Prepared Witness Testimony

The House Committee on Energy and Commerce

H.R. 3717, the 'Broadcast Decency Enforcement Act of 2004

Subcommittee on Telecommunications and the Internet
February 26, 2004
09:30 AM
2123 Rayburn House Office Building 

Mr. John Hogan
President and Chief Executive Officer
Clear Channel Radio Clear Channel Communications, Inc.
200 East Basse
San Antonio, TX, 78209

Good Morning, Chairman Upton, Ranking Member Markey, and Members of the Subcommittee. My name is John Hogan, and I am the CEO of Clear Channel Radio.

In the past when I've heard people testify before a Congressional Committee, they've stated that it's a pleasure to be here. Unfortunately, that is not the case for me today.

Today, more than anything else I'm embarrassed. I've read the transcript of a Clear Channel radio show featuring the personality known as Bubba the Love Sponge. As you may know, Clear Channel recently received a substantial Notice of Apparent Liability from the FCC for the content of that show. As a broadcaster, as a CEO, and as a parent of a nine-year-old girl, I am ashamed to be in any way associated with those words. They are tasteless, they are vulgar, and they should not, do not - and will not - represent what Clear Channel is about.

So let me begin my testimony today with an apology - to our listeners; to the public at large; and to you in this room. We were wrong to air that material; I accept responsibility for our mistake; and my company will live with the consequences of its actions.

While we cannot "take back" the words that were aired on our stations, we can take steps to ensure that it won't happen again. We are turning the page on how we deal with and prevent inappropriate content from airing on our stations, and that is what I'd like to focus on with you here today.

First, Clear Channel has ended its contractual relationship with the on-air personality known as "Bubba." His show will no longer be carried by any Clear Channel station. His dismissal will be costly and contentious but it is the right thing to do. Because of employee confidentiality rights, I can't go into much detail regarding his dismissal. But I can assure this Subcommittee that Clear Channel stations will no longer serve as his platform to reach an audience.

But dismissing an on-air talent or DJ isn't enough, and we recognize that. In the days since we received the Notice of Apparent Liability from the FCC, our top executives have devoted considerable time to trying to figure out what went wrong; what we need to do differently; and above all else, what we need to do to ensure that our stations broadcast material that is consistent with the standards and sensibilities of the communities we serve.

The result has been the adoption of what we are calling our "Responsible Broadcasting Initiative" which we are now implementing throughout the Company. It consists of five components, which I'd like to share with you:

1. The first element of the Initiative is Company-wide training. This will of course entail indecency tutorials on what the FCC does not permit broadcasters to air. But it will also include components that educate our employees about our Company - its values, its mission, and its sense of corporate responsibility. My goal is not only to put an end to broadcasts such as Bubba's, but to ensure that our stations accurately reflect what Clear Channel and our communities are all about.

2. The second component will take effect in cases where our training has failed - when a Clear Channel station receives a Notice of Apparent Liability from the FCC for a broadcast that the Commission believes to be indecent. While I hope that there will never again be a case when a Clear Channel station receives such a Notice, if one does we will do the following:

• First, automatically suspend the DJ who was cited;

• Second, require that DJ and anyone else associated with the offending broadcast to undergo remedial training on the FCC's indecency regulations and satisfy station management that they understand where the Commission draws the line; and

• Third, subject that DJ's broadcasts to a significant time delay, so that a program monitor will have the ability to interrupt a broadcast if its content crosses the line. In fact, our engineers are now in the process of developing equipment with the capability of imposing a five minute delay, something unprecedented in the radio business, at significant cost to the company. This will help to ensure that the monitor has sufficient time to exercise discretion and remove any portion of the broadcast that crosses the line.

3. The third component is mandatory termination. If a Notice of Apparent Liability issued by the FCC is adjudicated and Clear Channel is found to have aired an indecent program, the offending DJ will be terminated without delay. No appeals; no intermediate steps. If they break the law by broadcasting indecent material, they will not work for Clear Channel.

4. We have been implementing the fourth component for several months now, and we believe it will pay significant dividends. Our contracts with our on-air performers are being modified to make sure that these performers share financial responsibility if they utter indecent material on the air. This in no way absolves us of our legal responsibilities as licensees, but we hope that it will act as a deterrent to airing material that crosses the line. On a going-forward basis, every contract Clear Channel enters into will include these provisions.

5. Finally, we volunteer to fully participate with other representatives of the broadcast, cable and satellite industries to develop an industry-wide response to indecency and violence. In our view industry-developed guidelines will be as effective as Government-imposed regulations without running afoul of First Amendment protections that we all respect.

Mr. Chairman, I think it is important to mention that the "Responsible Broadcasting Initiative" I've just discussed represents a dramatic departure from Clear Channel's historical approach to our business. As a company, our success has always been based on our decentralized management approach. We have over 950 program directors in local markets across the country making decisions about what gets aired based on the preferences of the communities in which they live. Localism is at the heart and soul of our industry and of Clear Channel, and localism requires local control.

But clearly when it comes to the airing of the type of material that is the subject of this hearing, a different approach is required. As it must, the buck stops here. So in an effort to better serve our listeners and the communities in which they live, we will provide specific direction to our local managers in this area impose a response to the problem that is applied company-wide.

Finally, Mr. Chairman, I'd like to point out that our stations broadcast tens of thousands of hours of programming each week that is entertaining, informative, and completely in line with the standards of our local communities. That success doesn't absolve us of our responsibility for the excesses of the few that have broadcasted irresponsibly. But I hope that this Subcommittee will recognize that the Bubbas of our world are the exception to the rule. They don't represent what Clear Channel is all about, they will no longer have a platform on our stations, and I hope we will be evaluated as a licensee based on all that we do.

We certainly don't want to be associated with indecency. As the CEO, I won't have any more of it. And as an industry leader it's our responsibility to be part of the solution to the problem, and I intend to see that we help to lead the way.

The Legislation

Clear Channel supports H.R. 3717 as introduced. A ten-fold increase in the amount of fines that the FCC can levy will act as an effective deterrent to Clear Channel and the entire broadcast industry. It will also serve as a "shot across the bow" of the industry, putting us all on notice that Congress and the FCC are serious about cleaning up the airwaves.

At Clear Channel we're serious about it too. Our "Responsible Broadcasting Initiative" is designed to ensure that Clear Channel isn't charged with indecency in the future. But if we fail, and are ultimately ordered to pay a fine for broadcasting indecent material, I believe the levels contemplated in the legislation are reasonable and just.

The Amendments

It is my understanding that, when this Subcommittee considered the legislation two weeks ago, several Members offered amendments that were then withdrawn. Without commenting on each of them, let me lay out two broad concerns that I have with the amendments that I've seen.

Revocation of Licenses

The first is that the punishment should fit the crime - that whatever the FCC decides to do should be proportionate to the licensee's transgression. This is not only common sense, but our lawyers tell me that there is also a long-establish body of Constitutional law holding that penalties imposed by the Government must be proportionate to the related offenses.

Clear Channel's 1200 radio stations broadcast approximately 125,000 hours of live/local programming each week. The broadcasts for which we're received the Notice of Apparent Liability represent a fraction of 1% of the programming we air in one week. I don't say that in an attempt to minimize the significance of either the NAL or the associated broadcasts, but only to add a little perspective. We erred in permitting those broadcasts to air; we regret that we did so, and we will live with the consequences.

But radio stations are valuable assets. We have paid more than $100 million for a station in a large market. For the Government to revoke the license of such a station for such a transgression seems to me to be disproportionate.

I'm also concerned that threatening to revoke licenses will force us to contest any allegation of indecency by the Commission because the stakes will be so high. Although this isn't the case with every licensee, in the past Clear Channel has admitted wrong-doing and paid its fines without contesting the allegation. Upping the ante to include revocation as a sanction will put an end to that, since we will have no choice but to protect our company's assets.

Finally, I'm concerned about the proverbial "law of unintended consequences." Although offensive, indecent speech is protected under the First Amendment. If we're forced to contest FCC allegations of indecency in court, it is conceivable that the judiciary may weaken the ability of the FCC to protect the public. That's not an outcome that we want, and I'm sure it's not an outcome that Congress wants either. But when the stakes get raised to the point of endangering our licenses, our duty to our shareholders will force us to resist, and doing so may result in court decisions that are contrary to what any of us want.

Due Process

It appears that there may be an amendment offered that uses the issuance of a Notice of Apparent Liability as a trigger for a revocation hearing. A NAL is an allegation of wrong-doing. But having been accused, the Constitution guarantees a licensee due process rights that include a hearing before an impartial tribunal. In Clear Channel's view the resolution of an indecency complaint should only be viewed as final when an order has been entered by a court of competent jurisdiction, or when a licensee admits to having broadcast indecent programming.

As a general matter, Clear Channel stands ready to work with the Subcommittee to ensure that any amendments to H.R. 3717 are constitutional and will not result in an outcome that is contrary to what Congress is trying to achieve.

Conclusion

Let me conclude where I started - with an apology. I regret that our stations aired this material, and accept full responsibility for it. As I indicated earlier, I'm not happy or proud to be here today. I hope that the steps we are implementing will keep me from ever having to return under similar circumstances in the future.

I thank you for your courtesy, and I'll be happy to answer any questions that you may have.

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