Tobacco Documents Online

J M ~ l ~ Solumbl~ Broadcasting Syslem Inc i 1 i ~ 51Wsst 52 Street J i ) S~J C0~CE OF CvBS ~V~SIO~ ~lr~qf~O~ AF~I]~T~S ~ ~~ -- Remarks of FRANK STANTON, Vice Chairman ~' I~W ~&~ Columbla Broadcasting System, Inc. ~ ~ ~ ~. OBS Studio Center, North Hollywood, California As we meet here today in this marvelous world of maKe-believe against the ~ backdrop of the real world's threatening geopolitical problems, I suggest, / if we can, that we set aside those momentous considerations and focus for the moment c~ an issue which goes to the very heart of the American syste~ of commercial broadcasting. The subject is one that is fast b~eoming a political controversy of the first order, And as the debate intensifies, it is clear that what is at stake is the viability of bzoadcasting and hence our cal~city to serve the public. The issue is "counter ~dvertislng" and the central question is this: Shc~Ald broedcasters be compelled to provide a free platform for attacks on broadcast advertising? A peculiar coalition of the '~NewfPc~fst" movement on the one hang and high-place~ Washington officials on the other is becoming increasingly vocal in the affirmative. That stay of these strange bedfellows compre- hend the m~schief they are concocting is uncertain. But as ~Ic all know, ignorance of the facts has frequently triggered bursaucratie decisions whose results have been far more damaging to society than the conditions they were sit, posed to remedy.

-2- I would like to address the ramifications of the counter advertising di- lemma quite specifically, and particularly the implications for the pub- lic in mis~l~ed Federal actions. Under the "Federal Communications Ccm~mlssioa's Fairness Doctrine, broad- casters who present coverage of significant controversial issues are required to seek out and present contrasting viewpoints. Until five years ago it had ~ever been supposed that Fairness Doctrine obligations would he called into play by the presentation of ordinary product adver- tis~ents. In i967, however, the FCC held that the advertisements for a single product -- ~igarettes -- presented a ~ique case because the Congress of the United States had specifically found the normal use of cigarettes to be h~zardous. The Commission ordered licensees to make free announce- ment time available for messages that cigarette smoking was dangerous to health. The FCC, when its order was appealed to the courts, stated its belief that "instances of the extension of the ruling to other products would be 'rare,' if indeed they ever occurred." The U. S. Court of Ap- peals for the District of Columbia in turn emphasized that its "cautious approval of this particular decision does not license the Commission to SC~ the air raves for offensive material with no more discriminating a lens than the 'public interest' or even 'the public health.'" Less than two years later, the same Court held that a station which con- tinued to carry ordinary department store advertisements while a union- promoted boycott of the store was in progress, was implicitly expressing

-3- a viewpoint ~ainst the boycott. And hence, said the Court, it was a controversial Islue, as to which the opposlng viewpoint shoed have been presente~. Again, in the fall of 1971~ the same Court held that commer- cials for high-powered cars and leaded gasoline implicitly expressed a viewpoint wblch, in the light of the supposed polluting effects of these products, put them in the same category as ads urging the purchase of cigarettes. In both cases the Court overruled the Federal Communications Commission, ~hleh sought to eonflne counter advertising to the one product it viewed as ~lqt~ -- cigarettes. It Was in this climate that the FCC initiated a wlde-rangi~g i~qulry into all aspects of the Fairness Doctrlne, includ- trig the appr~riLte treat~ent~ under the Fairness Doctrine, of commercial advertisement s, This wus the sit~ticn into which the Federai Trade Co~mission stepped, om Janulry 6 of this year, when it filed with the FCC a statement in be- half of counter Rdvertisi~g to do things the FTC's own regulatory tools, it maid, ootllg not do. The ~C's petition stated that counter adv~rtls- img would he ~proprlate to deal with ads that explicitly raised a con- trover~al Imgue; ad~ that Btreae hrca~ ~heme8 imp31cltly raising such dssllesJ ~ ~g claims Based o~ ddspute~ scientific information; and ads that are ailent ~bout negative aspects of the advertised product. Having thus described the Tour categories, the FTC conceded that the last of them was all incluslwe: "This llst of e~amples could go on im- gef~tely~" the ~C ~oted, "for the existence of undisclosed ~egative

-4- aspects or Srade-offs of one sort or another, is inherent in all commer- cial products and, thus, in all advertising." The concrete examples set forth by the FTC give a clear idea of the r~ge of eo~ter advertisements that it contemplates: "For example, in response to advertising for small automobiles, emphasizing the factor of low coJt and economy, the public could be informed of the views of eome people that such cars are considerably less safe than larger cars. On the other hand, ads for big cars, emphasizing the factors of safety and comfort, could be answered by counter ~ds concerning the greater ~ollution argaably generated by such ears. In response to advertising for some foo~s, emphasizing various nutritional values end benefits, the public might be informed of the views of some people that eo~sump- tion of some other food may he a superior source of the same nutritional values and benefits. X~ response to advertising for whole llfe insur- ance~ e~hasizing the factor of being a sound 'investment,' the public could be informed of the views of sc~e people that whole life insurance is an t~uwlse expenditure. In response to advertising for some drug pro- duets, a~hasizing efficacy in curing various ailments, the public could be infor~e~ of the views of same people that competing drug products with eqUivalent efficacy are available in the market at substantially lower prices." The d@bat@~ ¢le~rly~ could he e~less. ~t would such debate between ad- vertisers and counter advertisers serve the public interest?

-5- NO one who listens to radio or views television news and public affairs broadcasts is ~naware of the vigorous discussion which is taking place as to the i~paet of various advertised products upon the environment and %rgc~ the ~uBIic health and well being. It is because the debate i~ tak- iD4E pipes there that the public has become concerned about such issues. But the ~Aestlon deserves to be asked whether the ~TC's sweeping pro- posal woul~ reJ~Alt in debate that was more meaningful and informative. ~%Ir~lug to the basics of marketing, paid advertising is usually brieF, it is ¢ostl~ and its pllrpose is to sell products or services. In the noz1~ 30- or 6C-second a/L~ottne~ent the advertiser cannot effectively present both ~be competitive virtues of his product and a defense aEalnst any l~ber objections to its social desirability that may be raised. Fltrther, what ~ advertiser cs~ say abo~t the merits of his product is not given the full protection of the First Amendment but, ratherj is l~mited by the vigorous truth-telling standards of the Fed- er~ Tra~e Cc~mission Act. The individuals and groups who would counter advertise would engage in these debates %rlthout any such restrictions. They need not pay for their time| they have no selling obligations; and they would not be restricted hy the FTC in what they could say. The result would not be a debate, but what Dr. Clef T. Whitehead, Director of the Office of Teleecmmunleations Policy, has called "a verbal stoning in the public square." Most of the organizations and groups which would counter ad- vertlse woul~ not be financially responsible for the damage they might cause to the ~vertiser's enterprise and to his employees sho,Ald their

charges be false or irresponsible. Nor is it likely that the First Amendment would be held by the courts to permit the imposition of li- ability on them even if they were financially responsible. Harmful as this unequal debate would be to ~vertisers generally, its detriment would be even greater to advertisers of new products and ser- vices. It would be espeeimlly harmful to products and services that promise sc~e degree of environmental improvement. New products and services always provoke skepticism ~nd for this reason advertising plays a critical role in efforts to obtain l~/01ic acceptance. But claims of environmental improvement (which so often, in the nature of things, is improvement step by step in successive increments) could, like a lightning rod, attract the fierce attacks of impatient counter advertisers, dissatisfied with the nature or the pace of the improve- ment or that it did not deal vith "the real problem.'~ The net result would be to discourage advertisements about product improvement re- late~ to environmental matters, since advertisers would be loath to purchase time which became an invitation to be attacked. And what would counter advertising do to radio and television? Recos~izing its possible impact, the FTC has attempted to suggest that counter advertising could be limited. In this it is following in the dubious footsteps of the FCC, which once thought it could be confined to a single product. But bitter experience points in the opposite direction.

-7- Almost every ~vertised product is susceptible to challenge, not from one, but f~ many different points of view. It has been observed that a 30~ Or 60-Beoond Commercial message featuming a new automobile being driven along a scenic highway could he challenged on the ground that the BAvertimement favors large cars over small ones, promotes expendi- tures on roads at the expense of other public facilities, encourages co, station of scarce resources, contributes to pollution of air and water, r~gzeBants a less desirable expenditure than the consumer might otherwise ~ep or fails to disclose safety hazards or other allegedly undesirable features of the automobile. One group may demand access on behs.lf of small cars, another on the pollution issue, and another on behalf of the highway resource allocation issue. Advertisers of products and services subjected to co~ter commercials ~o~/d flee the broadcast media and m~ke their expenditures in media ~hich weald not e~ose them to the seme hazards. ~ of the only pro~xtct yet subjected to counter advertising -- cigarettes -- offers dramatic mxp~ort for the proposition that this is wh~t~oul~d .... take place. The cigarette manufacturers, facedwith e oj~ter a dvertising~ aggressively SUl~ortad legislatio~ to prohibit cigarette advertising on television a~ radio in preference to exposing their product to increas- in@ attack ~ %he air. Whatever a~bio%ts merit that might be assigned to counter advertising is dissipated and made into a destructive force when the mandate is applied exclusively to radio and television. It would be only a matter of time

-8- before there would be a substantial exodus of advertisers from broadcast- lag to print -- ~ust as in the case Of cigarettes -- only this transfer would be vol~ntary. And understandably, for who could blame the adver- tiser for wantlh~ to avoid counter advertlsiag. But ~ssume for the sake of discussion that today's advertisers would mai~taln their current schedules, and consider what would happen If counter advertislng claims were limited to six product categories only -- cereals, automobiles, gasallne and oil, drugs and detergents -- which in 1970 aeco~uted for about one-fourth of all television networ~ sales. If replies ha~ Been presented in the form of free Bnnouncements occupy- ing time otherwise sold, and if only one such counter advertisement hod been presented for every five commercials -- the same ratio the FCC ap- plied to clg~rettes -- the 1970 loss to the three networks would have been abut $68 million, or $18 million more than the ~ombined pre-tax profits of the three networks. If counter ~dvertising claims, on the same one-to-flve ratio, were allowed with respect to all product cate- gories, the loss to the three networks would have been about $220 million. Those are network fi~ures. ~ut in no senBe would individual stations be spared. Eve~ by using a more lenient one-to-ten ratio, if counter ad- vortlsimg claims had been allowed ia 1970 with respect to all product categories o~ miX television stations, the loss in non-network time EalSs would ~Ve bee~ approximately ~130 millioa. This repreBents aimost one-third of all tel~vlslon stationsf 1970 pre-tax profits.

-9- In the face of these threats to the viability of commercial broadcasting, it is particularly pertinent to consider what such losses -- either through the exodt~ of advertisers or the economic penalties of counter commercials -o could mea~ for the very goal that is the asserted Justification for counter advertising, the goal of informing the public. This ~rear broadcasters are spending millions of dollars to bring to the public the events, the issues ~ud the personalities of a Presidential elec- tion ~ar, from the primaries through the conventions and the ~ampaign to the clims~tie counting of the ballots on Election Night. The financial resources that make this kind of public service possible come from adver- tising. T~iB is the touchstone of our free competitive television service. At stake here is a critical principle. If this country is to enjoy a full broadcast aerviee thst is not dependent upon government subsidies or sub- scri~tion ~ayments by each viewer or listener, the support of responsible adver$iBe~I m~eting ~ccmptable goods and services is the only practicable me~us of funding that free service. With all itm faults, with all its imperfections, the American system of televislom avoids the twin evils of government subsidy and control on the one hand, an~ direct public subscription on the other. Advertising is the foundatio~ of a free press. Remove this source of support and the whole structure falls. It's ms simple as that -- and as threatening. In this election year there will be many issues u~on which the major politi- oak parties will be called to take an u~equivoc~l stand. None is mo~

° -i0- important thLu a free broadcast press. It i~ an ~ue which affects every member of yot~r audlence. It threatens r~dio &nd belevlsion as vit~l in- stru~nents of informed self-gover~ent. And SO I urge you to t~e the in- itiative laperlua~ing the writers, the builders of the party platforms, to Incomporate planks that repudiate in str~ightforwar~ language the ~ole co~ter-prod~c~iv~ concmpt of cou~ter ~d~rtising. And I urge broadcasters to hake the fight against this concept elsewhere -- to your elected rep- resentative~ in WaBh~ngton~ for example, where ultimately the issue mu~t