February 27, 2007 - MARKEY ADDRESSES THE NATIONAL ASSOCIATION OF BROADCASTERS LEADERSHIP CONFERENCE

WASHINGTON, D.C. -- Representative Ed Markey (D-MA), Chairman of the House Subcommittee on Telecommunications and the Internet, today addressed the State Leadership Conference of the National Association of Broadcasters. His prepared remarks follow:Thank you Shaun Sheehan for that wonderful introduction.

Thank you to David Rehr, and to the NAB, for the opportunity to address all of you here today.  It’s great to be with you.

On the House Energy & Commerce Committee, Chairman John Dingell (D-MI) and I have great eagerness to work with you and I plan to conduct the business of the Telecommunications and Internet Subcommittee in a way that is bipartisan and consensus-based.  I intend to work very closely with Subcommittee Ranking Member Fred Upton (R-MI) and Full Committee Ranking Member Joe Barton (R-TX) to make progress on a variety of telecommunications issues this year.

In the news over the last week were a couple of items of note.  

Univision

First, was the report of a proposed fine of $24 million against Univision for violations of the Children’s Television Act.  I know the overwhelming majority of broadcasters take their obligation to the public interest seriously but it is vital for the Commission to enforce the law when licensees fail to live up to their obligation.  

From a public policy standpoint, it is the public interest standard and obligations such as those under the Children’s Television Act, of which I am the primary author, which make the broadcast medium distinguishable from other marketplace participants.  It is the public interest standard – the news, the public affairs, the civic information, and the educational fare for children – that convey to broadcast licensees the special status they possess under the law.  It is a special obligation that broadcast licensees discharge for your communities and I salute you for it.  Obviously, the arrival of digital technologies permit broadcasters greater versatility and ways to reach consumers and I hope you will work with me and the Subcommittee members as we explore issues related what constitutes the public interest in the digital era this year.

Radio

The second major issue in the news lately was the announcement of the proposed merger by XM and Sirius satellite radio.

On the afternoon of March 7th, the House Subcommittee on Telecommunications and the Internet will conduct an oversight hearing and will look at the radio industry from several points of view.  The Subcommittee will ideally hear from a broad spectrum of witnesses representing terrestrial radio broadcasters, from the satellite radio industry, and from other witnesses representing new technologies and other perspectives on the future of radio.

This hearing will explore several issues central to the future of radio, including the marketplace and policy implications of HD radio, Internet-based radio, low power radio, new applications at the FCC for non-commercial radio station licenses, the digital public interest standard, and what the rise in web-based downloads of music and other content means for the radio medium.

Television

Even as we see how the dramatic adoption of digital technologies and services affect traditional over-the-air radio, discerning the future of television is also difficult.  Part of this transition for TV is occurring at the behest of the government -- and part is due to the rise of digital, broadband technologies.

First, with respect to the government, as you all know, the digital TV transition now has a so-called “hard date” of February 17, 2009 after which the analog TV era will officially end.  

As many of you also know, I have long insisted that the government recognize its key role as instigator and shepherd of this policy.  For too long the government sat on the sidelines hoping that various private sector entities, operating independently, would work diligently to bring about timely progress.  The hard date was enacted into law with the hope of focusing attention and forcing progress.

Be assured that I will be working closely with Full Committee Chairman John Dingell (D-MI)– as well as Ranking Members Joe Barton (R-TX) and Fred Upton (R-MI), to vigorously conduct oversight of the relevant government agencies, as well as industry participants, to make this transition work well and I am optimistic that we can achieve real forward progress.  (For instance, we will have a hearing in the next few weeks with NTIA to look into its implementation of the consumer converter box program.)

Any abrupt end date to the digital television transition will be difficult to implement.  Even though that date is two years away, much work needs to be done to ensure that the transition is successful.  It will be nearly impossible if consumers are not informed of the government’s intention to end the use of a technology upon which they may depend.  For the elderly, the working poor, and for immigrant groups who speak foreign languages, the digital television transition may pose particular problems and contain greater risks.  

In this light, it is particularly welcome that the NAB has joined together with the cable industry and the consumer electronics manufacturing industry to launch an unprecedented consumer education campaign in advance of the February 2009 transition.  

We must remember the context here after all.  We’re talking chiefly about consumers who don’t get cable, and who probably don’t subscribe to satellite service either.  We’re talking, according to testimony from the GAO, about some 20 million households who rely exclusively on free over-the-air television, half of whom have household incomes of under $30,000 a year.  In one estimate, one out of three Latino households, for example, rely exclusively on free over-the-air TV.  In other words, these are not likely to be people with computers at home visiting the DTV transition page on the FCC website.   That’s why a campaign like the one just announced, which will help get info into consumer hands early and often is vital.

New Media

The future of television also has a somewhat fuzzy picture when one looks at the implications of broadband video.  The last several years has witnessed phenomenal growth in Web-based video applications.  More consumers are utilizing technology to watch programs over Internet “streams” or downloading TV content into an iPod.  Coupled with the prevalence of TiVo or other digital video recorders (DVRs) in more homes, consumers are increasingly able to simply ignore broadcast schedules and time-shift.  This, in turn, allows consumers to watch their favorite shows on their own schedule, but often in a way that has them skipping commercials, the life-blood of free over-the-air TV.  

Two years ago, in a New Yorker article, Ken Auletta noted the rise of Web-based media and the strain on traditional advertising models when he wrote [quote] “a typical American household today has a choice of more than a hundred TV channels, and the broadcast networks—there are now six of them—attract only about thirty per cent of viewers. Today, it would take a hundred and twenty-five CBS, NBC, or ABC ads to reach the percentage of viewers that three network ads once reached.”

Meanwhile even in the DVD rental market, companies are moving online.  Netflix, for instance, spent $300 million on postage last year mailing DVDs to consumers – it ships 1.4 million DVDs on average a day.  Now, Netflix – along with various other competitors  -- is preparing to permit consumers to download movies over the Internet.  

If one looks at sports, Major League baseball lets online Internet subscribers watch 2,500 baseball games a year.  Most people – including myself – still prefer to watch sports on a TV screen rather than a computer screen, but there is no doubt that the Internet is both supplementing or supplanting traditional TV.  Moreover, Apple recently announced that a product, “Apple TV,” that will transmit video from the Internet onto regular TV sets wirelessly – and other companies including Sony and Microsoft are working on similar products.  

Video from the established movie studios, the sports leagues, and the major TV networks is not the only fare going online.  In February of 2005 – just two years ago -- YouTube was just being launched.  Today, the site hosts 100 million downloads per day.

These marketplace changes challenge the traditional TV model.  And television companies are responding in different ways.  Viacom, earlier this month asked YouTube to take down 100,000 clips of its shows.  Meanwhile, ABC programs are available in their entirety on the ABC’s website after they have first aired over broadcast television.  

Yet for all the anxiety about these changes and marketplace experimentation, Americans are not abandoning free over-the-air television.  To the contrary, Americans are watching more television than ever – perhaps on our own schedules and utilizing new technologies – but often to catch up on shows we might otherwise miss.  According to Nielsen, the average American household has the television on for 8 hours and 14 minutes a day.  That is one hour more than a decade ago.  So, while more consumers are uploading and downloading and watching video and creating their own video and using multiple platforms, Americans still watch a lot of traditional TV.

Overall, this means that the future of TV can be just as colorful and bright as ever, even if it is a bit more complicated and competitive.  I remain a big fan of free over-the-air television and I remain committed to the medium.

I believe free over-the-air television and radio provide essential services to communities around the country and I know the long tradition of public service broadcasting represented in this room today.  I look forward to the strong continuation of that tradition and to working with you as we look to the digital future and what it means for broadcasting and the communities you serve.

And my door is open as we delve into media ownership and the Commission’s work on that front.  I want the FCC’s media ownership proceeding to be fact-based and respectful of the importance of localism and diversity in national and local media markets.

Thank you