A. Pleased to return; honor to be Regents’ Lecturer

B. Would like to dedicate this occasion to the memory and work of Herb Schiller. He gave me enough insight into the communications industries to enable me to spend seven years as a FCC commissioner writing nothing but dissenting opinions. We are all very lucky to have had his influence.

C. Would also like to express appreciation to

1. Dr. Carol Padden, Chair, Department of Communication, pick us up

2. Her assistant, Romel Hockanson, one of the ablest persons I’ve met in such a position, who practices what her cell phone answering message preaches about finding a little magic in every day

3. Dr. Robert Horwitz, arrangements, academic contributions to areas of our joint concern

4. My friend, Sandy Berman, who is also a great friend of this Department

5. Dr. Michael Schudson, wife Ann, got us off to a hospitable start Saturday evening

6. My wife, Mary Vasey

D. Prior University of California ties

1. My first teaching position, after my clerkship in Washington with Justice Black, was at the University of California in Berkeley at the law school, Boalt Hall

2. I have been on this campus on a number of occasions in the past, during Michael Schudson’s tour as Department Chair; and for a conference of the International Society for General Semantics

3. And, not unrelated to today’s topic, during much of the 1980s I was a faculty member of an online, distributed education program ultimately called the International Executive Forum. It was created by Dick Farson’s Western Behavioral Science Institute in La Jolla and, in its last days, run from this campus with sponsorship of UCSD.

4. So this is a homecoming of sorts, and I’m delighted to be able to be here, and long enough to update my Ralph’s card once again.

E. At dinner I was discussing with Michael how it is really easier to talk about this subject for a semester, which I do, than for 35 minutes, which I am about to try to do

A. Talking about any of these three – media, regulation, or the Internet – these days reminds me of that story about Albert Einstein. “Professor Einstein,” a concerned student told him after receiving an exam, “these are the same questions as on last year’s exam.” Einstein replied, “Ah, yes, young man, the questions are the same, but all the answers have changed.”

B. All of our answers seem to be changing as well. And here are some of the questions:

1. What do we mean by “media” in an information environment that includes list serves and Matt Drudge?

2. What do we mean by “regulation” of a place called “cyberspace” that is both everywhere and nowhere at the same time?

3. And what on earth do we mean by “the Internet” – after we come to realize that it is not, after all, on earth?

4. Have bits and bytes eaten up whatever was left on the counter that we used to call “copyright”?

5. We used to say, in a pre-feminist era, “Ours is a government of laws and not of men.” A Yale law professor turned this on its head with, “Ours is a government of lawyers and not of men.” To what extent, when it comes to Internet regulation, do we need to revise it once again to “Ours is a government of engineers and not of lawyers.” That is, to what extent is the regulation of the Internet – for good or for ill, deliberately or inadvertently  – built into the technology’s architecture?

6. And what of the First Amendment? Written at a time when even the technology and economics of newspapers were far different from today. No one had even dreamed of radio and television – let alone the Internet. Do its words mean anything today -- literally, figuratively or in spirit?

7. Convergence. How can we even begin to think about regulating a thing that is looking more and more like a big wad of chewing gum?

C. Those are not our only questions, but they’re a place to start.

A. 1960s “Media”; “Mass Media”

1. Major newspapers: New York Times, Washington Post, Wall St. Journal

2. Networks: ABC, CBS, NBC

3. Newsmagazines: Newsweek, Time, U.S. News

4. Books, films, other

5. In the 1960s the alternative press was referred to as “underground newspapers”

B. 1970s and 1980s Media

1. Mergers: ABC-ITT looks like small stuff; Sarnoff and Paley gave way to Westinghouse and GE, Disney and Time-Warner, SONY and Seagram’s

2. Satellites and cable television; WTBS as UHF and as nationally distributed signal; implications for regulation

a) Content providers didn’t have to be in conduit business; but mergers tended to bring back in

b) Economic change with advertising plus subscriber fees as revenue stream; beginnings of “information rich and information poor” (or what President called “digital divide”)

3. Economy of scarcity becomes economy of abundance; a late 1960s 2-1/2 network economy supports 100s of programming sources

4. With satellites, and other technologies creating what we call the “Global Information Infrastructure,” and Los Angeles and New York playing such a dominant role in the creation of media of all kinds – movies, television, and music especially – there was an acceleration of the globalization of the multi-media giants – and their audiences

5. Little noticed public access programming; potential for democracy, but little realized; pre-Internet but structurally and conceptually similar; as is this month’s FCC approval of low power stations

6. Simultaneously fattening up the 800-pound gorillas and extending their global reach while also  opening up some wee small opportunities for democratic participation, media opportunities for citizens

C. 1990s and 21st Century

1. It is at this point in history, the ‘90s and now the 21st Century, that the Internet and what we call the World Wide Web, began to explode.

2. We will return to it shortly.

D. Is the Internet “media”?

1. If the Internet is not media somebody better tell the old, 1960s giants that are still around, because they’re all there: the three commercial networks, television and radio stations, the leading national newspapers and magazines. Everybody’s going “dot.com”

2. The Internet is far from the only media, whether you define media in terms of content or distribution systems.

3. Justices Burger and Stewart took differing views of “the media” in the Bellotti case. The details of the case are not important at the moment. But Stewart was arguing that the First Amendment’s reference to “freedom of speech or of the press” created rights for the mass media in addition to those available to everyone else as “freedom of speech.” In taking the contrary position, a part of the Chief Justice’s argument was the difficulty in defining “mass media.” If you only include the most prominent urban newspapers of mass circulation, and the television networks, he contended, the definition omits the only form of mass media known to those who drafted the First Amendment. And if you include the very smallest papers, advertisers and offset flyers there is no rational basis for any distinction between the media and the rights of everyone.

4. If the National Enquirer can have its protected place on the newsstand along with the Los Angeles Times, by what rationale should Matt Drudge be entitled to fewer privileges and protections just because his “journalism” exists only in electronic form? There are many list serves that distribute their participants’ comments to far more subscribers than can be claimed by many hard copy print publications. There are audio streaming services on the Internet with more listeners than many licensed radio stations.

E. Yes, I think we have to treat the Internet as media.

A. Having had a go at what we mean by “media” in the Age of the Internet, what do we mean by “regulation”?

B. There are some ways in which the regulation of media is no different from any other business. Zoning regulations on where you can build antenna towers. OSHA requirements about worker safety. NLRB-enforced rights to unionize. IRS tax forms. SEC requirements when you sell stock.

C. So when we talk about regulation of media we are usually talking about

1. Licensing requirements

2. Ownership limitations

3. Prohibitions on speech, such as obscenity, fraud or defamation

4. Required speech, such as local news

5. Access requirements, such as the public access channels on cable, or the equal opportunity requirements on broadcasters during campaigns

D. Bear in mind that in broadcasting’s beginnings virtually ever nation on earth simply assumed that the technology’s potential power and influence were such that it could not be trusted to private hands. In some countries that meant ownership and operation by the government. In others it meant a public corporation – a distinction seldom grasped by either broadcasters or regulators in this country.

E. “Regulation” presumes some measure of private participation. It also recognizes an unwillingness to leave that private participation to the forces of the marketplace.

1. Out of Secretary of Commerce Herbert Hoover’s 1920s radio conferences and the Radio Act of 1927 came a peculiarly American compromise.

2. Station operators would not “own” their stations; they would be short-term licensees of the federal government – the Radio Commission, later called the Federal Communications Commission. They would be public trustees with substantial obligations to serve their communities of license; as the statute put it “in the public interest, convenience and necessity.”

3. The prescience of Congress in those early days is amazing. How much could they have understood of the technology of radio and its future? But they were aware, as one Member put it, “If we should ever allow such power to fall into the hands of the few, then woe be to those who would dare to disagree with them.” Woe be, indeed.

F. Deregulation.

1. Beginning in the 1970s, accelerating in the 1980s, and continuing to this day has been the mantra of “marketplace regulation” or “deregulation.”

2. It may surprise you to hear that I do not favor regulation for its own sake – for any industry. If a relatively unregulated market does an adequate job of providing innovation, consumer safety and choice and competitive pricing I see no reason to regulate it Examples in my home town of Iowa City, Iowa, probably would include clothing and grocery stores.

3. Regulation is necessary, in my view, when a handful of firms are able to keep prices at unreasonably high levels, degrade the quality of customer safety and service, and stifle innovation and choice. It is also necessary in any industry that has been created, or substantially benefited, by government

4. I believe the rush to deregulation of broadcasting has been an affront to the public interest and the product of political pressure by the powerful rather than rational analysis by the thoughtful.

G. Ah, you say, but aren’t there a lot more choices today – even before one considers the Internet?

1. And you’d be right – but only in a very limited sense.

2. In the 1920s there were less than 1000 broadcasters; now there are over 10,000 stations. In the 1960s there were three commercial TV networks and a handful of independent stations. Today’s cable systems often carry 50 channels or more, and satellite services offer many times that.

3. So why do I think there’s not really more choice? Because we’re only counting the number of outlets when the relevant number is the number of inputs.

a) As Boss Tweed of New York used to say in the context of electoral politics, “I don’t care who does the electing just so long as I do the nominating.”

b) So long as we permit the company that owns the content, the programming, to also own the conduit, the distribution system, we don’t have diversity.

(1) When I was on the Iowa City Cable Commission in the 1980s we didn’t have CNN. I talked to Ted Turner about it. He was then willing to make it available to us at 15 cents per subscriber per year, $1.80 a year. The Iowa City cable subscribers were quite willing to pay that. Now the market theorists will tell us that a willing buyer and a willing seller in the marketplace can contract. Not so in this case. Because the company that owned the Iowa City cable company did not own CNN at that time. There was no other cable company to deliver the service. Willing buyer, willing seller, no transaction.

(2) This point has been either overlooked or ignored by regulators and many commentators as well.

(3) So long as there is a firewall of separation between those who control content and those who control the distribution conduits it makes little difference how much of a monopoly is held by those who control the conduit. There were few free speech complaints when ATT controlled the whole thing. Why? Because (a) anyone who wanted a phone could have a phone, and (b) you could say anything you wanted over the phone.

A. The New World Disorder

1. You may know the story, modeled on a science fiction short story, of the fellow who puts the question to his computer, “Is there a God?” The answer comes back, “Insufficient data.” Over time, in a story that can easily take a half-hour to tell, he gradually links more and more computers – in his company, town, state, nation. He keeps putting the same question and getting the same answer. Finally, he creates what we today call the Internet. “Is there a God?” he asks. There is a pause and the screen lights up with the answer, “There is now.”

2. However fond I may be of computers even I would not endow them with deistic powers. And I’m fully aware that many believe them the creation of the Devil. Whatever your judgment on that question may be, I think we’d all have to agree the Internet has created what might be called, to borrow former President Bush’s phrase, “A new world disorder.”

B. Origins of the Internet

1. As you know, the Internet has been around in one form or another since the 1960s

2. There’s a certain irony in the fact that the military, thought to be one of the most hierarchical and command and control of organizations, created one of the least hierarchical, least controllable, flattest organizations ever designed. They called it ARPANet, for the Defense Department’s Advanced Research Planning Agency. It was to enable DOD personnel, defense contractors and academics to communicate easily with each other on military projects. Why no centralized communications command post? Because they wanted it to be able to survive a nuclear attack; to have no single obvious target; to be able to fix itself and route around damage. In fact, it is this quality of the Internet, its uncontrollable architecture, that creates one of the central issues in its regulation still today. Some of you early adopters may remember BITNET, the network that provided all academics the same facility. Some said at the time that the B-I-T stood for “because it’s there.”

C. But what’s there now, as we all know, is something called the Internet, complete with the World Wide Web, video, audio, still pictures, free voice phone service, online games, music CDs, multi-billion-dollar electronic commerce, access to billions of pages of information. It is a network of networks. Although half of the users and facilities are still in the U.S., it is increasingly becoming a truly global communications network. And it offers every form of media we have ever known before.

A. Consider the matter of copyright law.

B. In a pre-digital, industrial age, every form of media was both unique and extraordinarily expensive to copy. Newspapers, books, phonograph records, photos, films.

1. Unless the copy was made by hand it required the availability of expensive equipment: printing plants, record pressing facilities, cameras and darkrooms.

2. Three things have happened since then.

a) The 99.9%-off sale. We’re used to 50%-off sales; not 90%, 99% or 99.9%. A Rolls Royce for $100. Orders of magnitude reduction in the price of equipment necessary for copyright violations: VCRs from $200,000 to $200; computers from $3,000,000 to $3,000, copies of music onto tape or even CDs, the work of printing plants that can be duplicated with a $100 scanner and $200 printer.

b) Digitization. When everything is bits and bytes the copying is not only standardized and simplified, it is also a 100% perfect copy every time.

c) The global Internet now makes it easy to move illegal copies of copyrighted material around the planet in an instant by posting it to a Web site, or attaching it to an e-mail.

C. We still have copyright laws, but we also have videotapes of Hollywood movies on the streets of Beijing, Singapore and Moscow before they hit our movie theaters.

1. The illegal businesses that produce those multi-billion-dollar losses for our motion picture and music companies risk prosecution – though they seem hard to close down.

2. But enforcing the law elsewhere is virtually impossible. In some contexts industry and government have simply given up the attempt. The law authorizes kids to make copies – for their own use only – of music they own. Most computer software licenses now permit the equivalent.

D. Copyright is just one example of what has happened to the old laws confronting the new technologies.

A. Engineering a major part of broadcast regulation

1. Selection of bands/frequencies; communities of license; directional antennas; power; antenna height; transmission mode (AM, FM); availability of FM sub-carrier for data

2. all affect what’s offered to the public, content of programming (e.g., music and talk), cost of receivers (by all odds the largest investment is the consumers’ not the broadcasters)

B. Also true for the Internet

1. Although many of the decisions have not as directly involved government

2. And tend to be less obvious than antenna towers

3. Such things as

a) Filters on content; parents, schools and libraries, ISPs, corporations, governments

b) Ability to send anonymous messages

c) How much personal data about you is gathered by the Web pages you visit: name, address, e-mail, what Web pages you’ve visited, demographic data from others with whom you do business

d) Who gets to read your e-mail and know what Web pages you’ve visited?

e) Which users get to see what material; accounts and passwords, AOL vs. open access to all

f) Encryption availability, effectiveness, monitoring by others.
g) Information providers’ access to the Internet’s users (the content and conduit issues)

4. We don’t think of such things as “regulation” -- which we associate with government, acts of Congress, FCC regulations -- but just as surely they are

A. “Congress shall make no law abridging the freedom of speech or of the press”; discussed the “or of the press” earlier

B. S.Ct. says applicable to states as a part of “due process”; government at all levels, state institutions – such as the University of California

C. Fact is, we have lots of laws affecting speech – either requiring, or forbidding, it

1. The FAA says it’s an offense to joke while passing through an airport metal detector

2. The SEC regulates what you can, and cannot, say about your company when selling shares of stock

3. The FDA regulates what you can and can’t say when selling foods and drugs; Congress requires the cigarette package warning labels – a pretty severe abridgment of a tobacco company’s speech when advertising its product

4. The Post Office has regulations about the amount of advertising a newspaper can have and still get the second class mailing rates

D. But the real challenge comes when the conflict is not a balance between one person’s speech and a significant social need; it is when both parties believe the First Amendment supports their position

1. The newspaper owner says, “This is my paper. I can put in it, and keep out of it, whatever I want. That’s my First Amendment right. And I don’t want to run your ad.”

2. The advertiser – perhaps favoring or opposing some social policy -- says, “But you have the only paper in town. You sell space in it to others. When you refuse my money, and censor me from your pages – just on the basis of my content -- you effectively remove any meaningful First Amendment rights I have.”

E. The remedy, I believe, is to look to the purposes of the First Amendment. What is it designed to accomplish? How would we know if we’d been successful? We can then look at competing First Amendment claims and see which of them better serves these purposes.

1. Marketplace of ideas. The search for “truth.”

2. Self-governing. Democracy.

3. Checking value on abuses within government, corporations and other institutions.

4. Safety valve. An alternative to the violence and terrorism that result from unsuccessful efforts to suppress dissent.

5. Self actualization. The biological basis of the First Amendment. Self expression.

IX. Convergence

A. Convergence means the coming together, the melding, of things formerly separate. It is occurring in virtually every aspect of telecommunications.

B. Hardware

1. The cell phone, pager, pocket computer share capacities to carry voice and data, surf the Web, send and receive e-mail.

2. With Web TV and streaming video the TV set becomes an alternative computer monitor, and the computer screen becomes an alternative video display device.

3. There are machines that literally converge, in one box, the functions of printer, copier, scanner and fax machine.

C. Storage media

1. My first desktop computer used audiotape as its storage device. The same kind of tape cassette on which music was stored, or speech was recorded.

2. The CD in your computer can hold an encyclopedia or play your favorite music

3. If it is a DVD device you can watch movies on your computer

D. Software

1. A video game can be played on a video game player, the TV screen, on a computer, or over the Internet

2. A feature film can be seen in a movie theater, on television, videotape player, pay-per-view cable system, DVD disk, streaming video over the Internet, or stored on a hard drive

3. There is children’s educational material, in many media forms, that has a very high entertainment component; a convergence of entertainment and education

E. Industries and companies

1. When I was on the FCC the lines were pretty clear. We had a telephone company. We still had a telegraph company. Some television stations were commonly owned with AM and FM radio stations. But there was concern about a newspaper owning broadcasting facilities in its area. There were independent book publishers. A major Supreme Court decision, the Paramount case, expressed the nation’s outrage that motion picture studios would think they could also own the theaters in which their movies were shown. And as cable television began to grow it was an industry largely of what we called “Mom and Pop” operators.

2. The recent AOL acquisition of Time-Warner symbolizes where we are today.

3. When Time and Warner merged we asked them why. “Because,” one executive said, “someday there will be five firms that control all the media on planet Earth, and we intend to be one of them.”

4. There are not yet five firms that control all the media, but with Time-Warner’s even more recent acquisition of a major European music company, there are now five firms that control well over 90 percent of all the world’s music

5. The capacity for “hype” and its restraint on diversity of content

6. Billions of dollars at stake, and no one knows for sure which way it’s going to develop; no one big enough to force an end result

a) You can now get to the Internet from your school or corporation’s LAN, a landline phone with a modem, a wireless link from a laptop to a cell phone, your cable television provider, a communications satellite, or your pocket computer or pager

b) Here’s $100 million of venture capital. Where would you put it? You’d diversify. And that’s exactly what the big boys are doing.

c) Everybody wants at least a little piece of everything: newspapers, books and magazines; movie studios; television networks and stations; videotape and DVD sales and rentals; computer software and Internet Service Providers including search engines, free telephone and Web access with advertising, and various e-commerce operations; edge of the envelope innovators in garages; cable television; telephone companies both landline and wireless

d) Sometimes they acquire it outright; sometimes just buy a minority interest; enter into a joint venture; establish contractual relationships; share facilities

F. Regulation

1. So what are the implications of convergence for regulation?

2. When I was at the FCC we had a “broadcast bureau,” a “cable bureau” and a “common carrier bureau” for ATT.

3. How do you “regulate” one of these multi-media, converged companies – in an environment in which not everyone has yet merged? How do you come up with standards for an “industry” that is emphasizing a different activity today than it was last month?

X. Proposals and Conclusion

A. One of broadcasting’s most admired journalists was Edward R. Murrow. He made an observation about the future of his industry that is equally applicable to ours today.

1.  His point was that the magic of the new technologies – he was talking about the move from radio to television – lies not within the technology but within ourselves. It is we who must see technology’s dangers as well as the opportunities. Otherwise, as he said of television, “it is just lights and wires in a box.”

2. With today’s communications technologies the box and wires are ever so much smaller – as is the light! The dangers and opportunities have changed.

3. But the responsibility lies in exactly the same place as it did in Edward R. Murrow’s day. With us.

B. I don’t think we need a lot of regulation, but we do need some.

C. The digital divide; information poor, information rich.

1. Those of us interested in K-12 education have a bumper sticker that says, “If you think education is expensive just wait ‘til you start paying for ignorance.”

a) What regulation do we need to insure that everyone can benefit from the Information Age?

b) This is a need perceived by all political ideologies; liberals because it’s humane, and just, something we owe each other; conservatives because they need employees capable of making them even richer still, clerks who can make change, mechanics who can read the manuals

2. There’s a lot of loose talk about how the Internet makes it possible for everyone
on Earth to have access to all human knowledge. Let’s look at the facts.

3. Unequal distribution of wealth

a) According to the Federal Reserve, during the past three years alone the average net worth of families earning under $10,000 a year actually declined by 25% to $3,600. If you’re curious that’s about how much Bill Gates’ net worth increases every hour, 24 hours a day, 365 days a year.

b) The poorest one-fifth saw their net worth decline by 25%. The richest one-fifth saw their average net worth increase over that same three-year period by 22.4% to $1.7 million – nearly 500 times as much

4. Not surprisingly, these disparities in wealth are reflected in the financial ability to participate in the information age according to the National Telecommunications and Information Administration.

a) About 75% of the central city poor have phones. For those earning over $75,000 a year it’s closer to 99%.

b) One is reminded of Lilly Tomlin’s observation regarding the marketing genius behind the idea of selling snack foods in the Third World – those who haven’t been able to eat regular meals had not formerly even imagined the concept of between-meal snacks. Similarly, those without phones represent an enormous untapped market for the sale of modems: the purchase has simply never occurred to them.

c) Less than 10% of those earning under $10,000 a year have computers. For those earning over $75,000 the percentage is above 75%.

d) Less than 4% of the poor have online service; roughly half of those earning over $75,000 do.

5. And as our leaders like to remind us, this is one of the wealthiest nations on earth.

a) Most of the world’s people have never made a phone call. They don’t have electricity. They may be living on less than $200 a year.

b)  It is ludicrous, insensitive and unbelievably myopic to talk about how everybody now has access to the millions, if not billions, of documents on the Internet and Web. They don’t.

6. Nor is wealth the only limitation. There’s also the matter of education.

a) You know the expression, “Give a man a fish and he can eat for a day, teach him how to fish and he can eat for a lifetime.” Note that the lifetime fish diet comes, not from the fishing pole but from learning, from knowledge, from skill.

b) Knowing that, you will also not be surprised to learn of the disparity in Information Age access between those with the least education and those with a college degree.

c) Of those with less than a high school diploma fewer than 10% have a computer -- compared with about two-thirds of those who have a B.A. degree.

d) There is an even greater spread with regard to online service. About 2% of those with the least education are hooked up, compared with almost 40% of the college educated.

e) Once again, from a global perspective, bear in mind that every year there are more illiterate people on earth than there were the year before. Not only has our marketplace approach not solved the problem, it actually getting worse year by year.

f) And reflect on the fact that, in part because of the American domination of the Internet, English is its almost universal language.

(1) So imagine for a moment that this everyone we talk about did have the financial resources,

(2) the access to an Internet connection,

(3) the desire and leisure time to utilize an on line computer.

(4) Unless they knew the English language, and had a relatively advanced level of education, they would not be able to use that computer for much more than a doorstop – if they had a door.

7. Humankind has done a fairly respectable job of making it possible for everyone to participate in the Agricultural Age, the Industrial Age, the Services Age. Bringing everyone along into the Information Age is one of the most challenging regulatory tasks our species has ever confronted.

D. Content and conduit

1. We cannot mandate that all intellectual property be made available for no charge to anyone who wants it. But we can mandate that there not be artificial barriers to access by users. (With, of course, exceptions to preserve personal privacy, national security, and corporate proprietary information.)

2. Such Internet content “filters” as there may be should be (a) known to the user, (b) available as an option for parents, and not imposed on those who neither need nor want them.

3. We cannot mandate that every carrier carry every content providers’ information for no charge. But we can insist that they make access available to all providers for equal charges and with equal quality of service.

E. Personal Privacy

1. One could easily teach a semester-long course on Internet privacy issues: the technology, law, practices, needs, and balance of public policy considerations.

2. At a minimum we should be told what information is being obtained about us, how it is to be used, and whether it will be shared or sold to others.

3. We should be asked if we wish to opt in to such a system; at a minimum we need the opportunity to opt out.

4. We should have the ability to see what is being recorded and shared, to modify it and correct errors.

F. So there you have it, “Media Regulation in the Age of the Internet”

1. We are talking about a sector of our economy, our lives and our culture in which most of the components and qualities are constantly changing.

2. There are a variety of different needs for regulation, and means of achieving those ends.

3. But, to the extent the current evidence is an accurate forecast of what’s to come, it seems clear that the marketplace is incapable, alone, of getting us there.