The Public Interest Tax on Communications

by on April 26, 2005

My latest C:\Spin article, The Public Interest Tax on Communications, corresponded with last week’s National Association of Broadcasters show in Vegas. In this article I go after a weighty subject that is somewhat abstract but directly relevant to today’s communications industry – the “public interest” legal standard. Regulations predicated upon the public interest are essentially proxies for the public’s own taste and preferences. If there was a need for this requirement early in the days of broadcasting, today’s new technologies make it unnecessary and a costly way to regulate.

The public interest standard is overly subjective for a legal standard, which results in too much political pork and special interest hijacking. Consumers would be better off if we removed this language from our communications law. My article:

The Public Interest Tax on Communications

The “public interest” requirement for broadcasting has many interpretations. For some people, it is about the societal importance placed on broadcasting’s role in the marketplace of ideas. For others, the public interest symbolizes community standards and responsible programming. But no matter what your perception of the public interest, the standard is rapidly becoming bogged down by interest group lobbying. Every broadcast show and every technology is taxed by political debate and censorship. The “public interest” requirement, ironically, is leading to the shutdown of meaningful democratic input. That’s why attendees at next week’s broadcast industry conference should be discussing why it is in the public interest to eliminate the public interest standard from communications law.

Broadcasters have a legal duty to operate according to the “public interest, convenience and necessity.” This standard is the basis for laws against broadcast indecency, which is a subject on the agenda of the National Association of Broadcasters conference beginning April 18 in Las Vegas. In attendance will be Rep. F. James Sensenbrenner III (R-WI), who told executives attending a cable industry conference that indecent speech should be criminally prosecuted. Federal Communications Commission chief Kevin Martin will also be there. He recently warned satellite and cable operators to avoid greater government scrutiny by self-policing their content.

These government representatives will undoubtedly be reminding the broadcasters about their public interest duties. And the broadcasters will unquestionably nod their heads and presume that they understand the public interest requirement. But what does the “public interest” duty really mean? It depends–and that’s the problem for free speech and for the future of new communications technologies.

The Public Interest Standard is Overly Subjective for a Legal Standard

Vague principles, even civic-minded ones, are a recipe for fiasco in the hands of concentrated political power. The late Henry Friendly, a longtime judge of the Second Circuit Court of Appeals, wrote in 1962 about the need for more definite standards in communications law. He compared the job that Congress gave the Federal Communications Commission to asking the New York Board of the Metropolitan Opera Association “to decide, after public hearing and with a reasoned opinion, whether the public convenience, interest, or necessity would be better served by having the prima donna role on opening night sung by:Tebaldi, Sutherland, or one of several winners of high American awards.”

Judge Friendly’s analogy looks all the more prescient in light of the FCC’s current role in reviewing broadcast indecency complaints. Recently the FCC held that the indecent language in Saving Private Ryan was not against the law, despite the horrific violence and continuous use of the F-bomb. But Howard Stern’s use of similar language would result in million dollar fines. Now we can–and do–argue endlessly about what type of programs are more important than others. But we shouldn’t be burdening the FCC, and its new chairman Commissioner Kevin Martin, with the role of deciding speech issues that distract from the FCC’s broader regulatory role.

Special Interests Hijack the Public Interest

When an interest group cites the public interest when arguing against indecent programming, the myth is that there is a single public definable by an objective interest. But our diverse population means that we have many subjective interests that no group can competently represent under a single public interest standard.

Indeed, our system of government is organized as a republic to avoid a tyranny of the majority. But a subjective public interest requirement encourages an even worse scenario–tyranny by a vocal minority. Senator Ted Stevens (R-AK), chair of the powerful Senate Commerce Committee, wants legislation that extends indecency laws from traditional over-the-air broadcasting to cable and satellite programs. And last year, one organization called the Parents Television Council filed an overwhelming majority of the complaints at the FCC. But many members of Congress, like fellow committee member Senator Bob Goodlatte (R-VA), have expressed reservations about increasing the scope of the indecency law to cable and satellite.

It would be bad enough if the public interest hijacked communications policy only in free speech, but it also forms the basis for corporate welfare. Television broadcasters have historically been given free spectrum in exchange for a promise to serve the public interest. Unfortunately, as what often happens when something is received for free, the spectrum is undervalued and not used efficiently. Much of the blame on the slow transition to digital television is due to the broadcasting industry’s lobbying for additional spectrum instead of converting from analog. The cellular phone industry that paid for its spectrum completed the transition to digital years ago.

The Public Interest Standard Invites Political Pork

The “public interest” notion dates back to the early 1900s, when the perception was that the airwaves were scarce resources and broadcasters had to be stewards of the public’s spectrum. Although new technology has made the use of spectrum almost infinite, the old public interest requirement remains enshrined in our law. Through the years, determining which “public” and what “interest” has often yielded answers full of generally admirable goals like protecting children or encouraging fair and unbiased news shows but mostly devoid of factual data and legal cause and effect.

Concern for broadcast content has united Democrats and Republicans, divided on almost every other issue other than steroids in baseball, to pass the Broadcast Decency Enforcement Act of 2005 (H.R. 310), a bill that sharply increases indecency fines. It is a remarkable show of unity, given the subjectivity in defining indecency.

Congress is expected to hold hearings about telecommunications reform this year. This is an opportunity to address the “public interest” language of existing law. Removing it would force regulators to come up with more specific reasons for passing communications legislation. New technologies empower consumers and communications markets in ways that don’t require political oversight of the public interest.

However, referencing this ambiguous mandate is a powerful rhetorical device that extends well beyond broadcast indecency. The demise of the “public interest” as a means for regulation would be an admission by pro-regulatory politicians that consumers and the market can responsibly acting according to their own interests. Some advocacy groups primarily use the indecency debate as a platform to attack large corporate media ownership or a lack of “a la carte” cable programming. Perhaps this is why many liberals–who would normally be expected to rail against right-wing conservative efforts to impose content censorship–are for more broadcast indecency legislation.

The public interest standard is a tax. Broadcasters face fines and perhaps even criminal penalties. Consumers must pay to hear certain content via cable or satellite instead of by over-the-air. Politicians waste their valuable time discussing broadcast content instead of pursuing more important issues. Using government to enforce the public interest on communications is a costly arrangement for the public, which is why this legal standard is not in the “public interest”–however defined.

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