The great HDTV swindle

The 1995 session of the Nevada Legislature had just ended. At KOLO, Sam Shad pulled together a panel of people to discuss the session in his Nevada Newsmakers program. Midway through the taping, in a discussion of the effect of political money in campaigns, panelist Bob Tonelli—leader of the Ross Perot forces in Reno—said the prospects for reform in Nevada would be influenced by what happened in Congress. Shad pitched a question dealing with congressional politics.

“There’s a new bill going through Congress that is a reworking of … where the television stations, for example, should be given a second frequency for high definition television, and the broadcasters don’t want to pay for the second channel, they don’t want to give up the original channel they have, if they would be forced to 10 years down the road,” Shad said. “And Congress is making noises in the sense of, well, maybe we should have more children’s programming and more free political time for candidates. That seems like a kind of bizarre tradeoff there. Would that have any effect on …?”

Tonelli responded, “We could have political free time any day of the week if the president would sign an executive order to the FCC making it part of the licensing agreement for a television station.” Panelist Andrew Barbano said, “Hear! Hear!"Tonelli’s response about free air time for politicians diverted the discussion from Shad’s original question about the broadcasters wanting a new free television channel, and the discussion never returned to the topic. But Shad had nevertheless tried to undertake the only televised discussion in Reno about the impending theft of the century, a scam that broadcasters had generally been trying to keep under wraps.

From the newsboys’ 1899 strike against Joseph Pulitzer to the Archer Daniels Midland scandal of the 1990s, journalism has always known how to asphyxiate a story that might hurt its economic interests. But the snuffing of the theft of the public airwaves by U.S. broadcasters—ostensibly for HDTV advancements—must set some kind of a record.

Change at hand
In the 1990s, Congress and the Federal Communications Commission were slowly coming to grips with some fundamental changes in the way television would operate in the new century.

The FCC itself undertook planning how to have a problem-free transition to high definition television (HDTV), coming up with a program of lending every TV station an extra channel and mandating simultaneous broadcast of each channel’s programming on both stations in standard image (SDTV) or analog and in HDTV. After giving the public 15 years to adjust and get rid of their analog television sets, one of the television channels would revert to public ownership.

This arrangement offended some consumer activists. If times were passing analog by, so be it—the market would make that determination. But that did not entitle the analog stations to digital spectrum unless they were willing to pay for it at auction like any other users, such as cell phone companies. And given the grasping nature of the broadcast lobby, the consumer advocates were certain that once the broadcasters had their hands on two channels, their fingers would never be pried loose.

Electronic tech people soon determined that while a channel could be in fact be digitized, it could also be split up into six channels of other uses, such as one channel of analog plus others for paging, cell phones, data transfer and other configurations that could not yet be envisioned.

“Each broadcasting oil well was transformed into six gushers,” wrote New York Times columnist William Safire.

“Visions of sugarplums danced in broadcasters’ heads,” wrote Neil Hickey in the Columbia Journalism Review.

The broadcasters wanted all this good stuff for free and set out on the old practice of “adjusting” profits through corporate lobbying.

Soon a swarm of broadcast lobbyists—174, one for every three members of Congress (including leading Democrats like Ann Richards)—were darkening Capitol Hill, lobbying fiercely for the new channels to be simply turned over to stations, free of charge. The broadcast lobby in heat is a fearsome thing, at least to members of Congress.

The National Rifle Association is a bunny compared to the National Association of Broadcasters. “When news executives decide to throw their weight around,” Charles Layton has written in the American Journalism Review, “they have plenty of ways to do it, some subtle and some crude.”

The lobby is aided by congressmembers’ own insecurities. Members of Congress, conscious that there are television stations in every congressional district, are terrified that if they cross the broadcast lobby, the local owners will turn mean with their big megaphones. The broadcast lobby loves exploiting their fear.

The money involved in the spectrum giveaway was huge. Both in other nations and in the United States, the practice was for spectrum (wireless broadcast frequencies) to be auctioned off. Estimates of how much money would be brought in at auction have ranged from $30 billion to half a trillion. Billions were already then being raised from auctions to wireless companies—a much smaller spectrum sale had recently produced the largest auction sum in human history: approximately $19.6 billion. If the wireless industry had to pay, what justification was there for giving spectrum free to broadcasters? Sentiment on Capitol Hill shifted against the television stations.

Soon—we’re up to about 1995 now—the industry was planning a political campaign on its own television stations. Thirty-second lies masquerading as 30-second spots were appearing on screens around the nation, including in Reno:

“We all watch television. Well, now we may be watching some of our favorite shows disappear. [This narrative was accompanied by footage of popular television programs fading to black.] Some people in Washington want to tax local TV broadcasters billions of dollars in order to balance the budget.”

The advertising implored viewers to save “free TV” by calling their congressmembers—all because of the broadcasters’ desire for a second channel, which the public was not told.

Except for Shad’s question, the spots were the only things people in the Truckee Meadows heard, saw or read about the issue.

Journalists go AWOL
What was actually happening never reached the public’s radar screen. The national newscasts rarely touched the story and when they did the news was distorted out of all recognition, as when NBC trivialized one auction.

Senate Republican floor leader Robert Dole was outraged by the advertising offensive.

“For more than 40 years, the American people have generously lent TV station owners our nation’s airwaves for free,” he said. “Now some broadcasters want more and will stop at nothing to get it. They are bullying Congress and running a multimillion-dollar scare campaign to mislead the public. … The broadcasters say they cannot afford to buy additional airwaves … Last time I checked, the American people cannot afford to give it to them free. … We are simply stating that if broadcasters want more channels, then they are going to pay the taxpayers for them. That does not kill television.”

Sen. Ernest Hollings, supporting the broadcast lobby, responded, “First, there is a problem faced by the local broadcasters. To change over from their analog signal to a digital signal is going to be a cost of somewhere between $2 and $10 million. They are not going to put that $2 to $10 million in changing over unless and until there are digital TV sets. … So working as the public body in the public interest, we reasoned, after these hearings, that there ought to be a transition to change over, to certainly not penalize established free broadcasts in America—it is not a gift, if you please, but, on the contrary, we need to get them to switch from analog to digital, and then we’ll take the one that they relinquished and auction it.”

But few on the other side believed the stations would ever be surrendered. Suspiciously, the broadcasters did not want a deadline for HDTV, and they kept pushing back the date for return of the stations.

Through all of this, the story got little news coverage. What is amazing about the silence of journalism is that it was such a great story. A powerful lobby was throwing its weight around and succeeding in the greatest theft of public resources since the construction of the railroads. The silence of the network news departments spoke powerfully that they were not the independent arms they claimed to be.

Even if broadcast news wasn’t interested, where was print? A few newspapers ran stories, but there was nothing like the sustained coverage the story merited. There was a Pulitzer in this story. The Wall Street Journal called it a “planned multibillion dollar handout for wealthy TV-station owners” but did not provide a drumbeat of coverage. The New York Times editorialized on it, but only occasionally reported on it.

Of course, many newspapers do own television stations.

Gigi Sohn, then director of the Media Access Project and now a communications attorney, said she was exasperated by the way the story was covered up.

“The problem is that the industry that controls the main means of communications won’t cover itself and particularly won’t cover the fact that it gets huge regulatory benefits from the government, regulatory and financial benefits,” she says today.

And where was local news? Local television stations might well claim they did not cover the issue because it was a national one, except for one thing—those television spots that were running in Reno. They were news. Such issue-oriented television advertising campaigns often generate local news coverage. For instance, in November 2003, television spots produced by the Marijuana Policy Project began running in Nevada, calling for regulation instead of prohibition of marijuana. At least two televisions stations—KOLO and KRNV—ran stories scrutinizing the advertisements and their claims.

The broadcasters’ TV spots were running in Reno and dozens of other markets around the nation, sometimes supplemented with newspaper ads. This was a huge, expensive national campaign. Safire did a column urging, “Turn on your bosses, TV reporters and editors.” But reporters and editors ignored the giveaway.

Sohn notes that the Fairness Doctrine, abolished in 1987 after adverse court rulings, did more than just require television stations to provide opposing viewpoints.

“The Fairness Doctrine required two things, and people forgot about the first thing. The first thing the Fairness Doctrine required was affirmative coverage of controversial issues of public importance to a community. … People always forgot about the first part, [the part] that said you have to cover the news!”

Had the Doctrine still been in effect during the mid-1990s, the local stations would have had to cover an issue important enough to generate a television campaign in a community, she suggested.

Democrats go AWOL
At some point, the issue also became mixed up with congressional demands for improved children’s programming and free air time for political candidates. The broadcasters, who didn’t want to pay for the new channels with money, didn’t want to pay for them in other ways, either.

The Democrats were of little help here. President Clinton, supported by Al Gore, proposed a supposed compromise in which the stations would be granted for free in exchange for public interest programming—the exact same programming the stations were already required to provide for their analog stations. Democratic support for the giveaway was so pronounced that Democratic Sen. Bob Kerrey of Nebraska wrote a letter to the New York Times distancing himself from the pro-industry Democrats.

Dole fought tenaciously against the giveaway, backed by John McCain and others. (McCain wanted an open auction with anyone able to bid and television given no advantage over others who wanted the spectrum.) Dole pried the giveaway out of a telecommunications bill at one point and held up work on another.

They were supported by an unusual left/right group of activists, experts and think tanks. Adam Thierer of the Cato Institute was tireless, a Paul Revere of the spectrum theft. Safire, a former Nixon speechwriter, was the only mainstream commentator who kept hammering away at the issue. The Heritage Foundation carried papers with titles like “How the Telecom Bill Gives Away $70 Billion in Family Tax Relief to the Broadcast Industry.”

On June 11, 1996, Dole resigned from the Senate to focus on his presidential run. Before he left, he said he obtained written promises from legislative leaders and all FCC commissioners to prohibit distribution of the digital airwaves until Congress passed legislation governing the use of the spectrum.

The broadcasting industry’s favorite lawmakers waited 13 days after Dole’s departure—then torpedoed the agreement and authorized the giveaway. They didn’t let Congress vote on it. Republican leaders Trent Lott in the Senate and Newt Gingrich in the House plus the GOP chairs of the two commerce committees sent a letter to the FCC telling it to “move forward as expeditiously as possible on its current plan to award a second license to television broadcasters for the transition to advanced television services.”

“Strangely, no new laws have been passed, and the resolve of members of Congress has melted (with the exception of Sen. John McCain),” Dole later wrote in the New York Times. “And despite their commitment, F.C.C. commissioners plan to proceed with the giveaway. Given recent developments, what’s the rush?”

It was to no avail. The FCC granted the free channels in April 1997. Taxpayers unknowingly gave hundreds of billions of dollars to the broadcasting industry.

Soon the broadcasters were reneging. Industry amendments were being slipped into bills giving the industry the right to keep the new channels for as long as a trifling number of viewers did not switch over—or forever.

In September 1997, ABC said it was considering using its new channels to broadcast lower-resolution pay-TV programs instead of HDTV. The 29-station Sinclair Broadcasting said it would also skip HDTV and use the channels for pay-TV.

The date for HDTV kept getting pushed back. McCain called for a return to auctions. Eventually a deadline was imposed on the industry. But McCain’s long fight prompted him to tell a reporter, “As you know, my contests with them [the broadcast lobbyists] are unblemished by victory.”

What does it matter?
All this happened in the 1990s. Why retell the story now?

Because it’s still happening. The broadcast lobby is still at the federal trough quashing competition and filling its own larder. The broadcast lobby used its power to halt low power radio stations, a promising new frontier of democratized media, in favor of a few decades of “study.” (When we were trying to arrange an interview with Adam Thierer for this article, he asked, “Sorry, but what broadcast giveaway are you talking about?” There have been so many of them.)

Members of Congress are still cowering before broadcasters’ power, and the problem of the broadcasters covering up the whole story by burying it tells us much about their news coverage. For instance, can voters trust the honesty of network news coverage of John McCain’s presidential campaign from the industry that so dishonestly buried his crusade against the giveaway?

It’s also useful to take note of how much news coverage, crawls, public service announcements, and special programs local television stations are devoting to explaining to the public how to get ready for the switchover next year to HDTV. (One Reno station devoted a one-hour May 24 program, hosted by a station newsperson but appearing to be an infomercial for R.C. Willey, to the subject). Where was all the effort and air time now being used on the spectrum changeover when it was needed to explain the spectrum theft?