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Sen. John McCain (R-Ariz.) plans to introducea free airtime bill in the 108th Congress. The pro-posed law requires broadcasters to devote airtimeto political campaigns and to subsidize electoraladvertising for candidates.Supporters of the bill argue that it will reducethe need for campaign spending, which allegedlyleads to several harms to the public interest. Yetrecent research shows that increases in the costs of political advertising have not caused the overallrise in campaign spending. Proponents also claimthat free airtime would improve election dis-course, thereby better informing the Americanpeople prior to an election. Yet research also showsthat the negative ads cited by proponents as aproblem for democracy actually serve the publicgood by informing and mobilizing voters.Advocates of “free” airtime defend their proposalagainst First Amendment challenges by arguing thatthe broadcast spectrum is a publicly owned, govern-ment-managed resource that can and should be usedto further myriad political objectives. Because privatebroadcast companies do not technically own theirspectrum but merely lease it from the federal govern-ment, they must satisfy certain “public interest”requirements—such as offering the public a certainamount of educational fare and informational pro-gramming. Because those public interest require-ments are legally imposed on broadcasters, the argu-ment goes, broadcasters can also be required to allo-cate more time or money for political advertising orcampaign coverage in general.That justification for government regulation of broadcasting cannot be sustained. The traditionalarguments for regulation—scarcity, preventing signalinterference, providing a public service—no longerhold up. The Federal Communications Commissionitself is starting to recognize the decline of the broad-cast regulation regime and acknowledge quasi-prop-erty rights in the spectrum. This trend is certain tocontinue, depriving the free airtime proposal of itslegal and philosophical foundation.
Why Subsidize the Soapbox?
The McCain Free Airtime Proposal and the Future of Broadcasting
by John Samples and Adam D. Thierer
_____________________________________________________________________________________________________
 John Samples is director of the Center for Representative Government and Adam D. Thierer is director of telecom-munications studies at the Cato Institute. This study is a companion to Laurence Winer, “
The ConstitutionalCase against Free Airtime,”
Cato Institute Policy Analysis, forthcoming.
Executive Summary
No. 480August 6, 2003
 
Introduction
The urge to regulate political speech didnot end with the passage of the BipartisanCampaign Reform Act in 2002. “Reform is aprocess,” Sen. John McCain (R-Ariz.) now says.“It is not a one-time fight.”
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In the 108thCongress, this unending process will pick upagain. Senator McCain along with co-spon-sors Sens. Russell Feingold (D-Wisc.) andRichard Durbin (D-Ill.) plan to take the nextstep in “reform” by introducing the PoliticalCampaign Broadcast Activity ImprovementsAct. The bill codifies the persistent efforts of many politicians and so-called “public inter-est” groups to force broadcasters to providefree airtime to political candidates and parties.This paper examines McCain’s proposalin two parts. The first takes the proposal onits own terms and contends that it would notadvance the common good, largely because itrelies on false assumptions about Americanelections. Even those observers who acceptthe traditional justification for broadcastregulation have good reason to rejectMcCain’s free airtime proposal.The second part of the paper shows theflaws in the traditional justifications for reg-ulating the broadcast spectrum. The McCainmeasure rests upon and propagates the long-standing theory that the electromagneticradio spectrum must be treated as a social-ized resource, owned by the public and regu-lated at the whim of legislators and regula-tors. This need not be the case although ithas been for almost 70 years. Spectrum prop-erty rights can allow for private managementof the airwaves, including broadcast televi-sion and radio spectrum. Such rights aredeveloping right now in embryonic form.Senator McCain, a long-time critic of thebroadcast sector, should re-channel his ener-gies toward forcing the broadcasters to com-pete for spectrum in a free market anddemand that they return or sell much of thespectrum they have been given free of charge.The paper also raises serious constitutionalconcerns with the free airtime proposal,which will be addressed at greater length in aseparate briefing paper.
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The False AssumptionsBehind Free Airtime
The PCBAIA imposes two major require-ments on broadcasters. It requires broadcast-ers to run 12 hours of “candidate-centeredand issue-centered programming” in the sixweeks prior to primary and general elec-tions.
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The bill outlines the required pro-gramming as follows: “Candidate-centeredprogramming” refers to debates, interviews,candidates statements, and other news orpublic affairs formats that provide for a dis-cussion of issues by candidates; it does notinclude paid political advertisements. “Issue-centered programming” refers to debates,interviews, and other formats that providefor a discussion of ballot measures in theforthcoming election. It does not includepaid political ads.The bill limits editorial control in twoways. First, broadcasters have no choiceabout the content of the 12 hours (half of which must be during prime time)
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in the sixweeks prior to an election; broadcasters mustuse the time for political programming.Second, the bill dictates the formats to beused in the required programming. The billstates that broadcasters will not be paid forthe 12 hours. The mandate constitutes a taxthe sum of which depends on the lost air-time’s monetary value.The bill would also “establish a vouchersystem for the purchase of commercialbroadcast airtime for political advertise-ments, financed by an annual spectrum usefee on all broadcast license holders.” The taxwill be between .5 and 1 percent of gross rev-enues of broadcasters, and the expected over-all cost of the program is $750 million for the2004 election cycle, with subsequent adjust-ments for inflation. Most of the money willgo to House and Senate candidates althoughabout 13 percent will go to the political par-ties.
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The bill also foresees vouchers for pres-
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Even thoseobservers whoaccept the tradi-tional justifica-tion for broadcastregulation havegood reason toreject McCain’sfree airtimeproposal.
 
idential candidates in 2008. Candidates andthe parties will use the vouchers to purchasepolitical advertising from broadcasters whowill then redeem the voucher for cash sup-plied by a Political Advertising VoucherAccount administered by the Federal Com-munications Commission. Since the assets of this fund come from the taxes (or “spectrumuse fee”) extracted from the broadcasters, thevoucher program essentially forces the own-ers of television and radio to subsidize politi-cal advertising.
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The Flawed Rationalesbehind PCBAIA
Advocates rarely say how free airtime mightconcretely serve the public interest. PaulTaylor, president of the Alliance for BetterCampaigns and the leading proponent of thePCBAIA, has been an exception. He arguesthat free airtime will solve problems created bycampaign spending and improve public dis-course. Both rationales are dubious.
The Spending Argument
Campaign spending has risen over thepast few decades. Taylor argues that theincrease is due to the rising cost of campaignads.
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In his view, this situation leads to sever-al public problems.First, raising the money to pay for the costof campaigning corrupts public officials bymaking them beholden to their contributors.In turn, that “corruption” makes voters cyni-cal about politics and discourages voting,thereby raising the cost of reaching voters.Taylor also believes the increasing cost of cam-paigning reduces competition and politicalequality by tilting the electoral field towardwealthy or well-financed candidates: “Whensome candidates can speak with a megaphoneand others only in a whisper, all depending onthe size of their wallets, it offends the values of equal access and fair play we also prize in ourdemocracy.”
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According to Taylor, mandatingfree airtime for candidates would reduce thepower of moneyed interests, increase competi-tion and equality, renew citizen trust in poli-tics, and increase the flow of information tovoters. Each of those conclusions is empirical-ly wrong.
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 Ads and Spending.
Have increases in thecosts of ads caused an increase in overall cam-paign spending? In a recent study, threepolitical scientists from MIT and YaleUniversity compared total campaign spend-ing in very expensive markets (New York andLos Angeles) with total spending in verycheap media markets. They found that totalspending in the expensive markets was “near-ly identical” to spending in inexpensive mar-kets. Their statistical analysis shows a veryminor effect of rising TV costs on overallcampaign spending over time; in fact, theauthors note, they cannot rule out the possi-bility that the effect may be zero. They believethat costly TV advertising causes campaignsto opt for cheaper direct mail advertisinginstead. Consequently, total spending inexpensive media markets is roughly identicalto that in cheap media markets.
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This finding also contravenes Taylor’sclaims about equality and elections. Taylorbelieves the rising cost of campaigns createsgreater electoral inequality since only thewealthy or well-financed can afford the high-er rates. If the rising cost of TV advertisingdoes not explain the increase in spending oncampaigns, it cannot have caused the puta-tive rise in electoral inequality.Like many proponents of campaignfinance restrictions, Paul Taylor believescampaign contributions corrupt policymak-ing and elections. In his view, TV costs causecorruption by increasing candidates’ demandfor money. Whatever the relation betweenspending and corruption, the Ansolabeherestudy shows that rising TV costs are notbehind the rise in spending. Beyond that,Taylor is wrong about the influence of money. In a recent study three MIT profes-sors surveyed 40 academic studies of theputative influence of money on legislativevoting; they also conducted their own analy-sis of the factors affecting legislative roll callvoting. They concluded:
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TV costs are notbehind the rise inspending.
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