Friday, February 25, 2011

How the US Government Paid to Help Create Fox News

As conservatives make yet another attempt to convince Congress to shut down public broadcasting I believe it is worthwhile to revisit the history of broadcasting and the development of broadcast media and technology.

We will see that, in fact, the United States Government helped pay for the creation of Fox News and other modern media outlets by paying for the development of the technology they use and by providing preferential treatment in issuing licenses for the broadcasting frequencies they use.

About 30 years ago I wrote a college paper that explored some of the history of modern telecommunications and broadcasting technology. Although the paper isn't well written (I had no computer or the inclination in those days to do edits and re-writes) it does show us how these technologies were all developed by private companies originally funded by the Federal government. First came the telegraph, then the telephone, then radio and television. The paper was written before it's creation but most people today know how government funding helped create the Internet.

The basic story is that the government needed new communication technologies to assist them in various war efforts. Federal funding paid companies like Western Union, Westinghouse, General Electric, Western Electric, and American Telephone and Telegraph (AT&T) to develop these new technologies.

It all began in 1844 when Congress authorized $30,000 to build the first telegraph line between Washington DC and Baltimore, MD.

Once the government decided it didn't need to develop the technology further these companies had opportunities to develop commercial uses for the newfangled communication devices. At first it was difficult to figure out how to make money selling radios and eventually televisions. What would people do with them?

Westinghouse realized if they provided something for people to listen to there was a possibility that they would purchase radios. Thus it was the need to sell radios that helped to jump start the modern broadcasting industry around 1920.

"From there the beginning of sponsored (radio) programs came about" I wrote in 1980, "with 'brand name' programs such as the 'Browning King Orchestra.' After AT&T's decision to start what they called 'Toll Broadcasting' in 1922 such programs became the order of the day." The shows, paid for by a company or store, carried the name of the sponsor but didn't mention specific products. Also known at the time as "ether advertising," the development of radio programming centered on corporate willingness to allow this sort of indirect and eventually direct advertising which would be used to pay for the cost of production and broadcasting facilities.

With the formation of the Radio Corporation of America (RCA), consolidation and cooperation within this new industry was achieved. Western Electric controlled the manufacturing of transmission equipment while General Electric and Westinghouse controlled the production and distribution of radios. All were sold under the RCA trademark. They built transmitting stations all over the USA and thus controlled both ends of the broadcasting industry -- production and sale of receivers and the production and transmission of programming.

There were attempts to put non-commercial broadcasting on the air but in general they failed. Not only did non-commercial broadcasting prove to be economically infeasible but the tremendous economic success of advertising based programming left few people calling for any sort of non-commercial programming.

One such call was the Wagner-Hatfield amendment to President Roosevelt's Federal Communications Act of 1934 which created the Federal Communications Commission (FCC). This amendment would have provided 25% of all radio frequencies for educational programs to promote public interest content and civic engagement. The Wagner-Hatfield amendment was defeated. There were components of the  Communications Act of 1934 that did require companies to broadcast public interest material but those requirements (including what became known as the Fairness Doctrine) were removed during the Reagan Administration.
Edward R. Murrow

Commercial broadcasters did try to provide news and information for it's viewers. But most of those efforts didn't last long. Alcoa sponsored the CBS program "See It Now" which was a groundbreaking news and documentary program featuring Edward R. Murrow. Alcoa eventually withdrew sponsorship for this program and CBS was hard pressed to pay the $90,000 per episode to keep the program on the air. See It Now went off the air in 1958.

It was almost 10 years later that Congress passed the Public Broadcasting Act of 1967. In his remarks at the public bill signing ceremony President Lyndon Johnson said "Today our problem is not making miracles -- but managing miracles. We might well ponder a different question: What hath man wrought -- and how will man use his inventions?"

Johnson continued: "The law that I will sign shortly offers one answer to that question. It announces to the world that our Nation wants more than just material wealth; our Nation wants more than a 'chicken in every pot.' We in America have an appetite for excellence, too."

"While we work every day to produce new goods and to create new wealth, we want most of all to enrich man's spirit. That is the purpose of this act."

"It will give a wider and, I think, stronger voice to educational radio and television by providing new funds for broadcast facilities. It will launch a major study of television's use in the Nation's classrooms and their potential use throughout the world."

"Finally -- and most important -- it builds a new institution: the Corporation for Public Broadcasting." Unfortunately it was already too little, too late. More than fifty years of commercial broadcasting success meant it would be an uphill battle for public broadcasters to win viewers and the revenue it needed to succeed.

Today, the federal government allocates about $430,000,000 annually to the CPB. 95% of the federal dollars are allocated directly to public broadcasting stations with television and radio stations splitting this money 75% and 25%. House Republicans hope to slash all of this money from next year's budget in order to address skyrocketing federal deficits.

The federal allocation equals about 10% of the total budget for National Public Radio. The rest is paid for by viewer membership fees and corporate sponsors. By comparison, in 2011 the Fox network received over $270,000,000 in advertising revenue for the Super Bowl broadcast alone. With these kinds of numbers it is no surprise how difficult it is for public broadcasting to compete for viewers with the financial support they get.

Republican Congressman Doug Lamborn of Colorado told NPR that public broadcasting provides a valuable service and that "No one's talking about eliminating the Corporation for Public Broadcasting or NPR. We're just saying let's not have the taxpayer subsidy. The taxpayers just can't keep paying for everything."

Democrat Earl Blumenauer of Oregon disagrees and introduced a resolution to stop the proposed cuts. "There's a reason there isn't a commercial entity that provides local programs the way that NPR does, it's not commercially viable." Small towns and rural areas would be hit hardest.

Tracy Rosenberg, Executive Director of Media Alliance notes that Public Radio has been trying to address this issue for about a decade now through the Station Resource Group which created a plan to accumulate capital if the industry is to expand and remain competitive in an increasingly complex media environment. However, the amount of money and the number of frequencies they have to work with pales in comparison to the amount of money and media outlets commercial broadcasters own.

And then there is the Internet and how it's affecting all broadcasting outlets. and are amazing sites with tremendous valuable content published and growing each day. But again, how will they compete for viewers and listeners without the revenue necessary to keep the ship afloat?

Why should you care about public broadcasting? Let's let President Johnson have the last word:

"In 1844, when Henry Thoreau hear about Mr. Morse's telegraph, he made this sour comment about the race for faster communication. 'Perchance,' he warned, 'the first news which will leak through into the broad, flapping American ear will be that Princess Adelaide has the whooping cough.'"

"We do have skeptic comments on occasions. But I don't want you to be that skeptic. I do believe that we have important things to say to one another -- and we have the wisdom to match our technical genius."

"In that spirit this morning, I have asked you to come here and be participants with me in this great movement for the next century, the Public Broadcasting Act of 1967."

We have indeed reached that next century. It is upon us to decide whether we want that century to be as brilliant as Johnson hoped and envisioned it would be.

If you want to have a say in this matter join millions of Americans in a Response to the call for the end of federal funding for the Corporation for Public Broadcasting.

No comments: