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tv   QA with Thomas Hazlett  CSPAN  June 4, 2017 8:00pm-9:00pm EDT

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after that, theresa may's statements on last night's terror attack in london and then the bbc question time with prime minister may and germany gordon, talking about election issues. ♪ >> this week on q&a, clemson university professor and former chief economist of the fcc, thomas hazlett. he talks about his book "the political spectrum: the couple tumultuous -- tom his lip, why did you write the book "the political spectrum?" guest: there is a great set of stories, unknown to most people about how we got into the age of wireless.
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wireless seems like a bit of magic. it has always seemed that way. a supreme years ago court chief justice say he did not want to get any radio cases because he did not want to have to dive into the law there. this seems offputting to a lot of people. the way we allocate radio spectrum come and how we make resources available to the wireless world we are in today, is fascinating, and there is a political structure that was crafted in the 1927 radioactive. herbert hoover, secretary of rules, 90hrough those years ago, still govern the way we actually allow resources to .e used in our economy today it is tremendously important, fundamental to innovation, to technological progress, the way we talk, that way we get medicine to read everything's changing to wireless, for obvious efficiency reasons, but we have a lot of problems still with some of the very rigid -- i would say traditional,
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old-fashioned -- rules put into place. we are trying to break away. it has been a pattern of liberalization that has been extremely successful, but we have a long way to go, and so much more could come forth if we really understood that. >> what is a radio spectrum? guest: it is a space through which signals travel. it was originally thought to be a gaseous substance, the ether. not it. out, that is even in dead space, these radio can still travel. they are used recommendations. transmits, radio receives. we put stuff together and all of a sudden, you are in the wireless world. they think that is just part of society, to pull out the phone and text or snap. and it is. but who rules that have been very restrictive in some cases,
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overly conservative, we have held off a lot of the innovation, and loosened up enough so we got a glimpse of what is possible, and that is where we are now. what do youcal -- mean by political spectrum? who owns it? guest: in the 1920's, we had our first blast of a wireless industry, the new radio broadcasting business took off like wildfire. ,he first station in pittsburgh november 2, 1920, broadcasting election returns. the little political element in it from the get-go. tremendously popular trade within two years, there are 500 stations broadcasting across north america. it became contentious to use radio waves. we had the science since 1895. the innovation, the business model, to create actual conflict over who got to use what spaces, and try to
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remedy whatever conflict existed to now, there were conflicts because broadcasters dispute a of of tran -- spewed a lot transmitting power. in the new age of wireless, we came up with new rules and we essentially, to first-come, first-served. if you had a radio station transmitting with authorization, which was pro forma for the department of commerce, you got to be there and continue until some of the else came along that you might want to share with, or you might want to sell to. there were rules in place to first-come, first-served. that created a political hit back. on the one side, the first stations that became commercially successful did not want new entries, that kind of liberal policy to allow new bandwidth to be utilized. on the other side of it, you have policymakers like hoover and members of congress that
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wanted some control over this powerful new medium of expression. they wanted to license broadcasters according to what they said, what content was transmitted. those interests came together and created the 1927 radioactive --, which put a political process into place --, and you often have this exact same coalition with incumbent powerful incumbent businesses getting in line with policy makers to say this will be the public interest. there will be license is carved out of washington, hammered out in stone. you can only do this, that, this technology, this business model, this service. and the lucrative licenses will be passed out according to public interests, and that has to do with the political .alculations that are made on the other side, policymakers get to regulate under that system, kind of a quid pro quo. that put into place things like the equal time rule that goes
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back to 1927 and the radio act. and even though things like the full-time role did not work in the sense that they actually suppressed coverage of political candidates and stopped debates -- a fascinating aspect of presidential television debates. those debates could not happen until we deregulated the equal time i'll and made it possible for top -- equal time rule and made it possible for top candidates to get on the stage without 30 or 40 other minor candidates there. even though these rules did not work well to produce the public interest outcome, they did work well for the interests of the political spectrum. >> when did you start to book? [laughter] guest: people ask about that. i have been writing this book since 1975, and it has been a how theooking at economics and regulation work together in this space.
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i literally started on these issues in the late 1980's. at the federal communications commission in the early 1990's, and i have written .any academic articles since i started seriously writing this book about four years ago. host: where is your home and what do you do other than write this book? ,uest: i grew up in los angeles and i went to ucla. i taught at the university of california, davis. andved to the east coast ended up at george mason university and northern virginia, and then three years ago, i moved down to south carolina. i teach at clemson university. go tigers. we are now in a different part of the world. certainly different from the washington, d.c. area, where we spent the last 15 years.
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certainly different than california. it is an academic institution. very good economics department, so i teach comics to undergraduate and graduate students alike. host: o'connor things in our daily lives does these -- what kind of things in our daily lives uses these spectrums? does the iphone or any phone use the spectrum? guest: absolutely. it is routine now, a social amenity for kids growing up. that arecomputers internet connected through wireless, they use phones that are in networks or locally connected to broadband networks. in a general sense, even our fixed or wired broadband systems are part of the radio spectrum ecosystem. spectrum in a tube. the high-capacity lines that distribute to most homes, broadband services to maybe a cable operator or telephone is spectrum in a
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tube, and that is regulated some have the same, usually by the same agency in the united states and most other countries. host: a lot of cars today have the pushbutton opening to the door. garages have pushed a button, you know, far away from it. spectrum use? guest: absolutely. baby monitors, monitors and devices., sensing there is a whole ecosystem now developing for what they call m to m, machine to machine to machine medications. upone vending machines call distribution centers to say what they are out of. they need more granola bars and fewer m&ms, or vice versa. -- when you have a car that is stolen, there might be a locator that uses a wireless committee cater.
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when you have something like onstar, a crash and a car, that makes it an automatic phone call. devices where m people are not making calls anymore periodically, they make calls when using cell phones. video, and we still have over the air broadcasting for television. that is largely in terms of the consumer end of things, shifted to cable, satellite, and over the top broadband distribution and cell phone reception for video, but we still allocate a very large swath of radio a 1939m for essentially technology. that is when tv started in terms of the regulators, putting aside spectrum. i wanted to talk politics because you delve into this in your book, starting about page 139. you can pick up and go from there. a young new dealer emerged as a key defender of the agency.
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you name the federal communications commission. congressman lyndon b. johnson intervened with has speaker sam rayburn to support the commission and quash the budget cuts. what is the rest of the story? [laughter] guest: this is one of those, you know, interesting tidbits you get from this political history of spectrum allocation. it turns out that there is a very powerful georgia congressman thomas have", eugene cox -- congressman, southern democrat, eugene cox, extremely powerful within the house. at the same time he was a congressman, he was doing business as a lawyer, which he was. with radio stations getting license renewals. he was close to the mine on what was difficult. was being the time
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headed by a man who in history has become rather well-known. james fly. he later became head of the american civil liberties union. he stood up for civil liberties and wiretapping. he is very renowned in any contemporary versions. he is the best fcc chairman in history for what he stood up and did. one of the things he stood up to was this powerbroker in the house. congressman cox. in fact, when it became known, reported in the press, that there had been this ethically dubious action by the congressman, he did not back down. he scheduled that station for a hearing. in the political spectrum, that is a hostile thing for an agency station hase this to spend money for lawyers and might lose the license. they still have a very
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significant expense and maybe some risk. so at any rate, this congressman cox just went ballistic. a number of bills to be introduced and budget cuts slashe -- cut to the budget. a little-known congressman figured out an opportunity and ran in the background and under the radar to help salvage the fcc. makes thising that story rather sensational and completely ironic is that as good a reputation as he had and has standing up for ethical conduct at the agency, this relationship between johnson and andfcc would save the fcc let your johnson having the part
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ut to engineer radio and television licenses that may johnson perhaps the wealthiest residents in the history of the united states. now, he always had a public story that these licenses had no effect. he tried to put her name on as much as the documentation as possible. there is no question. johnson engineered stations, preemptive competitors from getting competing stations, and made a fortune on tv and radio media licenses in austin, texas as a result of this relationship at the fcc in the early 1940's. when really jaw-dropping you see the nature of that political relationship. this is probably a sensational example. not all of it is this correct. that is part of the story. host: let me get the page here and read it.
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that in, you say this as a, maryland, phillips found extreme right wing bethesda,ng -- in maryland, phillips found extreme right wing broadcasting irrationally hostile. guest: the fairness doctrine. it turns out that when we went political system for allocating spectrum rights in 1927, within a couple of years, the regulators at the commission are renewing licenses, but very carefully noting that propaganda stations will not be allowed. early on, in 1929, in a period, , tohave left wing stations use that political term, with the dubya cfo in chicago, and
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bbs who bought a station in new york city. they wanted it for political reasons. they wanted to espouse their opinions. these were immediately dubbed propaganda stations by the regulars. they were told to be careful about expressing their opinions. and that was an interesting kind of attack on open and free dialogue by the radio commission that in 1984 became the federal committee kitchen commission. there was further progress in this direction to keep the opinions quiet during the new fact, newspaper publishers, which were thought to be right wing and anti-new deal, they were told they would face restrictions on owning radio stations. that was within the roosevelt administration to keep voices silent.
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they have rules that came out. that is just around. after world war ii, and in the late 1940's, outcome is an explicit policy. a,y will be mandated to kerry issues of controversy, of interest to the community in which they broadcast, and do so rom balanced perspective. what is a balanced perspective and a controversial issue that needs to be covered? title, the chapter "revenge." fairness doctrine, doesn't that semi-something that would be very political did a fine? fast forward -- political to define? fast-forward to the 1960's. there was a nuclear test ban treaty. it passed the senate by a fairly 1960 two, but in there are a lot of conservative, very conservative radio
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commentators who are against it, and that was troubling to the kennedy/johnson administration, and there was actually a monitoring program of these radio stations put together in provide it byhelp the national committee. complaints amending free and equal time. the people who ran his operation said explicitly afterwards that it was done to harass and the stations are actually espousing this point of view. host: let me read what you wrote. a commerce official said "we wanted to use the fairness doctrine to challenge and duress right-wing broadcasters in hope that the colleges would be so costly to them that they would be inhibited and decide it was too expensive to continue. '" where did he say that?
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,uest: in testimony investigating after the fact. it comes from a wonderful 1975 , formerfred friendly president of cbs news. the good guys, the bad guys, and the first amendment. so it is -- it does upset the apple cart in terms of your normal view of partisan politics, perhaps, and maybe then, maybe more now, but their there are dirty hands all around the political spectrum. defined --y conventionally defined, i am talking about. they use these rules to take out opinions on "the other side." the thing that is amazing about the data structure and in his the thing that-- is amazing about the fairness doctrine in this period is that there is a case that goes to the supreme court, the redline case. it comes out of one of these challenges where a journalist on
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the left, fred took, wrote a "goldwater: extremist on the right." he is attacked and criticized on a conservative radio station in pennsylvania by the reverend, and ultraconservative. journalist demands free, equal time. the owner of the station says "i will sell you the same 15 minutes the reverend use for $7.50." cook says "i want free equal time." echoes to the supreme court. the supreme court finds 8-0, recused,ice douglas saying the fairness doctrine is ok, and it is just part of this
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licensing. if you do not do it this way, you will have chaos in the spectrum. and yeah, the government could look at what the public interest is in how the content works. that is editorially ok. they do say in the opinion that if there really could be shown that there was any chilling effect on the editorial independence of the radio sameons -- fame for tv -- for tv. ofdo not find any evidence chilling effect. it turned up a whole case was a chilling effect because it came out of this monitoring investigation. this came out of a political effort, a campaign, if you will. intimidatearass and small, low-budget broadcasters that had seemingly extreme views
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and were on the opposite side of the fence. the supreme court just missed that. that would be a rather sensational example of regulatory failure. host: when did the fairness doctrine finish and stop? guest: there were a lot of controversies. 1985, the federal communications commission, during the ronald reagan years, actually asked the court to overturn the fairness doctrine on first amendment grounds. they basically said it is your regulation. if you do not like it, do not tell the court to overturn it. you just undo it. what happened in august in 1987 is the federal communications commission overturns the fairness doctrine. they withdraw it amanda is a big negative reaction, the idea that that was going to cause problems
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with fairness. what it did do and what studies report on oned my such study i wrote with a former sosa,t of mine, david published a few years back, did find there was an explosion in informational programming on am .nd fm radio you have news, talk, public affairs format programming all through radio. a lot of people all the looked arehat and say that they conservatives and rush limbaugh and all this rise of conservative talk radio, and there is a link saying the deregulation allowed more vibrant opinions, so just be. the conservatives in general were against eliminating the fairness doctrine. arden conservatives were opposed to that reagan era deregulation policy. they wanted to read
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the fairness doctrine. host when there was a fairness walkine, you and i had to somewhere and find the person responsible for dealing with a complaints. where would he or she be? guest: at the federal communications commission -- host: how many people fussed over the fairness doctrine? guest: is good over decades. you know, i cannot give you the numbers -- host: small dozens? guest: i was there in 1991 and man ofnd the chair the commission was appointed by george h.w. bush. so, you know, the media bureau gets these complaints. the staff goes through them and obviously tries to formulate some kind of policy.
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it is consistent over time. again, it is not just the democratic left in the kennedy johnson years saying conservatives need to be attacked this way. the conservatives in the 1970's doctriney big fairness complaints against major networks are being allegedly too liberal. that was on defense policy issues. host: you have in your book, on the same section, a lot of politics. you have a memo from -- "for your eyes only, please." they are all involved in this, 1970. summary ofng is a the most pertinent conclusions from my meeting with the three spirit chief executive one, the networks are terribly nervous over the uncertain state of the law, the recent state decisions and granting congress access to tv. they are also apprehensive about us. why did you put that memo in the book? guest: because of the licensing
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control that was vested in washington, sensibly, in an independent regulatory agency, but the factor, there is political control. administration had a very pointed policy to talk to the network chiefs, particularly the presence of the news divisions, at the three network, cbs, and bc, and to tell them they were not happy with the theyting, the content, and would look at regulatory options , at the fairness doctrine enforcement, and licensing issues, and make things difficult for the corporations in the economic sense. so this happens early on in the nixon administration, and chuck colson, the presidential aide who later went to prison and central inhe is
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talking to the network heads in to york, and intimidating this power that the regulator that is supposed to be independent but implicitly is under the executive. host: her client writes "they told me anytime we had a complaint about platte slanted coverage, to call me -- about slanted coverage, to call me." they are very much afraid of us, and trying hard to prove they are good guys. here is chuck colson around the same issue, december 15, 1972, talking to president nixon on the phone. good. i was going to ask him. chance.ver got a he said, ok, see me. i said i have one thing to talk
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to you about. i said "i cannot see you tomorrow." he did not want to talk. i am seeing him monday at 1:00. i was a say that you guys are crazy. they are probably going to put somebody on the air, not mess it was going to get balanced. -- not unless it was going to get balanced. i will make a real pitch out of that. >> all right, sure. >> that would help us. client timeve the and money. host: what are you hearing?
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guest: the chilling effect. and that is what is not supposed to happen with the regulatory structure. we have the first amendment in the united states. congress should make no law abridging freedom of speech or the press. that is an effort to abridge freedom of speech and of the press. fairness doctrine challenges that do involve free, equal time . license renewals that are set aside for hearings. in some cases, denied, potentially. host: if he was alive today, would he be as afraid? guest: no, it is just the transparency has gotten a bit , and perhaps, the litigation that you can introduce to the court, i think, is probably more compelling today. if there really were conversations of his nature, said, if therert
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is a chilling effect, we will not look so crimea on the regulatory structure, so there is a better look so kindly on te regulatory structure. i think there is a better defense today under has been a liberalization. that is the interesting part of the story. we get the political spectrum in 1927, and there is a lot of great technology and free speech and a lot of market competition that is suppressed. there are many far stories in the book. there is a whole section called the silence of the entrance, where fm radio or the television network or the emerging cable tv technology, all suppressed through regulation. there has been a pronounced deregulation since the 1970's and 1980's that has really allowed a lot more market competition to commene in. and to have spectrum rights be more freely distributed and opens innovative ideas and competing viewpoints within the media. host: who in this town -- is
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there a person that has the most power when it comes to controlling the spectrum? guest: certainly the chair of chairs has some, and the of the commerce committees in the house and senate have some, and there is an interplay sometimes with the white house, depending on how engaged the white house is. one of the interesting things about the johnson white house -- lyndon johnson is literally in the oval office talking to the president of cbs news about business deals, having johnson on stations, getting better terms for affiliation agreements with cbs. and at the same time, johnson had people in his administration suggesting that there be better, more liberal, more market-oriented positions to open up new technology for
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things like cable tv. but he wouldn't go there. he was compromised by the fact he did not want there to be focused on this because he had his own conflicts to worry about. he literally kept that stuff that day. finally after that, starting in the 1970's, there is a tendency to look more favorably on market competition and freedom of speech to the first amendment actors in the market. host: who was at when armstrong and why did -- who was edwin armstrong and why did he commit suicide? guest: a great inventor, a student at columbia university in the early part of the last century. by the time he graduated, he had in a radio -- radio. first a professor when he graduated. also, a very wealthy investor.
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for a time, he was the leading shareholder in rca. of the zenithrt of his inventive career in the 1930's, came up with a better technology, fm radio, which was excellent in terms of high fidelity reception. it took them quite a while to get the regulators to give him any help at all, because there had to be spectrum allocated for this new technology. the incumbent radio stations a.m., thed to existing system, and pooh-poohed the innovation. he did get experimental licenses. prior to world war ii, he was able to get about 400,000 receivers sold for fm radio, big consoles costing hundreds of thousands each -- hundreds of dollars each. that was something.
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the reception in the audience and the technical reception was excellent. anyway, one were to comes, edwin -- anyway, world war ii comes. edwin armstrong helps in the u.s. army with radios. the federal communications commission at the end of the war , for reasons described sensationally in many places -- and i review in the book -- of roots the entire fm spectrum allocation, 42 to 50 megahertz. that is an old allocation, if you have a 42 to 50 megahertz receiver. that was fm until 1945, then it moves and the entire industry is destroyed. it is put 288 to 108, where it is today -- it is put to 88 to 108, where it is today. that is disastrous. armstrong thought it was all his might, and it broke him. he was also litigating on intellectual property against rca, became very despond and in
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1954 with his baby being so --mmoxed by the system iname very despondent 1954 with his baby being so flummoxed by the system. committed suicide in new york city. apartment,ut of an dressed in formal attire, walked out the window. he left a note to his wife, apologizing. years later, she did win significant settlements against rca and other users of the fm radio technology, and she became wealthy. he was not there to see that, nor was he there to see what happened in the 1960's, when the spectrum regulators finally let fm fully compete with a.m. in a short number of years, fm dominated, given its excellent quality, particularly for music.
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by the 1970's, you are seeing fm stations and audiences become dominant, and a.m., of course, becomes superseded in importance. host: i want to show the cover of your book, because if people want to delve into this, they have to read about it. there is so much, hard for us to deal with even in an hour. called "the political spectrum," published by yellow -- yaklle. our guest is at clemson university now. i want to know how often you have seen this. this is a hearing in 2016. you have the chairman of the fcc and a member of the fcc at a hearing, greatly disagreeing with one another. tell us the politics of this. ajitis tom witter and a pye.
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tom witter was chairman then, democrat, and pye is chairman now, a republican. >> there is no accident the regulatory framework we have built is depressing broadband investment. >> we are not seeing a decline in broadband infrastructure investment. you can say it, but it does not make it a fact. >> saxby for themselves. i would be -- facts speak for themselves. i would be happy to cement sworn declarations. >> i would be happy to submit the information that the companies provide under penalty of sec to their investors about their investments. >> what is striking is that ceos with pending mergers will say about the top priorities. >> i'm talking about at&t and comcast, companies like that. >> who are typically repeat players before arranging -- before an agency that regulates highly. host: what are you saying there? guest: that is great. usually it is the other way around, that people in public are collegial. i don't oppose collegiality.
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you won't see the disagreement be stated. here, you see the disagreement stated. certainly, they were talking about the effects of title ii net neutrality regulation. these are broadband rules that have come about both for wired and wireless systems, so it certainly does enter into the political spectrum. a very big factor is whether or not these roles tend to suppress investment in the markets, to undergird expansion and higher speeds and better functionality for networks. host: a little bit into the weeds for the average person. i want to ask you to define -- three things. what is the difference between wireless, wi-fi, and broadband? guest: broadband has to do with the speed at which you are throughg information electronic communication. so broadband is a very generic
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term for anything from cable ,elevision, the video signals to what you usually talk about now, data networks that have speeds that we associate with fast enough to be able to do things like stream video and get fast turnaround on website access and things of that nature. the fcc has its own rules for exactly what speeds, and that changes over time and to adjust those -- and they adjust those. wireless is spectrum-based technology, and it is curious that we define something by what it is not. wire-less. that has come to us from the days of marconi, from the very beginning. it was magical we could do something that we thought needed a wire without the wire. kind ofess is any
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communication that goes through space without that wire. of technologye that is very common, very popular. what we call wireless local area networks. if you subscribe to a broadband service that does data, brings data into your house through the cable company or telephone company, you will quite typically then have a wireless modem that distributes or signal around the house through a standard called wi-fi. so that is a particular type of wireless technology. host: you say some very positive things about a politician that is no longer alive. inleft congress, defeated 1980. he was the chairman of the communications subcommittee in the cows -- in the house.
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this is not good audio, but i want to show the audience what he sounded like. -- i want you you to tell me how he fits. >> three years ago, the subcommittee had just commuted -- completed a hearing on the breakthrough study of cable, cable promise versus performance. we found out that the regulatory impediment to full cable development has been such that you would have almost been put out of business. , thought then, i still think that some radical surgery was called for international communications law, failing that the 1934 act under which we operate, you operate, really annotated so much of the technological development, including broadband cable, that some basic changes were
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necessary. host: a former anchorman from san diego, chairman of the communications subcommittee. what would you tell us about him? 2017, sitting here today, it is her markable. -- it is remarkable. host: the video is from 1979. guest: he was a remarkable leader. 1979, he wasand pursuing what he talked about, a reform of the 1934 communications act. he was very frustrated with the fact that the government had locked -- had blocked competition to television, broadcast television, which was indemned as a vast wasteland the most famous beach ever given by an american regulator, 1961. when cable comes to compete and offer more selection then just
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abc, cbs, nbc, cable is pushed back and broadcasters protected by regulation. this goes on for years, until the late 1970's period, there was deregulation. he was fighting for more. the fcc and courts were moving on separate tracks in the same way. lionel van deerlin had a lot more in mind. he wanted to abolish the fairness doctrine and replace that sort of regulation, which was designed to promote public interest programming and public affairs and news and so forth. he said, let's just take a small tax on the value of the licenses and put that in an endowment for public broadcasting. that would take away a lot of the political control over licensees. it would mitigate some of the stuff that came out that we have been talking about during the nixon administration, previously during the kennedy and johnson administrations, undue political
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influence on broadcasters. he thought very highly of first amendment rights for broadcasters, having been one. he had a very deregulatory program. it was going to constrain at&t, with all a monopoly kinds of practices and restraint of trade, as was alleged by the u.s. government and finally broken up in the 1982 consent degree. he was very forward-looking. triggered all kinds of political opposition. the broadcasters hated what he was doing. they were afraid he would open up too much competition with cable. public interest advocates were afraid he was going to do away with regulation they liked. conservatives like barry goldwater fought him. he didn't have any natural allies at the end of the day. he had great ideas, in my opinion, and he has been proven
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to be ahead of the curve by what has happened since. we have had a deregulation that allowed cable to compete. we have a flowering of hundreds of channels and diversity of content today versus when we had three networks, doing 15 minutes of music day. -- 15 minutes of news a day. it was not even independent news, it was all the same news, the news from nowhere, and edward epstein's great book talking about how the networks did not have political views. they just had the sort of godly presence. we have competition in cable. that has extended to the net. it is important to see the end accidents of -- important to see ntecedents of free speech with the technology of today, broadband and internet. we have a laissez-faire position that allows free speech to get out there. that is what the free-speech mandate in the constitution
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seems to just. host: you mentioned the chairman of the federal communications commission's in 1961. here he is. this is audio talking about the vast wasteland. i want to ask if anything has changed. >> when television is bad, nothing is worse. i invite each of you to sit down in front of your own television set when your station goes on the air. keep your eyes glued to that said until the station signs off. i can assure you that what you will observe is a vast wasteland. you will see a procession of game shows, formula comedies about totally unbelievable families, blood and thunder, mayhem, violence, sadism, murder, western bad men, western good men, gangsters, more violence, and cartoons. endless commercials, many screaming, cajoling, and defending. most of all, boredom. true, you will see a few things
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you will enjoy, but they will be very few, and if you think i exaggerate, i only ask you to try it. host: what do you think? guest: it is the most famous speech ever given by u.s. regulator. it is remarkable then and now. he refers to,land which certainly appeals as a description to many of us, was created by regulation. 1940's, before we had the tv allocation table of 1952 finalized, we had four competing networks. the dumont network was crushed by world -- crushed by rules of licensing. we suppress competition to very few voices. it was a product of that system, that structure. the idea we could have more and more competition and better, more quality, not all higher, but more diversity, appealing to people with different tastes,
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that was just around the corner through cable. cable was an end run on regulation, because we had suppressed voices through over the air broadcast licenses. now there was spectrum being built to give us more choice. newton'ssuppressed by fcc that turned the tables. there was not a policy until 1952. that started at period where we stopped cable broadcasting from competing through a series of arcane rules. only through the 1970's deregulation did you get c-span, public affairs, cnn, competition between msnbc and fox news and cnbc and al jazeera advice and bloomberg. now we have a situation where networks, and go, but they can feet and have different views -- but they compete and have different views.
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we have sports, movies, reality tv. people say there is a vast wasteland, but there is a lot of diversity. through over-the-top and expanding to broadband-delivered video programs and wireless, all part of the mix, we are getting -- it is a golden age of hollywood. this is really a cornucopia, a bountiful cornucopia. we may not like what some people like. we may not like the taste and preferences of the public, but there is an opportunity for high quality and diverse programming, whether it be c-span or hbo or netflix. host: how often in the history of communications in the spectrum have incumbent industries, existing industries, blocked expansion in communications? and how often has money influenced politicians to stop something from happening, or for
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that matter, to get something started, in your opinion? -- i mean, it is the modus operandi. examples, itctual is the operating day. locus oft of the control has to do with the interests of incumbents and other powerful industries, as well as certain key institutional players. but the public interest, of course, is a fiction. this is the standard for making decisions in the 1927 radio act, public interest, convenience, and necessity. there is no where to look up the public interest. it is a political determination. the voices that are most influential in making that determination are certainly backed by important players.
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there is normal politics. you go back to the eisenhower administration, newspapers wanted tv licenses that have endorsed eisenhower. they generally got them. newspapers that endorsed stevenson generally did not. there is strong evidence of that. that is traditional politics. the much more ubiquitous aspect of politics is the influence of incumbent interests. today, as we sit here, satellite radio, which is popular with about 30 million subscribers, cannot do what is called local news. it can't broadcast local news. you might wonder, that's part of a program that is supposed to advance, literally, the public interest, local news. how did this perverse outcome come to be? the incumbent radio stations, terrestrial broadcasters, are very concerned about local
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advertising by their competitor in satellite. they have got rules attached to the satellite licenses to prevent satellite from doing locally distributed programming that is not distributed everywhere. ,ou can get on satellite radio you can get news and weather reports for miami, but you have to get them -- if you are in seattle, it has to be nationally broadcast, which is very inefficient, takes up space. the satellite, serious xm, has xm, has the ability to attach in local programming, but they are by law prohibited. they have to have national program. highly inefficient, anti-consumer, anti-news, and it protects the incumbent. that is what we are trying to get away from, but that is what we still have. -- do people that
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own a radio station or television station today, how much did it cost them for spectrum? guest: tv and radio, the prices are implicit. -- a footnote for a couple of exceptions -- but those licenses were assigned without competitive bidding. host: do they pay a tax now? guest: no. licensingvery nominal fees for regulatory administrative. in general, that kind of transaction is administrative. host: we have not got much time. there are billions and billions of dollars being paid to these broadcasters to give up the spectrum. why, who is paying them? guest: the idea of auctioning licenses, not issuing them administratively through agency the, was broached in 1950's, and was very controversial. people said, for technical
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reasons, you can do it. forwardts put this idea , ronald, who thought seriously about how he would organize competition in the market. he ended up getting a nobel prize for some insights that led to. 1990's, somein the countries -- not first united states, but soon after -- we had legislation passed, 1994, auctions are allowed, not for television at first, but for mobile licenses and other services. we have been doing auctions over 20 years, raised about $120 billion for the u.s. treasury. we just had a big auction that took a year. part of that option was two-sided. stations topaid tv hand their licenses back in to the u.s. government to make more room for their spectrum that was allocated to their tv
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broadcasts, make more spectrum for mobile services. and so that spectrum has been turned around in this so-called fcc incentive option, with money coming in, about $20 billion bid for the new mobile licenses, and about half going to tv stations paying for about 133 licenses that came back to the fcc and have been taken off the air at about 2000 total fcc licenses. host: in other words, where the government gave these frequencies the people years ago -- guest: yes. host: the government is now, or they are being paid millions of dollars to give them up? guest: you got it. host: it is hard to process. tell us how that happened. guest: let me just say. in "the political spectrum," what sounds completely straightforward to somebody who is there and the way i think about it -- in fact, it is a
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good idea to do this option, relative to some other policies -- it just sounds kind of crazy. yes, the government distributed these licenses in the public interest, and the government has now determined there is much too much spectrum allocated to over the air broadcasting, because we made the switch to cable and satellite and broadband. host: digital. guest: digital technologies all around. we have also done digital tv broadcasting. the big switch is we use other media distribution platforms, so why do we have this stuff that is very valuable going to tv? think, if you believe that the public interest works the way it is written on paper, that the government just end the license. they don't renew it. they say, we're going to reallocate the spectrum. that is not the way happens. broadcasters say, you can't do that. they are politically influential.
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so you have to figure out a way to get the broadcasters to cooperate. it turns out, actually paying the broadcasters and allowing the spectrum to be used on higher value news, is liable to society. given the constraints and rigidity and inefficiencies of the political spectrum, this is the best way to do it. there are other alternatives i talk about in the book that i think would be even better than the current situation has been structured by regulators, but this is a move in the right direction. host: are you glad this book is finished and published? how many total years would you say you took to write it? -- of course, i am happy to have it published, delighted. my editor and yale university press for helping in that effort. i have spent most of the last four or five years tied up in the book. i hope others think it was time well spent. host: we are out of time, but
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what level should you be at to be able to read this and understand it? who did you write for? guest: certainly not for professional economists were engineers -- economists were engineers -- economists or engineers. anybody who is interested in the way the economy works, washington works, fascinated by wireless technology, and just where we are in terms of this extraordinarily wonderful and disruptive set of opportunities that society has, and understanding how these opportunities came to be, some of the hurdles that have had to be overcome, and some of the barriers still in place, where we could do a lot better if we understood the market better. host: again, our guest has been thomas hazlett. the book is "the political spectrum: the tumultuous liberation of wireless technology, from herbert hoover to the smartphone."
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we thank you very much for joining us. guest: thank you, brian. announcer: for free transcripts or to give us your comments about this program, visit us at "q&a" programs are also available as c-span podcasts. [captions copyright national cable satellite corp. 2017] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit] if you enjoyed this week's "q&a" interview, here are some other programs you might like. tv lobbyists carol and tom wheeler on their experience working on the first barack obama residential campaign in iowa. josh sapan about his book. and our 2004 interview


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