McCAIN WARNS AGAINST CONGRESSIONAL INDECENCY STANDARDS

McCain said he believes “it’s very dangerous” for the Congress, “either collectively or individually, to try to make judgments on morality and standards of morality. I don’t think it’s our job and clearly it’s one of those things that’s in the eye of the beholder.” Several times during his presentation and in the Q&A that followed, McCain took potshots at the FCC on a variety of issues. For example, he said the Commission is “a very large bureaucracy and has very large salaries and should be doing more than perhaps they have done in the past” in enforcing indecency standards: “Perhaps now they will.”

If there’s any lasting fallout from the Janet Jackson incident, McCain predicted, it will spur more “self- disciplining” at the major broadcast networks “because of the reaction of the American people.” McCain said it’s possible future incidents will be met by threats of license revocation or hefty fines, given that legislation is now “winding its way through the Congress that would increase allowable fines by a factor of 10.” McCain said he didn’t have a clear answer on how community indecency standards should be defined, “but there have to be some standards set. Those standards may change over time as the standards of Americans change. But I don’t think they're ready yet -- when you're looking at the breadth of the audience watching a Super Bowl -- for crotch-grabbing and breast exposure.”

On media ownership concentration, McCain said “there are many who believe that what happened with Clear Channel is a miner’s canary for the rest of the broadcasting industry.” That Clear Channel was allowed to mushroom to 1,240 stations from 240 is proof that “there’s too much concentration in the radio industry,” he said. McCain said he finds nothing wrong in the fact that Gannett owns both the Arizona Republic and Ch. 12 in his home market of Phoenix. “But I wonder if it would be appropriate if Gannett also bought 2 or 3 more TV stations” in the Phoenix market, he said: “I think that would have dangerous implications.” McCain said he has no clear answers as to how many stations is too many, but he has concerns because “once consolidation takes place, I don’t think there’s any way you can force anybody to unload their property, and I wouldn’t be in favor of that as well. So before that happens, we at least should have far more careful scrutiny” of media consolidation “than the FCC has given it,” McCain said. He described himself as a “de-regulator” and an advocate of “smaller government.” But it’s one thing for consolidation to flourish in the banking or insurance industries, but “it pales in comparison to where Americans receive their information and their knowledge,” he said: “That in my view is a special category.”

McCain said he would prefer to “err on the side of at least slowing down this trend” toward increased consolidation. Again he took aim at the FCC, saying if ownership rules “were relaxed to the degree” that the Commission had proposed, in the L.A. market, 3 TV stations, 8 radio stations, one Internet service and “several other media outlets” would have been allowed under the control of a single corporation, “and that’s too much.” McCain implied that the enforcement problems he cited at the FCC perhaps were because he had never seen “a more divided” FCC than it is today, “and that’s not particularly healthy. It’s not good to see the FCC sharply divided along party lines.”

Responding to a questioner on the slow pace of the DTV transition and when the analog spectrum might be returned to the govt., McCain clearly cast blame for any delay on the NAB, which he called “probably the single most powerful lobby I know of in Washington.” Broadcasters “have strongly resisted this transition,” and return of the analog spectrum is “long, long overdue,” he said. Nevertheless, McCain said he had seen “some glimmerings of progress, in fact, more than glimmerings,” on the DTV front. He said he was encouraged that the prices of DTV sets themselves were coming down “rather dramatically from unaffordable to very expensive, but within the price range of an increasing number of Americans.” As a result of “greater demand” for DTV among the public, mainly because of sports programming, there’s now “a greater willingness on the part of the stations to make the investment, which is sizable, to make the transition,” McCain said. “At the time we gave away the spectrum” for DTV and were told by the broadcast lobby that the analog spectrum would be returned to the govt. by Jan. 2007, McCain said, “I knew that it wasn’t going to happen in the time frame that Mr. Eddie Fritts and others testified it would happen. But at the same time, I think we're finally seeing some progress… dictated to by the price of the sets themselves. I would think it will be another 3 or 4 or 5 years before we could start getting some of that analog spectrum back. I think it’s long overdue.”

Viacom Pres. Mel Karmazin, responding to McCain from the audience, told the senator that “most broadcasters have no interest in keeping analog and digital” spectrum side by side. “We don’t want to pay electricity twice,” he said. “We don’t have a business model that says we want to keep the analog.” But until there has been achieved the 85% DTV penetration “trigger” within a market that’s prescribed by law for the turnoff of analog service, Karmazin said, the 3-5 year time frame for returning the analog spectrum “may not be right.” He told McCain: “I wish you were right, because I'd like to give it back. I have no use for it. It doesn’t do me any good… But I don’t know if that poor woman in Sun City [Ariz.] who has these 3 analog sets is going to want to have you tell her that she no longer will be able to receive her free over-the-air broadcasts.” McCain said he didn’t disagree “with a word” Karmazin said, but “I just wish you had presented it that accurately at the time we gave you billions of dollars worth of free digital spectrum.”

On other issues: (1) Responding to a question on the implications of the Comcast-Disney merger, McCain said he’s “very worried about vertical integration. I'm very concerned about it.” (2) In passing Internet anti-spam legislation, he said, Congress “patted ourselves on the back, telling ourselves how wonderful we are, yet spam goes on.” McCain said he believes “it’s technology that’s going to fix it, not passing laws.” (3) McCain said he has “always been skeptical” of public TV, conceding “I'm not the greatest fan.” Nevertheless, he said he thinks PTV “is fine,” but said he hopes one day “they can get enough donors to support themselves.” (3) On VoIP, which he said would be the subject of Senate Commerce Committee hearings this week, McCain said “we've already diverted all of this money” to rural telcos, and “you're going to see a huge shakeout if they are left without that stream of revenue.”