Communications and Society Program

Achieving the Public Interest in an Era of Abundance

Achieving the Public Interest in an Era of Abundance

Forrest P. Chisman
President
Southport Institute

INTRODUCTION

The third and final meeting of the Aspen Institute Working Group on Digital Broadcasting and the Public Interest, held June 17-19, 1998, was devoted to refining the discussions of the previous two meetings. Two important themes explored by the Working Group at its third meeting had not been discussed at length in previous sessions. The first was that policymakers should broaden their scope to consider how the public interest in digital broadcasting might be achieved by other means than traditional public trustee content regulation. The second was the notion that any consideration of digital broadcasting policy should seriously consider the environment of other television and information media within which this new service is being born. Against the background of these themes, participants discussed policy options that had been raised at the first two Working Group meetings and explored a number of options that had not been considered in their prior meetings.

This report highlights the themes of alternative approaches to the public interest and the environment of media abundance, using them as a framework to organize the discussion at the third meeting. Broadly speaking, this report addresses the following question: How can the public interest in digital broadcasting best be served in an environment of media abundance? Focusing on this question provides a convenient way to connect many of the views expressed in the third meeting without recapitulating previous discussions. It also provides a means to focus on important considerations not discussed in previous reports. As a result, this document is in some respects less a report of the third meeting than a report about it, primarily based on ideas put forward by the participants.

This report begins by examining the traditional approach to achieving the public interest in broadcasting: content regulation. It describes the nature and justification of this approach and then discusses concerns about whether the theory and practice underlying it are applicable to digital broadcasting in an era of abundance. The report then reviews three alternative approaches to achieve the public interest in digital service discussed by participants in the third meeting of the Working Group, and it relates some of their ideas about how media abundance affects the merits of these options. The three alternatives to content regulation are (1) reliance on market forces, (2) industry self-regulation, and (3) subsidies. Finally, the report sounds a cautionary note that any policies applied to digital broadcasting may have unintended consequences for the policies that govern other media.

CONTENT REGULATION AND ITS PROBLEMS

The Rationales for Regulation

The Telecommunications Act of 1996 reiterates the admonition of the Communications Act of 1934 and the Radio Act of 1927 that broadcasters must serve "the public interest, convenience, and necessity."¹ Taken at face value, this admonition is no more than a statement of the grounds for asserting a government interest in the operations of any industry covered by the Constitution's commerce clause. Regulations of railroads, airlines, banks, and power companies might be explained in similar language, although more particular reasons for government intervention are required to explain exactly why and how regulation is applied to each industry: exactly what the public interest means in each case. Likewise, there are limiting conditions on public interest regulation of particular industries. In the case of broadcasting, the First Amendment provides such a limit.

Since 1934, the public interest standard in broadcasting has been construed by the Federal Communications Commission (FCC), Congress, and the Courts to mean that each broadcaster must act as a "public trustee." (While the term itself has not always been used, adherence to the ideas flowing from it has been remarkably consistent whatever the terminology.) In practice, this has meant that each broadcaster must act as an agent of the public to ensure that content is transmitted that members of the public wish to receive or from which they might benefit. To aid broadcasters in determining what that content should be, the FCC and Congress have adopted a host of affirmative obligations as well as prohibitions on broadcast content. Among the affirmative obligations have been local coverage, fairness, access and equal time for political candidates, and programming suitable for children. Among the prohibitions have been cigarette advertising, obscenity, payola, rigged quizzes, and cross-ownership that might bias news reporting. The role of the FCC and Congress in this regard leaves in question whether broadcasters or the government are the actual "trustees," but the vagueness of many affirmative obligations at least maintains the notion that broadcasters have both discretion and responsibility to decide what they must do to satisfy public wants and needs.

It has always been recognized that this type of content regulation is intrusive on commerce, inherently subjective, difficult to enforce and troublesome on First Amendment grounds. It has, however, repeatedly been upheld as constitutional by the Supreme Court. And the relevant Court decisions have provided much of the policy justification both for regulating content in the first place and for the form content regulation has taken.

Probably the most weighty justification was provided by the Supreme Court in a series of decisions culminating in the 1969 Red Lion decision.² The Court affirmed scarcity of spectrum and the resulting scarcity of broadcast assignments in any given market as the justification for regarding broadcasters as public trustees and for content regulation based on that notion. Due to technical considerations and legislative decisions, only a few broadcasters in any given market are the purveyors of entertainment, news, and public service over the airwaves.³ The public has to take what these broadcasters offer or do without the benefits of broadcasting. The Court judged that both the benefits of the medium and the potential for abuse of the broadcasters' oligopolistic power were great. As a result, it ruled that it is in the public interest to impose an obligation on broadcasters to act as trustees and for Congress and the FCC to specify and enforce that obligation.

Pervasiveness is a second justification for regulation, first articulated by the Court in the 1978 Pacifica decision.⁴ Because so many people listen to so much radio and watch so much television, these media have enormous social impacts. As a result, government is justified in regulating content to mitigate some adverse effects (in the case of Pacifica, broadcasting of indecent language).

Market deficiencies have been cited as a third ground for regulation. This argument is implicit in Red Lion. Broadcasting is a commercial medium. As a result there is little incentive for broadcasters to transmit content for which there is not a large audience and/or the potential for advertising revenue. For example, broadcasters do not optimize their revenues by transmitting public service content such as health and safety information, robust coverage of political campaigns, high-quality drama, or programming primarily of interest to particular ethnic minorities. Market deficiency arguments contend that commercial broadcasting is the only means by which the public can gain these types of services over the airwaves. As a result, broadcasters should set aside their commercial interests from time to time, and it is legitimate for government to force them to do so.

Public ownership of the airwaves is the fourth common rationale for content regulation.⁵ According to this argument, the electromagnetic spectrum is a natural resource that belongs to all Americans, like public lands or water resources. To make it useful, the government licenses some people to engage in commercial broadcasting. This allows them to create great wealth and denies the opportunity to others. In return for this grant of a valuable commodity, the government is justified in asking for something back, just as it receives rents on public lands. Asking that broadcasters do a good job of serving public wants and needs is a reasonable quid pro quo.

Underlying all of these justifications, and possibly more important than them in driving policy, have always been assumptions about the major social benefits that broadcasting should achieve. Two of these are particularly worthy of mention, because they are so frequently cited in current debates. First, it is widely assumed that broadcasting does and should play a major role in the American political process by providing a forum in which candidates for office and others concerned with public affairs can present their views to the public, and in which those ideas can receive a critical response in the marketplace of ideas.⁶ Because broadcasting has come to play such a large role in the political process, the quality of its public affairs programming, campaign coverage, and political access practices have been matters of great concern.

The effects of broadcasting on children is the second area of great concern.⁷ On the positive side, many people believe that broadcasting has enormous potential to "educate" children, both in the narrow and larger senses of the term, and that it has an obligation to do so. On the negative side, there are widespread concerns that broadcasters too often offer content (such as violence and indecency) that can be harmful to children. Because children watch so much television, there has been a presumption that government is justified in regulations that try to maximize the positive content and minimize the negative.

The Era of Abundance

As the FCC, Congress, broadcasters, and the public consider how to treat digital broadcasting, this legacy of thinking about content regulation is the primary intellectual capital with which they have to work. In the Telecommunications Act of 1996, Congress made clear that it expected digital broadcasters to live up to a "public interest" standard.⁸ And it is certainly tempting to interpret this mandate as simply a recipe to import into the digital age both the justifications for content regulation that have evolved over the years and the means of enforcing them. But developments in the telecommunications industry over the last twenty years raise serious questions about whether the longstanding justifications for regulation and the specific rules that have flowed from them still stand up, at least in the ways they have previously been understood.

Collectively, these developments can be characterized as the development of an era of media abundance. About two-thirds of households now subscribe to cable television, and that medium offers up to one hundred channels of television containing highly diverse fare. More than 90 percent of households own VCRs, which allows them to buy, rent, or borrow tapes from a virtual national "library" of hundreds of thousands of titles on every conceivable subject presented in every conceivable way. Arguably, the number of titles available on tape is larger and more diverse than the number of titles available at even the largest bookstores. The advent of satellite broadcasting to the home has provided even more options than most cable systems offer. The Internet already offers an enormous storehouse of information and entertainment to which anyone can contribute, and its potential for expanding its present service as well as for transmitting both audio and video is theoretically limitless.

None of these newer media services were widely available when Red Lion was decided in 1969. In a very brief period of time we have moved from an environment in which the choices of most consumers of electronic media were limited to the broadcasting stations in their market to an environment in which most people can get pretty much anything they want from one medium or another. In many ways, the advent of digital broadcasting is only the latest development in this trend. And if they multiplex, digital broadcasters will be adding additional channels and services to the nation's already rich diet of media choices.

Is There Still a Case for Content Regulation?

In this environment, the traditional rationales for broadcast regulation may not be as compelling as they once were. At the very least, there may be a need to reformulate them. The Aspen Working Group debated these issues.

Over-the-air broadcasting spectrum is still scarce, although less so with the advent of digital possibilities. But if the significance of scarcity was that it restricted choices, it is harder to argue that regulation of broadcasting is still justified when choices within the larger media environment are abundant. Why should spectrum scarcity matter from a public interest standpoint, unless it affects the public in some adverse way? If other media are fungible with broadcasting, then where is the adverse effect?

Likewise the pervasiveness argument is challenged by abundance. Television and radio are pervasive in the sense that they are heavily used and influential. But broadcasting is now only one way in which television and radio pervade American life. In fact, broadcasting has lost significant audience share to cable, and people who want to enrich or restrict their diet even further can turn to video tapes or, increasingly, the Internet. As a reason for prohibiting certain content, pervasiveness loses some of its luster when people can limit their viewing to other media; as a reason for imposing affirmative obligations, it is harder to justify when there are so many choices.

Market imperfections are harder to define in a market as rich as the electronic world of today. Certainly many of the commonly cited imperfections (such as lack of abundant news and cultural programming) are remedied by cable and satellite. And a case can be made that defects in service to children are also greatly reduced by the availability of cable channels such as Nickelodeon, by children's video tapes, and by interactive Internet services designed for children.

Finally, public ownership is arguably beside the point in an environment of abundance. If the public receives the service it needs and wants, then there is no need to extract a quid pro quo for spectrum usage by content requirements. The public interest could also be served by auctioning off the spectrum and putting the receipts in the general treasury, in the same way that surplus military equipment is sold.

Does Content Regulation Still Stand Up?

The environment of abundance, thus, challenges the traditional justifications for content regulation, and by doing so it challenges whether this regime should be applied to digital services. But some participants in the Aspen Working Group were not convinced that it entirely eliminates the case for regulation. They emphasized the unique characteristics of broadcasting. The justification for regulation that advocates of content regulation often articulate is an amalgam of the traditional arguments mentioned above. But their most common argument appears to be a variant on the market failure case. This argument might be called "market dominance." While participants in the Aspen meeting would probably not fully embrace this justification and all of its ramifications, they did discuss some of its ideas. For purposes of exposition, an unqualified case for it is set out below.

Advocates of content regulation in an era of abundance point out that the abundance is often overstated. Despite the plethora of choices, it remains the case that the three major broadcast networks still command the lion's share of television viewership, and they are still the major source of television entertainment, as well as national news and public affairs information, for most Americans. Moreover, local stations are virtually the only electronic media that provide news and public affairs information about their communities, as well as locally oriented health and safety messages. Finally, advertiser-supported over-the-air broadcasting is the only source of television for the one third of Americans who do not subscribe to cable or direct satellite service. Unlike other video services, over-the-air broadcasting does not require the payment of subscription or rental fees. The only direct, out-of-pocket payment cost of receiving broadcast service in all but the most remote of areas is the purchase of a television set.

Cable, satellites, and other media could challenge commercial broadcasters for dominance in entertainment, news, and public service, but thus far their challenges have not dethroned the older media. Broadcasters have obtained and retained their eminence because of their business and creative acumen, as well as the audience loyalty they inherited from the many years when they had a virtual monopoly on the media market. Moreover, even if the challenge of newer media was effective, it still would not benefit the tens of millions of Americans who do not live in an environment of media abundance.

This means that many longstanding concerns about the effects of broadcasting still apply today. If national networks or local stations tilt the news or discriminate against candidates for public office, the public will be ill served in the democratic process. Children are still exposed to a wide range of broadcast content, regardless of its suitability for them. If stations fail to cover local public affairs or to broadcast hurricane warnings, some people will be uninformed or endangered. With regard to prohibitions, advocates of content regulation could argue that anyone who would completely deregulate broadcasting must make a case why cigarette advertising, pornography, and payola should be part of the most widely used and influential video medium.

These advocates point out that many of these concerns are far from hypothetical. Critics contend that much network news has become "tabloid-ized," that local news focuses on the sensational, that children are still exposed to trivial and often offensive programming over the air waves, and that the terms and conditions under which political candidates and others can gain access to broadcast time are far from optimal. The Aspen Working Group discussed coverage of the California primary elections in the spring of 1998 as an example of the failure of broadcasters to provide adequate local coverage. Until a New York Times story chastised them two weeks before the election, California stations gave little or no news coverage to the races, and many refused to sell air time to "down-ticket" candidates.

If we abandoned public trustee regulation, according to its advocates, we would be abandoning many of the public interest goals it has attempted to advance over the years. These goals are still valid and achievement of them is endangered, despite the era of abundance. This is because broadcasting still exercises market dominance, and it is a commercial medium that is limited in what it will provide by the need to maximize advertising revenues.

A Middle Road?

The Aspen Working Group briefly discussed one possible way to maintain the benefits of regulation while taking advantage of the era of abundance. This approach would retain most present regulations, but it would apply them to media markets, rather than to individual broadcasters. Licensees in each market would still be bound by public trustee requirements, but these requirements would be satisfied if at least some stations in each market, possibly in conjunction with cable or other media outlets, provided the service necessary to achieve public service goals. This would create a policy regime analogous to the "pollution rights" policy that has been successful in some aspects of environmental regulation. Broadcasters could trade or sell "trustee rights" to determine which stations would assume which public trustee obligations. This might work particularly well in a digital environment, because broadcasters could have the further option of deciding to concentrate their public service on one or a few mutiplexed channels, or to determine which station would have to satisfy public service obligations by high-definition television in prime time. Also, broadcasters might be allowed to subsidize public broadcasting or cable channels to fulfill some of their obligations. In a modified form, this approach has already been adopted by the FCC in its requirement for three hours per week of children's television programming.⁹

While some members of the Working Group believed this approach merits further exploration, others objected that it does not solve many traditional concerns. Children would still be exposed to inappropriate content, local public service would still be poor on most channels, and at best "ghettoized" to a few, high-quality programming would be scarce, and prohibitive regulations might be endangered. Moreover, a system of distributing public trustee obligations would be even more difficult to police than is the present system of content regulation, and it is not clear who would be liable if it failed. Finally, just as "pollution rights" have gained a negative image in the eyes of the public because they are perceived as sanctioning pollution, trading "trustee rights" might evoke the visceral reaction that it is acceptable for broadcasters to neglect the public interest.

The Need to Look Farther

There is clearly something to both sides of the argument about content regulation, or the argument would not be as vigorous as it is. Obviously most Americans have access to far more media alternatives than they once did and this access moderates some of the concerns that have traditionally led to content regulation. Obviously, too, some Americans do not have this access and many others choose not to take full advantage of it. The media environment has changed. But at least some members of the Aspen Working Group were concerned that there is still not a satisfactory theory of exactly what these changes should mean for content regulation. One thing they probably mean is that past regulations need a thorough review to determine whether they are still, on balance, relevant to the new environment. The Working Group acknowledged this by reviewing them from the perspectives mentioned above. The changed environment also means that approaches to achieving public interest goals other than content regulation deserve more serious consideration, and the Working Group discussed three of these: (1) reliance on market forces, (2) industry self-regulation, and (3) subsidies.

ALTERNATIVES TO CONTENT REGULATION

Free Market Approaches

At a time when regulation is in disfavor and the benefits of the free market are widely celebrated, it makes sense to consider whether or how content regulation actually improves on what the free market might deliver.¹⁰ This may be one way to bound the reach of regulation in an era of abundance.

For the market. Despite the longstanding argument that regulation is justified in part by market failure, broadcasters for some time have pointed out that the United States undoubtedly has a television and radio broadcasting system that is the envy of the world. They have also argued that American broadcasters engage in extensive public service activities well beyond those required by federal regulations, such as long-format local news, airing hundreds of millions of dollars worth of public service announcements, selling time to state and local candidates even though this is not required, sponsoring state and local candidate debates, preempting commercial programs for coverage of important local or national developments, and producing at least some innovative children's programming.

Advocates of the market claim that the best of American television, such as the entertainment programming at which it excels and the comprehensive coverage of critical events, such as the Gulf War, are not the results of regulation. Broadcast television satisfies its public interest obligations by the most relevant measure: it satisfies its audience, and it has held on to most of that audience despite competition from other media. The market works remarkably well, and those who point to deficiencies are looking for perfection in an imperfect world. Other media and public broadcasting can satisfy most of those deficiencies in the era of abundance. If members of the public care enough about satisfying them, they will switch to a cable channel of their choice, rent a video tape, or support non-commercial outlets.

In response to criticisms of broadcast coverage of the 1998 California primaries, advocates of the market at the Aspen meeting argued that there were one hundred state-wide candidates on the ballot, and even more local candidates, along with referenda and groups seeking issue advertising time. This is more than the broadcast media in any California market could conceivably cover without causing confusion on the part of the audience and eliminating commercial fare that is of greater interest to most viewers. Nor could the stations have sold advertising time to all candidates without undermining their commercial base.

Advocates of the market as well as some other participants in the Aspen meeting argued that the competition for broadcast time by politicians and advocacy groups is a fundamental problem of the American political system that broadcasters cannot solve. Only a larger debate about campaign reform can solve it. As for criticisms of their failure to provide long-format access to political candidates, a number of participants in the meeting argued that most candidates do not want it and would only use it to offer canned responses. Moreover, why should government be in the business of dictating what types of political speech are to be preferred?

Finally, advocates of the market as well as some other participants, argued that affirmative content regulation, at least, has never been effective. Both the FCC and Congress have lacked the will to specify affirmative regulations in enough detail, and the FCC has lacked both the ability and the will to enforce them in more than a haphazard way. The result has been that they have little effect, and sometimes can create perverse incentives. For example, the "equal time" rule may discourage stations from presenting more robust political coverage.

Because of the failure of affirmative content regulation, the broadcasting industry we have today is essentially the creation of the free market, according to its advocates, and it is very good by most standards. Its achievements are due in no small part to a culture of public service: values that broadcasters have internalized over the years and that make good business sense in terms of building loyalty within their communities. Why continue the charade of content regulation, particularly when it is offensive to the First Amendment?

Contrary concerns. Arguments for the free market are very compelling on first blush. But its critics contend that, while broadcasting at its best is very good, it too often operates at its worst. It trivializes serious local and national issues, largely ignores the needs of children, and does far less than it could to promote democratic debate. One participant in the Aspen meeting called these concerns "paternalistic" in the era of abundance, but defended them nonetheless. Affluent and educated Americans have ample access to whatever entertainment and information they want, and they usually take advantage of their opportunities. But those who rely primarily on broadcast television are getting a poor diet of information and entertainment. Such judgments are subjective, but so are any definitions of the public interest in any sphere. The fact that the nation has chosen to fund public broadcasting as an alternative and to assent to content regulation means that many other people believe the market in broadcasting has serious deficiencies.

Critics of the market believe that because broadcasters enjoy the dominant position as sources of video for so many Americans, there is a compelling interest in demanding that they do more-not just occasionally and when they believe it is appropriate, but consistently and in all cases. It is in everyone's interest that all Americans, not just the information elites, be well served and well informed. While content regulation has often been ineffective, this may be because the FCC has only made a half-hearted effort at enforcement. The answers to its shortcomings may be to make standards more explicit and better targeted at their goals and to enforce them more rigorously, rather than to give up on the public trustee notion. At the very least, content regulation serves a precatory role. Broadcasters are reminded that the public interest lies in certain directions. Actual enforcement of public trustee standards in all cases may be less important than the threat of enforcement, and occasional FCC actions to correct egregious abuses may serve the same purpose as spot audits.

Balance. In balancing these two sides of the argument, three possible areas of agreement appear: (1) The effectiveness of market forces should not be minimized. Over-zealousness in regulation is pointless and often ineffective; any reconsideration of broadcast policy should take full account of what broadcasters can and will do, as well as their limitations and failures. (2) Even the strongest defenders of the free market agree that commercial broadcasting cannot satisfy all possible social needs for media service. Policies that encourage or take account of the contribution of Public Broadcasting and other media to filling those gaps should be in the forefront of attention, as well as mechanisms other than regulation to enlarge their role. (3) If content regulation is still desired, the mechanisms for enforcing it must be greatly improved. For example, most political access regulations place broadcasters in the role of traffic cop among candidates, without any clear rules to guide them. Perhaps the rules should be better, or perhaps someone else should be the cop. Likewise setting aside blocks of time for children's programming is a weak policy unless some quality standards are set, although the process of setting such standards is a daunting prospect and may not be an appropriate use of government power.

Industry Codes

One possible way to achieve public interest goals while maintaining the benefits of the market in broadcasting is through industry self-regulation. In fact, the National Association of Broadcasters (NAB) maintained a code of conduct for its members for several decades. It was partly undermined by court challenges in Writers Guild of America, West v. ABC (1979) and related cases.¹¹ The cases concerned a provision of the code that the industry had adopted at the urging of the FCC and Congress. The provision established a one-hour time period in the early evening for programming that would be suitable for "family viewing" (i.e., that would contain programming suitable for children and otherwise inoffensive). The courts questioned whether the family viewing provision was an unwarranted exercise of government action, due to the pressure exerted on the industry to adopt it. Thereafter other provisions of the code were called into question, and the NAB eventually abandoned it all.

Trust the trustees? Self-regulation plays an important, although not exclusive, role in the operation of many industries, such as the licensed professions, where entry is restricted, stakes are high, consumer information is limited, and a special relationship of trust is presumed to exist between the public and the industry. One way to operationalize the public trustee notion in broadcasting would be to trust the trustees. The common law notion of trusteeship presumes that trustees will be faithful to their missions unless proven otherwise.¹² As a result, it allows them a large measure of discretion in how they will discharge their duty as long as they honor the essential goals of their trust. One problem with this analogy, however (and with the "public trustee" metaphor generally), is that trustees are presumed to be disinterested, and their cardinal sin is acting in a self-interested way. Clearly broadcasters are not disinterested, and this is why many aspects of the public trustee notion break down. Nevertheless, the presumption in broadcasting policy has always been against them. If we reverse this way of thinking, can broadcasters be trusted to advance public interest goals through self-regulation?

Interpretations of the efficacy of the NAB code differ. By some interpretations it was overly broad, poorly policed, and contained few provisions that broadcasters would not have found in their commercial interests. By other interpretations, it set reasonable standards for public interest performance and helped create a culture of public service within the broadcasting industry.

Some participants in the Aspen meeting argued that a code could be more effective if it spelled out specific performance measures and if there was a reporting mechanism not controlled by broadcasters that would issue periodic reports on how stations live up to them. In that case, the public reputation of broadcasters would be at stake in living up to the code. Bad operators would suffer in the eyes of the local viewing public, whose opinions matter very much to them. Other participants questioned whether a code could ever address obligations that conflicted with commercial interests and whether it would be taken seriously without the prospect of government enforcement: in effect content regulation. They were also concerned that such a code would act as a smoke screen or public relations stunt to hide industry abuses.

Some participants argued that a middle ground, by which government and industry collaborate in establishing and enforcing a code, would probably fall victim to the same court challenges that undermined the family viewing hour. As a result, they held that any code would have to be purely industry developed and enforced.¹³

Self-regulation and abundance. In an era of abundance, self-regulation may seem more attractive than it would otherwise appear. To hold audiences who may turn to other media, broadcasters need to use every tool they can muster. Enhancing their reputation with the public by effective self-regulation may be attractive to them. In addition, there is less at stake if they fail. If the public knows what they aren't getting from broadcasters, they have the means to get it elsewhere.

But the era of abundance also raises the question of whether or how self-regulation should take account of other media. Should it, for example, contain provisions that allow broadcasters to suspend certain obligations if they are satisfied by some other generally available medium or to subsidize other broadcasters or other media to take on some of their obligations-a self-imposed version of the "pollution rights" model discussed above? If it is the case, as broadcaster contend, that they cannot possibly satisfy all demands for public service, it would seem that they should take some responsibility for considering which demands cannot be satisfied and what they can do to ensure that they are satisfied. This opens up a whole new territory for self-regulation (or regulation of any sort). The idea may be worth pursuing, but it would certainly be difficult to implement. Moreover, it could serve as an incentive for "buck passing" on the part of broadcasters: the too ready assumption that anything they find difficult can and should be done by someone else.

In sum. At least four ideas seem clear about self-regulation in an era of abundance. First, challenges to the traditional rationale of content regulation require that alternatives that would achieve the same goals should at least be considered. Second, while it is doubtful that self-regulation would be wholly effective in meeting public interest standards, there is some chance that it might make a contribution. Third, the major risk appears to be that self-regulation would muddy the waters in broadcasting policy, both for the public and for policymakers; it could well be an excuse for deferring action on problems that are both important and difficult. Fourth, to withstand court challenges, any scheme of self-regulation would probably have to be created by the industry without government interference, and to be effective it would have to contain a credible monitoring system.

Subsidies

For those who are not satisfied with content regulation, the free market, or self-regulation as means of achieving public interest goals in broadcasting, the era of abundance opens up another possibility. Why not subsidize either particular broadcasting channels or services via cable or the Internet to offer services that the market does not deliver in great enough quantity or quality? It is possible to imagine a children's channel, an educational channel, a public affairs channel, or some combination of these.

The Aspen Working Group considered various subsidy schemes at its prior meetings. Among these were charging digital broadcasters a spectrum usage fee which would be used to support educational broadcasting and possibly to create a "political time bank" to improve access by candidates. Versions of this ideas have been discussed at least since the 1970s. Another family of options would allow or require broadcasters to subsidize meritorious programming in kind. For example, variations on the "pay or play" model would allow licensees to either satisfy specified public service requirements by their own operations or to pay a fee that would be used to subsidize them elsewhere. The putative advantages of this model are that it would take advantage of the creative resources of broadcasters for public service purposes, and it would inject public service programming into the diet of what are presently the dominant media outlets. Still another version would auction off or lease the analog channels that broadcasters have previously occupied, and/or some of the analog or digital channels assigned to Public Broadcasters, to create an endowment or continuing stream of income for public service broadcasting.

Rationale for subsidies. However they are designed, these options are all ways of subsidizing meritorious programming. In any form this idea abandons the longstanding notion that each broadcaster should be regarded as a public trustee, at least in the sense that each should be required to fulfill all public interest obligations by their own broadcasting operations. It takes the broader view of mass media service adopted by the "pollution rights" model. The goal becomes to ensure that the public is somehow well served in each television market, rather than that particular broadcasters satisfy its needs.

In at least one form the idea of subsidies to achieve public interest goals has already been adopted. Public Broadcasting was created in the 1960s as a publicly subsidized system to compensate for the deficiencies of commercial broadcasters. The Killian Commission, which played an important role in establishing public broadcasting, recommended that the new service should be supported by a tax on television set sales, although this idea was not accepted by Congress.¹⁴ A 1979 Carnegie Commission on Public Broadcasting suggested support by a spectrum usage fee.¹⁵ Many subsidy arguments today presume that Public Broadcasting would be a major beneficiary of any system adopted.

One important element of most subsidy ideas discussed at the Aspen meetings was that commercial broadcasters would be relieved of some or all of the content regulation that has been imposed on them as a quid pro quo for paying a spectrum fee or accepting a "pay or play" system. This distinguishes these subsidy plans from "pollution rights" ideas, on the one hand, and the present system of supporting Public Broadcasting, on the other.

Subsidy plans of any sort are usually justified by a combination of the market deficiency argument (commercial broadcasters simply will not fulfill all public interest goals) and some combination of the public ownership and spectrum limitation arguments (commercial broadcasters have been given valuable spectrum and the public deserves some quid pro quo). They are also justified by arguments that content regulation has failed and/or is burdensome to the First Amendment. Both on administrative and constitutional grounds it would be more efficient to simply charge broadcasters a fee to subsidize meritorious programming, rather than try to micro-manage their content. Finally, by conferring new value on commercial broadcasters, new digital assignments provide a rationale for demanding a new quid pro quo.

Support for subsidies. Subsidy models have not won much support in the past. The fact that they are being revived in discussions of broadcast policy is due partly to the continuing difficulties of funding Public Broadcasting (and the cost of its transition to digital service) and partly to concerns about the American electoral process, among them the belief that coverage of elections and other public affairs is inadequate and that the system of providing access to candidates has failed. It is also partly a response to criticism of the new digital assignments as a "give away" to vested interests.

But the revival of interest in subsidies is also probably a result of the era of media abundance. Many traditional public service goals, such as abundant and high quality news, public affairs, children's programming, culture, and drama are today being satisfied by cable for the majority of Americans, and by tapes and the Internet for many others. For many years policymakers hoped that the availability of a greater number of media outlets would result in a proliferation of services not offered by commercial broadcasting. This hope has now been realized. Moreover, the newly assigned digital channels can be used by multiplexing to create a great many special over the air broadcast services-by commercial broadcasters, public broadcasters, or both-that can bring greater abundance to the one-third of households not served by cable.

In essence, the era of abundance invites policymakers to distinguish between the longstanding goal of public service by the television industry and the public trustee notion of how this can be achieved. In an era of abundance, public service goals can perhaps be achieved by subsidies, rather than by holding each station responsible for achieving all public service goals. And it can be achieved without depriving any broadcasters of their licenses to reap profits from commercial operations in the markets they serve. The public simply gets a "cut of the action" to subsidize other service, for which there is now ample spectrum space.

Problems with subsidies. There are, however, several problems with the subsidy idea. First, it is not entirely clear who the recipients should be. Public Broadcasting is often mentioned, because it already exists as, in effect, the "public trustee of last resort." But in an era of abundance, Public Broadcasting is not necessarily the obvious choice. Many people who are concerned about achieving public interest goals are dissatisfied with both Public Broadcasting's governance and the service it provides. If improved public affairs or children's programming are among the goals, a case could be made for subsidizing some of the cable services that already offer such programming to lease broadcast outlets, for subsidizing cable service to disadvantaged families, or for creating a competition to determine who gets the subsidies.

A disturbing feature about these and other options is that they put the government in the business of determining who is the best purveyor of certain types of content and, by extension, of determining what content should be supported. The recent controversies surrounding the National Endowment for the Arts indicate how troublesome this governmental role can be. It is all the more troublesome in the mass media, because of its reach and influence. It may be that some satisfactory arrangement can be devised, but the problems of doing so involve a careful consideration of the appropriate bounds and mechanisms of government action, rather than simply sorting out administrative details.

A second problem with subsidy plans is that most of them would offer broadcasters a measure of deregulation as a quid pro quo for paying a spectrum fee or engaging in a "pay or play" system. There is no necessary reason why broadcasters should be offered a quid pro quo in either case. It has long been argued that broadcasters should pay a spectrum fee simply because they derive great value from their assignments. This is, at least, the most apparent grounds for the outcry about a "give-away" of digital frequencies. Of course, such arguments have not gotten very far in the past, and a quid pro quo may be politically necessary. But a case can be made for spectrum fees without deregulation, and it probably will be made in the debates over digital broadcasting to come.

Third, even if it is desirable, the quid pro quo proposed to broadcasters may not, in fact, be realistic. Perhaps they can be relieved of some of their affirmative trustee obligations, but would anyone propose lifting regulations on cigarette advertising, obscenity, multiple ownership, and payola? It is not even clear that, in the interests of promoting fairness in democratic debate, that the equal time restrictions would be lifted. In short, would a subsidy program be deregulatory in any meaningful sense? The FCC and Congress have already lifted many of the most onerous regulations on broadcasters. Does it have much to offer them in a quid pro quo for spectrum fees?

Fourth, in an era of abundance, it is not clear that subsidies are necessary. Arguably, most Americans already have access to adequate service from various media, and whether or not they take advantage of them is their affair. No one knows how broadcasters will use digital capacity. But it is at least possible that they will offer specialized children's and public affairs programming. Perhaps it would be best to wait and see how the market works.

Fifth, by themselves subsidy systems do not solve one of the problems that parents in particular are most concerned about: the availability of programming unsuitable for children on almost all television outlets. Short of draconian content regulation, this problem can be partly addressed by technologies like the V-chip and television locks. Subsidy systems could make a contribution by supporting "safe haven" or "green space" channels for children. But this raises problems of who would decide what is "safe" and of how to serve the needs of children of differing ages. Still, subsidizing high-quality children's channels is an idea that has been mooted for decades, and it merits more consideration, particularly now that there are more media outlets on which such programming could be aired.

The paradox of abundance. The final problem with plans to subsidize meritorious programming on Public Broadcasting, digital service, or elsewhere is that the era of media abundance creates a cruel paradox. The paradox is that the public may be confused by more choice and not take advantage of the options available. As a result, subsidizing public service programming may accomplish very little, because very few people may watch it. To put this differently, television is used primarily as an entertainment medium, and specialized channels for public affairs or children may become "ghettoized" for all but the most dedicated few. In fact, this appears to be the case. While specialized cable channels do well, their ratings relative to those of commercial broadcasters are very low.

The Aspen Working Group discussed this problem in previous meetings as an issue of the "attention economy." There is no point in subsidizing public service programming unless people are aware of it and find it convenient to use. If this is true, the best way to get that programming into the public attention stream is to require that commercial broadcasters carry it, because they have the largest audience share of any media. This might well require continuing some form of content regulation, although not necessarily the set of policies that are currently in force.

The Aspen Working Group previously characterized the situation as a choice between whether the public interest could best be served by a "push" model (requiring meritorious service on commercial broadcasting where people will be most likely to find it) or a "pull" model (segregating meritorious service and trying to draw attention to it). A version of a "push" model that avoids traditional content regulation, for example, would be to use spectrum fees or some other subsidy method to buy time on commercial broadcasting for meritorious service. A "pull" model would be to purchase or require advertisements for that service on commercial broadcasting. One idea proposed by an Aspen participant to improve the "pull" of political information is to require broadcasters to air information about the Web sites of political candidates and their opponents or the sites of other sources of political information, such as The Democracy Network or the League of Women's Voters.

Both push and pull models are valuable ways of thinking about the problems that "the attention economy" creates for plans to subsidize media content. But any policies to either push or pull would decidedly put government back in the business of determining what content should be favored and of monitoring whether this occurs. Under either scenario, broadcasters would still act as trustees in some important way. Perhaps some version of these schemes would be less onerous than traditional content regulation, but others might not be. Still, it can be argued that adopting policies that either push or pull members of the public toward certain content is tantamount to government handicapping the programs they watch. Perhaps providing more choice to more people may be enough to satisfy any realistic public interest concerns.

The issues. Subsidy models certainly have appeal in an era when there are a great many media outlets and regulation is in disrepute. But policymakers must wrestle with a number of difficult questions. Among these are (1) How great is the need for subsidies in an era of abundance, and for whom? (2) Who should be the beneficiaries of subsidies (effectively, the "new trustees")? (3) Should the government be in the business of subsidizing content at all? (4) Do the paradoxes of "the attention economy" mean that little would be gained by many forms of subsidy? (5) Should government seek to increase the reach of subsidized programming by "pushing" or "pulling" the public toward it?

THE DANGER OF REGULATORY CREEP

In considering alternative approaches to digital broadcasting policy, some Aspen participants sounded an important cautionary note. In an environment of abundance, policymakers must consider the future ramifications for other media of any policies they apply to digital service. While it is true that broadcasting is still the only universal medium, it is also true that two-thirds of American households have access to cable, millions have access to the Internet, and direct satellite broadcasting to the home is a growing industry. Digital broadcasting resembles cable in many ways: licensees can transmit multiple channels of television as well as other digital services. The Internet already has slow scan and full motion capability (although the latter is presently of poor quality due to bandwith limitations).

Given these similarities, what sense does it make to apply content regulations, either affirmative or prohibitive, to broadcasting and not the other media? Neither the scarcity, market deficiency, nor pervasiveness arguments for distinguishing broadcasting from other media apply as neatly as they once did, and it is not clear that the public ownership of the spectrum argument, even if relevant in the new environment, justifies regulation as opposed to spectrum fees.

If these arguments for distinguishing broadcasting are fraying at the edges, then why should we apply different policies to this medium than we do to cable, direct satellite service, and the Internet? If, for example, indecent language or deceptive advertising practices must be regulated on broadcasting, why should they not be regulated on these other media? People who use any medium can be exposed inadvertently to this type of content. Moreover, people who use any medium also have the option of changing the channel (or Web site). The same is true of affirmative obligations. If broadcasters must provide public service programming and high-quality children's shows, as well as serve their local communities in a non-trivial way, why should this not be the case for cable operators? And why should we not require the companies that sell Web browsers to construct home pages that prominently identify sites that will achieve traditional public service goals? In fact, why shouldn't the equal access and equal time requirements placed on broadcasters be applied to advertising on cable and on heavily used pages of the Internet, such as Web browsers? Would we be troubled if one of the political parties bought up all of the advertising space on Yahoo or Netscape?

One argument for maintaining a distinction between broadcasting and other media for policy purposes is the "dominance" rationale mentioned above. More people will be harmed if broadcasters are guilty of sins of commission or omission than if the same sins were committed by cablecasters or Web masters. This may be true, but if we worry about adverse effects on the broadcasting audience, it seems that we should worry about adverse effects on the audiences for other media as well, particularly because the latter audiences are large and growing very fast.

Another argument for distinguishing broadcasting is the "universality" rationale, also discussed above. Everyone receives broadcasting signals and can be helped or hurt by them. Making sure that broadcasting does a good job ensures that a modicum of public interest content is available to all Americans. This also is certainly true. But, as discussions of the "attention economy" indicate, simply making media content available does not mean that people will use it. Shouldn't we be concerned about the growing number of people who get most, or at least a large part, of their news, entertainment, consumer information, and children's programming from other media? Shouldn't we care whether they are well served? Can these other media still be considered "supplementary" to broadcasting at a time when they command at least a third of the market for television, plus a market for information over the Internet that is growing by leaps and bounds? Moreover, if digital broadcasters multiplex their signals, the audience for any one channel may be of about the size of the audience for a cable or satellite channel. Why should we care about protecting one small audience rather than another?

The answers to these questions are far from clear, as evidenced by the differences of opinion about whether or how to regulate non-broadcast media. Some people believe that we should impose at least some of the same regulations on cable, satellites, and the Internet that we now impose on broadcasters. By extension, their views imply that should have a policy for electronic mass media that does not distinguish between different media in most ways. We should see the relevant market or industry as one market or industry in which the different media are fungible: consumers do not distinguish between the different media in ways that are relevant to public interest concerns. Consumers see them all as mass media and use them interchangeably.

Many other people do not want to see the same policies applied to cable, satellite broadcasting, and the Internet that they would accept for broadcasting. The Supreme Court's refusal to apply to cable the public trustee provisions affirmed in Red Lion and its rejection of the Communications Decency Act provide powerful support for this school of thought. But anyone who wishes to distinguish broadcasting from other media must find a clear rationale for doing so, and it is not apparent that such a rationale has been articulated. What is clear is that such a rationale will be much harder to articulate with the advent of digital broadcasting in an environment of abundance, because one result of digital service is that broadcasting will resemble cable, direct satellite broadcasting, and the Internet in many more respects than it does today.

This is not necessarily an argument for either ending regulation of broadcasting or extending it to other media. It is a caution that anyone who wishes to place restrictions on digital broadcasting, or to extract some public interest value from it by means such as a spectrum fee, must seriously consider the possibility of regulatory creep. That is, they must consider the possibility that by regulating a medium that in many ways resembles other media, they will be setting a precedent that eventually helps to expand regulation beyond the service for which it was originally intended. If they have no difficulties with such future expansion or think the likelihood of it is small, then all is well. But they should think long and hard about whether they are comfortable with that prospect.

Ultimately what is most needed is a compelling rationale for asserting government power that explains why and how we should either distinguish among different media or treat them all the same for purposes of public policy. It is not clear that anyone has developed a rationale of either type that can command widespread assent in the era of media abundance. The Aspen Institute Working Group did not develop such a rationale. Someone should. Doing so would be an important contribution to the development of digital broadcasting policy as well as overall telecommunications policy for the decades to come.

In a background paper for the Working Group, Henry Geller argues that if digital broadcasters were charged a spectrum fee and the fee was used to support public interest content, broadcasting could come under the same jurisprudence now applied to cable.¹⁶ This is an important start.

CONCLUSION

For many decades, policymakers saw the development of more abundant sources of television service as a solution to the First Amendment tensions created by broadcast regulation. If only the public had more options to choose from, they reasoned, the need for a government role in broadcasting would be greatly reduced. Now the era of abundance has arrived, and policymakers have found that they are still faced with many of the same dilemmas they have confronted for decades, as well as a family of new issues created by the convergence of media. Worse, the traditional justifications for broadcasting policy must be reconsidered. The quest today is not only to find new broadcasting policies, but also to find a new rationale for government policy toward the mass media as a whole.

Were policymakers naïve in the past? Are they wedded to archaic ideas today? Neither seems to be the case. Clearly the telecommunications industry is in the midst of a rapid transformation, and its future directions are unclear. Making policy in an environment of uncertainty is always hard. Some Aspen participants cautioned against a rush to judgment. Others were more willing to embrace a vision of the future. Policymakers will doubtless balance these two lines of thought. We can hope that they will not end up in a muddled middle.

But if those who advocated abundance as a solution to the problems of television policy were not entirely right, they were also not entirely wrong. The fact that so many Americans have enthusiastically accepted the new services is testimony enough that they advance the public interest in important ways. Viewing the public interest from the perspective of abundance prompts at least one thought with which most Aspen participants would probably agree: Any future policies should take full account of how the diversity of options now available to most members of the public furthers "the public interest, convenience, and necessity," and how the newer media might play an even larger role in furthering these goals. The development of policy for digital broadcasting should not be blind to the era of media abundance within which broadcasters operate.

The late Fred Friendly used to say that one of his goals was to make the difficulties of choice so painful that people had no recourse except to think. This may be among the greatest benefits that the era of abundance brings to policymakers concerned with the media today.

Endnotes

1. 47 U.S.C. Secs. 151, 336(d).
2. Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 386, 390 (1969).
3. For a discussion of technically created and government-created scarcity, their relationship and the implications of the distinction between them, see Tracy Westen, "Government-Created Scarcity: Thinking About Broadcast Regulation and the First Amendment," in this volume.
4. FCC v. Pacifica Foundation, 438 U.S. 726, 748-50 (1978).
5. As far as I can tell, the idea of "public ownership" as such is not stated in law. Rather, it is a longstanding expression of the fact that, beginning with the Radio Act of 1927, the government has successfully asserted the right to manage the spectrum as a common good. This shorthand description has taken on a life of its own over the years. See Glen O. Robinson, "The FCC and the First Amendment," Minnesota Law Review 52 (1967): 67.
6. See, for example: CBS v. FCC, 453 U.S. 367 (1981).
7. See, for example, Policy and Rules Concerning Children's Television Programming, 11 FCC Rcd. 10661 et seq. (1996).
8. 47 U.S.C. Sec. 336(d).
9. 47 U.S.C. 73.671. Policies and Rules Concerning Children's Television Programming, Report and Order, 3 Comm. Reg.(P&F) at 1395 et. seq.
10. For a discussion of the benefits of a market approach see Robert Corn-Revere, "Self-Regulation and the Public Interest," in this volume.
11. Writers Guild of America, West v. ABC, 609 F.2d 355 (9th Cir. 1979). Writers Guild of America West v. FCC, 609 F.2d 365.
12. Ultimately the law in this area stems from sixteenth-century English legislation and court opinions relating to charitable trusts and fiduciary responsibilities. See Marion R. Freemont-Smith, "Trends in Accountability," in The Future of the Nonprofit Sector, ed. Virginia A. Hodgkinson (San Francisco: Jossey-Bass, 1989), 75-78.
13. See Corn-Revere, "Self-Regulation and the Public Interest."
14. Public Television: A Program for Action (New York: Harper & Row, 1967).
15. A Public Trust: The Report of the Carnegie Commission on the Future of Public Broadcasting (New York: Bantam Books, 1967) 139-146.
16. Henry Geller, "Implementation of Pay Models and Existing Public Trustee Model in the Digital Broadcasting Era," in this volume.

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