Report of the Commission on Radio and Television Policy: Volume 5, Number 1

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Report of the Commission on Radio and Television Policy: Volume 5, Number 1

The Carter Center

November 1993

Table of Contents

Introduction
Report of the Commission on Radio and Television Policy
Working Group Preparatory Document: Changing Economic Relations Arising from Democratization, Privatization, and New Technologies
Members of the Commission
Participants of the Working Group
Business Market Forum

Introduction: Co-Chair Jimmy Carter

Changing economic relations are among the most important issues in the future of telecommunications throughout the world. Everywhere, governments and private companies are attentive to profound changes introduced by the processes of privatization, democratization, and development and implementation of new technologies. The future is already upon us, with great speed and often unexpected consequences.

The shape of that future can be determined with wise and farsighted policies. How can the power and spread of technology serve to strengthen the democratic process? How can societies ensure that all citizens are included and have a voice in a new communications network that will provide information resources of great importance? How can privatization be accomplished in a way that protects and strengthens the autonomy of the press? How can the interest of the public be safeguarded and its fund of information be increased? How can the public be assisted in understanding the very significant changes that all of our economies are undergoing as we leave behind the frozen period of the Cold War and prepare for the truly global, interconnected world of the next century? Democratic societies depend on an informed public, and the level and quality of that information depend increasingly on radio and television.

Formed in 1990, the Commission on Radio and Television Policy recognizes the relevance of these issues to all of its members. The specific decisions and options will be different for each member's country, but all are confronting major change. The report of the Working Group that set the stage for the Commission's work produced a large number of options and, as is our procedure, argumentation for and against each. In this fashion, the Commission members can consider the trade-offs of strategies and policies and produce their own recommendations. Naturally, not every member agrees with each point, but together, the options and recommendations represent the deliberations of our body.

Some of the policies we recommend relate to all of the countries represented on the Commission, whatever their pattern of television and radio ownership and development. Others are directed at specific problems faced by countries reconstructing their entire societal infrastructure after the end of the Cold War. For these countries, the severe economic difficulties associated with transitions and the very rapid tempo of political, social, and economic change generate particularly acute concerns in the public. That is why the role of television and radio is especially meaningful.

It is our hope that the Commission can contribute to working out these overall policies, as it has to those specifically relating to television and elections and to television/radio and minorities. Our meeting at The Carter Center was the largest and most diverse in our short history. We look forward to continuing our work.

Introduction: Co-Chair Eduard Sagalaev

It is important to note that in the rush of changing life, the international Commission on Radio and Television Policy has not fallen behind the times. The recommendations from our meeting in Almaty on the problems of ethnic minorities played a significant role in easing ethnic and religious conflicts in the territory of the former Soviet Union. The guidebook, Television & Elections, which has been translated into Russian, Kazakh, Ukrainian, and Georgian, appeared on the eve of referenda and parliamentary elections in these and other independent governments of the NIS and became a reference for many electronic mass media.

The stromy process of the formation of a television market, creation of new independent radio and television stations, and privatization of governmental television channels is now underway, and as a consequence of this, new technologies have been introduced and additional private investments have been attracted. Thanks to the authority of the Commission and its Co-Chair, President Carter, at the November 1993 meeting in Atlanta, the first Business Market Forum took place with the participation of U.S. executives from television production companies. New contacts, business agreements in the area of exchange and acquisition of television programs and equipment, and general "know-how" resulted from this forum - this means a new stage in the development of radio and television broadcasting.

Thus, we are making new strides forward. It is this that pleases and inspires confidence in the necessity and usefulness of our Commission and its great future.

Changing Economic Relations Arising from Democratization, Privatization, and New Technologies

Report of the Third Annual Meeting of the Commission on Radio and Television Policy

The Carter Center
Atlanta, Georgia
November 18-19, 1993

Democratization and Privatization of Mass Communication: Financing, Managing, and Developing New Media Systems

"Television is the heartbeat of democracy, the people's opportunity to judge for themselves the performance of government." With this introduction, former President Jimmy Carter opened the third meeting of the Commission on Radio and Television Policy. Convened at The Carter Center in Atlanta, Georgia, the Commission brought together leading media, officials from the United States as well as the nations of the Participating States including Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan. The director of the state television system of Albania was an observer, as were representatives of the World Bank and the United States Agency for International Development (USAID). The Commission placed on its agenda as principal topic, "Changing Economic Relations Arising from Democratization, Privatization, and New Technologies," guided by the report of the Working Group, which met in May 1993, under the co-sponsorship of The Aspen Institute's Communications and Society Program and The Carter Center.

In his introductory remarks, co-chairman Eduard Sagalaev stated that "as the 20th century draws to a close, humanity is undergoing profound changes. A gigantic totalitarian regime has ended. For the independent states, television plays a leading role: It changes the world, and it represents the world to us. President Yeltsin's reference to the Commission in his decree on the election process is a measure of the direct effect this body has had on society. In addition, among the Commissioners are three members of the Information Arbitration Court, an institution that has come into being as a result of the recommendations of this Commission." Imands Rakins also applied the work of the Commission. "During the 1993 Latvian parliamentary elections," he said, "we read the book [Television & Elections, a publication of The Carter Center and The Aspen Institute] and drafted legislation and forwarded it to a parliamentary commission, which based its acts on our draft." Laymonas Tapinas noted that earlier during the Lithuanian presidential elections in 1993, "We borrowed the scheme for organizing electoral campaigns from the book."

In the years ahead for all of the countries represented on the Commission, the outcomes will be defined increasingly by the economic relationships and the technological solutions to the provision of information to citizens. How will the strategies adopted now affect the broadening and strengthening of an autonomous, democratic media system? And how will citizens and governments best harness the power of the new technologies to enhance democratic processes? Though the states at the Commission table have different problems and different solutions, both interim and long-term, they described their futures as interrelated and increasingly complex.

The United States, as well as the nations of the Participating States - and indeed most nations of the world - are undergoing major, interrelated changes in their economies and their telecommunications systems. Most significant, new communications technologies are proliferating, creating novel means of wired and wireless delivery, relatively inexpensive production equipment, and new outlets for mass communication. New organizations for media production and delivery also are arising, with various forms of private ownership growing where government long exerted substantial or total authority.

There is a need for governments, businesses, organizations, and citizens in all of these countries to develop long- and short-term strategies to address these transformations to enhance democracy and their economic, cultural, and intellectual well-being. Developing indigenous communications enterprises, including the promotion of high-quality radio and television programming, local program production, and the employment of new telecommunications technologies, facilitates achievement of valued social goals. Since the Commission's beginning, it has become increasingly obvious that the proper use of television is especially important to peace, racial and ethnic harmony, democracy, human rights, and the enhancement of education, health, and quality of life. This is particularly true where freedom of speech has risen to unprecedented levels.

Along with great potential benefits come new challenges for all countries. The rate of change in the Participating States is impressive: With literally hundreds of television stations and dozens of networks blossoming, some serious problems have become apparent.

For these states, there is a lack of access to adequate equipment, studio facilities, and financial support. Useful information about the availability of equipment, its cost, maintenance, and compatibility with existing systems is scarce. And there is little opportunity for the exchange of programming between the Participating States and other countries, with insufficient information available about the programs that can be bartered or mutually bought.

Realizing that high-quality programming is a key to viewership and therefore financial income, many television producers with limited funds have turned to piracy, through the theft of signals from satellites or videotapes. Increasingly, this is alienating the legitimate owners and suppliers of these programs and preventing their active marketing. This practice also diverts new stations from concentrating their efforts on local production of programs meeting needs of local cultures.

With the continuing necessity for government funding, questions of autonomy are inevitable. As to external support, in many cases, major donors and sources of loans, especially international ones, must have approval or direct requests from government officials for telecommunications before they can meet the needs of "independent" (nongovernment-owned) stations. Under the general heading of "telecommunications," applications for assistance sometimes omit broadcasting and place almost exclusive emphasis on telephonic communications as the highest priority.

This report explores these and other significant issues facing all the countries present, as they adjust their mass communications systems to changing economic, technological, social, political, and cultural realities. The report recognizes that each country is in a different stage of development on the road to political democracy and economic progress. Accordingly, each recommendation is not intended for every country, but rather, is raised as a possible aid to the many dilemmas facing each country or enterprise involved.

I. Financing Public Service Programming

Television and radio are crucial institutions in modern societies. When political trouble erupts, it is often the major television station that is subject to attack, both verbal and physical. These stations tell the public who controls the country, and inform the people of major developments. In calmer times, broadcasting stations offer a new civic space for discourse and deliberation among citizens, as well as a major outlet of advertising and entertainment.

In view of the essential role broadcasting plays in building and maintaining both national and local community, it is important that the citizenry have access to information necessary for public participation and to indigenous cultural programming, not just to "entertainment." The question is how to foster attractive, high-quality, public service programming in the new environment. As Daniel Yankelovich said, "There is a special difficulty in financing public television. Governments and advertisers will always find resources. Public television for the community has a hard time." He was optimistic about the promise the new technologies held for expanding public television if the right model could be found. Mr. Sagalaev agreed that television should express the interests of the community and not only those of governmental or commercial interests.

This issue arises in divergent contexts of rapid political, economic, and technological change. For some countries, the most important function of a broadcasting entity is the building of a new state, and significant government funding and influence are necessary. To others, the development of independent and autonomous broadcasting entities is the most crucial step for movement to a true democracy. Still others face problems of control over the programming agenda by commercial interests.

Recommendation No. 1: The Commission recommends that each nation's broadcasting system have sufficient viability to offer its audiences at least some high-quality public service programming that will enhance the economic, cultural, and political well-being of its citizens. To that end, the Commission suggests the following options:

The regulatory authority should mandate commercial broadcasters to provide certain amounts of public service programming.
A tax on communications equipment or other dedicated financing arrangement should be devoted to public service programming. Any monies channeled through government should not provide a means for state officials to exert undesired influence over programming.
In the United States and the Participating States, particular attention should be paid to finding innovative ways of financing one or more "public interest" channels. These should not be financed either by the state or by advertising but should be free from the political constraints necessarily imposed by the state and the commercial constrainsts necessarily imposed by profit seeking. Such public interest channels can significantly enrich the civic education and political culture of civil society.

Recommendation No. 2: The Commission suggests that new models should be created for broadcasting that strives for viability with maximal independence from governmental controls. This can come in the form of independent commercial, viewer-paid, or community-supported broadcasting. The Commission urges foundations, academic bodies, and other impartial institutions to study this issue for additional models and suggestions.

II. Strategies for Modernizing Video Production and Delivery Equipment

In every country, technological and economic changes are forcing re-evaluations of the appropriate technologies for mass telecommunications. Broadcasting and production organizations will have to employ sophisticated management techniques and financial controls as well as obtain and skillfully use modern equipment. The Commission identified several options for the selection and funding of broadcast and communication equipment and for upgrading the management of broadcasting and production organizations. Strategies must encompass both the long term and the immediate future. Sometimes the simpler technology makes the greater impact. President Carter reflected that in the United States, the most widely seen television pictures were amateur tapes of the beating of Rodney King.

The Commission believes that governments which support developing democracies directly and through such international agencies as the World Bank should see broadcasting and communication technology as integral to the process of both political and economic development. Grants and loans for broadcasting equipment and management should be considered as important as aid for constructing roads or power plants. Perhaps most crucially, broadcasting facilities and programming are essential to the process of building legitimate states, and transforming the way nations are governed and citizens participate. Broadcasting should not be viewed as luxury; a healthy broadcasting industry helps to build a market economy as it stimulates democratic involvement. It is a necessity. According to Tatyana Bolshakova, a station in Siberia with an audience of should be created for broadcasting that strives for viability with ma 1.5 million viewers needs equipment desperately. "Everything else is theoretical," she said, "unless we solve this problem." She went on to say that for independent broadcasters, "expensive equipment is a barrier to entering the market."

In discussing the matter of external aid to the Participating States, for equipment and for programming (considered in the next section) the Commission disagreed about exactly what kind of entities should receive external support. Some felt equipment, programming, and management assistance should go exclusively to entities unaffiliated with the state; others felt that state-owned broadcasters should also obtain aid. Those against aiding the latter argued they already enjoy special advantages and should not be given outside help in competing with private entities, whose financing is precarious. Others believed state-owned operations also need assistance and are more likely to maintain editorial independence from government if they obtain outside support rather than depending wholly on the state for funding. These are issues that obviously must be decided by each nation for itself.

Recommendation No. 1: The Commission recommends a combination of the following interim solutions be implemented, in accordance with the particular needs of each Participating State.

Obtain loans from the World Bank, USAID, European Bank for Reconstruction and Development, and similar sources, with Participating State (PS) governments as guarantors of loans. These loans and grants should be for equipment modernization, improved management and business practice, programming and other software requirements, and personnel training. As Nugzar Popkhadze noted, assistance would be put to good use and result in the enrichment of indigenous resources. "We have enormous riches - our audiences and our personnel." Vsevolod Bogdanov echoed this idea in saying that "television production presents opportunities for Western investment in Eastern endeavors. If we do it right, we could do something very interesting and profitable."
To the extent feasible, funding should support arrangements that allow independent broadcasting stations and production organizations to take advantage of international expertise in the industry. Loans, though guaranteed by governments, should not be allowed to introduce government influence over otherwise private broadcasting entities. These international bank loans will be maximally successful if:
1. The priorities set by governmental applicants seeking assistance include or, better, emphasize the non-state sector.
2. Television/radio broadcasting is included as a high priority in telecommunications loan proposals.
3. The World Bank and other international agencies and development banks facilitate applications by making available information about opportunities for funding and models of approved projects.
Provide transmitting, production, and other equipment no longer needed by U.S. organizations to those PS entities that meet standards of editorial autonomy from the state. In this way, PS entities could receive a fast and inexpensive way to upgrade, using equipment that will last for several years while audiences and revenues grow. Although U.S. television transmission and reception equipment will not be compatible with current PS technical standards, transcoders might be used to convert signals, and equipment from nations in Western Europe and elsewhere might be immediately compatible. (Radio should have no compatibility problem.)
The Commission is aware that these efforts have not been notably successful in the past, that technical incompatibilities may prove an insurmountable barrier, and that in some cases the transfer of outmoded equipment may be more burdensome than helpful. Bella Kurkova and Leonid Zolotarevsky warned that piecemeal assistance of this sort might complicate the future and that the only solution was a large-scale integrated program of assistance. Nonetheless, several Commission delegates from the Participating States strongly urged that such small-scale interim assistance be made available to a number of smaller independent stations that have expressed strong desires for such assistance.
Provide technical advice for using equipment that is donated, sold, or leased. Develop training programs to ensure PS personnel get full use from equipment. To this end, assemble volunteer technical advisors from a variety of countries, perhaps under the auspices of this Commission, to assure proper equipment is acquired and training carried out.
Expand financial aid from U.S. and other governments for equipment purchases as a means of serving broader interests in nurturing democracy throughout the Participating States.
Rent the lastest equipment for digital production where feasible, even if the delivery system is not digital. In this way, broadcast entities can reduce initial capital investment and maximize efficiency of equipment by having it leased to a variety of users.

Recommendation No. 2: The Commission recommends consideration of the following long-term policies for developing an optimal telecommunications infrastructure:

Move to digitial production, and eventually, a digital delivery system. Although expensive, digital technologies are cheaper in the long run and cross international and technical boundaries.
Make optimal use of direct broadcast satellites. The Participating States have expertise in satellites, and that technology is particularly suited to large land masses.
When affordable, develop broadband networks with the expansion of the telephone system. Laying fiber and/or cable could become a realistic objective in many of the Participating States and could bring these nations in line with highest current standards.
Investigate the possibility of using manufacturing facilities formerly devoted to the military for production of modern telecommunications equipment.

III. Mechanisms to Improve Quality of Programming in the Participating States

The Commission recommends a number of strategies for augmenting the quality and variety of television programming. A major point of discussion related to piracy. Laymonas Tapinas pointed to a serious consequence of piracy for his television network: "We who attempt to buy programming legitimately find it difficult to compete with pirates." Tatyana Bolshakova offered the services of her association of independent stations (MART) to initiate court challenges as a method for reducing or eliminating piracy in Russia. The specific recommendations of the Commission follow:

Recommendation No. 1: Obtain PS government grants or other subsidies to enable purchase of higher quality foreign programming and to encourage productions based in the Participating States. The Commission recognizes recognizes that any governmental involvement in programming, even when limited to supplying money for independent purchasing decisions, may taint independent entities. Moreover, severe budgetary constraints restrict the amount amount of monies available for this purpose. Nonetheless, governments currently subsidize some broadcasting outlets and could distribute subsidies more widely. Subsidies should go to broadcasting facilities as well as program producers.

Recommendation No. 2: Encourage involvement and assistance of the United States and other countries that have long-developed private market broadcasting entities. The Commission recognizes the potential for undue foreign influence, perceived or actual, over the culture of broadcasting in the Participating States. There is an inevitable tension between encouraging outside investment and involvement and maintaining control over a nation's culture. The Commission assumes each Participating State can come to its own balance in this matter. There was considerable disagreement among Commission members about the desirability or feasibility of most of the following ideas. Therefore, options for external involvement should be seen as just that - suggestions for external activities that could take one or more of the following forms:

Adapt specific shows (like Sesame Street) to local cultures using local production talent and facilities, with advice of foreign producers and partial use of foreign segments. Among other things, such practices build on the commonality of humanity across cultural boundaries and transfer production expertise to the Participating States, which should then extend to other productions.
The United States and other countries with large supplies of programming should donate anthologies of programs, representing a wide range of genres, for distribution in order to encourage production in the Participating States of new program types.
A consortium of U.S. program suppliers, including those broadcast networks that desire to participate, should supply a package of programming for a two-year period. In exchange for receiving these programs, PS broadcasters would undertake not to transmit any programming without permission. Stations using "pirated" material would be excluded from further use of the consortium program package.
Provide programming libraries from program owners in exchange for equity positions in independent PS broadcasting entities.
Encourage collaborative ventures between PS broadcast entities and programmers and private firms in other nations.
To maximize the effectiveness of marketing efforts, it is important to take greatest advantage of improved equipment, help to make management of broadcast organizations more efficient, and ensure responsiveness to audience interests. All of these will be aided by increasing efforts to train administrative, creative, and technical personnel. Such efforts are mutually beneficial, with the United States and others gaining from the creativity, new perspectives, and special expertise of PS personnel.

Recommendation No. 3: Enhance the operation and efficiency of the programming market through such means as:

Establishing a clearinghouse for program exchanges so that willing buyers and sellers are efficiently brought into contact with each other.
During a short transitional period, reducing fees charged by producers or distribution agencies to stations in the Participating States, especially privately owned, for using copyrighted materials.
Strengthening efforts to provides discipline to the program distribution market that would eliminate piracy of copyrighted material, assuring respect for legal agreements and relationships with copyright owners. New techniques, including binding arbitration of copyright disputes and other enforcement vehicles, should be established.

Recommendation No. 4: Carefully consider the role of advertising in support of improved programming. Advertising has yielded benefits and exacted costs in the quality of programming in nations with market-oriented broadcasting systems. On the positive side, advertising helps support high-cost production values. On the negative, advertising often dilutes those aspects of quality programming that interfere with selling products. In particular, programming is often served in small bites in order to maximize audience size and commercial value. These short messages do not require the viewer's deep involvement or intense thought and are often placed in situation comedies, game shows, and programs that feature episodic fragments sandwiched between advertisements. Many forms of quality cannot thrive or even survive in such a restricted environment. Therefore:

Participating States should conduct careful research to find a balance between commercial imperatives and quality programming, with particular attention to the placement of commercial messages and the total amount of time allocated to them.
If they decide to allow some advertising, Participating States should devote resources to researching proper advertising practice. The States should be aware that many in their viewing publics are dissatisfied with the transition to a market economy or reject what they perceive to the results of reforms (such as inflation) and may find in advertising a symbol of the changes in society that they dislike. Moreover, advertisers from outside a nation may be unfamiliar with its culture and may develop advertising themes and images that unintentionally offend its citizens. These instances suggest that advertising may fail to achieve its goal of selling products, and thus that advertisers will not be a reliable source of support for program production, equipment acquisition, or operating costs. Advertising should therefore be developed in conjunction with reliable research on audience attitudes and values.
Assuming careful research has convinced broadcast entities of the desirability and specific nature of effective advertising, Participating States should develop better mechanisms for marketing and pricing advertising, including improved systems for measuring audience size and demographics (ratings).
Participating States should consider the benefits and costs of obtaining programs in return for "barter" - that is, providing program suppliers with revenues from the sale of advertising time on their programs. Extensive reliance on barter, however, may provide insufficient revenue for broadcasters to develop their own programming facilities.

IV. Disseminating Information about Economic Reform and Free Market Systems

Both the United States and the Participating States are experiencing major economic challenges and confronting needs for dramatic alterations in long-established public policies. While the innovations that must be implemented in the Participating States are far more profound, the United States also faces the prospect of sweeping change. In all of the countries, economic change may not be welcomed by many. Yet, movement to privatization and market economies will require that the general population be informed of the workings, models, alternatives, and options in a private enterprise economy.

The Commission is conscious of the need, however, that programming designed to educate citizens about economic issues be attractive, locally relevant, and informative. Tigran Akopyan suggested showing a roundtable discussion in the studio before showing imported programs. In this fashion, the audience could be alerted to the elements of the program likely to be most relevant and useful. In contrast, broadcasters should avoid propagandizing and preaching.

Citing recent experience in the United States, President Carter said that "it is surprising that a debate on an agreement on trade with Mexico [NAFTA] - an issue many thought would be `boring' and `complicated' for the audience - gathered the highest audience in the history of CNN. For the Participating States, where economic issues are even more burning than NAFTA is for us, television can help to build consensus." Turning to the Commissioners from the Participating States, Daniel Yankelovich urged them to approach the future with imagination. "You can invent formats in which true dialogue takes place, not shouting matches or empty rituals, as some debates in the United States are. This would contribute to democracy generally, and you could provide an example for us, while strengthening your own programs."

The Commission thus suggests consideration of the following measures:

Recommendation No. 1: Political leaders should undertake regular campaigns of economic education, including speeches, press conferences, and shows with audience participation both in the studio and by telephone (various forms of "electronic town meetings"). Broadcasters should ensure that issues raised are debated in a robust and open manner, conducive to deliberation. As Pierre Salinger remarked, "Television stations should organize dialogue among the citizends of the country." According to Boris Grushin, decision-makers, including those in broadcasting, may not appreciate fully the attitudes of their audiences. He argued that the population-at-large lacks an adequate understanding of economic and political change and that there is a considerable gap between programs currently being broadcast on these subjects and the receptivity of viewers and listeners.

Recommendation No. 2: Broadcasters should consider methods of explaining economic matters thoroughly and accurately, such as:

Showing documentary programs focusing on businesses and business personnel who may experience success or failure and draw lessons from them. A focus on small-scale enterprises and farms may prove especially useful in describing markets to unfamiliar audiences.
Importing foreign programs on economics that should be supplemented by "warp-around" narrations that place material in the context of the Participating State and may conclude with a panel discussion by PS experts or call-in opportunities from the local broadcast audience.
Entering into co-productions with foreign production companies where different programs can be made for two distinct countries simultaneously from the same or similar film footage.
Create entertainment television shows (dramas, soap operas, comedies) that include micro or macro economic lessons, such as characters who experience success or failure in business, "go from rags to riches," or have to deal with complicated government regulations. Stories should be realistic, not oversimplified or heavily propagandistic, which would be illegitimate and ineffective.
Use talk shows to spread knowledge of individual experiences and problems in the market economy in a compelling, personalized way.
Explain economic conditions and trends in news programs, and do not rely only on a handful of summary indicators such as inflation or unemployment rates, as in the United States.

Recommendation No. 3: In addition to importing programs about foreign economies, help producers to make programs from their own perspectives that illuminate the operation of business in other countries.

Recommendation No. 4: Countries should grant urgent priority to children's education, on the assumption that adults will be harder to reach and change. This effort should also employ broadcasting and other telecommunications technologies to enhance classroom education, making sure to train teachers in proper applications of these technologies.

Recommendation No. 5: Educational programs for small business can be produced and distributed by means other than mass media broadcast such as audio and video cassettes and libraries.

In their concluding remarks, President Carter and Mr. Sagalaev looked back at the momentous political events that have shaped past images and relationships. President Carter noted, "During my presidency, the threat of nuclear war was the key factor in our relationship. Today, the connections are still vital for all of us, and the Commission is a place where cooperation can be promoted." Mr. Sagalaev concluded that "When I came to work on October 3 and 4, I saw in the corridors and in my office - across from the White House - empty gun cartridges. It prompted me to think seriously about how difficult it is to kill a totalitarian system and create democracy. We look forward to exchanging opinions and beginning exchanges. We want new contacts, new friends, and new hopes."

Changing Economic Relations Arising from Democratization, privatization, and New Technologies: Models and Options

Report of the Working Group

The Carter Center of Emory University in Association with The Aspen Instiute

Wye Woods Conference Center

Queenstown, Maryland

May 6-8, 1993

This document idenrifies options for enhancing the choice and quality of radio and television programming. Underlying this aim is a shared commitment to the democratic, economic, cultural, and intellectual betterment of free and open societies and to mutual understanding among the peoples of the world.

The United States and the nations of the New Independent States (NIS) are undergoing major, interrelated changes in their economies and in their telecommunications systems. Among these changes are:

the advent of digital and optical fiber technologies,
the proliferation of delivery mechanisms and outlets for mass communications,
the spread of relatively inexpensive production equipment, and
the ability to use cellular and other radio technologies for telecommunications.

These developments have stimulated decentralization and competition in communications, yet have also raised issues involving economic concentration of the new media.

There is a need for governments, businesses, organizations, and citizens in all of these countries to develop strategies to address these transformations. Some of the strategies are more appropriate for the longer term, while others are short-term or transitional solutions.

One continuing concern in considering options is whether the proliferation of viewing options and fragmentation of the audience might undermine the broadcasters' traditional role of aggregating citizens to participate in a forum of common political discourse, and some of the options are designed to address this issue.

In many cases, options call for aid to the NIS from outside sources. In general, the Working Group believes that outside assistance to NIS broadcasting entities should be conditioned on the entity's possession of clearly established and consistently enforced editorial autonomy from the state. Such guarantees should apply whether the entity is independently owned or affiliated with the state. This belief reflects the Charter of Media Independence developed by the Commission, which strongly endorses the principles of editorial independence. However, Working Group members disagreed over the extent to which state-affiliated broadcasting entities should be granted assistance, even when their editorial autonomy is guaranteed. Specific instances of such disagreement are described below, as in Sections II (A7), (A 9-10), (C2-b), and (C2-e).

Also, it should be noted that not every member of the Working Group subscribes to every option - indeed, some of the options conflict with each other. The goal of the group is to recommend options for consideration by the Commission, not to endorse final policy decisions. No member of the group should be assumed to support any particular option.

I. Recommendations for Options Applicable to the NIS and U.S.

Approaches to financing public service television and radio programming. As a system becomes dominated by commercial interests, the question arises how sufficient amounts of high-quality, public service programming, including cultural, political, and children's educational shows, reach the television audience.
1. Create or enhance an independent nonprofit, noncommercial entity, along the lines of public broadcasting ventures in several Western countries.
  Pro: Removes commercialism as motivation of programming.
  May give voice to elements of society otherwise ignored.
  Con: Very expensive, with some funding coming from scarce governmental sources.
  May not be fully responsive to mass audience tastes.
2. Regulatory authority should mandate commercial broadcasters to provide a certain amount of public service programming.
  Pro: Commercial broadcasters may be in the best position to create quality programs.
  May enhance image of local television entity.
  Con: Very difficult to require entity to produce a high-quality show against its will.
3. In the United States, require that independent, profit-oriented bandwidth users make financial contributions for noncommercial bandwidth uses or users, perhaps via proceeds from a spectrum auction or spectrum fees. In exchange for these payments, the "public trustee" obligations of licensed broadcasters could be eliminated.
  Pro: Creates a financial system for funding programs to be produced by those who are interested and capable in the field.
  Could reduce the role of government in broadcasting if used in lieu of government funding and regulation.
  Con: Change of status quo disrupts continuity of funding for private, noncommercial entities that are already under great financial pressure.
  Eliminating "public trustee" obligations could lead to abuse of power by specific broadcasting entities.
4. Use subscription television to create noncommerical or less commercial broadcasting. This can be achieved by over-the-air scrambling of signals or pay channels on cable (or direct broadcast satellite) systems.
  Pro: Allows people to pay directly for the programs they strongly desire.
  Provides revenues for programs that advertisers do not find attractive.
  Allows for more narrowcasting channels, as such channels could have to revenue streams: advertising and subscriptions.
  Con: Limits accessibility to those who can afford to pay.
  May require direct subsideis to low-income viewers for access to programming.
5. Set aside bandwidth for public, educational, and governmental channels on broadband systems such as cable or fiber networks.
  Pro: Provides outlets for: creative independent programming produced by ordinary citizens and serving interests of diverse communities of viewers; educational programming not able to generate commercial support; and coverage of local governmental activities such as city councils, boards of education, and other decision-making bodies.
  Con: May be costly and attract few viewers.
6. Create a model for interrepublic, interethnic broadcasting that strives for maximal independence from governmental controls. For example, Mir, an organization supported by governments of nine NIS republics but relying mostly on private financing, intends to produce and distribute programming across the NIS to serve such a diverse audience.
  Pro: Can give voice to the diversity of the various republics, while promoting exchange of ideas, common values, and understandings.
  Con: May be difficult to finance on an adequate basis.
7. Create a "World Vision" programming service. Organize a worldwide satellite program network to present excellent programs from around the world.
  Pro: Enlightens the viewer with a variety of viewpoints and genres.
  Establishes a new approach to programming.
  Con: May be costly and difficult to coordinate.
Disseminating information about economic reform and free market systems. Both the United States and NIS countries are experiencing major economic challenges and confronting needs for dramatic alterations in long-established public policies. While the innovations that must be implemented in the NIS are far more profound, the United States also faces the prospect of sweeping change. In both places, communications media can assist the process.
1. Political leaders should undertake regular campaigns of economic education, including speeches, press conferences, and "electronic town meetings." Broadcasters should ensure that the issues raised are debated in a robust and open manner.
  Pro: Leaders can seek public support for new economic programs.
  Educates citizenry in economic conditions and options and enhances participation in public debate about policy.
  Con: Leaders could use media for propaganda, crowd out debate, and oversimplify issues.
2. Thoroughly and accurately explain economic conditions and trends in news programs. Do not rely on a handful of summary indicators such as inflation or unemployment rates.
  Pro: Gives a more realistic picture of the economy.
  Con: Increases cost to news programmer. Mir, an organization supported by governments
3. Show documentary programs focusing on businesses and business personnel who may experience success or failure and draw lessons from them.
  Pro: Personalizes life in the market economy.
  Encourages realistic expectations.
  Con: Increases production costs.
  Cases may not serve as accurate, generalizable models.
4. Focus more attention on children's education, on the assumption that adults will be hard to reach and change. This effort should also include training teachers and making videos available in the classroom.
5. Employ broadcasting and other telecommunications technologies to enhance classroom education, making sure to train teachers in proper applications of the technologies.
  Pro (for 4-5): Long-term approach to changing underlying attitudes.
  Con: Does not reach many workers, voters, and decision-makers in the short term.
6. Create entertainment television shows (dramas, soap operas, comedies) that include micro or macro economic lessons, such as characters who experience success or failure in business, "go from rags to riches," or have to deal with complicated government regulations.
7. Use talk shows to spread knowledge of individual experiences and problems in the market economy in a compelling, personalized way.
  Pro (for 6-7): Reaches larger audience with subtle message.
  Con: May be vehicle for propaganda.
  Depictions may not serve as generalizable models.
8. Distribute educational programs for small business via narrowcasting, audio and video cassettes, and libraries.
9. Import U.S. and other nations' programs on economics provided with "wrap-around" narrations that place material in NIS context and may conclude with panel discussion by NIS experts.
  Pro (for 8-9): Allows individuals to obtain specialized information in a format suitable and convenient to the viewer.
  Con: Some programs lack professional production values or are boring.
  Wrap-around may be a poor fit to local experience.
Organizational structures for collaboration. The Working Group discussed and highlighted the need to consider different forms of financial associations both within and between countries. These include different forms of business associations, public-private partnerships, and joint ventures. In each case, the question of investment versus control arose. The Working Group recommends that the Commission make models of collaborative ventures available to those seeking advice in this area.

II. Recommendations for Options with Respect to the NIS

Mechanisms to improve quality of programming in the NIS. The Working Group addressed a number of strategies for improving the economic relationships among public and private parties to improve the amount and quality of programming that is aired over television in the NIS. Most of the suggestions related either to enhancing the capability of NIS broadcasters to operate in the world programming market or to the provision of subsidies in some form.
1. Adapt specific foreign shows (like Sesame Street) to local cultures using local production talent and facilities, with advice from foreign producers and partial use of foreign segments.
  Pro: Applies established and effective formats to local context.
  Reduces costs of original programming.
  Transfers production expertise to NIS.
  Con: Foreign influence, perceived or real, in original programming.
2. Obtain NIS government grants or other subsidies to enable purchase of higher quality foreign programming and to encourage NIS-based productions.
  Pro: Enables entity to acquire or produce more attractive and desirable programs.
  Con: Governmental involvement in programming may taint independent entities.
  Difficult to obtain funds for this purpose.
3. Develop better mechanism for marketing and pricing advertising so that demand for advertising increases, charges can go up, and advertising will earn enough to support acquisition and production of high-quality programming.
4. Obtain programs in return for "barter" - that is, the program supplier gets revenues from advertising within the program.
5. Establish a clearinghouse for program exchanges so that willing buyers and sellers are efficiently brought into contact with each other.
6. Develop programming that matches the programs to the audience to be reached.
  Pro (for 3-6): Allows for better operation of market mechanisms.
  Should stimulate an increase in local program production as well as ability to import higher quality material.
  Con: May increase dependence on commercial advertiser values.
  Clearinghouse may be difficult to establish due to institutional conflicts and additional costs.
7. During a short transitional period, reduce fees foreign companies charge NIS for using copyrighted materials, especially for privately owned NIS broadcasting entities.
  Pro: By reducing copyright payments, owner may create demand for program (or other similar material) at a later time.
  Con: Contributions from private companies in the form of reduced copyright payments may be unattractive to copyright holders.
  Could deter NIS entities from building a free-market system in which supply and demand determine prices.
  Note: The Working Group split on the issue of altering normal copyright fee negotiations. Many felt that normal negotiations would lead to affordable fees and that no special reductions could be sought without undermining the ultimate goal of building a viable free market in programming. Others felt that a limited period, during which copyright holders might voluntarily grant substantial discounts, could serve as a subsidy to stimulate the emergence of commercially healthy independent broadcasting in the NIS.
8. Donate an anthology of foreign programs, representing a wide range of genres, for distribution to encourage NIS production of new program types.
9. Allow NIS to pay for imported programs in local currencies, not hard currency. This enables NIS broadcasting entities to earn profits from advertising in local currency, which can be reinvested in local co-production of new programming.
10. Provide programming libraries from foreign program owners in exchange for partial ownership in independent NIS broadcasting entities.
  Pro (for 8-10): In the long run, healthy independent TV entities would form a better market for exported programs that would earn hard currency profits for the exporter.
  Healthy NIS entities will support production of high-quality programming that will become desirable exports to the United Strates and elsewhere.
  Con: Lack of hard currency means uncertainty that there will ever be payment for the program.
  Danger of foreign influence over program content of independent entity in which program owner has an ownership interest.
11. Obtain loans from the World Bank and similar sources, with participation of NIS governments as guarantors of loans.
  Pro: Loans allow television entities to keep greater ownership interest.
  International competitive bidding for goods and services, required as a condition for World Bank and similar loans, helps entities obtain lowest prices.
  Con: Cumbersome and difficult process to obtain such loans.
  Would introduce a governmental role.
12. Eliminate piracy of copyrighted material and assure respect for legal agreements and relationships with copyright owners.
  Pro: Builds confidence by foreign suppliers in market and legal systems.
  Program owners more comfortable with supplying programming if protections are in place and enforceable.
  Con: May take time to build an effective enforcement system.
Training programs and transfer of expertise. By augmenting personnel training, the NIS could:
- maximize the effectiveness of marketing efforts,
- take greatest advantage of improved equipment,
- enhance efficient management of broadcast entities, and
- ensure responsiveness to audience interests.
Among the options that might be considered:
1. Use universities and broadcast industry personnel from the United States and elsewhere to train NIS employees in business management, production, programming, accounting, and journalistic and technical skills.
2. Advertising companies or associations from U.S. or other market economies should train NIS advertising executives both in market advertising as a product and in producing good commercials. The foreign organizations would then be compensated for training programs by receiving free advertising time on NIS broadcasts.
  Pro (for 1-2): Takes full advantage of long experience of the United States and other nations in producing popular programs, and in effective management, marketing, and advertising.
  Transfers knowledge, with the United States and others gaining from the creativity and expertise of NIS in production and other areas.
  Enhances the likelihood that programming will be responsive to the needs of a diverse mass audience.
  Con: Compensation for trainign programs may be insufficient to obtain cooperation from non-NIS organizations.
Strategies for modernizing video production and delivery equipment. In every country, technological and economic changes are forcing reevaluations of the appropriate technologies for mass telecommunications. The Working Group identified several options for the selection and funding of hardware.
1. Long-term policies include a combination of the following:
  1. Move to digital production, and eventually, a digital delivery system.
    Pro: Digital technologies are cheaper in the long run, will allow for reductions in operational expenses, and cross international and technical boundaries.
    In early phases, digital might be combined with analog equipment.
    Con: New equipment is expensive. Analog equipment may be easier to obtain in the next few years.
  2. Make optimal use of direct broadcast satellites (DBS).
    Pro: The NIS has expertise in satellites, and that technology is suitable to large land masses.
    Con: Direct broadcast satellite systems may not be responsive to the needs of local viewers or communities.
    DBS is a very expensive, unproved undertaking.
  3. Develop broadband networks with the expansion of the telephone system.
    Pro: In rebuilding a telecommunications system, laying fiber and/or cable can combine television and other telecommunicatiosn functions efficiently and bring the NIS in line with highest current standards.
    Con: Fiber and cable are expensive, especially in areas with large land mass and sparse population.
2. Interim solutions.
  1. Sell NIS technologies in areas such as low earth orbit satellites (LEOs), satellite launches, and computer software to global markets to earn hard currency for equipment purchases. (Proceeds could also go to other enhancements of the mass communications system.)
    Pro: Exploit comparative advantage that NIS countries enjoy.
    Con: No guarantee that proceeds will go to enhancement of television system.
  2. Provide transmission, production, and other equipment no longer needed by U.S. organizations to NIS entities that meet standards of editorial autonomy from the state.
    Pro: Can provide a fast and inexpensive way to upgrade.
    Con: Could embed analog or outdated equipment.
    May have problem with spare parts and training.
    Equipment provided may not be compatible with current NIS technical standards; special efforts will be needed to ensure compatibility; equipment may only be used when Secam/NTSC/Secam or Secam/PAL/Secam transcoders are available.
    Note: The Working Group disagreed whether equipment assistance should go exclusively to entities unaffiliated with the state or might also be provided to state-owned groups. Some argued that the latter already enjoy special advantages and should not be given outside help in competing with private entities, whose financing is precarious. Others believed state-owned operations also need assistance, often attracting significantly larger audiences, and are more likely to maintain editorial independence if they obtain outside support rather than depend financially on the state.
  3. Rent latest equipment for digital production where feasible, even if the delivery system is not digital.
    Pro: Allows television entities to avoid initial capital investment, and maximizes efficiency of equipment by having it rented to a variety of users.
    Promotes additional independent producers of programming.
    Allows higher quality and lower cost productions.
    Con: Renting does not build ownership of equipment (however, while high prices of digital equipment may now prevent ownership, costs are decreasing over time, which should permit ownership eventually).
  4. Provide technical advice in using equipment that is donated, sold, or leased. Develop training programs to ensure NIS personnel get full use from equipment.
  5. Expand financial aid from U.S. and other governments for equipment purchases as a means of serving the world's interests in democracy in the NIS.
    Pro (for d-e): Costs of grants in broadcasting equipment are considerably lower than costs of defending against a nondemocratic opponent.
    Con: Competes with many other demands for foreign and domestic aid.

III. Recommendation for Option Applicable to the United States Only

The following recommendation was raised within the context of the Working Group's discussion of making hard currency available to NIS entities to trade more effectively with foreign equipment, program, and service providers. While the subject matter is one of international trade, it does relate to the communications field generally and thus is included in this report.

The United States should eliminate restrictions against buying NIS satellite launches and export of LEO satellite technology so that NIS countries might earn more hard currency.
Pro: Additional hard currency could allow an NIS country to enhance its television and telecommunications systems and acquire equipment and programming from the United States.
Con: Creates additional competition to U.S. industries and may therefore be politically difficult to attain.
Proceeds could be used to purchase non-American products unless restricted by the United States, again creating potential political opposition.

Commission on Radio and Television Policy

Co-Chairs:

Jimmy Carter: 39th president of the United States

Eduard Sagalaev: President, Moscow Independent Broadcasting Corporation

President, Confederation of Journalists' Unions

Members from the United States:
Roone Arledge: President, ABC News
Tom Johnson: President, Cable News Network (CNN)
Andrew Lack: President, NBC News
Ellen Mickiewicz: Fellow, The Carter Center
Director, DeWitt Wallace Center for Communications and Journalism
James R. Shepley Professor of Public Policy, Duke University
Eric Ober: President, CBS News
Monroe Price: Professor, Benjamin N. Cardozo School of Law
Alfred Sikes: President, New Media and Technology, Hearst Corporation
Former Chairman, Federal Communications Commission
Ted Stevens: Member, U.S. Congress
Al Swift: Member, U.S. Congress
Daniel Yankelovich: Chairman, Daniel Yankelovich Group Inc. (DYG Inc.)
President, The Public Agenda Foundation

Members from the New Independent States:
Tigran Akopyan: Chairman, State Board of Radio and Television, Armenia
Tatyana Bolshakova: Executive Director, International Association of Radio and Television (MART)
Vyacheslav Bragin: Chairman, Russian State Television and Radio Broadcasting Company (Ostankino)
Mikhail Fedotov: President, Russian Copyright Society
Former Minister, Press and Information, Russian Federation
Boris Grushin: President, Vox Populi, Public Opinion Research Center
Vitaly Ignatenko: General Director, Information and Telegraph Agency of Russia (ITAR-TASS)
Bobojon Ikromov: Chairman, State Television and Radio Broadcasting Service, Tajikistan
Vakhtang Khundadze: General Director, Television and Radio Broadcasting Service, Georgia
Aleksandr Kopeyka: Member, Commission for Draft Legislation for the President of Russia
Bella Kurkova: Chair, St. Petersburg Television and Radio Company (Channel Five)
Deputy Chair, Russian State Television and Radio Broadcasting Company
Babek Mamedov: Chairman, State Television and Radio Broadcasting Company, Azerbaijan
Aygar Misan: General Director, Russian Television and Radio Broadcasting Company (Moskva)
Sherkhan Murtaza: Chairman, Kazakh Television and Radio Broadcasting Company
Nikolai Okhmakevich: President, State Television and Radio Broadcasting Company, Ukraine
Kadyr Omurkulov: Director, State Television and Radio Broadcasting Company, Kyrgyzstan
Annageldy Orazdurdyev: Chairman, National Television and Radio Broadcasting Company, Turkmenistan
Mikhail Poltoranin: Director, Russian Federal Information Center
Nugzar Popkhadze: Vice President, Moscow Independent Broadcasting Corporation
Vice Chairman, Confederation of Journalists' Unions
Oleg Poptsov: Chairman, Russian Federation Television and Radio Company
Imands Rakins: General Director, Latvian Television
Gadilbek Shalakhmetov: Chairman, Intergovernmental Television and Radio Broadcasting Company (Mir)
Vice President, Union of Journalists, Kazakhstan
Hagi Shein: General Director, Television Company of Estonia
Aleksey Simonov: Chairman of the Board, Glasnost Defense Foundation
Co-Chairman, Provisional Committee for Television and Radio Licensing
Secretary, Union of Cinematographers
Sergei Stankevich: Advisor to Russian President Boris Yeltsin
Aleksandr Stolyarov: Chairman, National Television and Radio Broadcasting Company, Belarus
Laymonas Tapinas: General Director, Lithuanian Television
Mikhail Taratuta: San Francisco Bureau Chief, Russian State Television and Radio Broadcasting Company (Ostankino)
Adrian Usaty: General Director, National Radio and Television, Moldova
Shavkat Yakhyaev: Chairman, State Television and Radio Company, Uzbekistan
Anatoly Yezhelev: President, Telemak Television and Radio Corporation
Chairman, St. Petersburg Union of Journalists
Tatyana Zaslavskaya: President, Russian Center for Public Opinion Research
Member, Academy of Sciences of Russia
Yassen Zassoursky: Dean, Department of Journalism, Moscow State University
Professor, Journalism and Literature, Moscow State University
Leonid Zolotarevsky: Director, Center for International Relations, Russian State Television and Radio Broadcasting Company (Ostankino)

Working Group on Changing Economic Relations Arising from Democratization, Privatization, and New Technologies

May 6-8, 1993

The Aspen Institute Wye Woods Conference Center

Participants from the United States:
Edith C. Bjornson: Program Officer, The John and Mary R. Markle Foundation
David Britt: President and CEO, Children's Television Workshop
Patricia Delaney: Director of Program Administration, Thirteen/WNET
Robert M. Entman: Associate Professor of Communication Studies, Journalism, and Political Science Department of Communications Studies, Northwestern University
Charles M. Firestone: Director, Communications and Society Program, The Aspen Institute
Henry Geller: Former General Counsel, Federal Communications Commission
Former Assistant Secretary of Commerce for Telecommunications and Information Communications Fellow, The John and Mary R. Markle Foundation
Cheryl Glickfield: Telecom Policy Analyst, National Telecommunications and Information Administration U.S. Department of Commerce
Peter Huber: Senior Fellow, Manhattan Institute
Nicholas Johnson: Former Commissioner, Federal Communications Commission
Visiting Professor, University of Iowa, College of Law
Peter T. Knight: Division Chief, National Economic Management and Economic Development The World Bank
Richard Lorber: President and CEO, Fox-Lorber
Ellen Mickiewicz: Director, International Media and Communications Program, The Carter Center Alben W. Barkley Professor of Political Science, Emory University
Larry Namer: President and CEO, Comspan Inc.
Arthur Obermayer: President, East-West TV
Kenneth G. Robinson Jr.: BellSouth
Jonas Rosenfield: President, American Film Marketing Association
Henry Sandbank: President, Sandbank Films Company Inc.
Michael Tracey: Professor, School for Journalism and Mass Communication, University of Colorado at Boulder
Director, Center for Mass Media Research

Participants from the New Independent States:
Leyla Beketova: President, TAN-TV, Kazakhstan
Mikhail Berger: Chief Economics Editor, Izvestia
Mukhamed Mezgilbayev: Vice Chairman, Kazakh Television and Radio Broadcasting Company
Sergei Muratov: Academic Researcher, Moscow State University
Stella Neretina: Technical Director, Moscow Independent Broadcasting Corporation (TV6 Moscow)
Nugzar Popkhadze: Vice President, Moscow Independent Broadcasting Corporation
Vice Chairman, Confederation of Journalists' Unions
Andrei Richter: Lecturer, Moscow State University
Gadilbek Shalakhmetov: Chairman, Inter-State Television and Radio Company (Mir)

Business Market Forum

The first major forum for the development of new economic ties and co-production ventures between television, radio, and film companies from the United States and the New Independent States (NIS) took place under the auspices of the Commission at The Carter Center on November 19, 1993. Commission Co-Chairs Jimmy Carter and Eduard Sagalaev presented the keynote address, and Commission Director Ellen Mickiewicz and former NBC News Vice President Gordon Manning chaired the forum. An extensive compilation of communications companies in both the United States and the NIS that listed television, radio, and/or film services and logistics was distributed at the forum.