[Congressional Record Volume 141, Number 140 (Monday, September 11, 1995)]
[Senate]
[Pages S13309-S13312]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                FCC/SPECTRUM/PUBLIC BROADCASTING REFORM

  Mr. PRESSLER. Mr. President, as my colleagues know, as chairman of 
the Committee on Commerce, Science, and Transportation, I have made 
telecommunications policy reform my top priority for the 104th 
Congress. I am quite proud of the swift progress made to date, 
including the sweeping Senate passage of S. 652, the Telecommunications 
Communications Competition and Deregulation Act of 1995.
  As I indicated before we left for the August recess, as significant 
and necessary as S. 652 is for our country's economic and social well-
being in the 21st century, it is only one item in my overall plan for 
telecommunications policy reform.
  Today, I would like to take a few minutes to briefly discuss two 
additional areas of telecommunications reform I intend to pursue 
through the remainder of the 104th Congress: Spectrum reform and public 
broadcasting reform.
  Regarding spectrum policy reform, there was a recent essay by William 
Safire in the New York Times entitled ``The Greatest Auction Ever. Get 
Top Dollar for the Spectrum.''
  Mr. President, I ask unanimous consent that William Safire's article 
be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                [From the New York Times Mar. 16, 1995]

                       The Greatest Auction Ever

                          (By William Safire)

       Washington.--They all laughed at the economist Milton 
     Friedman when he suggested a generation ago that the Federal 
     Government auction off broadcast licenses, instead of giving 
     them away to political favorites.
       The last laugh is his; last week, in the greatest auction 
     in history, bidders for wireless places on a tiny fragment of 
     the broadband spectrum committed nearly $8 billion to the 
     U.S. Treasury.
       And that's only the beginning of the taxpayer's bonanza in 
     the sale of our valuable thin air.
       Remember all the talk, eight years go, of high-definition 
     television, the Japanese invention that was supposed to force 
     us all to replace our 200 million TV sets? U.S. 
     manufacturers, with antitrusters' blessing, formed a ``Grand 
     Alliance'' to match the Japanese advance.
       Along came an unexpected scientific breakthrough. We 
     leapfrogged the analog (feh!) competition into the brave new 
     digital world. This not only produces a knock-your-socks-off 
     picture but expands each TV channel into five or six wireless 
     channels for video, audio, computer data transmission, 
     telephones and every form of communication short of mental 
     telepathy.
       Broadcasters smacked their lips at the bonanza. ``Advanced 
     television is not just about pretty pictures anymore,'' 
     F.C.C. chairman Reed Hundt told Edmund Andrews of The Times, 
     one of the few reporters on top of this story. ``It's about 
     the digitization of television and a huge range of new 
     services.''
       It's as if one old oil well gave birth to six new gushers. 
     Broadcasting lobbyists have descended on Congress and the 
     F.C.C. to insure ``flexibility''--that is, to exploit 
     exclusively 

[[Page S 13310]]
     all the new technology, and to charge viewers for the ``ancillary and 
     supplementary'' services.
       Even if accompanied by payment of rent to the Government, 
     the exclusive arrangement sought by broadcasters would be an 
     outrageous taxpayer ripoff.
       What is the digitized, divisible channel worth? Senate 
     Commerce Committee Chairman Larry Pressler gave a hint in an 
     op-ed piece last week, suggesting that noncommercial 
     licensees had a huge hidden asset: ``Public broadcasting 
     stations could rent, sell or make use of the additional 
     channels for other telecommunications and information 
     services.''
       Based only on current uses, which are primitive, the market 
     value of the VHF, UHF, cellular, broadband and narrowband 
     spectrum ranges around $120 billion.
       But in the near future, your television set will combine 
     with your computers and telephone and fax machine into a 
     single unit you can hang on the wall or fold up in your 
     pocket. That's soon--possibly in the next Presidential term.
       I've seen not-for-attribution estimates that the market 
     value of the digitized spectrum in that onrushing era will 
     be--hold your breath--a half-trillion dollars, give or take a 
     hundred billion.
       Before rushing into any giveaway, or any long-term 
     exclusive rent-away, we need extended, wide-open, thoroughly 
     debated hearings to make certain of three outcomes:
       First, we want a guarantee of spectrum competition. The 
     criterion to determine competition must be scrupulously 
     economic, not jiggered by the Government to introduce sexual 
     or racial or ethnic or ideological favoritism. An appeals 
     court yesterday stayed the F.C.C. from holding auctions that 
     favored minority fronts.
       Next, we want a holdback of certain rights. For example, we 
     can solve the campaign finance dilemma justlikethat by 
     putting a right-of-way in the deed setting aside air time, 
     online time and direct E-mail advertising for candidates, 
     which could be used or traded or sold by them in election 
     campaigns.
       Finally, we want top dollar for our public property. That 
     means a series of Friedman-style auctions. After the 
     purchases, sophisticated risk-takers and their banking 
     backers can enhance the value of their property at no cost to 
     the taxpayer and with great benefit to the consumer.
       Where should the spectrum-sale money go? Toward reduction 
     of the crushing national debt. By recognizing our hidden 
     asset of the spectrum, Americans can ride the wave of the 
     future.

  Mr. PRESSLER. Mr. President, a major priority for the 104th Congress 
involves giving American private enterprise a fuller and fairer chance. 
Right now, we just have too many rules and too many of them just do not 
make any sense. Remember, bad rules are not just expensive and foolish, 
they represent far more than a dead-weight loss for the economy; they 
are obstacles to progress.
  One of the challenges we face today concerns channels that have been 
earmarked for advanced television. Not only has the FCC set aside a 
significant number of channels for the broadcast television industry, 
it has also placed severe restrictions on additional uses of those 
channels.
  Mr. President, technologically speaking, these channels could be used 
to provide extensive new and competitive offerings, in addition to more 
TV. Due to advances in digital technology, they could be used for new 
mobile radio services, for wireless loops that could make the local 
telephone business more competitive, and for many other services as 
well.
  Legally speaking, however, these channels currently are dedicated to 
one specific use: High-definition television, or HDTV. In effect, the 
Washington bureaucracy has defined and limited the future. The 
bureaucrats, not consumers of the marketplace, have decided what new 
technology will be offered, where it will be offered and how it will be 
offered. It is time to revisit these regulatory decisions. If 
broadcasting is the best and highest use of those channels, let the 
marketplace make that decision.
 Once the best use for these channels is determined, how should the 
licenses be allocated? Again, let the market decide. Consumer choice 
and preference will quickly choose who best deserves the licenses 
associated with the new channels.

  I thus intend to work toward several changes in the FCC's advanced 
television broadcasting plan. All of these changes are geared toward 
unleashing creative powers, not smothering them with FCC rules. 
Therefore, our committee is considering allowing everyone--broadcasters 
including--to bid for the right to develop these channels. That bidding 
process can be carried out through spectrum auctions. At the same time, 
however, we want to guarantee the winning bidders have sufficient 
commercial and operational flexibility. In other words, they must be 
given the discretion to make what they think is the best use of those 
channels to meet consumer demand and increase consumer choice.
  I will chair a Senate Commerce Committee hearing concerning this very 
topic tomorrow. Earlier this year several newspaper articles, including 
an excellent piece by William Safire, which I ask to be included in the 
Record following my remarks, characterized the FCC's HDTV plan as ``a 
billion dollar giveaway.''
  At a July 27th Commerce Committee hearing, Henry Geller, former FCC 
General Counsel and NTIA Administrator, testified that giving 
broadcasters an additional six megahertz would be a ``national 
scandal.'' A number of organizations across political lines recently 
have come out against giving free spectrum to the broadcast industry 
and support auctioning the advanced television spectrum. Not 
surprisingly, the television broadcast industry strongly opposes 
auctioning spectrum which the FCC proposes to give away to them for 
free.
  But beyond the special interest arguments, let me tell you, Mr. 
President, why this proposal is especially important. It is important 
because it plays right into another major priority for the 104th 
Congress--stimulating economic growth.
  The great thing about communications technology is that it is such a 
powerful catalyst for growth. Engineers and economists talk about 
communications as a leverage technology. Experts point out it is both 
demand-inducing and cost-reducing at the same time. That is, at the 
same time advances in communications technology make it possible to 
encourage consumption and investment, they also make it possible for 
businesses to keep costs in line. This keeps America competitive.
  Mr. President, some of the best economists in the world work for the 
Japanese Government. They have actually quantified how communications 
fosters economic growth. Their calculations show that for every dollar 
we invest in communications, we get almost 3 dollars of growth. That is 
why telecommunications industries are so important.
  You cannot improve and expand communications services, however, if 
the basic building blocks--like the radio spectrum--are locked up in 
some regulatory backwater. You cannot improve and expand communications 
services, if the people who develop innovative ideas are artificially 
denied the ability to move their product to market.
  Getting more spectrum into the hands of more people with more and 
better ideas on how to use it is a critical
 objective. Beyond bringing new and exciting technologies to the 
consumer, it also is an excellent way in which to contribute toward the 
new jobs, new services, and new investment opportunities this country 
needs.

  This leads to public broadcasting policy reform regarding spectrum.
  Such a bold, forward looking approach on spectrum policy reform also 
creates an opportunity to reinvent and privatize public broadcasting. 
To borrow a phrase from my good friend, Vice President Al Gore, we need 
to reinvent the way we finance public broadcasting in this country.
  Ever since President Johnson's administration and the heyday of the 
Great Society, we have relied on taxpayer funds, channeled through the 
Washington-based bureaucracy at the Corporation for Public 
Broadcasting. Over the past few decades, literally billions of dollars 
in appropriations have flowed through Washington back to the public 
broadcasting stations.
  Federal funds successfully have built a nationwide public 
broadcasting system that enjoys wide support. Viewers such as myself 
help stations with annual membership dues and other contributions. 
Corporate underwriting contributes significant programming support. At 
the same time, Federal financing funneled through a Washington 
bureaucracy has created a public broadcasting system not necessarily in 
touch with most Americans. Today the public broadcasting system is 
mature. It now must be allowed to evolve.
  Why? One very good reason is that with today's crushing national 
debt, all 

[[Page S 13311]]
Federal spending must come under careful scrutiny. Unfortunately, when 
I first raised the issue of privatizing public broadcasting, no one in 
the public broadcasting establishment seemed to hear what I was saying. 
I was accused of trying to kill Big Bird and Barney.
  Fortunately, public broadcasting is beginning to look at realistic 
options for survival in a budget deficit conscious world. I am 
encouraged by these efforts and look forward to working with my 
colleagues to ensure public broadcasting continues to serve public 
needs.
  Should we reexamine the charter CPB was given in 1967? I think we 
should. As I mentioned earlier, today public broadcasting is a mature 
system. There are still some regions which are not served, but the vast 
majority of Americans receive one--if not several--public radio and 
television stations. Efforts to consolidate and increase efficiencies 
should be encouraged. At the same time, reaching under-served areas of 
our Nation must remain a primary objective of any reinvented public 
broadcasting system.
  What about programming? Today's competitive marketplace has made the 
market failure rationale for public funding obsolete in some respects. 
Cable television network services including the Discovery Channel, the 
History Channel, Arts & Entertainment, the Disney Channel, Nickelodeon, 
and others provide quality, educational and artistic programming once 
thought only available on public
 television. At the same time, I believe most Americans want more 
quality children's and educational programming available over free TV. 
The great promise of broadcasting to educate and uplift our children 
and our citizens has not been realized. Too much violence and tawdry 
programming dominates the public's airwaves.

  Children's and educational programming should be the primary, if not 
sole, focus of taxpayer support for public television programming. 
Public radio also should be helped to flourish.
  At the same time, American taxpayers cannot afford to continue the 
inefficiencies in the current system. Because of historical accident, 
PBS and National Public Radio, for example, have separate distribution 
networks. I understand PBS actually has more audio capacity on its 
system than NPR. However, CPB has no power to make PBS and NPR 
consolidate and realize these efficiencies. Congress does. We should 
accept that responsibility and reinvent public broadcasting to provide 
a meaningful and quality legacy for our children.
  We also need to provide public broadcasting with a baseline of 
support. An excellent model already exists for how a baseline of 
support can be continued in an industry while providing the flexibility 
necessary to allow the industry to evolve, improve its product, and 
expand its services. We have accomplished the kind of privatization of 
Federal functions I am talking about in other areas--with, for 
instance, the Federal Home Loan Mortgage Association, the Student Loan 
Marketing Association--Fannie Mae and Sallie Mae. We can and should do 
the same for public broadcasting.
  We can accomplish the goals I have laid out by establishing a new 
privatized entity to provide public broadcasting baseline support. We 
can get the seed money necessary to carry out this initiative through 
the spectrum auction process. The fundamental goal should be to 
privatize the financing process and to empower broadcasters and public 
broadcasting organizations besides just those that exist in 
Washington--inside the Beltway.
  This approach would pay a number of public policy dividends. It would 
provide public broadcasting with a financial baseline of support. That 
is, this year's, or next year's, financing would not be subject to the 
vagaries of the Washington appropriations process. That, in turn, would 
help stations plan. Among other things, public broadcasters would not 
have to continuously lobby Washington to get the support they need. 
They could bank on continued support. Not all the money for the initial 
capitalization, moreover, would have to come from Washington. The 
business community, foundations, and others would be encouraged to 
participate.
  Financial experts currently are working out how much seed capital 
would be required. Indeed, I will chair a second Commerce Committee 
hearing this week in which we will take testimony from an investment 
banker at First Boston on how to move forward with this capitalization 
idea.
  At the same time, and as a way of ensuring the continued success of 
public broadcasting, we need to change some of the restrictions on 
public broadcast stations. This can be controversial. Nobody wants to 
sanction unfair competition between tax-exempt public broadcasters and 
the private sector's commercial broadcasters. But there are safeguards 
that can be established.
  One of the concepts that has been around for years is that of limited 
advertising. Numerous public broadcasting organizations in Europe 
already have commercials, clustered at natural program breaks. Limited 
advertising represents a significant source of revenue for public 
broadcast stations. It also represents a source of funds that may be 
preferable to the current situation in which companies basically 
produce and underwrite the programs run on public broadcasting. 
Advertising revenue tends to come without the content strings that 
program underwriting inevitably entails.
  Privatization means relying more on private, individual effort, less 
on a Washington handout. It also ensures decisionmaking can take place 
at a level much closer to the particular consumer in the particular 
market. In any country as big and diverse as the United States, that is 
especially important. A one-size-fits-all approach virtually never 
works well in our society.
  My thinking regarding public broadcasting is consistent with the 
approach this new Congress has taken in other areas. One of the 
cornerstones of most of the sound welfare reform proposals, for 
instance, is the concept of block grants and State and local 
decisionmaking. The thinking there is that local authorities are in the 
best position to manage these issues wisely, and Washington can assist 
them in addressing their State and local needs.
  Privatizing public broadcast financing would accomplish much the same 
objective. It would cut the Washington umbilical cord--or should I say 
straitjacket--and vest decisionmaking--plus the money and resources 
needed--with the stations and people at the local level. It is they, 
after all, who provide the service to the American public.
  Mr. President, the simple theme running through each of the reform 
ideas I have spoken of today is the fundamental principle that we do 
not want the Washington bureaucracy determining what is possible and 
what is going to be allowed.
  Let me conclude with an excellent example of what telecommunications 
policy reform means at a practical level for my home State of South 
Dakota and other areas of the often forgotten West. I am referring to 
an article in Investor's Business Daily last August 31st. That is the 
new Wall Street Journal competitor, incidentally, which makes an effort 
to provide news, especially financial news, that is important to people 
out West.
  The newspaper reported on a new communications technique that could 
revolutionize farming--a vitally important part of South Dakota's 
economy. It is called ``site-specific'' or ``precision'' farming.
  Having grown up on a family farm, I find the technology fascinating. 
First, soil moisture and crop yield sensors are spotted in fields. 
These sensors can narrow acres and acres of land down to as little as 
20 foot squares. These censors then interact with the new Global 
Positioning Satellite network. The system feeds information back to 
computers on the farm. This information give farmers the kind of 
precise information they need to target fertilizer, irrigation, and 
other services.
  The approach radically reduces operating costs. It helps the 
environment by reducing leaching and stream run-off. It is the kind of 
smart farming we need in this country to maintain our global 
competitiveness. Mr. President, it is possible only because of the 
marriage of computers and communications.
  Now, Mr. President, do you honestly believe the inside-the-Beltway 
crowd would ever have thought of this? I doubt it. It took innovative 
entrepreneurs to identify and fill a market need. What if the 
Washington bureaucracy had set up a system of rules that 

[[Page S 13312]]
kept communications channels from being used for ``site-specific'' 
farming? Its promise and all that means to the farming sector and the 
American economy as a whole would never have been realized. I ask 
consent the ``Investor's Business Daily'' article be printed in the 
Record immediately following my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered. (See 
exhibit No. 1.)
  Mr. PRESSLER. Americans are great and diverse thinkers. 
Unfortunately, not enough of that original thought and invention takes 
place in the big gray stone government buildings that sit around 
Washington. What we need to do is to try to unleash American ingenuity. 
At a minimum, we need to make sure we do not block it. I will continue 
to fight to make sure we do not--whether it is thought the 
comprehensive telecommunications reform bill, spectrum policy reform or 
public broadcasting reform.
  In conclusion, Mr. President, let me say I think it is time that we 
fundamentally think about spectrum policy reform in this country. I 
think we must think about the taxpayers.
  The Commerce Committee has been charged to raise $17 billion, give or 
take a few half billion. Indeed, we are told that we are supposed to 
round everything off to a half-billion dollars. So, having grown up on 
a farm in South Dakota and being told to round things off, in my 
response to a half-billion dollars, that is quite a change from the 
kind of money that I usually think about in my life.
  In any event, the new potential uses of the spectrum of the property 
of the American people--as William Safire says, they should be 
auctioned off. How else will we do it? The auction system has been used 
successfully for some of the earlier spectrum that we have auctioned 
off.
  We now have this complicated matter where the broadcasters propose to 
migrate from the spectrum they are on, the analog, to the UHF and 
digital, and they say that at some point they will give back the 
original spectrum, although some say that when the time comes that will 
not happen.
  What we are proposing here is not to take anything away from them, 
not to take anything that they feel they may have paid for in terms of 
licenses to stations. What we are proposing is merely to auction the 
new uses of the spectrum, and the American taxpayers have a great 
interest in this. It is billions of dollars.
  I propose that we use a small portion of that to capitalize public 
broadcasting and to set up a privatized base, and they would then be 
cut free from annual appropriations. We could eliminate the 
headquarters, the Corporation for Public Broadcasting, and many of the 
stations will testify this week that they would like that approach. We 
could do that without spending any appropriated taxpayers' money.
  So we need to have some innovative thinking. We also need to think 
about reinventing many areas. As Mr. Safire quotes in his article, he 
quotes me as saying in the public broadcast area there is much spectrum 
and many overlapping jurisdictions where the taxpayers could be saved a 
great deal of money.
  I know that anyone who makes proposals along these lines will be 
criticized by both the broadcasters and some in the public broadcasting 
area. In fact, I am sure the broadcasters will strongly oppose--I know 
they are strongly opposed to what I am trying to do.
  The people inside the beltway here in public broadcasting are 
strongly opposed. They are strongly opposed to changing anything.
  The stations have formed a coalition, that they want to change, and 
they would like to see this. The people out in the country in public 
broadcasting would like to see the change.
  So, Mr. President, we stand at a crossroads with this spectrum 
reform. It is something that sounds like Greek to the average citizen, 
but the average taxpayer has a great interest in it. We have a 
responsibility to stand up to special interests and to auction off 
those portions of the spectrum that will provide new uses and will 
provide billions of dollars for the taxpayers of this country.
  It will provide the basis for the Commerce Committee's reconciliation 
responsibilities, and it will provide our country with a more 
innovative and a better future. I yield the floor.
                               Exhibit 1

                     Plows, PC's, Satellite Dishes

                            (By Ira Breskin)

       As computer power drops in price, a new way to farm called 
     site-specific or precision farming is taking off.
       Precision farming lets growers take into account the unique 
     features of each field, without boosting cost much. Paycheck 
     usually takes about a year.
       ``Farmers used to farm fields,'' said David Franzen, a soil 
     expert at North Dakota State University in Fargo. ``Now they 
     farm locations in fields.''
       Within five years, about half the 150,000 major grain 
     farmers in the Midwest will use the approach, says Harold 
     Reetz, Midwest director of the Potash and Phosphate 
     Institute.
       About 10% to 15% do now, he says. Most started this year or 
     last. Sugar beet growers also are strong proponents.
       ``Interest among farmers is stronger than we anticipated,'' 
     Reetz said. ``It helps us deal with the variability that is 
     out there.'' Among these are big differences in soil found 
     across a large farm.
       The goal is to make the land more productive by using just 
     the right amount of costly fertilizer and pesticide for each 
     field or even part of a field down to a 20-foot section. 
     These inputs now are blended to meet average regional 
     conditions.
       Fully outfitted farmers need high-tech yield monitors, crop 
     moisture sensors and a satellite receiver, all mounted on a 
     tractor. Personal computers and special analytical software 
     usually is bought separately or provided by a consultant. 
     Farmers also can buy special gear for applying field 
     nutrients.
       ``The one thing that makes site-specific farming work is 
     the computer processing power that is available today,'' said 
     Steve Koep, marketing manager at privately held Ag Chem 
     Equipment Co. in Minnesota, Minn. The company makes a 20-ton-
     capacity precision fertilizer applicator that costs about 
     $250,000.
       Site-specific farming ``minimizes cost and maximizes 
     production,'' said Ron Phillips, a spokesman for the 
     Fertilizer Institute in Washington.
       The environment also gains. By making better use of 
     nutrients, farmers reduce leaching, runoff into streams and 
     soil erosion. Pesticide use often is cut.
       Most farm chemical suppliers back site-specific farming 
     because it helps them provide value-added service, says Jim 
     Egenreider, regulatory affairs director at the Agricultural 
     Retailers Association in Washington.
       ``For (farm) cooperatives, it's a wash,'' said Cheryl 
     Kohls, an agronomy equipment specialist with Conex-Land 
     O'Lakes Services, a co-op in St. Paul, Minn.
       Farmers may use less fertilizer in one area but more in 
     another. And even if co-ops do sell fewer chemicals, many 
     also supply soil testing and other services needed for 
     precision farming.
       About half the time, farmers get exacting field maps so 
     they can receive the most precise results. Farmers use a 
     plow-mounted device to record signals from an orbiting 
     satellite, part of the Global Positioning System.
       New ``differential correction'' signals have boosted 
     precision farming. They unscramble and orient the GPS 
     satellite signal to a known, fixed point, ensuring accuracy.
       The receiver is used to map the field on a grid. 
     Separately, crop yield and moisture data are taken from 
     sensors on the tractor when farmers harvest crops. The field 
     maps and crop data later are correlated on a PC.
       Demand for GPS hardware is strong, says Colin Stewart, a 
     sales rep for Satloc Inc. of Tempe, Ariz., a major supplier. 
     The company's backlog now is four to six weeks.
       Other data also may be matched up to the maps. In Britain, 
     for instance, farmers can quickly assess weather conditions 
     by retrieving recent photos of cloud formations taken by a 
     weather satellite. The British Metrological Office offers 
     these photos for a $750-a-year license fee and $7.50 a frame. 
     Photos are shipped to PC's via phone lines.
       Even without weather photos, farmers gain. By overlaying 
     and analyzing crop and soil data from their fields, they can 
     pinpoint where yields are falling short.
       ``Yield monitoring is like a report card,'' said Koep. ``It 
     tells you how you did.''
       Farmers can buy the receiver-yield monitor and analytical 
     software for less than $8,500. The satellite signal runs 
     about $500 a year.
       Using the data to improve yields usually means hiring an 
     expert who relies on still more high-tech equipment to 
     correlate data and figure out why the yields are low. The 
     experts analyze soil samples and field features, again using 
     the satellite to get precision positions. They then offer 
     prescription. Topography and location of drainage systems are 
     taken into account.
       Treatments are straightforward. Farmers vary the use of 
     additives over a large field, seeking maximum efficiency.
       They may rely on precision applicators with tracking 
     equipment. But some, armed with the new data on their fields, 
     will fall back on institution and their old application gear 
     when putting this information to use.
     

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