FCC'S DEPARTING HUNDT DEFENDS LIQUOR AD STAND: ONE ON ONE: BEER, WINE ADS 'RED HERRING'

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One year ago today, a TV spot for Seagram Americas' Crown Royal whiskey ran in Corpus Christi, Texas, signaling a decision by the Distilled Spirits Council of the U.S. to abandon the industry's moratorium on broadcast advertising. Federal Communications Commission Chairman Reed Hundt, who has announced his departure from office, has been a vocal critic of spirits brands on TV and radio, and has tried unsuccessfully to get his fellow FCC commissioners to authorize a formal inquiry. Last week, he sat down with Washington Bureau Chief Ira Teinowitz to discuss his views.

Advertising Age: Why did you get into the distilled spirits fight?

Reed Hundt: Some very good things have happened. The major networks and the major [station] groups said they won't carry hard-liquor ads. Citizens groups, a huge number [240] representing millions of citizens, said hard liquor should not be on the airwaves. The president has twice spoken about this to the nation, and twice written us a letter asking us to conduct an inquiry . . .

Why did I get in it? Because this is our job and the airwaves belong to the public. We should pass rules and do inquiries and be held accountable for uses of the airwaves.

For most uses, we trust the private sector to do the right thing in a competitive market. That works out great. But as [far as] hard liquor is concerned, from 1948 until a year ago, doing the right thing was widely believed to mean that a product illegal and dangerous for kids to consume would not be advertised on a medium that has an enormous impact on kids.

All of a sudden there was a negative epiphany. Instead of a flash of light, a period of darkness ensued. It's as if bad ideas exploded and the atmosphere was covered in ash-and no one could see clearly the fundamental problem, which is [that] to make kids intimately familiar with the distinctions between rye and rotgut and bourbon and scotch is unnecessary and ill-advised.

AA: At the same time, the FCC had never really gotten involved in beer and wine advertising.

Mr. Hundt: This is the biggest and smelliest red herring anyone has tried to draw against my particular path. When the liquor industry rescinds its own repeated statements that its product is not appropriate for advertising on TV, we are supposed to look away from that and look at the use of beer advertising when no one in the country has petitioned us to keep beer advertising off the airwaves?

If the liquor industry was true to its statements, it would have come here and said, "You ought to have had a rule banning beer." But they never ever did that.

AA: Are you satisfied with what has happened?

Mr. Hundt: I am very pleased about the [station] groups and networks saying they won't carry ads . . . but I am not the least bit satisfied with the current state of affairs.

We have an intransigence in various quarters at even examining the facts. We have drafted a notice of inquiry that says we would like to permit all parties to comment on the material we have received and we would like to gather information. The nine-page notice said we would like to write a report to the president and to Congress and the American people on the status of distilled spirits advertising and broadcast, and we don't even have a majority on this commission right now that is willing to do a report.

Why not? Just a report. What is the number of stations carrying hard-liquor advertising? Why don't I have more information? Because I can't get a majority of the FCC to vote to do a report or an investigation. The Federal Trade Commission is not doing that; no one is doing that. We have the primary jurisdiction to ask the broadcasters what they are doing.

AA: You have scheduled a vote for June 19, but Commissioner James Quello has indicated he may ask that a vote be postponed.

Mr. Hundt: We have an informal practice that a one-month delay can be obtained-I will honor it. But what is the point of a postponement? Why would you not want to have an inquiry? Why would you not want to know the facts?

I am not going to change my views. I don't know if you will be reporting them in the future.

AA: It seems your views have changed somewhat, though. Initially you called for banning liquor advertising on TV, but later you talked of beer advertising and what should or should not be done.

Mr. Hundt: I don't think my views have changed. The distilled spirits industry argued they wanted a chance to make their case about other kinds of alcohol advertisements, and what I've said is, "If that is what you want, support our inquiry and make your case."

If they have a case they want to make, we would certainly welcome their input. But I note that this open invitation to support our notice of inquiry has been declined by earsplitting silence from the . . . industry.

On the other hand, when they jumped to the conclusion that my resignation was effective immediately, they revealed . . . their true view in copious detail, which is "Eureka, now we can get our hard-liquor advertising on television."

I would say that was a moment of light on a very dark situation. Now we know exactly what the true deal is.

AA: Going back to beer, what is your view on counteradvertising?

Mr. Hundt: An inquiry ought to investigate all the topics raised by anyone. There is no reason for the government, which is the guardian of the airwaves and the steward of the American people, to close the door on some issue. But it isn't necessary for me to have a definitive close-minded view before we even have the inquiry.

All I am fighting for here is the notion that on our watch, while all of us are commissioners, we ought to do the job of the watchman.

AA: Are you for counteradvertising for beer?

Mr. Hundt: I am not saying that. If the hard-liquor industry wants to raise this issue, then do it in an open and above-board manner in our record during our inquiry. Don't ask me to make up my mind in advance. Make your arguments.

AA: You had said you were looking at counteradvertising?

Mr. Hundt: It is worth considering, but I am not coming in with preconceived opinions.

AA: One of the complaints coming from the distilled spirits industry is that you have already made up your mind and should recuse yourself.

Mr. Hundt: Recuse myself from what? They won't support a notice of inquiry [into which] they could make this allegation.

AA: If you leave the commission without this being resolved, how will you feel?

Mr. Hundt: Like we have been fighting the good fight. If you know how many stations they are on, I will tell you how successful we have been. This is a strange situation for people in government, to feel that government doesn't even have the role of reporting to the American people what is going on.

AA: Is broadcasting's public service responsibility in carrying liquor ads different from its overall responsibility for public service?

Mr. Hundt: There are lots of products that broadcasters have traditionally regarded as too dangerous, inappropriate, too tasteless or unlawful to be advertised to audiences that include children. Historically, it has never been thought we needed to [ban] that; [we felt] the broadcasters could self-regulate. That is fine with me.

And, if we have an inquiry and [the National Association of Broadcasters] comes to me with proof that individual broadcasters are deciding separately not to carry the hard-liquor advertising, then I guess the unwritten rule doesn't need to get written.

AA: But what about responsibility for running public service announcements? Are they not doing enough?

Mr. Hundt: As far as I know, the nub of the problem has two parts. The first part is that the different networks have very, very different standards as far as putting PSAs in the national feed, a huge range of difference. That's not a good thing. The ones that do the most are going to have a hard time doing the most if the others are setting a new, lower standard.

The second problem is the time, by and large, is being covered by local stations with commercial advertising. That is what we are informed is the problem, and we are going to begin chatting with the networks on this topic very soon.

We will start the discussion in an open-ended way and see what happens.

AA: What do you mean when you say PSAs? What the networks describe or what the Ad Council describes?

Mr. Hundt: When I say PSAs, I mean the kind the Ad Council prizes and makes wonderful use of in creating its national campaigns. [It] makes the same kind of advertising campaigns that sell us Pampers or Grape-Nuts. For the networks not to give [the Ad Council] that opportunity [to air those spots] would be a very sad day.

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