November 2003

Penalties related to the importance attached to things.

Penalties related to the importance attached to things.

The penalties a society attaches to breaches of law or codes are almost always a pointer towards the importance attached to things and a number of news stories over recent weeks together with the impressions given by the severity of US Federal Communications Commission (FCC) penalties for various offences seem to present a disturbing perspective on the US.

We say this because of the comparatively high penalties levied in general on pirate station operators compared to those on commercial broadcasters, the amount of comment in recent results about the degree to which the absence of political adverts this year have reduced revenues and profits, and also the marked lack of response to stories of US broadcasters and programme providers --- such as Sky Radio (See RNW Oct 28) - charging their subjects to carry out and use interviews; it is difficult not to conclude that domestically in the US money rules and democracy comes a poor second whatever high-flown declarations may be made from the White House about Iraq.

The issues have a common thread although they may not be directly linked and in Australia when similar activities by talk hosts in taking money but then not disclosing an interest became public in the cash-for-comment scandal in it provoked widespread responses, a regulatory enquiry, and a change in the rules (See RNW Feb 28, 2000). The US, it would seem is different and either has a different perspective on democracy or doesn't mind being bought.

Relative penalties and the logic behind them.

Apart from the recent exceptional penalties levied on Infinity over the Sex in St Patrick's Cathedral stunt - and even then they were low in the impact on Viacom compared to a USD 10,000 penalty on a small-scale pirate operator - the US seems to take the content of what is broadcast much less seriously than what we might call "technical" and safety-related offences.

In this we see some sensible considerations underlying the relative scales but a lack of proportion. Unless the argument is that the pirate could affect emergency service transmissions as opposed to causing interference to the signal of a commercial broadcaster, our view is that offences relating to unlit towers that could be a hazard to aircraft or unfenced antennae that could damage people's health should generally attract significantly more severe penalties than an activity that inconveniences others but is not risking injury to anyone's life or limb.

The fact that they don't should surely be of public concern unless the realistic view is that the whole edifice of tower lighting rules is unnecessary in many areas since the de facto risk of an aircraft hitting a tower is considered to be negligible. If that is so, the rules make sense; if it is not so, the delays permitted for remedying some defects should not be allowed and the penalties for breaches should be much higher and by higher we mean higher in both absolute terms and in relationship to the resources of the offenders.

As regards "content" related offences, it would seem to us that the US has generally just about given up on these except where a particularly gross violation takes place that leads to significant public outcry. Were this because of a genuine concern for freedom of speech, the outcry would not matter and the penalty would relate solely to the severity of the breach in terms of the rules as written. This it seems to us is manifestly not the case at the moment.

We would therefore suggest that if the intent is to ensure safety through inhibiting breaches and minimize offence and inconvenience where safety is not an issue, penalties should automatically be related to the ability of the offender to pay; in other words it would be quite just at times to fine Clear Channel or Infinity a million dollars where a near-bankrupt local station pays thousands. The current base scales are totally inadequate to do this and are therefore clearly going to be ineffective in that in some areas the big companies will simply write down paltry fines as part of the cost of doing business.

Political concerns.

Where politics is concerned, we again think the current situation in the US should be giving far more cause for concern than seems to be the case despite measures by some politicians such as Republican Senator John McCain to do something about the degree to which money is allowed to influence things.

Taking on board arguments that an individual should be allowed to spend their money as they like, we would point out that this is not accepted where it is to the known detriment of society; were this not so, it would be no offence to hire a hit man. Logic thus says to us that where democracy is concerned it is quite reasonable to limit activities so as to ensure a balance is struck between the freedom of the individual and the health of the body politic.

Following on from this, we would suggest that it is reasonable to limit individual contributions so as to ensure that contributions do not end up running close to bribery and corruption - either by placing absolute limits on the amounts individuals and corporations can donate and that politicians can accept from lobbyists without making full and public declarations or possibly by splitting sums above a certain amount into two parts - one a general fund providing matching funds to those a political or party raises from small donations (i.e. relating it to the numbers of people supporting the party or individual) and the other that which can go to the candidate and party. In our case a four to one split would seem about right - any donation above say USD 50,000 would go eighty per cent to the general fund - thus improving the health of the democracy - and twenty per cent to the individual.

We would also suggest that as the airwaves are a leased public resource, broadcasters should be set well-defined public duties in terms of news coverage of issues allied with a similar restriction on the maximum advertising a candidate could buy as a multiple of a base amount or the amounts spent by other candidates, whichever is the greater. Allies with this, those broadcasters who did not meet the duties in terms of news coverage should be banned - with automatic immediate revocation of licence as the penalty - from carrying any political or issue advertising in an election thus giving them the option of taking on their public duties in the period with potential financial rewards or not doing so with no benefits being permitted.

Open declarations of interest.

In the case of the other issue noted, that of requiring payment for interviews that are then carried without adequate information concerning the details, we think the Australian experience shows the way.

To us what is required is open declaration of interest with the most severe financial penalties where this is not done; if the interview is in fact an advertisement it should be made clear to the audience that it has been paid for - and here we would go further than the Australians and insist on the actual amount also being broadcast on air and put on a company web site available to all so as to allow the public to put things into context.
Similarly if an individual or company has vested interests in an issue this should be stated openly and again - as in Australia - broad details
should be available to the public via web sites as well as being stated on air. This is done routinely by most major newspapers, which note when covering an issue, their vested interests.

Where this is done we think financial penalties rather than the licence revocation we mooted above would be the appropriate response since in the one case the actions are a denial of responsibility to play it fair when using a resource leased from the public and the other an exploitation and potential misleading of the public for financial reward.

As to the level of the penalties, we would suggest that a penalty that is the equivalent of telling the pickpocket caught red-handed to give back the goods is a waste of time; the penalty should automatically be of the order of at least ten times the amount of benefit that has been gained by the individual or organization with a baseline set of one twelfth of the past year's total revenue and the company or individual having to provide evidence as mitigation to reduce this rather than the onus being on the regulator to prove the amount.

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