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What The Media Tell Americans About Free Enterprise

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March 1997


Diversify Digital TV
Guest Editorial, by Robert L. Johnson

The biggest federal government giveaway of a public asset since the days of the railroads is about to occur in Washington, D.C. In a matter of weeks, the FCC is scheduled to decide how digital TV licenses in this country will be distributed. This represents the last major TV allocation to local markets before the 21st century. Unless more deliberation and debate occurs before this decision, the FCC will literally give away billions of dollars worth of licenses, mostly to large media conglomerates.

As a result, a host of new players who want to compete in the new digital age would be kept out of this market. To make matters worse, this huge federal giveaway to large media conglomerates will occur as the government urgently seeks to balance the budget, provide economic investment incentives, and reduce federal programs.

Prior to the upcoming FCC decision concerning the digital TV channel giveaway, there remains an opportunity for all of us to ensure that all segments of our society will benefit in the digital TV age. As we approach the year 2000, it is imperative that the government provide viable, new opportunities for new entrants in the digital marketplace. I strongly feel that entrepreneurs -- especially minorities and women -- should participate in all aspects of digital communications services, including digital TV ownership. The best way to achieve this objective is for the FCC to auction spectrum for digital TV services to new businesses that are ready to compete. This plan would benefit our country by promoting consumer choice, competition, and generating new federal revenues to offset federal programs or tax cuts.

So far, the discussion concerning digital TV ownership has been tightly controlled by the National Association of Broadcasters (NAB) and a few media conglomerates. Their opinions should not dominate the entire debate on how the valuable public asset of digital TV should be licensed. Entrepreneurs should be given the opportunity to own a piece of digital TV, one of the most important bridges to the 21st century.

While some politicians quibble and argue about the exact amount of revenue a spectrum auction for digital TV would generate, there can be no serious doubt that an auction of digital TV channels in 1998 would raise a few billion dollars.

Recently, columnist Alexander Cockburn criticized the spectrum giveaway plan and said, "If the new frequencies were auctioned, they wold fetch anywhere from $11 billion to more than $70 billion." Similar observations were made by New York Times columnist William Safire. The Clinton Adminstration's budget has predicted that an auction of television channels associated with digital TV could raise $14-17 billion. Even if the Administration's estimate is partially correct, this amount of money could be used for a large payment toward federal budget priorities.

Some of us already know that digital television will provide far more than an opportunity to buy a larger, more expensive television set. A digital TV set will likely serve as one of the local information and technology "command centers" for America's households. Many predict that these digital TV channels will carry interactive telecommunications services, educational programs, Internet access, and links to other important information networks that will help narrow the gap between rich and poor.

Now is the time for the FCC, the Clinton Administration, and Congresss to step up to the plate and develop an action plan to provide viable, new ownership opportunities in digital TV. I emphasize the need to act now because the FCC's deadline for making a decision on how to give the incumbent broadcasters their free TV channels is fast approaching. One plan under consideration by the FCC would place all incumbent TV broadcasters in a core spectrum area and auction the remaining channels. Recently, the Coalition for a Sound Spectrum Policy, which includes myself and groups from across the political continuum -- from the Coalition for Diversity of Ownership and the Media Access Project to Americans for Tax Reform and the Small Business Survival Committee -- endorsed this core spectrum plan. Certainly, the FCC should auction as much digital TV spectrum as possible to provide new ownership opportunities.

We need an effective strategy to create a vibrant and varied digital marketplace. The digital TV age should offer viable, new opportunities for imaginative businesspeople, particularly minorities and women, to own and operate facilities that will serve their growing audiences. In a country as diverse as the United States, a handful of media conglomerates should not control the vast majority of information flowing to American citizens. Diversifying the digital television market makes a lot of sense.

Robert L. Johnson is chairman and chief executive officer of BET Holdings, Inc.


Rich Noyes


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