TV Interests Sit Out Campaign $ Debate

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While campaign-finance reform legislation looks to have a better chance of passing Congress than ever before, the cable and broadcast industries are likely to remain on the sidelines of that debate, unless a measure mandating free airtime for political candidates is resurrected.

Sens. John McCain (R-Ariz.) and Russ Feingold (D-Wisc.) introduced the latest version of their campaign finance legislation (S. 27) in the Senate on Jan. 22, and have received a commitment by Senate Majority Leader Trent Lott (R-Miss.) that the measure will be considered by the Senate this spring.

Absent from that legislation, though, is any provision for mandating free airtime for political candidates-something originally in the bill.

Without that provision-which the broadcast industry was largely responsible for killing four years ago and to which the cable industry is opposed-both industries are not very interested in the issue.

"We don't have a position," said National Association of Broadcasters senior vice president Dennis Wharton when asked about campaign finance reform in its current version.

"It hasn't been on the front burner for us," echoed David Beckwith, a spokesman for the National Cable & Telecommunications Association.

McCain and Feingold took the free airtime provision out of their reform bill in September of 1997, in a tactical decision designed to make the legislation more palatable to those-especially the broadcast industry-that opposed a free airtime mandate.

McCain then called the NAB "the most powerful lobby in Washington."

The two lawmakers say they now have enough votes to get their campaign finance reform bill, absent a free airtime provision, to the Senate floor.

They have launched a series of town hall meetings in an attempt to put pressure on key Republican senators that have yet to commit their support. Two meetings so far have been held in Arkansas and Illinois, the home states of holdout Republican Sens. Tim Hutchinson and Peter G. Fitzgerald, respectively.

The current version of McCain and Feingold's legislation, and its House counterpart (H.R. 380), sponsored by Reps. Christopher Shays

(R-Conn.) and Martin T. Meehan (D-Mass.), is mainly designed to limit the influence of so-called soft money-money donated to the political parties, not to the candidates-on federal elections.

Both bills would ban unregulated contributions to political parties by corporations, labor unions and individuals.

A National Journal
analysis of numbers compiled by Votenet Solutions, a nonpartisan group, shows that the two major parties raised $440.1 million in soft money this election cycle. This represents an 83-percent increase over the $240 million that the parties received in the 1995-96 cycle. Both bills would virtually eliminate this money, much of which is spent on political advertising in closely contested races.

McCain-Feingold also would prohibit corporations or unions from funding television ads that mention a candidate's name within 30 days of a primary or 60 days of general election. It would permit non-profit advocacy groups to fund such ads, but only with money donated by individuals, not corporations or unions.

Even without free airtime, this legislation would decrease the revenue that broadcasters and cable receive from political advertising by limiting soft money and restricting corporate and union ads close to elections.

Paul Taylor, founder and executive director of the Alliance for Better Campaigns and a big advocate of free airtime, estimates that between $771 million and $1 billion was spent by candidates, parties and issue advocacy groups on television advertising during the 2000 election cycle alone.

Given this large amount, it might seem odd that the cable and broadcast industries are not aiming to shoot down any reform that would limit political spending.

A closer look at advertising expenditures, however, puts political spending in perspective.

According to Advertising Age, total expenditures for cable and broadcast advertising have hovered around $50 billion for the last few years. Advertisers spent about $41 billion on broadcast advertising in 1999 and about $9.8 billion on cable that year.

This amounts to about $100 billion per two-year election cycle. Thus, all political advertising connected with federal campaigns amounts to less than 1 percent of total television advertising revenues-and McCain-Feingold would not begin to eliminate it all.

Cable is much less dependent on advertising in general than broadcasters. This holds true for political advertising as well.

At the same time, political advertising for broadcasters makes up a very small piece of their overall advertising pie.

However, a few local stations, in areas where there are hotly contested Senate and House races, can rake in huge amounts of money from political ads.

New York City's WNBC, for example, sold 3,875 political ads in the last cycle and grossed more than $18 million from those ads, according to the Alliance for Better Campaigns.

The top 10 beneficiaries of political advertising last cycle were local stations in only five large cities where there were competitive races-Detroit, Los Angeles, New York, Philadelphia and Seattle. Those 10 stations charged a combined $107 million for all politically oriented advertising last cycle, according to the Alliance.

So, while political advertising is a relatively small percentage of total advertising revenue across the entire broadcast industry, it can pay off big for stations that are in the right place at the right time.

If the cable and broadcast industries are relatively unconcerned about McCain-Feingold in its current form, their tune might change if free airtime is resurrected.

It seems likely that someone in Congress will offer an amendment to reform legislation that mandates free airtime. There are many strong advocates of such a provision in both the House and Senate.

The political reality, though, is that there are too many friends of the broadcast industry in Congress for a bill including free airtime to pass.

One congressional aide intimately familiar with the debate said free airtime had "no chance" of being added to the bill.

A spokesman for McCain said the senator still supports the idea of free airtime, but conceded that he would not encourage such an amendment because it would "automatically doom" the bill.

CABLE REMAINS 'SKEPTICAL'

The NAB's Wharton said broadcasters were still opposed to any free airtime provision. The cable industry is also opposed.

"We're skeptical about a government mandate on airtime or other burdens on private enterprise and their First Amendment rights," said NCTA's Beckwith.

He said cable already is providing large amounts of political information to its viewers, citing polls that consistently indicate cable is the No.1 source for political news.

"It is amazing how many cable channels do political news, from C-SPAN to the news channels to MTV to Comedy Central," Beckwith said.

Wharton pointed out that broadcasters already are required to sell airtime to political candidates at favorable rates.

The law to which he refers was enacted as part of campaign finance reform passed in 1972, and applies to broadcast and cable networks. Known as the "lowest unit charge" provision, it requires that candidates be charged the lowest existing rate for advertising time during the 45-days prior to a primary election and 60 days prior to a general election.

Another provision, also enacted in 1972, requires broadcasters, but not cable channels, to sell airtime to candidates who wish to buy time. A candidate, therefore, cannot be denied access to airtime they wish to purchase, regardless of availability.

Advocates for free airtime say these provisions don't do enough to reduce the cost of elections.

Taylor points out that the lowest unit charge provision, for example, can be easily skirted by sellers of airtime because the law requires only that sellers charge candidates the lowest rate for a given class of time.

Political candidates often choose to buy so-called non-preemptable time-time that guarantees their advertising spots will not be preempted by a higher bidder. This can end up costing many times the lowest rate for preemptable spots.

Whereas most advertisers can afford to have a certain percentage of their slots preempted and eventually aired later, political candidates need assurances that their spots will run by Election Day.

No matter how inhospitable the current political climate, Taylor and other advocates still believe a free airtime mandate would do more to lessen the influence of money in politics than any other single reform measure. Television advertising, according to Taylor is "clearly the engine that is driving the money chase."

According to the Congressional Research Service, media costs in competitive races account for more than half of House, Senate and presidential candidates' spending.

Taylor advocates a system of vouchers that candidates could use to purchase airtime at no cost. Candidates who limit spending and parties that limit soft money expenditures would earn the vouchers.

Dwight Morris, president of the Campaign Study Group, a research organization that studies congressional races, disputes Taylor's claim that political advertising is a major component of campaign spending.

Morris claims that free airtime advocates focus narrowly on the most competitive races, neglecting to look at the entire electoral picture. If they were to do so, Morris says, they would find that the vast majority of candidates for the House and Senate, engaged in non-competitive races, spend a very small percentage on television advertising.

Spending on campaign advertising for House races "averages less than 1 percent for the last decade," Morris said. "If you look at the actual dollar amount, it is not the engine that drives most campaigns."

It is hard to verify the numbers that either Taylor or Morris cite, as almost no one is currently tracking campaign spending on television advertising. Morris plans to release a study of the last election cycle later this year that he says will verify his claims.

Morris said that high-profile campaigns like Hillary Rodham Clinton's campaign against former Rep. Rick Lazio for New York's Senate seat represent the "absolute extreme," but are not representative of most campaigns.

Morris also contends that most House races are won not because of spending, but because the vast majority of districts overwhelmingly lean in the direction of one party or another.

"The gerrymandering that goes on, sets the Congress for a decade," Morris said.

In addition, broadcasters argue that when they offer free airtime to candidates they are often rebuffed. Wharton cited a 1996 NAB study that revealed that $15.1 million in free airtime offered by broadcasters went unused that year.

Though they face opposition in Congress and from cable and broadcast industry representatives, free airtime advocates remain hopeful that McCain will have a change of heart, and push for a free airtime provision.

"Our hope is that [McCain] will take the lead on this issue," Taylor said.

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