Friday, March 17, 2006

This week's FCC fines for indecent content of TV broadcasters just a cost of doing business

You may have seen on Wednesday that the FCC fined CBS as well as some local broadcasters a total of about $4 million for violations of decency standards. This included instances of violence as well as impermissible sex.

Though the headlines were about the fines, the broader subtext is about equity: First Amendment equity. The larger issue is the double standard that is applied to broadcast television—even though only a handful of households even obtain their signal via traditional broadcast—is different than that applied to the other hundreds of channels we can view. Any programming that does not start out life from a broadcast station has the same First Amendment privileges as the print media. In short, the boundary is obscenity and libel. Broadcasters have a tighter reign, called indecency.

Adam Thierer has a concise review of the history of the legal rationale for why programs on television have fewer content rights than others. If it was cable network ESPN that carried the 2004 Super Bowl in which Janet Jackson had her infamous “wardrobe malfunction” there would have been no cause for FCC action. But it was broadcaster CBS, and it was hit with a $550,000 levy. In today’s video world, such a distinction is ludicrous.

The time is right to level the playing field for content. Broadcasters, however, will need to pay a price to buy themselves out of what Thierer describes as “asymmetrical regulatory policy that unfairly singles out one set of speakers [i.e., broadcasters] relative to all others.” The asymmetrical regulation is an artifact of three rationales created by Congress and the courts: 1) spectrum was perceived as scarce, 2) broadcast signals were considered “pervasive” and 3) in return for being allowed to use this scare spectrum broadcasters had to serve in the “public interest.” So the bargain was free spectrum in return for some public service obligations.

In the last 15 years or so, however, the level of public service obligations eroded. The fairness doctrine has been rescinded, as have old regulations on network ownership of programming and prime time access limits. Despite the recent fines, the scope for sex and violence on broadcast programs is far more liberal today than 20 years ago. In effect, just about the only limit today’s license holders have is the modern boundaries of indecency, a boundary that is restrictive only when compared to the nearly anything goes content permitted print and non broadcast video.

In 1996 the broadcasters could have bought their way out of their asymmetry. That was when they lobbied hard and successfully to be given new spectrum to make the transition to digital from analog. A few lonely voices in Congress, Sen. Robert Dole being the most prominent, thought it was time to make broadcasters pay for the spectrum the same way satellite providers, cell phone operators and the like all must bid for the spectrum they use.

There should be a price for broadcasters to win full First Amendment rights

Broadcasters want it both ways. The cable operators had to invest tens of billions of dollars to build and upgrade their systems. DBS providers have to launch satellites and often subsidize user hardware beyond the TV set. Broadcasters have none of these expenses. (In reality most broadcasters today have paid for their spectrum in buying it from someone else, but that is not relevant here). Broadcasters have also been given the benefit of “must carry” rights on cable and DBS, whereas nonbroadacst networks must negotiate with those carriers for a space on their systems. In many cases they also must pay dearly to get such carriage.

To remove all content restrictions specific to broadcasters, as logical as it seems when looking at the greater freedom of everyone else in the video universe, should not be a one-sided deal. It would seem that symmetry would be achieved only when broadcasters must pay for their transmission pipeline the way their competitors do and negotiate with the cable and DBS providers for carriage. Then it would be equitable to admit that their remaining public service obligations are moot and content regulation can be made a level field with other video providers.

My guess is that when push comes to shove, broadcasters would be willing to put up with their few limits on content if the alterative was paying billions for spectrum and losing their must carry rights. If content equality is really important to them, then they could go to Congress and offer to give up their current benefits in exchange for a level playing field. In the meantime a few hundred thousand dollars here and there is simply one of the costs of doing business.

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