Adelstein Addresses Copyright and Media Ownership

January 6, 2003. Federal Communications Commission (FCC) Commissioner Jonathan Adelstein gave an speech titled "The Last DJ?: Finding a Voice on Media Ownership". He addressed the FCC's pending rulemaking proceeding regarding copyright protection, and the FCC's pending proceedings pertaining to media ownership and cross ownership rules

He spoke at a convention at Georgetown University in Washington DC titled "The Future of Music Coalition Policy Summit 2003". It was his first major public address since being named an FCC Commissioner.

Copyright. Adelstein first referenced the FCC's Notice of Proposed Rulemaking (NPRM) [15 pages in PDF] in its proceeding titled "In the Matter of Digital Broadcast Copy Protection". This is MB Docket No. 02-230. He stated that in this NPRM, "We are considering whether to require manufacturers to incorporate copy protection technology in digital TV sets. Broadcasters could then embed a digital ``flag´´ in transmissions designating content to be protected."

Jonathan AdelsteinAdelstein (at right) also addressed copyright issues more broadly. He said that "the technological advances of the last decade have changed our lives. You live with them everyday. You know the enormous potential of these technologies -- such as broadband, wi-fi, satellite radio, and digital cable -- to bring your creative message to millions of people all over the world. And we have heard your concern that corporate or government restrictions may limit artists' ability to distribute their products and to receive fair compensation for their use."

He also stated that "our copyright laws are designed to balance the rights of artists with the rights of their audience -- the American people. In order to ensure that lawmakers achieve the right balance, it is critical that artists like yourselves become involved in the policy battles here in Washington."

He also touched on the FCC's authority with respect to copyright law. "While the FCC does not enforce the copyright laws, the industries we oversee play a key role in the distribution of copyrighted material -- including music, movies, and television programming", he said.

17 U.S.C. § 702 delegates to the Register of Copyrights authority to promulgate regulations pertaining to Title 17, which covers copyright. The FCC derives its authority to promulgate regulations from Title 47, which contains no express grant of authority with respect to copyright.

Media Concentration. Adelstein also spoke at length about broadcast based speech, and the FCC proceedings regarding "how we approach the rules governing media ownership in this country". (See also, the FCC Media Bureau's Broadcast Ownership Rules page, and Newspaper Broadcast Cross-Ownership page.)

He stated that "It is the FCC's job to protect the free flow of ideas, of creativity without strictures. This obligation means not only that the FCC should not impose restrictions, but also that we should refrain from actions that have the effect of impeding the exchange of diverse viewpoints. We need to ensure that we do not allow the structure of the industries that distribute ideas and creative products to limit the voices that can be heard in this country and in each of our communities."

Adelstein continued that "We need to ensure that we do not allow the structure of the industries that distribute ideas and creative products to limit the voices that can be heard in this country and in each of our communities." He also said that "the rules we are now reviewing have shaped the media landscape as we know it. They are designed to prevent individual companies from gaining too much control over what we see, hear, and read."

"The rules make it difficult for one company to own both a newspaper and a television or radio station serving the same community. They cap the number of TV or radio stations that one owner can control in a single area. They prevent a network from owning TV stations that reach more than 35 percent of the national audience. They prevent companies from owning more than one of the four major TV broadcast networks. And they limit the number cable systems one company may own nationwide. Any changes that the FCC makes to its media ownership rules could massively and irreversibly change the media landscape," said Adelstein.

Adelstein added that "consolidation also carries risks, risks that go beyond traditional antitrust analysis." First, he said that "Unlike the Justice Department, the FCC is charged by law with ensuring that media mergers are in the public interest." He continued that "One risk of radio consolidation to the public interest is the loss of localism, a core value at the foundation of the American system of broadcasting. Unlike some other countries, we have never awarded nationwide radio licenses. Radio stations are licensed to communities and serve as outlets for local expression, as sources of local news and information and as outlets for local artists like yourselves. Programming that serves the unique needs of local communities by definition varies from community to community. Consolidation, on the other hand, often leads to the homogenization of programming."

Second, he said that "Another risk of consolidation is the loss of a diverse array of voices and viewpoints over our airwaves."

Finally, he cautioned that "radio is just one of the many media outlets to which the FCC is paying attention. Congress’s relaxation of the rules on radio consolidation has been the canary in the mine, testing whether it is safe to go in before miners dare to enter. The miners in this case are all of the consumers affected by FCC rules that govern ownership of television, radio, cable, and newspapers. The FCC better carefully consider the health of that canary before we proceed further, because changes to the FCC’s media ownership rules potentially could alter the media landscape as much or more than the 1996 actions by Congress changed the radio industry."

Commentary: Adelstein Revives Red Lion

Newly appointed FCC Commission Jonathan Adelstein gave his first public speech as a Commission on January 6, 2003. He began his discussion of media ownership with praise for the Supreme Court's decision in the Red Lion case. He called it "that seminal First Amendment decision".

The opinion, which is nearly as old as the Commissioner, is one of the most criticized Supreme Court cases in communications law. FCC Chairman Michael Powell has repeatedly called from reexamination of its principles. Several Judges of the U.S. Court of Appeals (DCCir) have written that they are "stuck" with Red Lion, and are waiting for Supreme Court to reverse itself.

However, the Red Lion case has its supporters, and apparently, Commissioner Adelstein is one of them. Its supporters include groups such as the Media Access Project (MAP) and the Consumers Union. See for example, MAP's Red Lion page and Gene Kimmelman's testimony [PDF] to the Senate Commerce Committee on media consolidation.

Adelstein stated in his speech to a convention at Georgetown University that "The FCC is charged with protecting what the Supreme Court referred to as an ``uninhibited marketplace of ideas.´´ Let me read from that seminal First Amendment decision: ``It is the right of the public to receive suitable access to social, political, esthetic, moral, and other ideas and experiences which is crucial here. That right may not constitutionally be abridged either by Congress or by the FCC.´´ Thus, the Supreme Court of the United States itself has said that the FCC may not abridge the right of Americans to have access to ideas and to creativity." The quotations are from Red Lion v. FCC, 395 U.S. 367, at 390 (1969).

While Adelstein went on to discuss media ownership rules, the Red Lion case pertains to FCC regulation of the content of broadcast based speech, not FCC regulation of ownership of broadcast entities. However, the rationale for regulating one is the same as the rationale for regulating the other.

In 1964, Red Lion Broadcasting Company, which operated a radio station, broadcast a show titled "Christian Crusade", starring the Reverend Billy James Hargis, a once famous crusader against "godless communism". In one program, the Reverend Hargis referenced a book by one Fred Cook. Cook took exception, and demanded that Red Lion broadcast his viewpoints too. Red Lion refused. The FCC stepped in. It ordered Red Lion to put Cook on the air. Red Lion went to court, but lost. Ultimately, the Supreme Court affirmed the FCC's power to compel broadcasters to carry speech. It was called the "fairness doctrine".

Carrying all opposing views is not a profitable business plan, and thus, many broadcasters retreated from airing views. While editorial and op-ed sections thrived in unregulated newspapers, broadcasters gave the public Emily Litella instead.

In its Red Lion opinion, the Supreme Court ruled that the free speech protections that apply to printers, pulpits, and pedestrians do not apply to broadcasters. It wrote that "differences in the characteristics of new media justify differences in the First Amendment standards applied to them." The Court rationalized its ruling by stating that "Because of the scarcity of radio frequencies, the Government is permitted to put restraints on licensees in favor of others whose views should be expressed on this unique medium." It added that "It is the right of the viewers and listeners, not the right of the broadcasters, which is paramount." And, it is the function of the FCC to determine what speech viewers and listeners have a right to hear.

Chairman Powell gave a speech titled "Willful Denial and First Amendment Jurisprudence" on April 22, 1998 in which he criticized Red Lion. He stated that "I submit that the time has come to reexamine First Amendment jurisprudence as it has been applied to broadcast media and bring it into line with the realities of today's communications marketplace." He elaborated that "there is a dual standard that exists today, which holds that broadcasting is somehow less deserving of First Amendment protection than other mass media. This theory, which derives primarily from the Supreme Court's 1969 decision in Red Lion Broadcasting Co. v. FCC, has been the target of much criticism. Many scholars have pointed out that the factual assumptions underlying this case and its progeny, if they were ever true, clearly are not true today."

He continued that "In 1969, broadcasting consisted of a handful of radio stations in any given market plus 2 or 3 television stations affiliated with one of the three major networks. Occasionally, larger markets had an independent television station too. Three major television networks held more than 90% of the market for video programming. Not so anymore. Not only has the market share of the three largest networks been eroded by cable programming, the last time I looked there were about seven "declared" national television networks working feverishly to bring new stations on the air. Obviously, things have changed a lot."

Powell then added that the Internet further changes the media landscape today from that which existed at the time Red Lion was decided.

He said, "the advances in technology have been astonishing since the time of Red Lion. Digital convergence, rather than reinforcing the unique nature of broadcasting, has blurred the lines between all communications medium. The TV will be a computer. A computer will be a TV. Cable companies will offer phone service, and phone companies will offer video service. Digital convergence means sameness in distribution. What one sees or hears is dependent only on the order of zeros and ones, nothing more. It will become impossible to separate ``broadcast´´ from other services, and to continue to maintain the historic fiction of ``uniqueness´´ of broadcasting is to see the world through Lewis Carroll's looking glass."

He concluded in that speech that "Even this brief overview of the marketplace makes the reasoning of Red Lion seem almost quaint and leads unavoidably to the simple question: Should we continue to apply the reasoning of Red Lion to determine the First Amendment rights of broadcasters in today's communications environment? At the very least, any responsible government official who has taken an oath to support and defend the Constitution must squarely address this important question."

More recently, on October 30, 2002, Powell gave speech titled "Broadband Migration III: New Directions in Wireless Policy". This was a speech on spectrum policy. But, again he criticized Red Lion, and its notion regarding spectrum scarcity. He stated that "Much of the Commission's spectrum policy was driven by the assumption of acute spectral scarcity -- the assumption that there is never enough for those who want it. Under this view, spectrum is so scarce that government rather than market forces must determine who gets to use the spectrum and for what. The spectrum scarcity argument shaped the Supreme Court's Red Lion decision, which gave the Commission broad discretion to regulate broadcast media on the premise that spectrum is a unique and scarce resource."

Powell said that "the presumptions of Red Lion and similar broadcasting regulation based on scarcity have been called into doubt by the proliferation of media sources", and that "we question the continued utility of the pervasive scarcity assumption for spectrum based services".

He added that "innovative technologies like software defined radio and adaptive transmitters can bring additional spectrum into the pool of spectrum available for use. Scarcity will not be replaced by abundance; there will still be places and times when services are spectrum constrained. However, scarcity need no longer be the lodestar by which we guide the spectrum ship of state."

The U.S. Court of Appeals (DCCir), which is the Appeals Court most likely to hear petitions for review of FCC orders, apparently concurs with Powell.

Judge Silberman, who was joined by Judges Sentelle and Garland, wrote in the Court's opinion in Tribune Company v. FCC, as follows. "Nor are we free to ``reexamine the scarcity doctrine in this case on this record,´´ as Tribune asks. The Supreme Court has told the lower federal courts in no uncertain terms that we are to leave the overruling of its opinions to the Court itself. ... We are stuck with the scarcity doctrine until the day that the Supreme Court tells us that the Red Lion no longer rules the broadcast jungle." (Citations omitted.)

Similarly, Judge Sentelle wrote a dissent to the Court's opinion in Sinclair Broadcast Group v. FCC, remanding the FCC's local television ownership rule for further consideration. (In this April 2, 2002 opinion the Court remanded certain media ownership rules. Sentelle dissented to the extent that he would have vacated, rather than remanded.) Sentelle quoted from both Powell's 1998 speech, and the Court's opinion in Tribune v. FCC.