Nicholas Johnson is a former Commissioner of the U.S. Federal Communications Commission currently teaching at the University of Iowa College of Law in Iowa City, Iowa, USA. He participated in an American Bar Association/Central and East European Law Initiative project on media law in Tbilisi, Georgia, February 21-March 3, 1998. Anyone interested in this piece will probably also find of use the following (some of which are referred to in this piece; all available as links from the Nicholas Johnson Georgia Media Web Site: https://www.nicholasjohnson.org [Previously http://soli.inav.net/~njohnson ], and then, under "Resources," click on "Web pages, Georgia media"):
"Comments of Nicholas Johnson on The Proposed Creation of a Public Broadcasting System for Georgia," March 24, 1998
"United
States Code, Title 47," referred to in this document, is available
from Nicholas Johnson's Georgia Media Web site. All U.S. federal
statutory law is contained in a single set of volumes called the "U.S.
Code." The laws are organized by subject into numbered "titles." Title
47 of the U.S. Code ("Telegraphs, Telephones, and Radiotelegraphs") contains
most of the law related to radio and television stations, cable television
systems, telephone companies, communications satellites -- and the Federal
Communications Commission itself.
Virtual Someone (VS): How does one set up a regulatory board like the FCC? Who chooses the members? How many should there be? How long should they serve? Are terms staggered?
Nicholas Johnson (NJ): "Regulatory boards" would normally be created by legislation passed by a legislative body (in Georgia, the Parliament). In the U.S. such "boards" are often called "independent regulatory commissions" (for reasons to be explained shortly) with members "nominated" by the President and "confirmed" with the "advice and consent" of the U.S. Senate.
Of course, they could probably be created by the President as Executive Branch agencies of some sort, or as a special unit within his or her office. The Judicial Branch sometimes creates "special masters" or other functionaries that report to judges.
Although a non-governmental body would not normally have the power to select who could, and could not, receive broadcasting licenses, much setting of technical standards is done by industry "self-regulatory" bodies. And, of course, there is nothing to keep private citizens, NGOs, or other foundation-funded projects from petitioning for the revocation of a broadcaster's license (as distinguished from having the power to revoke), providing ratings of programs, or otherwise attempting to have an impact on the media of a country.
So, theoretically, there would be many ways this could be done, although legislative creation would be the most common..
Issues regarding the number of members of such a body, the length of their terms, and the advantages and mechanics of "staggered terms" are discussed in Nicholas Johnson, "Comments of Nicholas Johnson on The Law of Georgia on Broadcasting, Proposed Law of the Parliament of Georgia," March 23, 1998, under "Article Analyses, Chapter II, Art. 3 (4)."
VS: How does the board regulate television and radio for the whole country? By relying on local, affiliate boards?
NJ: In the U.S. the FCC operates without the use of "local, affiliate boards" -- at least in any formal, or legal sense -- and for a country much larger than Georgia (nearly 4,000,000 vs. 27,000 square miles). On the other hand, it does very little, if any, independent, random monitoring or investigation of local stations. So it is very dependent on non-official local individuals or groups to pass along the complaints to which it responds.
VS: How does the board decide fairly who gets television and radio frequencies?
NJ: If only one party is applying for a frequency the FCC has some very minimal standards the applicant is required to meet, such as financial ability and technical feasibility. However, if more than one party applies, and a choice must be made, the Commission can use a number of "comparative criteria" in evaluating all the applicants. These might include "local" ownership, the participation by owners in management, or proposed programming designed to meet the needs of the community of license.
VS: What does the board regulate with respect
to content on the airwaves that doesn't impinge on free speech?
NJ: "Regulations impinging on free speech"
can be defined in a number of ways.
Clearly, "prior censorship," a requirement that anything broadcast would first have to be approved by the FCC -- something the FCC does not do, and has never indicated a desire to do -- would be a violation of the First Amendment.
But suppose a station wants to broadcast nothing but music all day, and the FCC requires that it devote 5% of its broadcast day to "news." The station owner may well think of this requirement as something that "impinges on free speech."
However, so long as the Commission leaves it to the broadcaster to determine what news to broadcast, most commentators -- including, not incidentally, the U.S. Supreme Court -- would find this well within the constitutional powers of the FCC.
VS: Who oversees the regulatory board? How does one proceed against members of the board who have conflicts of interest or who act illegally? Who has responsibility for removing a corrupt board member? How is that member replaced?
NJ: Because technically the FCC is not a part of the Executive Branch, the President does not "oversee" it as s/he would Executive Branch agencies. (For example, most "presidential appointees" can be removed by the President at any time for any reason. Independent regulatory commissioners, appointed for a term of years, cannot.)
Those in Congress sometimes refer to the independent regulatory commissions as "an arm of Congress." This rhetoric is not precise, and means little. But Congress does "oversee" the commissions in a number of ways. It considers and disposes of the agencies' proposals for Congressional legislation, passes on their budget requests, conducts general "oversight hearings," and the Senate confirms the appointments of commissioners.
To insure the independence of the commissioners, the system is deliberately designed to make it difficult to remove them. Questions of "conflicts of interest" would be a subject for inquiry at the time of appointment and Senate hearings -- and a valid reason for the Senate to reject a Presidential nomination.
Subsequent complaints about the job a commissioner is doing would most likely be dealt with, first, by the commissioners themselves informally, and then as the subject of a Congressional inquiry. (Ironically, the complaints are most often that a commissioner is doing his or her job all too well; that they are upholding "the public interest" against what an industry group wants, rather than the other way around.)
Some commissioners would resign in the face of criminal prosecution, or even very embarrassing revelations. But if one wished to "tough it out," it could be difficult to remove him or her.
VS: What legislation or rules must exist to prevent conflicts of interest among board members?
NJ: See "The Law of Georgia on Broadcasting," Arts. 5 and 6, and "Comments of Nicholas Johnson on The Law of Georgia on Broadcasting," cited above, Art. 6 (1) (d) and (g).
This is a subject that is relatively well handled by the Proposed Law of the Parliament of Georgia.
VS: What is a reasonable and fair licensing fee for radio and television broadcasters? How does one decide? Are licensing fees annual?
NJ: There are three or four ways of handling the matter of fees.
Initially, the FCC's fees were quite nominal; say, $100 for a TV license that -- because of the "medallion value" associated with such scarcity -- could turn a $1,000,000 studio, transmitter and antenna tower into a $100,000,000 "TV station."
Subsequently, the FCC and Congress fashioned a fee structure designed to cover -- not the value of the station -- but the cost of processing the license application by the FCC, a kind of user-fee-based license fee. The theory is that, since the applicant gets the benefit of the license, it is the applicant, rather than general taxpayers, who should pay the cost of running the agency.
Later the FCC and Congress sometimes went to a system of auctioning off frequencies for some purposes, such as frequencies for cell phone operations. Financially, this brought into the U.S. Treasury far greater amounts of money -- sometimes running into the billions of dollars. The theory was that the licensee was paying for the value of the frequencies. Not only should the taxpayers not have to pay the cost of running the agency, they should also get some financial benefit when their frequencies ("the public owns the airwaves"), public property, are going to be used to make private profit. Of course, a necessary corollary of this theory is that the "property" has, in effect, been "sold," and is no longer "public property" -- thereby removing some of the rationale for the FCC's regulation of its use.
Whether fees are "annual" is, of course, a function of the theory. A nominal fee might be charged for a "license renewal" as well as a new application. Similarly, a cost based fee would be charged for processing it. A "sale," however, would not support an "annual fee."
VS: Are licenses granted permanently?
NJ: No -- unless the rationale is that a "sale" of frequencies has taken place. Initially the FCC's term of license for commercial broadcasters was for 18 months; it was later increased to three years. In recent years it has been extended further.
VS: How does a broadcaster lose his license? What are legitimate reasons for revocation of a broadcaster's license? If a broadcaster goes bankrupt, does he lose his license?
NJ: For starters, broadcasters in the U.S. very rarely lose licenses. Theoretically, they have no legal right to expect, or receive, a license renewal. See 47 U.S.C. Sec. 301. (The entirety of the U.S. Telecommunications Law, "Title 47," is available from Nicholas Johnson's Georgia Media Web site.) The analogy is sometimes suggested that, although most incumbent politicians who want to be re-elected are re-elected, they have no legal right to be re-elected. The FCC must find that the initial grant, or renewal, will serve "the public interest."
There are any number of reasons why a broadcaster might
fail to get a license renewed (or have it revoked). One of the most
serious offenses involves misrepresentations to the FCC. Many violations
do not produce serious penalties if they are honestly confessed to, and
the licensee's practices are effectively brought into compliance.
Indeed, most violations would have to be "willful" or
"repeated" to result in loss of license.
They might involve violations of terms of the license, such as operating in a city other than the city of license, on the wrong frequency, with too much power, or (for a "daytime only" station) at unauthorized hours. They might involve violations unrelated to broadcasting, such as antitrust violations. The list would be almost endless.
Most of the standards would be spelled out in FCC regulations. These would be adopted by the Commission after complying with the procedural requirements of the "Administrative Procedure Act," including notice to interested parties, with an opportunity to file comments. They are then published, indexed, and made available to all citizens throughout the country in "depository libraries." All agencies' regulations are published each day in a government publication called the Federal Register. They are later compiled into volumes called the Code of Federal Regulations, and organized by the same volume numbers as the titles of the U.S. Code.
VS: Should a broadcaster be warned that he may lose his license? What are the mechanisms for issuing such warnings, and how long should a broadcaster have to comply with warnings?
NJ: There would normally not be a "warning" as such. But neither would there be a preemptory revocation of license without prior notice.
Because, as mentioned, the FCC does very little independent monitoring of licensees' performance, the "mechanism" would normally be (a) a complaint from a citizen to the FCC, (b) an inquiry from the FCC to the station, attaching the complaint, and (c) a response from the station to the FCC -- perhaps denying the violation, perhaps indicating that the station has already come into compliance.
The penalties exacted by the FCC most often take the form of financial penalties, or "fines." Only in very rare instances -- such as the "willful" or "repeated" violations mentioned above -- would the FCC be inclined to revoke a license.
The Administrative Procedure Act, mentioned above, also outlines the procedures the FCC must follow in a revocation case -- including a public hearing, not unlike a court trial, with the opportunity to be represented by a lawyer, and so forth.
A licensee would usually be given a reasonable amount of time to come into compliance with lesser violations -- say, operating slightly off frequency, or failing to replace the aircraft warning light on the top of an antenna tower. Depending on what is required to comply with Commission regulations, "reasonable" might be as short as 24 hours.
VS: What does a broadcaster do if he disagrees with a warning issued by a regulatory board? How does a broadcaster appeal revocation of his license?
NJ: There are numerous avenues for appealing any decision of a Commission employee.
In formal proceedings there is an analogy to the U.S. federal court system, with its District (trial) Courts, U.S. Courts of Appeals, and Supreme Court. The FCC "trial court" provides a hearing before an "Administrative Law Judge." The FCC's "Review Board" is similar to the U.S. Court of Appeals. And the full Commission, the FCC Commissioners sitting as a body, is equivalent to the Supreme Court. Any licensee has the right to appeal through this process.
Beyond the FCC, appeals are also possible from the final FCC decision to the actual U.S. Court of Appeals, and from there to the U.S. Supreme Court.
There are also the less formal mechanisms of appeal: talking to the deciding employee, his or her supervisor, or a Commissioner.
Once a case is set for formal proceedings, however, the "ex parte" rules prohibit communications other than those "on the record."
VS: How does the board decide to allocate frequencies for broadcasters who want television or radio networks? What constitutes a monopoly on frequencies by any one broadcaster?
NJ: There are a number of ways in which ownership can affect the public interest in broadcasting.
At one extreme would be a requirement that all licensees will be limited to (a) individuals (that is, not corporations), and (b) one station each. This provides the greatest possible diversity of opinion and information for the audience.
If corporations are permitted to have licenses, and for more than one station, then the following troublesome situations arise.
Some of the problems involve conventional antitrust problems for other station owners, and advertisers. A media owner who controls all the major media in a community (newspapers and broadcasting) can charge small businesses much higher advertising rates than one who must compete for advertising dollars. A small broadcaster will also have more difficulty competing at all against such an owner.
But, as serious as such problems are, the far greater problems involve, not "the marketplace," but "the marketplace of ideas" -- the diversity of information, opinion, and culture that is provided to the citizens of a democratic society.
(1) Local domination. If one person, or company, owns most of a local community's media they are in a position to push, or censor, information and points of view -- with regard to that community. In other words, the citizens of that community may or may not have competition in national media available to them, such as a number of national newspapers, to provide a variety of points of view on national issues. But so far as information about their own community is available to them -- or to the rest of the nation -- one person controls it.
(2) Regional concentration. Similarly, a single owner can have a disproportionate control over the information about a state (oblast) or region of a country.
(3) Chains. This may take the form of one owner controlling (only) a number of newspapers, or a number of broadcast properties.
(4) Multi-media. But it can also take the form of multi-media ownership; that is, a single owner of what may be newspapers, magazines, book publishers, TV stations, radio stations, cable television systems, movie studios, and so forth.
(5) National power. If a single party is permitted to have sufficient chain, or multi-media, ownership, they have what can be a dangerous level of national power. Politicians cannot be elected without their support; and they thus gain political power regarding not only media law and policy but other areas of legislation. They are in a position to help shape the national public opinion, mood and styles in other ways as well.
(6) Conglomerates. A "conglomerate" is a firm engaged in more than one line of business, one of which is media. This could be a local broadcaster, in a small town, with only one radio station, who also owns another local business -- say a store, or a lumber yard. More often, it is a powerful national corporation. Any media firm has an economic incentive (whether or not they act on it) to help shape the news, and public opinion, in ways that will benefit their media business. There is no way of eliminating this risk if a country is to have private ownership of media at all. But the risk becomes much greater if the media owner is also permitted to have other businesses as well. The risk, of course, is that the conglomerate will look upon its media subsidiary as a kind of public relations, or advertising, outlet that it can use to promote its other businesses.
Each of these risks is analytically distinct. In practice, of course, they often overlap.
VS: What is the role of a regulatory board like the FCC in light of new technologies that combine the superhighway and computers with telephones and television? Does the FCC regulate the Internet?
NJ: Ever since 1934, when the old Radio Commission became the Federal Communications Commission and took over regulation of the telephone and telegraph industries from the Interstate Commerce Commission, the FCC's self-defined responsibilities have expanded to include new technologies as they evolved. Initially created at a time when there was only AM radio, the FCC has gone on to regulate FM radio, VHF and then UHF television (first black and white, and subsequently color), and many aspects of cable television. Telephone and telegraph transmission, originally over copper wires, has evolved into land-based microwave relay towers, geo-synchronous communications satellites, and under-ocean optic fiber.
"Convergence" -- of technologies (cell phones and pocket computers; radio and Internet audio transmission), industries (book publishing and CD-ROMs; feature films and video rentals) and regulation (the merger of the FCC's "broadcasting" and "cable" bureaus into a "mass media" bureau) -- has created challenges for the FCC no less than every other institution.
One of the qualities of the Internet is that it is, for the most part, not regulated by anyone. To the extent it is to be regulated by government, however, the FCC would be the most logical agency to take on the responsibility.
VS: How does a country rearrange its frequencies between civilian and military use in light of the Soviet legacy of frequency arrangement?
NJ: As mentioned above, the FCC is sometimes thought of as "an arm of Congress" and is responsible for allocating such frequency space as is available for civilian purposes. The President, among other things as "Commander in Chief," has responsibility for the military establishment and other Executive Branch agencies -- including their needs for frequency space.
Fortunately, over the years, a Constitutional crisis has been avoided between the Congress (FCC) and the President in the allocation of frequency space to Executive Branch (primarily military) and civilian uses. Disputes have been negotiated peacefully.
This is fortunate because there is no formal mechanism for resolving such a conflict should it arise; presumably it would fall to the Judicial Branch.
VS: How does a regulatory board decide how much foreign investment to allow into telecommunications and mass media? To what extent should Americans or others be allowed to invest in television, radio, and newspapers? (I raise these questions given my experience elsewhere in the Former Soviet Union, where national security questions rose in relation to the level of foreign investment, particularly in broadcast media. On the other hand, the fact of the matter in these countries is that without foreign investment, their broadcast media can't get off the ground, while foreign investors need a reason to plunk that money down.)
NJ: The explanation for the question really provides the answer. It is a dilemma that can only be resolved, politically, within each country. The U.S. has limits on foreign ownership of broadcast media. Most countries have some concern about this. The current Georgia draft Broadcast Law includes limits -- see Art. 19 (e). Similar concerns are involved with requirements regarding domestic content in broadcast programming -- see Art. 32 (2).
To the extent a country wishes to maintain its own culture, create and support its own creative community, encourage a diversity of local owners of media, and make it easier to have a measure of control over the impact of media on the society it will impose limits on foreign ownership and content.
On the other hand, to the extent it wishes to "jump start" the media business, get it going in a hurry with the "best" programming the world provides, it will be more open to outside investors and programming.
VS: Folks here need to discuss how to keep regulation of the airwaves fair. A great fear on the part of many is that if the government divests itself of its broadcast frequencies, they will be taken over by thugs or politicos with agendas -- or both. In fact, this seems to occur if the government doesn't divest.
In large part, of course, keeping regulation fair depends on the traditions, habits, culture, and mind set of a country, which includes an independent judiciary to sort out various messes. But Georgia has quite a few good men and women. Are there ways to write fairness in that we or they have not thought about?
NJ: The shortest answer to this question
is a reference to Nicholas Johnson, "Georgia's Media Future: A Personal
View of Options and Opportunities," especially the nine suggestions under
the sub-heading, "Democratizing the Media: Some Alternatives." It
is certainly true that the "traditions, habits, culture, and mindset of
a country" are crucial, but there are mechanisms that can help.