at renewal obtain assurance that they have done so." Another important statement in the legislative history is this, and I quote: "The Committee does not intend that the FCC interpret this section as requiring a quantification standard governing the amount of children's educational and informational programming that a broadcast licensee must broadcast to have its license renewed . . . The Committee believes that a broad range of programming can be used to meet the standard of service to the child audience required by this section." Given these and other statements by Congress, I do not think that the FCC can properly set a renewal standard that looks only at one aspect of a licensee's efforts. The effect of focusing only on core programming either in a standard or a processing guideline would be to negate the rest of the statute. Again, I think the statute clearly indicates that we've got to look at the total efforts of the broadcaster. My second reason for opposing a quantitative approach is that such an approach diminishes a broadcaster's incentive to listen to its community. If a broadcaster knows it can get an automatic pass at the FCC by showing X hours of programs, there's no reason for the broadcaster to talk to its community about the particular needs of its children. The hourly quota effectively becomes an artificial ceiling and no community needs are taken into account. I don't think that is what Congress intended. My third reason for opposing quantification is that such a standard would set an uncomfortable precedent contrary to the principles of the First Amendment. My thinking on this subject is affected by my deep respect for the concept of freedom of speech. While I do not agree with those who contend that the First Amendment bars any government examination of a broadcaster's programming decisions, I do believe that government intrusion into those decisions should be narrowly tailored to achieve a compelling government interest. I am not convinced that a quantified standard for children's educational programming, set out of context, without looking at the broadcaster's total efforts, meets this test. In my view, the better way to achieve the goal of the Act is to do the following: First, on a going forward basis, tighten our definition so that only truly educational and informational children's shows will be credited as core programming. Education should be a significant purpose of the show, and it should be targeted to a particular age group. The show should be aired during hours when children are up -- between, say 6 a.m. and 10 p.m. The show should be regularly scheduled and of program length. Second, I would like to increase the information flow between a broadcaster and its community about children's educational programming. One information flow idea is to require a broadcaster to identify for program guide services which of its shows it believes to be children's educational and informational programs. This way families may find these shows more easily and schedule them into their day. I like this idea -- it's parental empowerment! I also think our rules should promote broadcaster accountability during the license period, not just after the fact at renewal time. I suggest that, as to core shows it plans to claim as educational, we require the broadcaster to place information about the show in its public file at the time of first broadcast. This information would identify the educational and informational purpose of the show, the target age group, and how that show meets the Commission's definition of children's programming. The way I see it, this information provides a basis for dialogue between a broadcaster and its community. And it gives an interested community -- teachers, children's advocates, the local PTA -- a chance to be involved in enforcement of the Act. Again, this is about broadcaster accountability to its community. Third, I would ask each broadcaster to submit a narrative statement with its renewal application describing its total efforts as how it met its obligations under the Act. What would be included in this narrative statement? First, the statement would include a detailed description of the core programming aired for the license term. The broadcaster would be asked to attach the materials from its public file which describe how those shows met our definition of core programming. A broadcaster's commitment to core programming would be an important factor we would consider. But in addition to that, just as the Act suggests, the broadcaster could include in its narrative statement other programming that may not meet our core programming definition, but which it thinks should be credited. The broadcaster could also include any other nonbroadcast activities that are relevant, and show a commitment to the educational and informational needs of the children in its market. In our children's programming decision, I propose that the Commission would give examples of those types of things that we would credit in the non-core programming arena. To give you an idea of the types of things we are thinking about, let me give you a few examples: * First, the creation and/or airing of public service announcements during well-rated shows, so long as the PSAs are targeted to children. For example, these could be PSA's with themes relating to anti-drug, anti-gang, or nonviolent means of settling disputes. * Second, airing educational or informational specials that are targeted to children but did not meet our core definition because, for example, they aren't "regularly scheduled" or of program length; * Third, a media literacy program with a local school; * Fourth, funding the development of an educational program that is aired on its channel or the local public TV station; and, * Fifth, airing programs that promote pro social activities by children, such as promoting volunteerism by children in their communities. I think you get the idea. This is not an exhaustive list; it is limited only in terms of a broadcaster's imagination. In short, broadcasters would have the flexibility Congress envisioned in creatively fulfilling the needs of the children in their community. At renewal time, as required by the Act, the Commission's staff would review the narrative statement and make decisions about whether a licensee fulfilled its CTA obligation. Some complain that this review by its nature is subjective and cry out for a simpler, quantitative standard. But, to me, it is important to evaluate a broadcaster's performance in context and not according to a preset "one size fits all" standard. I would much rather see a renewal standard developed through case law that takes a look at the broadcaster's full record. Such a standard would take account of the differences in broadcasters' circumstances. For example, if a broadcaster serves an urban environment with many non-English speaking immigrant children, it may choose to focus its shows on English as a second language with related efforts in the schools. Again, we ought to look at each broadcaster's efforts in context of its community and give it the flexibility to serve its child audience in the way it believes best. Some claim that without quantitative standards, broadcasters can "get away" with doing very little core programming. On the contrary, it is my belief that this Commission will view the obligation to children's television as substantial and important. If there are broadcasters who have shown little or no commitment to serving the children in their communities during this past license term, I personally will not hesitate to recommend the following sanctions: stiff forfeitures and fines, short term renewal, and increased reporting requirements on children's programming. How else can we ensure real commitment to children's television? A rather new idea that I have been floating around for the last week is what I call "promise vs. performance." On a going forward basis, I suggest that each broadcaster tell us what it intends to do to meet its CTA commitment for the coming license term. That's the promise part. And the Commission will ensure that this promise shows real commitment. If the broadcaster meets those commitments for its next license term -- that's the performance part -- the broadcaster would be deemed to have met its CTA obligation at its next renewal time. What I like about this idea is that the broadcaster gets to draft its own kidvid plan of action -- including core programming, appropriate noncore programming, and any other activities that makes sense for the kids in its community. Also, the broadcaster knows that if it meets its own plan of action, it will get a pass at renewal time for its CTA obligation. I hope my proposal can help break the log jam at the Commission on this issue of license renewal. There is much that we agree on. I hope others -- including my colleagues, the broadcasters, the networks, and the children's advocates -- can embrace this proposal and move forward to implement these improvements. Just as the emperor realized how silly he had been parading about, we should realize just how close we are to agreement and what a shame it would be if we failed to bridge our final differences. "Stone Soup" Let me shift away from this topic and tell you another story. This is the story of Stone Soup. It was a staple on the Captain Kangaroo Show when I was growing up. Once upon a time, some hungry soldiers entered a village and asked for food. The villagers quickly hid all their food and told the soldiers they had nothing. Undaunted, the soldiers announced that they would help the villagers by making stone soup. The soldiers got a big pot, filled it with water and put several large stones in the pot to boil. "What a pity that we have no vegetables," the soldiers said loudly so the villagers would hear. "It would make the soup taste so much better." One curious villager said, "I believe that I may be able to find a carrot or two." And she did. Another villager offered to find some meat bones to add to the broth. Another dug up some potatoes while another went to find some cabbage. Gradually, the soldiers coaxed the villagers into helping them make the soup. Little by little, the villagers added to the pot until there was a savory hearty soup. Finally, they all feasted together. The moral of this little story is that we should not be afraid to work together. We all have something to contribute, and together, we can make good things happen. To double back to my last topic, I believe that if all the Commissioners and the broadcast industry work together, we can achieve our shared goal of improving our children's television rules. But the other reason I picked this story, is that the moral of the story -- teamwork produces great results -- is applicable to women's groups like yours. Last June, in a speech to AWRT at your national conference in Los Angeles, I talked about the need for more input at the Commission from women on key communications issues. I urged women's groups to form an alliance for the purpose of lobbying Washington policymakers on communications issues relating to women. Within minutes of my appeal, a task force was formed to make it happen. I am absolutely delighted that AWRT took up the challenge. Together with Women in Cable and Telecommunications, Women in Wireless and Women in Communications, AWRT has made it a reality. I read a recent interview with Lucille Luongo, the President of AWRT, where she noted that this coalition brings the voices of 12,000 women together. As you know, that many female voices can make a lot of noise and I'm sure it'll be heard in Washington! I did some checking on what the coalition has been up to lately, and I found out that they have been hard at work lobbying and researching at the Department of Labor to get information on women in business. As you may know, such information is essential to support government initiatives for women. I also understand that the group has been working with the White House's office of Women's Initiative and Outreach. I wanted to take this opportunity today to reemphasize that it is very important for groups like yours to have regular input on women's issues in FCC proceedings. About two weeks ago, the Commission held a Spectrum En Banc hearing in which we heard from many parties on how we ought to forecast trends in technology and services, forecast demand for spectrum and appropriately allocate and license services. Shelly Spencer appeared on our panel on spectrum licensing and did a wonderful job discussing the need for diversity in ownership on behalf of women. The Commission needs to hear that kind of input. My message here is that women's groups need to continue this important work and endeavor to do even more. Because this takes money and effort, I believe that pooling resources is the answer. Just as no one family in that village could afford to feed the hungry soldiers alone, together they found enough food to make stone soup for all. So, I praise you for your efforts and encourage you to keep up the good work. Implementation of the Telecom Act of 1996 Now I want to turn to a story of a different kind. This is the story of an independent federal agency that has just been assigned a big job. I am referring, of course to the FCC and our responsibility to implement the Telecom Act of 1996. I wanted to take a few minutes today to tell you little about the new law. I didn't think it would be fruitful, however, to try and review the entire Act because it is sweeping in scope. Let me hit some highlights. Mass Media Issues Let's start with broadcasting. The new telecommunications law changes the media world in a number of ways. I will just mention three areas: (1) the new violence or V-chip provisions; (2) the provisions that affect the coming broadcast digital technology; and (3) the provisions that revise the FCC's radio and television ownership rules. The V-chip provisions of the law have gotten a lot of media play, because violence on television is an issue that many Americans are concerned about. The V-chip is intended to give parents a tool that will allow them to block television programs that contain "sexual, violent or other indecent material" that they do not want their children to see. Congress also found that the "most narrowly tailored" way of giving parents this power was to require television manufacturers to put a device in televisions that can decode a rating signal transmitted with the television show. The rating would work like ratings on computer software and simply identify the program as "violent" or "sexually explicit." Any parent with the technical savvy to figure out how to work the V-chip program -- all those whose VCR's are not still flashing "12 o'clock, 12 o'clock, 12 o'clock"! -- will be able to block TV programs they do not want their children to see. While this sounds fairly simple, the V-chip proposal requires the video programming industry to develop a rating system for television programming. There is an industry-wide effort afoot to do just that. On February 29th, representatives from the broadcasting, cable and video production announced a plan to develop a rating system that will make the V-chip viable. I praise this voluntary effort and I wish the group well as they tackle this difficult chore. Digital TV Another hot topic in the broadcast arena is the transition to digital television. Section 336 of the Telecom Act states that if the FCC decides to issue licenses for advanced television services, it should limit initial eligibility for those licenses to existing broadcasters. Recognizing that digital technology will increase the potential uses of this spectrum, the law allows broadcasters to provide non-broadcast services in addition to their broadcast signals. But here's the catch -- they will be charged a fee for the nonbroadcast use. Now, let me be clear here. I just said that Section 336 gives broadcasters "first dibs" on the spectrum to be used to provide digital television service. This is not the end of the story. Just as the bill was going to the floor of the Senate for a vote, there was an agreement in Congress that our legislators would take up the issue of auctions for these so-called "digital channels" in the next few months and decide whether they should require the FCC to auction the digital channels. At this time, the Commission has no authority to conduct such an auction. Suffice it to say that we are awaiting further instructions from the Hill on this point. There are hearings being scheduled to address this issue very soon. Ownership Rules Another big change for broadcasters is in the ownership rules. The new law eliminated the national limits on the number of radio and television stations a broadcaster can own, but also says that no one can control television stations that reach more than 35% of the national audience. Depending on the size of the market, the new law also raised the number of radio stations one broadcaster can own in a given market. For local television ownership, Congress delegated that issue back to the FCC for further action. To allow further cross-pollination, the law eliminated the ban on cross-ownership of television networks and cable systems. We have already adopted some orders and rulemaking notices to implement many of these changes immediately. As a result of the rule changes, there has been a surge in radio ownership transfers and mergers. As they say in the business, stay tuned. Telecom Issues The mass media provisions of the Telecom Act are not the main focus of the new law. The real focus of the new Act is the telephone industry. The heart of the Act is the introduction of competition to the local telephone company and other segments of the telephone market that currently are not fully competitive. It also specifically recognizes that the trend in the market is towards convergence. Some of the key provisions of the statute call for competition in the local telephone business -- what we call local loop competition, and more competition in the long distance market, by allowing the Bell operating companies to provide service outside of their local exchange regions. The statute also prescribes an entirely new way of regulating competition in the video market, specifically, provision of video programming services by the new kids on the block -- the local telephone companies. Essentially, telephone companies will have four options in this area. They can enter the market as a traditional cable operator, as a radio-based provider of video programming, as a common carrier providing video transport services, or as a new animal, called an open video system -- OVS, the newest in acronyms. Under this last category, OVS, the Commission must adopt rules by August that provide a streamlined method for telco provision of video. The FCC's rules implementing all these provisions are going to be subject of hot debate. While many portions of the Telecom Act are clear, there are provisions that require Commission interpretation. In a recent debate hosted by our General Counsel's office, it became clear that the industries we regulate do not agree about what that interpretation should be. Moreover, the Commission has received letters giving us different directions about what we should do from different members of Congress. A Miller and His Donkey All of this leads me to my final story of the day. It is an Aesop's fable. It seems that once upon a time, a miller decided that he was going to sell his donkey in town. (The original fable calls the donkey an "ass," but I will change it here for polite company.) He called his son to join him, and together they started to walk the donkey into town. They hadn't gone very far when they overheard someone saying, "Look at those fools, walking when they could be riding!" Well, no one likes to be criticized, so the man decided to let his son ride on the donkey. Shortly after that, the two heard another person say, "Look at that selfish boy, riding while his aged father walks!" To avoid this criticism, the man got on the donkey too, and they continued on their way. But alas, still others pointed at the two of them riding on the donkey and said loudly, "Look at that poor overburdened animal. What cruel owners." Shamefaced, the man and boy dismounted, tied the donkey by its legs onto two poles, and carried this upside down, unhappy beast between them into town. Then, many people jeered at the man and his son carrying the donkey into town. The noise and discomfort soon became too much for the poor animal. The donkey broke free and disappeared into the crowd, leaving the miller with nothing. Now the moral of this story is one that I think the FCC might apply as we are pushed and pulled in all different directions, while we implement the Telecom Act: "You just can't please everyone, and if you try, you could lose your ass in the bargain!" Thank you very much for inviting me to speak to you today.