Preliminary Draft-Comments and Suggestions Welcomed Version lo1 Communications Policy, Media Development, and Convergence Douglas a galbi Senior economist Cor DI Common Carrier Bureau, FCC January 18, 2001 abstract In the deliberations of scholars, policy analysts, and policy makers television has exceptional power and influence. Yet the historical record shows that television has not changed the economics of attention not merely a fluke or just ironic. It points to a major impedim onir for large populations in the course of their daily lives. This contrast is development of information societies. State-owned-and-controlled media can be an important policy lever for overcoming this opposition and promoting the growth of more diverse media environments and more diverse ways of interacting with media IThemostcurrentversionwillbeavailablefromhttp://www.erols.com/dgalbi/telpol/think.htmor http://www.galbithink.org The opinions and conclusions expressed in this paper are those of the author. They do not necessarily reflect the views of the Federal Communications Commission, its Commissioners, or any staff other than the author. I am grateful for numerous FCC colleagues who have shared their insights and experience with me. Author's address: dgalbi @fcc. gov; FCC, 445 12'th St SW, Washington, DC 20554, USA
Preliminary Draft – Comments and Suggestions Welcomed Version 1.011 Communications Policy, Media Development, and Convergence Douglas A. Galbi Senior Economist2 Competitive Pricing Division Common Carrier Bureau, FCC January 18, 2001 Abstract In the deliberations of scholars, policy analysts, and policy makers, television has exceptional power and influence. Yet the historical record shows that television has not changed the economics of attention for large populations in the course of their daily lives. This contrast is not merely a fluke or just ironic. It points to a major impediment to the development of information societies. State-owned-and-controlled media can be an important policy lever for overcoming this opposition and promoting the growth of more diverse media environments and more diverse ways of interacting with media. 1 The most current version will be available from http://www.erols.com/dgalbi/telpol/think.htm or http://www.galbithink.org . 2 The opinions and conclusions expressed in this paper are those of the author. They do not necessarily reflect the views of the Federal Communications Commission, its Commissioners, or any staff other than the author. I am grateful for numerous FCC colleagues who have shared their insights and experience with me. Author’s address: dgalbi@fcc.gov; FCC, 445 12’th St. SW, Washington, DC 20554, USA
Contents . Introduction II. Thirty Years of Deliberation of US Broadcast Law Il. Time with Media in Everyday life A Media Use Prior to radio and television B. Radio and Television Time in the late 1990s C. The Boring Story IV. Macro-Economics of Attention Seeking A Advertisings Share of the Economy: Constant Long-Term B Real Advertising Spending Per Media Hour: Constant Long-Term V. Effects of Advertising Prior to Radio and Television A. Visions and Aspirations B Building National Brands C. Commercial Value VI. The Importance of Attention to Government A. The Future Includes state media B. Promoting a Multiplicity of Sources and Outlets VII. Conclusion
2 Contents I. Introduction II. Thirty Years of Deliberation of US Broadcast Law III. Time with Media in Everyday Life A. Media Use Prior to Radio and Television B. Radio and Television Time in the late 1990s C. The Boring Story IV. Macro-Economics of Attention Seeking A. Advertising’s Share of the Economy: Constant Long-Term B. Real Advertising Spending Per Media Hour: Constant Long-Term V. Effects of Advertising Prior to Radio and Television A. Visions and Aspirations B. Building National Brands C. Commercial Value VI. The Importance of Attention to Government A. The Future Includes State Media B. Promoting a Multiplicity of Sources and Outlets VII. Conclusion
I. Introductio Convergence is widely considered to be about television. Anticipated developments ¨ interactive television,”“ TV meets the Web,"“ the coming collision of the Internet with broadcast law, etc -describe enhancements to television, new platforms for television, and the relationship between the regulatory framework for television and that for other media. Policy makers have considered at length how to foster the development of high- density television and digital television. Internet content providers have sought to move from banner advertisements to advertisements more like those on television from the perspective of many advertising agencies and Internet entrepreneurs, streaming media, following the model of television, are necessary to get rich, to be entertaining, and to hold persons attention Television is subject to detailed and distinctive government regulation. Among most scholars, policy-analysts, and policy-makers, television is considered especially powerful and influential. Thirty years of deliberation of us broadcast law demonstrate clearly the power and influence of television on this group of persons. Further scholarly and policy deliberation about the special power and influence of television does not appear to be worthwhile. If convergence is about television, or something like television, convergence will happen only very slowly The historical record indicates, however, that different media have not had dramatically different effects on the mundane personal choices of large populations. Television did not replace reading or other activities; it supplemented them. Over the past seventy-five years, growth in discretionary time can account for all the time currently spent watching television. Moreover, the advent of radio and television has not changed total advertising spending as a share of total output, nor changed significantly total advertising spending per adult media hour. The historical record shows that print media alone were sufficient In its Public Notice indicating approval of the merger between America Online(AOL) and Time Warner, the FCC stated its intention to initiate a proceeding on"interactive television services. See FCC 01-11 focusingonmediaconvergenceinEurope.Seehttp://www.tvmeetstheweb.com.AworkshoponNercter January 11, 2001. TV Meets the Web" is the name of Van Dusseldorp& Partners' website and newsl Generation Internet Policy in Brussels in mid-September, 1999 highlighted"the coming collision of the the forum. See the GIP publication, "Convergence Cyberspace: New Challenges Emerge"(May 2g Internet with broadcast law. " The European Commission and the Global Internet Project( GlP)co-host 2000), p 3. Paper available at http://www.gip.org/publications/classification.asp?classifIcatIoniD=10 licensee for the provision of advanced television, high density television, digital television, or othon 4 In a major industrial policy initiative, in 1997 the FCC gave additional spectrum to each televisi services; the total value of this spectrum has been estimated to be $15-$70 billion dollars. The development of this policy is still widely discussed. See, for example, "FCC Chairman Kennard Calls For More Benefits To Public From $70 Billion Give-Away Of 2nd Digital TV Channel, " FCC Press Release October 10.2000 online at http://www.fcc.gov/bureaus/miscellaneous/newsReleases/2000/nrmc0044.html;rEportoftheAdvisory Committee on the Public Interest Obligations of Digital Television Broadcasters(Dec 1998), online at http://www.ntia.docgov/pubintadvcom/pubint.htmforFccproceedingsinthisarea,see http://www.fcc.gov/dtv/.OthercountriesareencounteringthesamepolicyissuesinAustraliaseefor example, Given, Jock, " Digital D-Day(20 July 1999), online at
3 I. Introduction Convergence is widely considered to be about television. Anticipated developments – “interactive television,” “TV meets the Web,” “the coming collision of the Internet with broadcast law, ” etc. – describe enhancements to television, new platforms for television, and the relationship between the regulatory framework for television and that for other media.3 Policy makers have considered at length how to foster the development of highdensity television and digital television.4 Internet content providers have sought to move from banner advertisements to advertisements more like those on television. From the perspective of many advertising agencies and Internet entrepreneurs, streaming media, following the model of television, are necessary to get rich, to be entertaining, and to hold persons’ attention. Television is subject to detailed and distinctive government regulation. Among most scholars, policy-analysts, and policy-makers, television is considered especially powerful and influential. Thirty years of deliberation of US broadcast law demonstrate clearly the power and influence of television on this group of persons. Further scholarly and policy deliberation about the special power and influence of television does not appear to be worthwhile. If convergence is about television, or something like television, convergence will happen only very slowly. The historical record indicates, however, that different media have not had dramatically different effects on the mundane personal choices of large populations. Television did not replace reading or other activities; it supplemented them. Over the past seventy-five years, growth in discretionary time can account for all the time currently spent watching television. Moreover, the advent of radio and television has not changed total advertising spending as a share of total output, nor changed significantly total advertising spending per adult media hour. The historical record shows that print media alone were sufficient 3 In its Public Notice indicating approval of the merger between America Online (AOL) and Time Warner, the FCC stated its intention to initiate a proceeding on “interactive television services.” See FCC 01-11, January 11, 2001. “TV Meets the Web” is the name of Van Dusseldorp & Partners’ website and newsletter focusing on media convergence in Europe. See http://www.tvmeetstheweb.com . A workshop on Next Generation Internet Policy in Brussels in mid-September, 1999 highlighted “the coming collision of the Internet with broadcast law.” The European Commission and the Global Internet Project (GIP) co-hosted the forum. See the GIP publication, “Convergence & Cyberspace: New Challenges Emerge” (May 20, 2000), p. 3. Paper available at http://www.gip.org/publications/classification.asp?CLASSIFICATION_ID=10 . 4 In a major industrial policy initiative, in 1997 the FCC gave additional spectrum to each television licensee for the provision of advanced television, high density television, digital television, or other services; the total value of this spectrum has been estimated to be $15-$70 billion dollars. The development of this policy is still widely discussed. See, for example, “FCC Chairman Kennard Calls For More Benefits To Public From $70 Billion Give-Away Of 2nd Digital TV Channel,” FCC Press Release October 10, 2000, online at http://www.fcc.gov/Bureaus/Miscellaneous/News_Releases/2000/nrmc0044.html ; Report of the Advisory Committee on the Public Interest Obligations of Digital Television Broadcasters (Dec. 1998), online at http://www.ntia.doc.gov/pubintadvcom/pubint.htm ; for FCC proceedings in this area, see http://www.fcc.gov/dtv/ . Other countries are encountering the same policy issues; in Australia, see for example, Given, Jock, “Digital D-Day” (20 July 1999), online at http://www.comslaw.org.au/research/Broadcasting/19990729_digitalaq.html
to create new visions and aspirations, build national brands, and generate significant commercial value. For the most part, divergence never occurred in the economic effects of media. Hence convergence cannot be slow in coming In any case, communications policy should promote, not convergence, but worthwhile social, political, and economic goals. The historical record shows that over seventy-five years advertising has grown about the same rate as the over-all economy. Thus if policy seeks information industries to serve as an engine for creating new economic opportunities and jobs, policy should seek to develop media not supported by advertising Most persons today spend a large amount of time within the home, sitting down, watching pre-packaged, distributor-scheduled streaming audio and video, i.e. television If the greatest menace to freedom is an inert people, policy should encourage the growth of more diverse media environments and more diverse ways of interacting with media. To promote serious discussion of serious issues, as well as the release of human energy in healthful productive, avocational, social, political, and ludic communications, policy should encourage the development of a multiplicity of communications sources and outlets Stating policy goals is easy; the question is al ways what to do. The growth in the number of participants in the communications industry, the globalization of firms, and rapid technological change make many traditional policies unintelligible or ineffective. In the Microsoft antitrust case, in the aol Time Warner merger, and in formulating pricing policies, policy makers and industry participants are increasingly recognizing the importance of economics of attention. An insightful policy analyst pointed out early in the 1990s When new technologies conducive to increasingly diverse and smaller-scale mass communications emerge, commercial market forces and deeply ingrained media habits pull back hard in the other direction. Communications policy needs to identify effective levers for influencing commercial media development and wide-spread habits of media use Thus for policy purposes television is not something to be made into an appliance like a toaster; it's always been more or less like People magazine with animation The quotation is from the concurring opinion of US Supreme Court Justice Louis Brandeis in Whitney v California 274 US 357(1927). Articles in the trade press indicate that Internet appliances currently under development may foster the growth of more diverse environments for media use and more diverse ways of interacting with media 7 The provision of mere entertainment, while not encouraged, is generally tolerated A key issue in the Microsoft case relates to how control was exercised over the first screen seen when starting Windows. The first screen is important because most users notice it and do not change it Similarly, the FCC's approval of the AOL Time Warner merger included a condition requiring that AOL Time Warner must allowing ISPs providing services over AOL Time Warner facilities to control the contents of the first screen that subscribers see. With respect to pricing policies, Odlyzko, Andrew, "The history of communications and its implications for the Internet"(available at http://www.research.att.com/-amoshowsthathistoricallycustomershavepreferredflat-rate communications services. With such services customers do not have to pay attention to For a short well-written article building on Odlyzko's work, see Cohen, Hal, "The Price is Wrong, The Industry StandardJanuary1-8,2001,onlineatwww.thestandard.com Neuman, W. Russell, The future of the mass audience(Cambridge, UK: Cambridge Univ Press, 1991)p
4 to create new visions and aspirations, build national brands, and generate significant commercial value. For the most part, divergence never occurred in the economic effects of media.5 Hence convergence cannot be slow in coming. In any case, communications policy should promote, not convergence, but worthwhile social, political, and economic goals. The historical record shows that over seventy-five years advertising has grown about the same rate as the over-all economy. Thus if policy seeks information industries to serve as an engine for creating new economic opportunities and jobs, policy should seek to develop media not supported by advertising. Most persons today spend a large amount of time within the home, sitting down, watching pre-packaged, distributor-scheduled streaming audio and video, i.e. television. If “the greatest menace to freedom is an inert people,” policy should encourage the growth of more diverse media environments and more diverse ways of interacting with media.6 To promote serious discussion of serious issues, as well as the release of human energy in healthful productive, avocational, social, political, and ludic communications,7 policy should encourage the development of a multiplicity of communications sources and outlets. Stating policy goals is easy; the question is always what to do. The growth in the number of participants in the communications industry, the globalization of firms, and rapid technological change make many traditional policies unintelligible or ineffective. In the Microsoft antitrust case, in the AOL Time Warner merger, and in formulating pricing policies, policy makers and industry participants are increasingly recognizing the importance of economics of attention.8 An insightful policy analyst pointed out early in the 1990s: When new technologies conducive to increasingly diverse and smaller-scale mass communications emerge, commercial market forces and deeply ingrained media habits pull back hard in the other direction.9 Communications policy needs to identify effective levers for influencing commercial media development and wide-spread habits of media use. 5 Thus for policy purposes television is not something to be made into an appliance like a toaster; it’s always been more or less like People magazine with animation. 6 The quotation is from the concurring opinion of US Supreme Court Justice Louis Brandeis in Whitney v. California 274 US 357 (1927). Articles in the trade press indicate that Internet appliances currently under development may foster the growth of more diverse environments for media use and more diverse ways of interacting with media. 7 The provision of mere entertainment, while not encouraged, is generally tolerated. 8 A key issue in the Microsoft case relates to how control was exercised over the first screen seen when starting Windows. The first screen is important because most users notice it and do not change it. Similarly, the FCC’s approval of the AOL Time Warner merger included a condition requiring that AOL Time Warner must allowing ISPs providing services over AOL Time Warner facilities to control the contents of the first screen that subscribers see. With respect to pricing policies, Odlyzko, Andrew, “The history of communications and its implications for the Internet” (available at http://www.research.att.com/~amo ) shows that historically customers have preferred flat-rate communications services. With such services customers do not have to pay attention to usage. For a short, well-written article building on Odlyzko’s work, see Cohen, Hal, “The Price is Wrong,” The Industry Standard, January 1-8, 2001, online at www.thestandard.com . 9 Neuman, W. Russell, The future of the mass audience (Cambridge, UK: Cambridge Univ. Press, 1991) p. 165
In the right media environment, state-owned-and-controlled media can be such levers consistent with liberal, democratic values. The unattractive history associated with such forms of media, as well as the past limited scope of broadcasting opportunities, ha rightly foreclosed most consideration of such policy instruments. Current and anticipated changes in relevant circumstances suggest that more extensive discussion of state media is now warranted. State-owned-and-controlled media might be used to help change habits of media use, address issues that are hindering the development of business plans for commercial Internet information sources and services, and further the separation of politics and business in the information industry. Recognizing the importance of economics of attention, communications policy could converge with media development IL. Thirty Years of Deliberation of US Broadcast Law Since the late 1960s scholars, policy-analysts, and policy-makers have deliberated extensively about the legality and desirability of regulating broadcasting differently from print media in the US The U.S experience offers rich insight into the special power and influence of broadcasting. In contrast to most countries, in the US there has been private commercially driven broadcasting continually since the mid-1920s. The fundamental US sector-specific statutory law regulating broadcasting has not changed since 1934 Moreover, in contrast to European constitutional law, US constitutional law features greater continuity of texts, a more clearly defined domain of texts, and a more rigidly structured textual hierarchy. In this context, commercial and institutional incentives deep ideological currents of skepticism toward constraints on personal and entrepreneurial freedom, and a rich civic tradition of articulating the public interest have powered deliberatively productive clashes between broadcast law and other legal claim In the US the special nature of broadcasting has been discussed and scrutinized at various levels for over thirty years accepted changes in policy orientation. s The current practical significance ofU ely At the end of the year 2000, highly respected commentators and relevant US governme institutions are deeply divided on broadcast law, and there have been no clear, wide "Unattractive" means here unattractive to most persons living in high-income liberal democracies. Many persons living in formerly communist countries in Central and Eastern Europe now consider the historical period associated with state media to be preferable to their current situation Constitutional law might rightly preclude policies that seem desirable in particular circumstances; clearly a strong constitution is important to public health. I leave to others to analyze questions of constitutional law. Note, however, that observed new practices are consistent with the emergence of state media. See Section v Important early contributions to these deliberations are the Supreme Court case and judgement, NBC v United States, 319 US 192(1943)and Barron, Jerome, " Access to the Media-A New First Amendm Right, 80 Harard Law Review 1641(1967) Recently the FCC's personal attack and political editorial rules have created an unusually dramatic controversy. See Joint Statement of Commissioner Susan Ness and Commissioner Gloria Tristani Concerning the Political Editorial and Personal Attack Rules(Gen. Docket No. 83-484 )[on the web at http://www.fccgov/speecheS/ness/states/stsn819.htmlI,JointStatementofCommissionersPowelland
5 In the right media environment, state-owned-and-controlled media can be such levers consistent with liberal, democratic values. The unattractive history associated with such forms of media, as well as the past limited scope of broadcasting opportunities, has rightly foreclosed most consideration of such policy instruments.10 Current and anticipated changes in relevant circumstances suggest that more extensive discussion of state media is now warranted.11 State-owned-and-controlled media might be used to help change habits of media use, address issues that are hindering the development of business plans for commercial Internet information sources and services, and further the separation of politics and business in the information industry. Recognizing the importance of economics of attention, communications policy could converge with media development. II. Thirty Years of Deliberation of US Broadcast Law Since the late 1960s scholars, policy-analysts, and policy-makers have deliberated extensively about the legality and desirability of regulating broadcasting differently from print media in the US12 The U.S experience offers rich insight into the special power and influence of broadcasting. In contrast to most countries, in the US there has been private, commercially driven broadcasting continually since the mid-1920s. The fundamental US sector-specific statutory law regulating broadcasting has not changed since 1934. Moreover, in contrast to European constitutional law, US constitutional law features greater continuity of texts, a more clearly defined domain of texts, and a more rigidly structured textual hierarchy. In this context, commercial and institutional incentives, deep ideological currents of skepticism toward constraints on personal and entrepreneurial freedom, and a rich civic tradition of articulating the public interest have powered deliberatively productive clashes between broadcast law and other legal claims. In the US the special nature of broadcasting has been discussed and scrutinized at various levels for over thirty years. At the end of the year 2000, highly respected commentators and relevant US government institutions are deeply divided on broadcast law, and there have been no clear, widely accepted changes in policy orientation.13 The current practical significance of US 10 “Unattractive” means here unattractive to most persons living in high-income liberal democracies. Many persons living in formerly communist countries in Central and Eastern Europe now consider the historical period associated with state media to be preferable to their current situation. 11 Constitutional law might rightly preclude policies that seem desirable in particular circumstances; clearly a strong constitution is important to public health. I leave to others to analyze questions of constitutional law. Note, however, that observed new practices are consistent with the emergence of state media. See Section V. 12 Important early contributions to these deliberations are the Supreme Court case and judgement , NBC v. United States, 319 US 192 (1943) and Barron, Jerome, “Access to the Media – A New First Amendment Right,” 80 Harvard Law Review 1641 (1967). 13 Recently the FCC’s personal attack and political editorial rules have created an unusually dramatic controversy. See Joint Statement of Commissioner Susan Ness and Commissioner Gloria Tristani Concerning the Political Editorial and Personal Attack Rules (Gen. Docket No. 83-484) [on the web at http://www.fcc.gov/Speeches/Ness/States/stsn819.html ], Joint Statement of Commissioners Powell and
broadcast programming regulation may be rather small. However, the discourse associated with US broadcast programming regulation is closely related to that associated with broadcast ownership regulation. Parties have argued that such regulation has highly significant effects, and regulations concerning broadcast ownership currently present important, contentious issues before the FCC. Moreover, broadcast programming regulations often have a broader scope and are more determinately implemented elsewhere In important ways thirty years of deliberation of us broadcast law have been fruitful This experience provides important evidence about the economics of human attention with respect to scholars, policy-analysts, and policy-makers. It shows that broadcasting has a powerful and influential position, and that changes in broadcast law are not likely to be the result of scholars, policy-analysts, and policy-makers'deliberations Consider an important text published and widely read in the US over twenty years ago A young scholar wrote, acknowledging and strengthening the conclusions of a growing literature, Differences [between print and broadcasting indeed exist, but they are either too insignificant to justify momentous distinctions in treatment under the first amendment or too broad and vacuous to be persuasive. We must, therefore, conclude that they are the same. He then noted, ". society has long considered broadcasting to be meaningfully different from the print media, and this perception has greatly influenced the decision to allow regulation only in the former. Finally, the scholar went on to provide a rational defense for different regulatory treatment of broadcasting, given that there are no relevant differences between broadcasting and print. This argument proved to be highly influential, at least in the legal academy. The success of the argument Furchtgott-Roth, Re: FCC Gen Docket No. 83-484 [on the web at http://www.fccgov/speecheS/powell/statements/stmkp817.html],FccOrderandreQuesttoUpdate Record(rel. Oct 4, 2000)MM Docket No. 83-484 [on the web at http://www.fccgov/bureaus/MassMedia/orders/2000/fCc00360.pdfl,FccOrder(proceedingterminated (rel. Oct 23, 2000) MM Docket No. 83-484 [on the web as Word document at http://www.fccgov/bureaus/massMedia/orders/2000/Fcc00386.doc,astextfile(withoutfootnotes)at http://www.fcc.gov/bureaus/MassMedia/orders/2000/fCc00386.txti One respected scholar states that in some measure traditional US broadcasting regulation is still in place, but it has a"musty odor. He states, ". neither private or public controls seem likely to have a large impact on the free flow of information and ideas. " See Robinson, Glen O,The Electronic First Amendment: An Essay for the New Age, 47 Duke Law Journal(March, 1998)p 903, 970 For a review of broadcast programming regulation in Britain, France, Germany, and Italy, see Barendt, E, Broadcasting Law: A Comparative Study(Oxford: Clarendon Press, 1993)Chapter V. I6 This analysis of the economics of human attention is different from an analysis of professional interests and incentives, which would consider, for example, of shaping foundational law versus collecting and publishing numbers. For an example of such analysis, see Powe, L.A. Jr, "The Supreme Court, Social Change, and Legal Scholarship, 44 Stan. L. Rev. 1615 July, 1992), Section V. Bollinger, Lee C, "Freedom of the Press and Public Access: Toward a Theory of Partial Regulation of the Mass Media, 75 Michigan Law Review(Nov 1976), p. 16 pp.16-17 Powe notes, "...it swept the legal academy, being immediately and impressively embraced in Laurence Tribes treatise American Constitutional Law and becoming the standard citation in any discussion of the topic [footnote to American Constitutional Law omitted]. " Powe, Lucas A Jr, American Broadcasting and the First Amendment (Univ of California Press, 1987)p. 5. On the other hand, the argument or the
6 broadcast programming regulation may be rather small.14 However, the discourse associated with US broadcast programming regulation is closely related to that associated with broadcast ownership regulation. Parties have argued that such regulation has highly significant effects, and regulations concerning broadcast ownership currently present important, contentious issues before the FCC. Moreover, broadcast programming regulations often have a broader scope and are more determinately implemented elsewhere.15 In important ways thirty years of deliberation of US broadcast law have been fruitful. This experience provides important evidence about the economics of human attention with respect to scholars, policy-analysts, and policy-makers. It shows that broadcasting has a powerful and influential position, and that changes in broadcast law are not likely to be the result of scholars, policy-analysts, and policy-makers’ deliberations.16 Consider an important text published and widely read in the US over twenty years ago. A young scholar wrote, acknowledging and strengthening the conclusions of a growing literature, “Differences [between print and broadcasting] indeed exist, but they are either too insignificant to justify momentous distinctions in treatment under the first amendment or too broad and vacuous to be persuasive. We must, therefore, conclude that they are the same.”17 He then noted, “…society has long considered broadcasting to be meaningfully different from the print media, and this perception has greatly influenced the decision to allow regulation only in the former.”18 Finally, the scholar went on to provide a rational defense for different regulatory treatment of broadcasting, given that there are no relevant differences between broadcasting and print. This argument proved to be highly influential, at least in the legal academy.19 The success of the argument Furchtgott-Roth, Re: FCC Gen Docket No. 83-484 [on the web at http://www.fcc.gov/Speeches/Powell/Statements/stmkp817.html ], FCC Order and Request to Update Record (rel. Oct. 4, 2000) MM Docket No. 83-484 [on the web at http://www.fcc.gov/Bureaus/Mass_Media/Orders/2000/fcc00360.pdf ], FCC Order (proceeding terminated) (rel. Oct. 23, 2000) MM Docket No. 83-484 [on the web as Word document at http://www.fcc.gov/Bureaus/Mass_Media/Orders/2000/fcc00386.doc , as text file (without footnotes) at http://www.fcc.gov/Bureaus/Mass_Media/Orders/2000/fcc00386.txt ]. 14 One respected scholar states that in some measure traditional US broadcasting regulation is still in place, but it has a “musty odor.” He states, “…neither private or public controls seem likely to have a large impact on the free flow of information and ideas.” See Robinson, Glen O., “The Electronic First Amendment: An Essay for the New Age,” 47 Duke Law Journal (March, 1998) p. 903, 970. 15 For a review of broadcast programming regulation in Britain, France, Germany, and Italy, see Barendt, E., Broadcasting Law: A Comparative Study (Oxford: Clarendon Press, 1993) Chapter V. 16 This analysis of the economics of human attention is different from an analysis of professional interests and incentives, which would consider, for example, interests in getting re-elected or re-appointed, or the relative personal returns from exploring news ways of shaping foundational law versus collecting and publishing numbers. For an example of such analysis, see Powe, L.A. Jr., “The Supreme Court, Social Change, and Legal Scholarship,” 44 Stan. L. Rev. 1615 (July, 1992), Section V. 17 Bollinger, Lee C., “Freedom of the Press and Public Access: Toward a Theory of Partial Regulation of the Mass Media,” 75 Michigan Law Review (Nov. 1976), p. 16. 18 Id., pp. 16-17. 19 Powe notes, “…it swept the legal academy, being immediately and impressively embraced in Laurence Tribe’s treatise American Constitutional Law and becoming the standard citation in any discussion of the topic [footnote to American Constitutional Law omitted].” Powe, Lucas A., Jr, American Broadcasting and the First Amendment (Univ. of California Press, 1987) p. 5. On the other hand, the argument or the
shows the powerful intellectual position of broadcasting law and the extensive rational resources and options available to justify it Broadcasting has successfully invoked the emotive power of democracy, education, and other important values. The following scholarly analysis of broadcastings importance provides a good example A well-functioning democracy therefore depends not just upon a formal education system, but also upon an ongoing informal education system In the United States, this informal education system has many components film, newspapers, books, journals of opinion, magazines, radio, political campaigns, billboards, marches, workplace conversations-but none is as important as television The Internet provides vastly more information than television, but does so only if citizens actively seek that information out. Television informs even the e observer It [television] defines the public .. more than forty million households tuned in for the final episode of Seinfeld a thirty minute adult situational comedy]. Television is unique in its capacity to produce this type of shared experience and for that very reason can be regarded, at least today, as the paramount public medium Here television shows its power in a seamless argument from democracy to education to Seinfeld. Other arguments have linked broadcasting to other emotive subjects such as raising children, sex and violence, self-improvement, and helping disable persons. The success of such arguments demonstrates broadcasting's tremendous power in policy deliberations Broadcasting is also very powerfully positioned economically. A significant amount of deliberation about broadcast law has drawn upon economic authority. For example, an article's author( bollinger) was not mentioned at all in an influential article that the reigning FCC chairman and his legal assistant published four years after Bollinger's article was published. See Fowler, Mark S and Daniel L. Brenner, " A Marketplace Approach to Broadcast Regulation, 60 Tex. L Rev. 207(Feb 1982 20 See also Logan, Charles W, "Getting Beyond Scarcity: A New Paradigm for Assessing the Constitutionality of Broadcast Regulation, 85 Calif. L. Rev. 1687 (Dec. 1997). Writing about twenty years after Bollinger, Logan notes that the scarcity justification for broadcast regulation has become unpersuasive and that there are ominous signs that the Supreme Court may re-examine whether broadcasting should be legally distinguished from print. He then offers new justifications to maintain the distinction. Note that such an argument is relatively complex and is probably more powerful in print than if offered in audio or Democracy is so emotive of a word than some countries with political systems that might be judged, after even just a small period of consideration, to be totalitarian include the word"democratic"in their names consider, for example, the former German Democratic Republic, which was known informally as East Germany. Education is also highly emotive. Most persons feel that education is very important, al though discussions about curricula and standards are considered to be the epitome of tedium. Such discussions often attract only narrow attention and achieve few results. See Graff, Harvey J. The Literacy Myth(New Fiss, Owen M, "The Censorship of Television, 93 N. UL Rev.( Summer, 1999)1216, 1217. Fiss is Sterling Professor of Law, Yale University
7 shows the powerful intellectual position of broadcasting law and the extensive rational resources and options available to justify it.20 Broadcasting has successfully invoked the emotive power of democracy, education, and other important values.21 The following scholarly analysis of broadcasting’s importance provides a good example: A well-functioning democracy therefore depends not just upon a formal education system, but also upon an ongoing informal education system. In the United States, this informal education system has many components – film, newspapers, books, journals of opinion, magazines, radio, political campaigns, billboards, marches, workplace conversations – but none is as important as television. …The Internet provides vastly more information than television, but does so only if citizens actively seek that information out. Television informs even the passive observer. …It [television] defines the public. …more than forty million households tuned in for the final episode of Seinfeld [a thirty minute adult situational comedy]. Television is unique in its capacity to produce this type of shared experience and for that very reason can be regarded, at least today, as the paramount public medium.22 Here television shows its power in a seamless argument from democracy to education to Seinfeld. Other arguments have linked broadcasting to other emotive subjects such as raising children, sex and violence, self-improvement, and helping disable persons. The success of such arguments demonstrates broadcasting’s tremendous power in policy deliberations. Broadcasting is also very powerfully positioned economically. A significant amount of deliberation about broadcast law has drawn upon economic authority. For example, an article’s author (Bollinger) was not mentioned at all in an influential article that the reigning FCC chairman and his legal assistant published four years after Bollinger’s article was published. See Fowler, Mark S. and Daniel L. Brenner, “A Marketplace Approach to Broadcast Regulation,” 60 Tex. L. Rev. 207 (Feb. 1982). 20 See also Logan, Charles W., “Getting Beyond Scarcity: A New Paradigm for Assessing the Constitutionality of Broadcast Regulation,” 85 Calif. L. Rev. 1687 (Dec. 1997). Writing about twenty years after Bollinger, Logan notes that the scarcity justification for broadcast regulation has become unpersuasive and that there are ominous signs that the Supreme Court may re-examine whether broadcasting should be legally distinguished from print. He then offers new justifications to maintain the distinction. Note that such an argument is relatively complex and is probably more powerful in print than if offered in audio or video. 21 Democracy is so emotive of a word than some countries with political systems that might be judged, after even just a small period of consideration, to be totalitarian include the word “democratic” in their names; consider, for example, the former German Democratic Republic, which was known informally as East Germany. Education is also highly emotive. Most persons feel that education is very important, although discussions about curricula and standards are considered to be the epitome of tedium. Such discussions often attract only narrow attention and achieve few results. See Graff, Harvey J. The Literacy Myth (New York: Academic Press, 1979). 22 Fiss, Owen M., “The Censorship of Television,” 93 Nw. U. L Rev. (Summer, 1999) 1216, 1217. Fiss is Sterling Professor of Law, Yale University
important proposal for communications policy put forward four principles. Two of these principles draw directly on the authority of economics Principle: As a matter of policy, government should foster access by speakers to media.... access means the ability to reach any willing recipient by any speaker willing to pay the economic cost [omitted footnote defining economic cost in a standard way] of doing so(and does not mean that government must or should require others to subsidize the would-be communicator) Principle: Government policies should foster diversity in the media marketplace. .. diversity is achieved when people are allowed to bid for any That is, the diversity principle dictates that there be no artificial governmem 3 information or entertainment they desire- no censorship-and they receive what they seek, so long as they are willing to pay the economic costs of receiving posed barriers to transmission or reception of speech While the above principles might be interpreted as endorsing the extension of a vulgar kind of freedom widely experienced and cherished in some societies, the principles are also associated with economic authority. In economics, "cost "and"willingness to pay are key terms in disciplined analysis. The phrase "no artificial government-imposed barriers"can best be understood as an emphatically phrased conventional descriptor for a particular comparative setting in an economic model. Overall, the two principles above resonate with the terms and thrust of the first fundamental welfare Theorem of Economics, widely considered to be a key source of authority in economics Using terms of economic authority, broadcasting can be also contraposed to that authority in ways much more intricate, awe-inspiring, and powerful. One can consider the public goods aspects of media products, positive and negative externalities, the implications of collecting money only from advertisers, the conflict between advertisers' and audiences interests, the malleability of preferences, the role of information problems, the significance of monopolistic competition, the impact of international trade, and"Ruinous Competition: Too Many Products, Too Much Fake Diversity. There is also"A Solution and New Problem: Price Discrimination. "4 One scholar has cataloged,".ten generic types of externalities that greatly affect whether a market production of media content will correspond to the content that would be produced if the audience got what it Krattenmaker, Thomas G, and Powe, L A Jr, "Converging First Amendment Principles for Converging Communications Media, 104 Yale LJ.1730, 1731. The other two principles are: Editorial control over what is said and how it is said should be lodged in private, not governmental institutions, and Government is not permitted to sacrifice any of the three foregoing principles to further goals associated with either or both of the others. Where such sacrifice is not needed, however, government may extend the goals associated with any of those principles. Section VI of this paper argues that government editorial control over government-generated information and content should play an important role in communications policy "Consumer sovereignty"is also a term associated with economic authority. It tends to enter discussions of broadcast law along with the other terms mentioned. Like them, it is not a term that a large number of persons physically learn in the course of their daily lives; one learns what it means by studying economics texts. Hence this term, as well as the other terms from economic authority, has little significance to the question of whether persons should have the same sort of experience of freedom with respect to communication goods as they have with respect to many other goods 25 See Baker. Edwin C. Giving the Audience What it Wants. "58 Ohio St. L.J. 316-338 2d,p.344 8
8 important proposal for communications policy put forward four principles. Two of these principles draw directly on the authority of economics: [Principle: ] As a matter of policy, government should foster access by speakers to media. …access means the ability to reach any willing recipient by any speaker willing to pay the economic cost [omitted footnote defining economic cost in a standard way] of doing so (and does not mean that government must or should require others to subsidize the would-be communicator). … [Principle: ] Government policies should foster diversity in the media marketplace. …diversity is achieved when people are allowed to bid for any information or entertainment they desire – no censorship – and they receive what they seek, so long as they are willing to pay the economic costs of receiving it. That is, the diversity principle dictates that there be no artificial governmentimposed barriers to transmission or reception of speech.23 While the above principles might be interpreted as endorsing the extension of a vulgar kind of freedom widely experienced and cherished in some societies, the principles are also associated with economic authority. In economics, “cost” and “willingness to pay” are key terms in disciplined analysis.24 The phrase “no artificial government-imposed barriers” can best be understood as an emphatically phrased conventional descriptor for a particular comparative setting in an economic model. Overall, the two principles above resonate with the terms and thrust of the First Fundamental Welfare Theorem of Economics, widely considered to be a key source of authority in economics. Using terms of economic authority, broadcasting can be also contraposed to that authority in ways much more intricate, awe-inspiring, and powerful. One can consider the public goods aspects of media products, positive and negative externalities, the implications of collecting money only from advertisers, the conflict between advertisers’ and audiences’ interests, the malleability of preferences, the role of information problems, the significance of monopolistic competition, the impact of international trade, and “Ruinous Competition: Too Many Products, Too Much Fake Diversity.”25 There is also “A Solution and New Problem: Price Discrimination.”26 One scholar has cataloged, “…ten generic types of externalities that greatly affect whether a market production of media content will correspond to the content that would be produced if the audience got what it 23 Krattenmaker, Thomas G., and Powe, L. A. Jr., “Converging First Amendment Principles for Converging Communications Media,” 104 Yale L.J. 1730, 1731. The other two principles are: “Editorial control over what is said and how it is said should be lodged in private, not governmental institutions;” and “Government is not permitted to sacrifice any of the three foregoing principles to further goals associated with either or both of the others. Where such sacrifice is not needed, however, government may extend the goals associated with any of those principles.” Section VI of this paper argues that government editorial control over government-generated information and content should play an important role in communications policy. 24 “Consumer sovereignty” is also a term associated with economic authority. It tends to enter discussions of broadcast law along with the other terms mentioned. Like them, it is not a term that a large number of persons physically learn in the course of their daily lives; one learns what it means by studying economics texts. Hence this term, as well as the other terms from economic authority, has little significance to the question of whether persons should have the same sort of experience of freedom with respect to communication goods as they have with respect to many other goods. 25 See Baker, Edwin C., “Giving the Audience What it Wants,” 58 Ohio St. L.J. 316-338. 26 Id., p. 344
wanted when charged its real cost. 27 Another scholar's text supplies a list ofeleven perceived problems and associates them with the proposition that well-functioning television markets are inadequate This same text also contains references to" the television market, the communications market, the emerging communications market, the broadcasting market, ""the media market, and"the emerging media market. The complex analytical work necessary to sort out and evaluate the functioning of all these different configurations of markets is rather intimidating, and the effect is to induce deference to the associated general claim A recent text on television and the public interest illustrates well this economics of attention. The text starts with the following two sentences The communications revolution has thrown into question the value of impose. o public interest obligations on television broadcasters. But the distinctive nature this unusual market-with "winner-take-all" features with viewers as a commodity, with pervasive externalities from private choices, and with market effects on preferences as well as the other way around -justifies a continuing role for government regulation in the public interest The second sentence presents as its subject"the distinctive nature of this unusual market. Use of the word"market "economically invokes the authority of disciplined analysis and the readers' personal representations of the status quo in communications, media, broadcasting, or television. The preceding adjectives"distinctive" and unusual help color the readers configuring of these representations. The second sentence dashes off jargon, economic terms, and complex interactions, and then releases intellectual tension in a familiar conclusion. Readers economically defer to economic authority, connect television to the need for government regulation, and conserve attention in dealing with the rest of the text Recent texts from influential sources in Europe also highlight the distinctive power of audio-visual media. This term encompasses all streaming pre-produced audio and video, but in deliberations it does not appear to be economically distinguishable from the terms broadcasting or television. The European Commission wrote in March, 1999 The socio-cultural impact of the audiovisual sector, in particular broadcasting, is without parallel.. The audiovisual sector, for its part, combines economic 27ld.p.349 See Sunstein, Cass R, " Television and the Public Interest,88 Calif.L Rev. 509 291 30 Evaluating whether US Supreme Court Justice Oliver Wendall Holmes used"market" in this way in his famous"free speech opinion in Abrams v. United States(1917) requires much more than a literal reading of his opinion and a formalistic understanding of markets. Cf. Sunstein, Cass R, Democracy and the well developed at the time Holmes issued his opinion. Moreover, Holmes's apparent post-modern as not Problem of Free Speech(New York: The Free Press, 1993)pp. 23-28. Neo-classical economics w perspective on truth( see ld. p. 26)differs strongly from the epistemological framework of neo-classical economics. For an important article on another metaphor that has been widely misconstrued, see Rothschild, Emma, Adam Smith and the Invisible Hand, American Economic Review 82(2), May 1994
9 wanted when charged its real cost.”27 Another scholar’s text supplies a list of eleven perceived problems and associates them with the proposition that “well-functioning television markets are inadequate.”28 This same text also contains references to “the television market,” “the communications market,” “the emerging communications market,” “the broadcasting market,” “the media market,” and “the emerging media market.”29 The complex analytical work necessary to sort out and evaluate the functioning of all these different configurations of markets is rather intimidating, and the effect is to induce deference to the associated general claim. A recent text on television and the public interest illustrates well this economics of attention. The text starts with the following two sentences: The communications revolution has thrown into question the value of imposing public interest obligations on television broadcasters. But the distinctive nature of this unusual market – with “winner-take-all” features, with viewers as a commodity, with pervasive externalities from private choices, and with market effects on preferences as well as the other way around – justifies a continuing role for government regulation in the public interest.30 The second sentence presents as its subject “the distinctive nature of this unusual market.” Use of the word “market” economically invokes the authority of disciplined analysis and the readers’ personal representations of the status quo in communications, media, broadcasting, or television.31 The preceding adjectives “distinctive” and “unusual” help color the readers configuring of these representations. The second sentence dashes off jargon, economic terms, and complex interactions, and then releases intellectual tension in a familiar conclusion. Readers economically defer to economic authority, connect television to the need for government regulation, and conserve attention in dealing with the rest of the text. Recent texts from influential sources in Europe also highlight the distinctive power of audio-visual media. This term encompasses all streaming pre-produced audio and video, but in deliberations it does not appear to be economically distinguishable from the terms broadcasting or television. The European Commission wrote in March, 1999: The socio-cultural impact of the audiovisual sector, in particular broadcasting, is without parallel. …The audiovisual sector, for its part, combines economic, 27 Id. p. 349. 28 See Sunstein, Cass R., “Television and the Public Interest,” 88 Calif. L. Rev. 509. 29 Id. passim. 30 Id. p. 501. 31 Evaluating whether US Supreme Court Justice Oliver Wendall Holmes used “market” in this way in his famous “free” speech opinion in Abrams v. United States (1917) requires much more than a literal reading of his opinion and a formalistic understanding of markets. Cf. Sunstein, Cass R., Democracy and the Problem of Free Speech (New York: The Free Press, 1993) pp. 23-28. Neo-classical economics was not well developed at the time Holmes issued his opinion. Moreover, Holmes’s apparent post-modern perspective on truth (see Id. p. 26) differs strongly from the epistemological framework of neo-classical economics. For an important article on another metaphor that has been widely misconstrued, see Rothschild, Emma, “Adam Smith and the Invisible Hand,” American Economic Review 82(2), May 1994 pp. 319-22
social, and cultural issues in a unique way. The socio-cultural impact of television, for example, is without parallel. The European Parliament wrote in October, 1999 Parliament also considers that television as referred to in the directive television without Frontiers includes cable and satellite delivered television] will remain the principle medium of primary information provision and processing for the foreseeable future and that it is therefore of paramount importance in helpi people in our pluralist societies to arrive at opinions and decisions and in functioning of democracy, the preservation of cultural diversity and conveying subscriptions,pay-per-view) and the method of transmission,rtising social values, irrespective of the type of financing(charges, ad The Report of the High-level Group on Audiovisual Policy(October 1998)wrote it is essential that the specificity of the [audiovisual] sector continues to be recognized The Seminar on Audiovisual Media and Authorities(November, 1998)wrote There was a consensus on the specificity of the audiovisual sector and the consequent need for regulatory measures which addressed this specificity A recent influential review of Europe's digital revolution put in print an unusually detailed and direct analysi The true rationale for broadcasting regulation lies in the uniquely influential role of a medium which helps form public opinion, provides a forum for public debate and discussion, and -in places where regulation has not intervened to prevent it offers a unique source of commercial and political power for private media owners [reference omitted] The pervasiveness and influence of such written texts provides compelling evidence of the distinctive power of audio-visual media. Some philosophically oriented persons may find it difficult to accept the truth that audio-visual media are especially powerful. But 5 European Commission, Communication to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions, The Convergence of the Telecommunications, Media and Information Technology Sectors, and the Implications for Regulation, Results of the Public Consultation on the Green Paper [COM(1997)6231, Brussels, 10 March 1999, COM(1999)108 final, p 5.avAilableonthewebathttp:/europa.eu.int/ispo/convergencegp 331 $4 Id p. 22(Annex 2) Id p. 23(Annex 2) 56 Levy, David A L, Europe's Digital Revolution: Broadcasting regulation, the eu and the nation state ndon Routledge, 1999), p. 144 37 For example, Mark S Nadel, "A Technology Transparent Theory of the First Amendment and Access to Communications Media" Federal Communications Lan Journal, Vol 43, No. 2(April 1991)pp. 157-184 presents a carefully reasoned philosophical approach emphasizing conventional economic analysis Unfortunately such an approach is unlikely to win much substantive interest or have any effect. Much philosophical thought has an insufficiently rich perspective on the relationship between truth and word action, and person. See Matthew Stewarts learned, magisterial review of the intellectual history of
10 social, and cultural issues in a unique way. The socio-cultural impact of television, for example, is without parallel.32 The European Parliament wrote in October, 1999: Parliament also considers that television as referred to in the Directive Television without Frontiers [includes cable and satellite delivered television] will remain the principle medium of primary information provision and processing for the foreseeable future and that it is therefore of paramount importance in helping people in our pluralist societies to arrive at opinions and decisions and in the functioning of democracy, the preservation of cultural diversity and conveying social values, irrespective of the type of financing (charges, advertising, subscriptions, pay-per-view) and the method of transmission;33 The Report of the High-level Group on Audiovisual Policy (October 1998) wrote: …it is essential that the specificity of the [audiovisual] sector continues to be recognized….34 The Seminar on Audiovisual Media and Authorities (November, 1998) wrote: There was a consensus on the specificity of the audiovisual sector and the consequent need for regulatory measures which addressed this specificity….35 A recent influential review of Europe’s digital revolution put in print an unusually detailed and direct analysis: The true rationale for broadcasting regulation lies in the uniquely influential role of a medium which helps form public opinion, provides a forum for public debate and discussion, and – in places where regulation has not intervened to prevent it – offers a unique source of commercial and political power for private media owners [reference omitted].36 The pervasiveness and influence of such written texts provides compelling evidence of the distinctive power of audio-visual media. Some philosophically oriented persons may find it difficult to accept the truth that audio-visual media are especially powerful.37 But 32 European Commission, Communication to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions, The Convergence of the Telecommunications, Media and Information Technology Sectors, and the Implications for Regulation, Results of the Public Consultation on the Green Paper [COM (1997)623], Brussels, 10 March 1999, COM(1999) 108 final, p. 1,5. Available on the web at http://europa.eu.int/ISPO/convergencegp/ . 33 Id. p. 11. 34 Id. p. 22 (Annex 2). 35 Id. p. 23 (Annex 2). 36 Levy, David A. L., Europe’s Digital Revolution: Broadcasting regulation, the EU and the nation state (London: Routledge, 1999), p. 144. 37 For example, Mark S. Nadel, “A Technology Transparent Theory of the First Amendment and Access to Communications Media” Federal Communications Law Journal, Vol. 43, No. 2 (April 1991) pp. 157-184 presents a carefully reasoned philosophical approach emphasizing conventional economic analysis. Unfortunately such an approach is unlikely to win much substantive interest or have any effect. Much philosophical thought has an insufficiently rich perspective on the relationship between truth and word, action, and person. See Matthew Stewart’s learned, magisterial review of the intellectual history of
