The NewsHour with Jim Lehrer

JIM LEHRER: Good evening. I'm Jim Lehrer. On the NewsHour tonight, a conversation with Steve Case and Gerald Levin two days after they announced the creation of AOL.-Time Warner, the largest media company in the world; a Gwen Ifill and Jan Crawford Greenburg look at two decisions and an argument at the U.S. Supreme Court; and another Terence Smith-led examination of campaign 2000 political ads. It all follows our summary of the news this Wednesday.

NEWS SUMMARY

JIM LEHRER: The U.S. Supreme Court today gave added power to police and took some away from the states. The justices ruled 5 to 4 that police may stop and question people because they ran at the sight of an officer. In another decision, they said unanimously that Congress may bar states from selling the personal information on driver's licenses. Also today, the Justices heard arguments about whether grandparents may see their grandchildren, even when the parents object. At issue is a Washington state law. It gives grandparents and others visitation rights, provided a judge decided it was in the child's best interest. But the state's highest court struck it down as intrusive. A lawyer for the grandparents in the case commented after today's arguments.

MARK OLSON, Lawyer for Grandparents: The best interest of the child standard is a very flexible standard, and damages can apply it along with the assistance of psychologists, psychiatrists and social workers who will assist the families in sorting out these family disputes. There has to be a forum for the children to process that focuses on the children's needs. That's what we're asking the court to maintain in the State of Washington.

JIM LEHRER: A lawyer for the parents said they know what's best for their own children.

CATHERINE SMITH, Lawyer for Parents: The court has recognized that for over 80 years. As a society we've recognized that since the beginning of time. And there's nothing different about today that suggests the state is in a better position to decide day-to-day decisions for a child than their parents.

JIM LEHRER: We'll have more on the day's Supreme Court action later in the program tonight. Attorney General Reno said today a state judge in Miami has nosay in the case of a six-year-old Cuban boy. The judge had ruled Elian Gonzalez must not be returned to his father in Cuba, pending a March hearing. Reno sent a letter today to lawyers for the boy's relatives in Florida. She said federal courts must handle any legal challenge to returning him to Cuba. But, she indefinitely postponed a Friday deadline for sending the boy back, allowing the family time to appeal. The Spanish government said today it would not pursue the extradition of former Chilean dictator Pinochet. Yesterday, British officials declared the 84-year-old general too sick to stand trial. We have this report from Robert Moore of Independent Television News. (Singing)

ROBERT MOORE, ITN: It may still be a little premature, but on the streets of the Chilean capital, Santiago, General Pinochet's supporters began to celebrate. There is now a sense the former dictator is coming home, after the panel of four independent British medical experts all judged him unfit to stand trial. Those eminent specialists-- three doctors and a neuropsychologist-- declared that in September and October, General Pinochet had suffered a sharp deterioration in his health, and that no improvement was likely. That has allowed the home secretary to state last night, and to the commons today, that subject to further representations, he will allow the former Chilean leader to return home.

JACK STRAW, Home Secretary, Britain: I am minded to take the view that no purpose would be served by continuing the present extradition proceedings.

ROBERT MOORE: There has been no reaction from General Pinochet himself, who remains out of sight and under house arrest on a Surrey estate. His lawyers know there could still be further legal challenges to any decision to release him. But after so many months of battling to see their old enemy in the dock, human rights campaigners are today expressing bitter disappointment and vowing to carry on what they call their "fight for justice." Both human rights activists and some senior labor MP's are demanding that General Pinochet's confidential medical records are made public. They argue that if the former dictator does escape justice, then his torture victims have the right to know it's because of compelling and overwhelming medical evidence.

JIM LEHRER: Chile's ambassador to Britain said the former dictator could still face prosecution if he returns home. Israeli Prime Minister Barak said today a peace deal with Syria could come within two months. He told Israeli Army Radio he was confident he could overcome potion to turn the Golan Heights to Syria. In Syria, state-run media charged again that Barak had prevented any progress in the peace talks that ended Monday. The talks are due to resume next Wednesday. And that's it for the News Summary tonight. Now it's on to Case and Levin, the day at the Supreme Court, and another round of 2000 campaign ads.

NEWSMAKER

JIM LEHRER: The largest corporate merger in history, the most significant coming together of the mass media and the Internet. It happened on Monday with the announcement of the AOL/Time Warner deal. The men who made that deal are with us now: Steve Case, chairman and chief executive officer of America OnLine; he'll be chairman of the new company, AOL/Time Warner - Gerald Levin, now Time Warner's chairman and chief executive officer; he will serve as AOL/Time Warner's CEO.

Gentlemen, do you feel as good about your deal tonight as you did on Monday?

STEVE CASE: Oh, even better. We've had a chance now for a couple of days to meet each other's management teams. Gerry was visiting the old team today in Virginia; I was in New York meetings, a number of people, the last couple of days, and we're very excited because ultimately this is about the people coming together from both companies to make these things possible. We've always known it was a powerful idea bringing these companies together. We always knew it could have a profound impact on consumers' lives in terms of improving the way they get information, how they communicate, how they buy products, how they're entertained, and after spending a couple of days, taking it beyond the deal stage into the reality, how we can make this work. I think we're more excited than ever.

JIM LEHRER: Amen to that?

GERALD LEVIN: Oh, absolutely. You know, when you're working hard over a weekend to make something happen, and retain the element of surprise, your mindset isn't, you know, that you're fully embracing the new family. But once you get past the euphoria of an announcement on Monday, and you've crossed a major line, and we spent a lot of time together the last several days, I'm even more reinforced about the correctness of the decisions we've made.

JIM LEHRER: Speaking of euphoria, let me read you the lead in today's "Financial Times." It says, " Wall Street" - it's from a story about this - "Wall Street knocked $30 billion from the combined stock market value of America OnLine and Time Warner yesterday as Monday's euphoria over news of the world's biggest merger departed, leaving behind a notable hangover." No hangover with you?

GERALD LEVIN: Absolutely not. This is a question of understanding the way the markets operate. And you normally have some dislocation with a deal of this size, so that there is a shuffling of shareholders; there's what's called arbitrage activities; and there's a lot of trading activity. And I'll use the word "trading" because it's not fundamental. It's not fundamental. As a matter of fact, if you look at some of the - or listen to some of the analysis, you're basically hearing this is a good deal, it makes a lot of sense, and then you go through what I'll call financial pyrotechnics, and that's what's going to happen.

JIM LEHRER: But $30 billion is a lot of money, Mr. Case.

STEVE CASE: Well, sure it is, and we do believe we're on the path of building what may be the most valuable company and most respected company in the world someday, and we're going to continue to focus on making that happen. But we can't focus on what happens in the stock market one day or one week or one month, or even one year. We've really got to take a long-term view of this, and we certainly watched our valuation as an Internet company bounce all over the place. We've seen our valuation go up $100 billion in six months and then drop $100 billion. So you can't really focus on the stock market, which can get a little bit of a roller coaster. The thing you have to focus on is trying to do a better job than anybody else and meeting the needs of consumers. We're at the cusp of what we think will be a new era as the television and the PC and the telephone start blurring together and the promise of the Internet - the promise of interactive personalized services really move out to the world at large. And that's really what's exciting about this company. We think we have a unique opportunity to really improve people's lives, and that also will be in the interest of our shareholders.

JIM LEHRER: Let's talk about that. The blurring together into what? What is it that the two of you want to create, when you talked about, let's get together, let's create something new and different and bigger. What was it?

GERALD LEVIN: Well, what's really happening now is we've seen two strands, one through the PC, and one through the television set. And both have different histories, and they're at a certain state in their development. And this overused word of convergence is, in fact, about to happen. As a matter of fact, I guess you could say that this transaction, I hate the word transaction because it's so cold -- this is a form coming together - that this really signifies that the kinds of functions that have been applied to these two instruments are about to come together so that the television set, for example, you'll be able to do a lot of these things that AOL has been working through the PC.

JIM LEHRER: You mean, like what, that you could, that AOL has been doing through the PC that you can do...

GERALD LEVIN: Right now consumers are watching your news show, a distinguished news show.

JIM LEHRER: That's right.

GERALD LEVIN: If at the same time you start talking about a Supreme Court decision or what's happening abroad or in China, at that point, if I want to go and do a little background checking and go into the Net to get some information -

JIM LEHRER: While we're still on the air?

GERALD LEVIN: -- while you're still on the air, excuse me, I don't mean to offend...

STEVE CASE: Your face would still be on the screen. We'll just add a few little things in the corner. Don't you worry.

GERALD LEVIN: Better yet for you, Jim. I want to send a little note to a buddy or relative to tune into your show, and I can send that e-mail in effect while you're watching through the television on the screen. I don't have to go to my PC -- just a small example. But it's, again, to make a very useful communications interactive function with something that hasn't served that role before.

JIM LEHRER: But why is that a good thing, Mr. Case?

STEVE CASE: Oh, it's a great thing. What's happened in the last 20 years are two big trends -- one actually led by Time Warner, Jerry in particular, and more recently the Internet. The first was capable television. 20, 30 years ago you typically had three TV networks that you had to go to.

JIM LEHRER: Four, including PBS.

STEVE CASE: Three-and-a-half.

JIM LEHRER: Okay. Three-and-a-half.

STEVE CASE: But now you have in some markets dozens, some markets even hundreds. So there's a diversity of choices possible on television because of cable television -- Jerry's leadership of HBO, which became the killer application that really drove a lot of the success of cable television. The last ten years have really been about the Internet, taking the PC, which ten years ago most people didn't have one at home, and if they did, it was for word processing and maybe for recipe filing. Now it's an interactive device, a communications device, and more and more people are connected more and more habitually. What's happening is people have far more choice. They're empowered to do what they want, when they want, the way they want. And, similarly, we're starting to see real significant trends on the telephone, which is starting to have screens, particularly cell phones. Consumers love the fact they have new ways to get information, new ways to communicate, new ways to buy products, new ways to learn things, new ways to be entertained. And they want to figure out how to take what's happening on the PC, what's happening on the television, what's happening on the telephone and have it a little more integrated so it's more convenient.

JIM LEHRER: Are you sure that the consumers want to do this, or is this a decision you've made and you want to sell it to them?

GERALD LEVIN: No. It's so fundamental with respect to the human condition. The first, you know, the current Internet word is community. But it really goes back to something very fundamental, that there's a shared experience by people who have a certain affinity. And community is expressed in chats and again modern words. But what it really is, we think back and there's some nostalgia for the days of television where the whole country congregated for a particular event, an experience that that still happens, by the way. Here you have the opportunity to do two things that are fundamental - actually many more than two. First is community -- to interact with like-minded people on lots of subjects. The second is to have available information. I mean, what's happened here, the Internet is essentially like the library at Alexandria, not Alexandria, Virginia, but that Alexandria -- the sum total of the world's thinking - Gresham's Law -- some good, some not so good, but it's all there. It's all there for me to access. We've never had that condition before. So what this does is just facilitates that ability to get information, news, things that are related to my lifestyle in an easy way with no central control.

JIM LEHRER: Well, if there's no central control, then why did you all get together to make this major company? Aren't the two of you going to control this?

STEVE CASE: No, no, nobody's going to control anything. There's really a major revolution in terms of the diversity of content. As I said, with now hundreds of cable channels, millions of web sites out there, anybody can now become a publisher. But what we can do together is quite profound in terms of how to improve the integration of these different devices. What people are starting to say is I really love the Internet, I love AOL; I'm using it more and more; my family members are using it more and more; but I really want to have access to it all the time -- not just when I happen to be at home. So when I'm in the car or at the office or traveling in a hotel or if I'm in the living room, I want to have access to these services; I want to be able to check my e-mail; I want to be able to check my stock quotes. So they need us to integrate this, and one of the big ideas we'll be pursuing over the next decade is what we call AOL TV, making the TV experience more interactive, more personalized, more customized, learning some of the lessons or applying some of the lessons from the Internet.

JIM LEHRER: Let me just try to be specific here. Warner Brothers makes movies.

GERALD LEVIN: Good movies.

JIM LEHRER: Good movies.

GERALD LEVIN: Great movies.

JIM LEHRER: Okay. Get movies. You're watching a Warner Brothers movie. How are you going to inter-react or interact with that? Why would you want to do that?

GERALD LEVIN: What we've found, and I'm a product of my own experience, where we actually built a fully interactive system some years ago before the availability of all this technology. Even in the case of a movie, people love to consume it -- what we call VCR functionality, the ability to stop a scene, not just because the phone rang or I want to go to the fridge, but I want to ingest it. I want to embrace it. I want to go through it. I want to... actually, if there's a director's cut so I can understand what the director was doing or in the case of even my own family, to show them trailers for the film that we used to have 30 or 40 years ago, a rich experience -- and to kind of consume it at various pieces and not just in a linear fashion. You know, there's this old saw that people really don't want interactivity. They want to sit back in a chair and just relax and let it wash over them.

JIM LEHRER: You don't buy that?

GERALD LEVIN: No, because the kind of interactivity, it's already been demonstrated. The development of the VCR told us that people want to control themselves what they want to see and now do it when they want it.

STEVE CASE: That's the success of AOL. We've added ten million customers in the last two years because people want to take control of their information and their communications and their entertainment. But it's not about movies. There are also things like CNN -

JIM LEHRER: I was using that as an --

STEVE CASE: -- that could be more personalized. You could have a news clipping service that actually has video clips or a music jukebox, so you don't have to necessarily get the CD's. You have an electronic jukebox in your car or home, and you have access to all kinds of songs on a pay-per-play or a one-time license fee basis. It would be a much more convenient way to listen to music than figuring out which CD do I have in which car.

GERALD LEVIN: I'm recalling when I was a young person and joined Time Inc. and I went to dinner with some of my elders who actually worked with Henry Luce and Roy Larson. What we were kind of saying around the lunch table is wouldn't it be great if the sum total of human experience in terms of information, creativity, storytelling, music was available somewhere - and I could have access to it in a convenient form - and as a matter of fact we made it available to as many people as possible? Well, that's really the period. That's what this digital revolution is coming close to being able to provide. So there's no one who kind of edited all this stuff out here. It's the individual who becomes the editor.

STEVE CASE: It's very empowering.

JIM LEHRER: Let me ask you a simple-minded question, but a lot of people... simple-minded friends of mine who have asked this and been talking about it since you announced this thing on Monday, and it goes like this. Hey, wait a minute. I have got this big-screen television, and I have got this little-screen computer -- why in the world would I want to watch movies on a little screen, when I can go home?

STEVE CASE: You won't. That's not what we're talking about. We're not dumb. We don't think people are going to be watching the new Time Warner film on a little palm pilot. That's ridiculous. What we're saying is people are using the television now; they have been for decades. They're watching lots of things on it. But as there are more and more channels, it starts getting harder to find the things you want. So, you need a program guide. Maybe it would be helpful to have some way to get the programs you want when you want them as opposed to having to be there at the right time. And it certainly would be nice to add some elements of community on particular shows so you can talk about shows or sports teams or things like that or take a poll or order a product, and on the PC side, broadband is coming, higher speed access to the Internet.

JIM LEHRER: Broadband means cable, right?

STEVE CASE: Means cable or telephone or wireless.

GERALD LEVIN: High capacity.

STEVE CASE: But it's not just higher speed access to web pages, which is important, it also enables you to create a whole new kind of Internet, which has some of the multimedia components like video that are common on the television. This is a service that will really come to life.

GERALD LEVIN: Maybe the easiest way to say this, not showing movies on a PC, it's taking control -- let's just use the television because that's the mass instrument that's out there - and before we talk about the PC -- it's taking control. The reason I use the VCR analogy is you take control of the television set. You decide what you want. You put it in the television set. You start it. You stop it. You go back. You go fast forward. Okay. That concept, if I can do that, let's not get beguiled by the technology. In fact, digital does enable you to do all those things even with live television. But if I can add the ability to communicate so that this experience is not a solitary experience and the communication is with others who I want the communicate with or it's with information that I want at that time, and I don't want someone telling me about it on their schedule, that's the empowerment that we're talking about.

JIM LEHRER: Let's talk about power here for a moment. It's been widely reported since this deal was announced on Monday, Mr. Case, that you have said in the past you want AOL to be the king of the world. Where did that get started?

STEVE CASE: I don't think I ever said I want AOL to be the king of the world. I have said I believe the Internet is the future and we're moving toward a more connected society and AOL is the leading Internet company and 20 million people -- 20 million families rely on AOL. So I felt like we were at the epicenter of a major revolution. But I've always been, I think, sort of humble about the role we play and recognize that we don't do much. It's really up to consumers to decide how to customize AOL for their own needs. Even though at 20 million customers, we have 20 million people doing very different things.

JIM LEHRER: But now the combining of your two companies, there's a lot of power in your four hands.

STEVE CASE: Oh, I think there's power in the hands of consumers -- unbelievable choices. And we'll be able to create new kinds of offerings that they can take advantage of. They ultimately decide whether they want to subscribe the AOL, which website to go to, whether to subscribe to "Time" Magazine or watch CNN. It's a consumer choice. We're going to just give them more choices.

GERALD LEVIN: But, you know, here's a case where I think it's very important for us... We're not Pollyannaish. But this isn't about size. It's certainly not about power. We happen to share the same kinds of personalities. You know, we both to a certain extent have had a charisma bypass, at least that's the description of me.

STEVE CASE: I've heard the same.

GERALD LEVIN: What we're really talking about is we want to do something different. We want people to understand that in business you can have a social commitment because of the things that we do and our own orientation. We'd like to state very clearly, which we have, that this company, put aside its financial size, is going to operate in the public interest. We're going to try and make a better world. Now, you would ask, well, you're in business to make money. Government is in the business of the public interest; educational institutions are -- non-profit organizations. And our intention is to try and establish like-minded individuals with a committed workforce and a group that really feel we can do that. And that's one of the messages that we're delivering.

JIM LEHRER: But how should the American people value or judge that message tonight? In other words, people are watching you tonight, the two of you. So you're talking about public interest. Now, both of you have been running huge companies that have made a tremendous amount of money, and you're answerable to stockholders, both of you are; you're answerable to investors. How should they decide tonight whether or not you're also going to be answerable to them in this new venture?

GERALD LEVIN: As Steve answers that, he's now aware of something that's in our genetic history. So now we both participate in it. In Henry Luce's will, there was a statement that Time Inc. was to be operated not only in the interest of shareholders, but in the public interest. And he said that for several reasons. First of all, because part of what we do is important journalism. Now part of what we do is also telling stories and things that in an entertainment sense are also quite impactful. But it's because we have the skill, the resources and the intellectual capacity to play a role in the articulation of public policy, and I think given where the world is going, not just with global companies who should be feared and limited, but where we have the opportunity to disseminate, to be meaningful in this society.

JIM LEHRER: But isn't that -- didn't you just -- didn't Mr. Levin just define power? Isn't that --

STEVE CASE: Well, to an extent. We feel like we shoulder tremendous responsibility. And in terms of how people should judge it, I think one way to start is look at what we've done in the past. AOL Is the leader in trying to bridge the digital divide, make sure as we move to this connected world nobody is left behind. AOL is the leader in trying to make sure the Internet is safe for kids. We've built an alliance among Internet companies to do things like parental controls. We've been the leader in trying to build privacy protection for the industry. Time Warner has been the leader in many different initiatives, education, for example. Jerry was the first major CEO of a major company to have the board put a values committee in place a couple years ago, which shows there really is a commitment as I've said for several years, we believe we can, if we continue to focus on the needs of consumers and ride this wave of this connected world, build the most valuable company in the world. But it's not enough. We also have to build the most respected company in the world.

JIM LEHRER: What about the credibility problem, Mr. Case, particularly in the journalism... there are several...many journalism organizations that are coming now under AOL-Time Warner. There's "Time" Magazine and there's CNN and on down. And neither one of you have a journalism background. How are you going to view --

GERALD LEVIN: I was the editor of a high school newspaper. So there you go.

JIM LEHRER: Okay. A professional journalism background.

STEVE CASE: I completely respect the journalistic traditions of "Time" Magazine, as Gerry said, of Henry Luce and many others and recognize it's important to have a separation of church and state and recognize it's important to really empower journalists to do their job and the whole thing unravels if there is any question about that. And that value is going to grow as the Internet takes hold, because as there are suddenly millions of choices from millions of web sites, brands are going to become more important, and brands are basically a trusting relationship with consumers. So if you ever violate that trust, the value of that brand dissipates.

GERALD LEVIN: Let me -- for the record, since I am the CEO of Time Warner and I will be the CEO of this combined company, my genetic tradition-- I grew up in the past 30 years in Time Incorporated with all of the journalism that's in our magazines and then with Ted Turner at CNN-- and I believe that my DNA is related to the practice of first-rate independent journalism. And you have to look to the CEO of these companies to see who it is, where did they come from, what's that person's orientation? And I guarantee you, I am willing to stipulate that my respect and my participation with respect to the journalists has everything to do to secure their independence. In fact, the whole history of taking Time Inc. into its current state, and new with AOL, has been designed to protected and enhance the journalistic independence of our company.

JIM LEHRER: Let me ask you this, Mr. Case: Are you prepared as chairman of this company, to pick up a copy of "Time" Magazine on a Monday morning and see a story in there that just completely is negative about AOL?

STEVE CASE: Of course. I'm used to that.

JIM LEHRER: And you're not going to call Levin?

STEVE CASE: I've seen more negative stories about me and AOL in the past ten years than probably anybody else. I think it goes with the territory. I'll tell you what I think is going to happen -

JIM LEHRER: But - these -

STEVE CASE: Here's what I think is going to happen: I think the coverage of AOL and me is going to get tougher in the Time Warner publications over the next few years because it's like when you're coaching your kid's soccer team, you're less likely to put your kid into play because you want to make sure nobody thinks there is any favoritism. I think people are going to bend over backwards and be more likely to be cynical, more likely to be negative in the Time Warner publications than in anybody else's publication. I think that goes with the territory. This is not about trying to have some influence over all these media properties for some kind of self-serving reason. This is about trying to help consumers kind of wind through this new world as the television, the PC, their telephone, the world, the media, entertainment, Internet communications start blurring together. We want to create services that really can improve people's hives. That's the real driver of this whole deal.

JIM LEHRER: And make some money in the process?

GERALD LEVIN: To be sure. But Jim, in the first conversations that Steve and I had, I established as a benchmark the independence of our journalism, regardless of how we were structuring the company. And, you know, he understands that. It's also understood that that's my responsibility. And these issues are issues that we have faced, understood for many, many years.

JIM LEHRER: All right. Gentlemen, thank you both very much and good luck to you.

GERALD LEVIN: Thank you.

STEVE CASE: Thank you.

FOCUS - SUPREME COURT WATCH

JIM LEHRER: Still to come on the NewsHour tonight, today at the U.S. Supreme Court, and political campaign ads.

Gwen ifill has the court story.

GWEN IFILL: A very busy day at the Supreme Court. For more on today's rulings and arguments, we turn to NewsHour regular Jan Crawford Greenburg, national legal affairs correspondent for the "Chicago Tribune."

Jan, I'm going to ask you the take us inside the court on three key cases today. The first one hand had to do with police stops. A fellow is walking down the street. He sees four police cars converge in the neighborhood. He turns tail and runs, and the court is basically said today the police are totally within their rights in stopping him, apprehending him, and in this case arresting him?

JAN CRAWFORD GREENBURG: That's right. The court and n a 5-4 decision said that the officers here could pursue this gentleman and stop him for further questioning because he ran when he saw the officers, and he was in an area that was known for drug trafficking. The decision, which was written by Chief Justice William Rehnquist, said that head-long flight, wherever it occurs, is the consummate act of evasion, and I quote here. He said, "it is not necessarily indicative of wrongdoing, but it is suggestive of such." And that gives the police officers the justification to pursue and stop and ask more questions.

GWEN IFILL: 5-4 ruling, very narrow. There was obviously a lot of dissent.

JAN CRAWFORD GREENBURG: Right. The dissenters made much of the fact that the majority opinion didn't explicitly say that flight alone was always enough to justify a police officer stopping someone. So they said, yes, we agree with the court's refusal to issue this very specific rule, trying to limit the scope of today's decision.

GWEN IFILL: In the court's decision today, was there some sort of sense that the Supreme Court in general is favoring broader rights for police officers, giving police officers the right to pursue a hunch?

JAN CRAWFORD GREENBURG: Well, they would say, no, you can't pursue a hunch. You still have to have some grounds of suspicion that you can articulate, but, yes, this is the latest in a series of decisions from this court that have gradually given police more power to stop and question people and have trimmed people's rights to avoid contact with police officers.

GWEN IFILL: Second important case today. The court decided that the states cannot sell information from people's driver's licenses to political candidates or to businesses and instead that they have to keep that private. Was this more about regulating commerce or about restricting states' rights or neither?

JAN CRAWFORD GREENBURG: Well, it was actually a little of both. The court today let stand a federal law that prohibited states, as you said, from disclosing this information. They said that Congress was, and this again was written by the chief justice, that Congress was within its authority to regulate commerce when it limited states from selling this information, information that went into the stream of commerce, and that Congress wasn't going, you know, too far in ordering states around when it said that that information could be restricted.

GWEN IFILL: But this wasn't in favor of states' rights like we have come to expect from this court. What in the decision -- a unanimous one in this case -- showed why that was so?

JAN CRAWFORD GREENBURG: Well, the decision was very... this is interesting, like I said, for two reasons. One, it's interesting because now we're going to have this information restricted. But also, it's the first in recent terms to slow down this move to give states more rights vis- -vis Congress and limit Congress' power over the states. But the opinion was very tightly written. There's no broad, sweeping language, as we've seen in some of the other cases. It certainly suggests that Congress is going to be free still to impose regulations on states, but it doesn't give us a lot of hints about what other behavior it won't allow.

GWEN IFILL: How widespread a practice is this, selling personal information, states selling personal information and profiting from it?

JAN CRAWFORD GREENBURG: It was quite widespread and considerably lucrative for the states. In fact, New York, for example, one year made $17 million selling this kind of information. So states really wanted to have this authority to sellthe information. And that's why they so strongly protested.

GWEN IFILL: Does the court decision also prohibit states from just releasing this information for free if they wanted to?

JAN CRAWFORD GREENBURG: Well, to certain groups. There are some exceptions. Law enforcement agencies still can get the information, private investigators, but it focuses on the state's practice of selling the information to telemarketers or other groups who would then take it and use it. And the law, Congress passed the law in 1994 in response to the murder of an actress who was pursued by a stalker who had gotten information about her location through these records.

GWEN IFILL: Third important case, this time arguments rather than a decision. Grandparents' visitation rights. Thumbnail sketch: A set of grandparents in Washington State decided they wanted to have... the court enforced their right to visit their grandchildren even though their son had passed away. Is this a question of parent's rights versus grandparents' rights?

JAN CRAWFORD GREENBURG: Not quite. I mean, it certainly seems that way at first blush because the grandparents did go into court to seek this visitation to ensure that they would be able to see their grandchildren. But the law that they turned to allows any person at any time to petition for visitation. The Washington Supreme Court said that law was just too broad because it went beyond grandparents.

GWEN IFILL: Excuse me. What kind of reaction were we getting there from justices in the courtroom about this today?

JAN CRAWFORD GREENBURG: Well, Justice Rehnquist jumped right in and said, focus focusing on the broad nature of this law, and said, a great aunt could go to court and say she wants visitation, you know, on Friday afternoons to take the child to the movies, and Justice O'Connor, Sandra Day O'Connor also was quite adamant about how could this be that this broad rule that just seemed so, you know, extraordinary that anyone could at any time petition for visitation, how could a state court allow that kind of thing?

GWEN IFILL: At first blush when you look at a case like this, it sounds like grandparents want to see their grandchildren, what's wrong with that? But that's not where the Justices were today, at least it didn't sound like it.

JAN CRAWFORD GREENBURG: Right. It's such an emotional case. And it's obviously a really difficult issue that they struggled with because, sure, the grandparents want to see the children, but the Justices also focus on the parent's rights to decide how their children should be raised, as the Chief Justice said, their right to determine how they're going to be brought up and who they're going to see. And those rights are fundamental. That's what the lower court, the Washington State Supreme Court focused on when it sided with the parents. It said the parent's rights were fundamental and that any person just couldn't come in and trump them.

GWEN IFILL: 50 states now have some sort of visitation rights laws on the books. With this case, which is of course speaking very much to a broad, broad, anybody can visit kind of Washington State case, will this affect those other states, as well?

JAN CRAWFORD GREENBURG: The lawyer for the grandparents said, yes, it would. And he made clear that sure it's any person at any time, but the court still has to look at whether or not the request is in the best interest of the child. Those laws that you refer to do focus on the best interest breast interest of the child analysis, but very few of them, I think the lawyer said today, only four have that broad, any person, any time language. The other laws refer more specifically to grandparents or stepparents or siblings.

GWEN IFILL: When you talk about the best interest of the child, I wonder whether there was any concern expressed today about the argument of children being used as weapons in adult controversies.

JAN CRAWFORD GREENBURG: That's a really good point, one made by Justice John Paul Stevens, who said it seemed striking to him that if someone did want to use the child as a weapon, as he said, to deny someone visitation, it just seemed very unfair. A grandmother who has cared for a child or lived with a child for ten years could then be denied visitation.

GWEN IFILL: So it's impossible. This won't be decided until June. It's impossible to tell what any of these Justices would ultimately do, but did any of them say, maybe we should give some sort of nod to grandparents' rights?

JAN CRAWFORD GREENBURG: Like you said, it's hard to predict. But they seemed very dubious of this law because it's so broadly written. But that's not to say that other, more narrow laws might not pass muster.

GWEN IFILL: Of the nine Justices, six are grandparents themselves. Was there any way of telling, listening to them debate this today, that their own personal experiences were informing the things they were talking about?

JAN CRAWFORD GREENBURG: No. I think the issue is such an emotional one that they didn't even bring in personal experiences or anecdotes about - you know -- hanging out with their grandchildren. But the nature of the questions reflected how focusing on a grandparent wanting to continue a relationship with a child versus a parent wanting to decide who the child can see and on what terms illustrated just the difficult nature of the case.

GWEN IFILL: Jan Crawford Greenburg, thank you very much

SERIES - AD WATCH

JIM LEHRER: Finally tonight, another of our looks at year 2000 political advertising. Tonight, it's that of advocacy groups. Again, media correspondent Terence Smith has our report.

TERENCE SMITH: Interest groups are once again taking to the airwaves in campaign 2000, focusing attention on their particular issues and indirectly campaigning for or against different candidates. Business leaders for sensible priorities, a group led by a founder of Ben & Jerry's Ice Cream, wants to cut the defense budget.

QUESTIONER: Admiral, could you give me a thumbnail sketch of our nuclear arsenal?

SPOKESMAN: Paul, we have enough warheads in our arsenal to destroy every major city on the planet ten times over.

QUESTIONER: Let's say we reduce that arsenal so that we could destroy every major city on the planet only four times over.

SPOKESMAN: We'd save $15 billion a year every year. That could buy a lot of education for a lot of kids. Invest in kids, not pentagon waste. Let's get the candidates and politicians to talk about the real issue.

TERENCE SMITH: Such advertising can attract new activists like this former schoolteacher who now has her own commercial.

SPOKESPERSON: Hi. Some of you know me as the cookie lady. I've been asking questions and trying to get some straight answers. Improving our schools, providing health care for our kids, and taking care of local priorities costs money. We can save $15 billion a year by reducing our nuclear arsenal, and still maintain the world's strongest defense. Doesn't that make sense?

TERENCE SMITH: The Sierra club, which focuses on the environment, takes Texas Governor George W. Bush to task for his record on air and water pollution.

SPOKESPERSON: Texas leads the nation in cancer-causing and toxic chemicals released into the

environment, in hazardous waste, in the number of factories violating clean water standards.

And while federal laws are forcing states to clean up their air and water, Texas lags far behind.

And even though Texas has over 400,000 kids with asthma, like William Tinker, Governor

George Bush has proposed weakening the Clean Air Act. Call George Bush, tell him to

clean up Texas's air and water for our families, and for William Tinker's future.

TERENCE SMITH: The Democratic candidates have not escaped the issue ad wars. In December, during a New Hampshire town meeting sponsored by ABC's "Nightline," the Republican National Committee aired this commercial on the local television station.

AD SPOKESMAN: Last week Bill Bradley said he might raise taxes. For a solid week, Al Gore attacked him for that statement. But then Gore admitted that he, too, might hike taxes. And remember, in 1993 it was Gore who cast the tie-breaking vote for the biggest tax increase in history after breaking his campaign promise to pass a middle-class tax cut. Call Gore and Bradley. Tell them not to take any more money from American families to give to Washington bureaucrats.

TERENCE SMITH: For several weeks, Republican Senator John McCain has been under assault from the right. Americans for Tax Reform, a conservative activist coalition, objects to his campaign finance reform plan.

SPOKESPERSON: We all know John McCain's inspiring personal story. But can we trust his political

agenda? McCain's top priority in Washington: Nationalized campaign laws that muffle

conservative voices, making taxpayers pay for political campaigns. Conservative leaders call

McCain's political agenda dangerous and reckless, dishonest, tramples on the Constitution.

And the real purpose, to throttle criticism of politicians. Call Senator McCain. Tell him that being a

Washington politician doesn't give him the right to trample our rights.

TERENCE SMITH: More issue and special interest ads are expected on the airwaves as the primary season progresses.

TERENCE SMITH: For more on the role that interest group and political party ads are playing in the presidential campaign, we turn to John Carroll, a long-time media and advertising critic who is now managing editor at WGBH TV's "Greater Boston" news and public affairs program; and to Kathleen Hall Jamieson, dean of the Annenberg School for Communication at the University of Pennsylvania; and to Doug Bailey, a longtime political consultant and founder of the Freedomchannel.Com, an internet site that provides video on demand about candidates and political issues. Welcome to all three of you.

Kathleen Jamieson, let me begin with you and ask you, what are... what is special and different about these issue ads and special interest ads? How do they differ from the regular candidate ads?

KATHLEEN HALL JAMIESON: The issue ads are created by a footnote in Buckley Vs. Vallejo, which says that as long as the advertising doesn't expressly advocate the election or defeat of a candidate, it is not required to do two things: One, it doesn't have to disclose the source, and secondly, it can spend as much money as it wants. There is no cap on the amount of expenditures. Its function in the system was intended by the court to increase the number of voices that were able to participate in the process. In practice, it is able to set the agenda, that is, focus on issues that might not otherwise be the focus of the campaign, shift the balance of discourse by putting more money behind some messages than others, and when it is coherent and behind a party, create a sense on the part of the electorate of the ideological grounding of that party.

TERENCE SMITH: John Carroll, how effective can these ads be in doing that sort of thing in a presidential campaign?

JOHN CARROLL: Well, it depends. Issue ads are sort of like kibitzers at a card game. If they circle the table long enough, someone's going to start rearranging his hand. And that's what they hope to do in one way or another. They hope the media pays attention, and that get a bump from that, because these are... these are generally campaigns that can't compete with the candidate ads on a money standpoint. You're talking tens of thousands of dollars versus tens of millions of dollars. So if they can get a media bump from them, that's a good effect for them, also, to stir up some grassroots activity. And the third thing they can try to do is make a candidate spend more money defending him or herself on a specific issue that the special interest ad raises.

TERENCE SMITH: Doug Bailey, you've made hundreds of ads for political... for Republican candidates over the years. When you look at two of the so-called attack ads in the ones that we just saw, the attack on Senator McCain, on his campaign finance reform proposal, and against Governor Bush on the environment; how effective do you think those are?

DOUG BAILEY: Well, one of the things that's important is that most voters don't pay enough attention to the ads to know who made them. And so when an attack ad comes on... the attack ad against McCain, for example, was pretty hard-hitting, although that is the softer version of that ad. They had made one earlier that didn't recognize him as a prisoner of war and didn't have anything nice to say about him at all. But people looking at that ad quickly and just get the notion that McCain is being seriously attacked in pretty blunt style may conclude that Governor Bush did it. I mean, that's the contest that's going on. It's Bush versus McCain. So issue ads tend to be a wildcard in a race. Conversely, if the ad against Bush by the Sierra Club on the environment record in Texas is seen as an attack on Bush and might have come from McCain, then it might have bad impact and negative impact, as well. My own...

TERENCE SMITH: So they could backfire?

DOUG BAILEY: Absolutely, it could backfire. My sense is that these are not just agenda-setting ads, although I think the Sierra Club ad falls into that category. The Americans for Tax Reform ad is much more than that. They are playing a direct role in the campaign, and viewers can come to their own conclusion about that ad. My sense is that that's a seriously overdone ad.

TERENCE SMITH: Overdone?

DOUG BAILEY: Overdone.

TERENCE SMITH: All right. Kathleen, from the research that I know you have done in past years, how much of this gets through to the public? Have you ever been able to measure that impact?

KATHLEEN HALL JAMIESON: Yes, and it's important to note that issue advocacy can in fact be a very strong voice in a campaign. In 1996, the AFL-CIO, basically offering a message consistent with the Democratic message and the message of Clinton/Gore, and the coalition, offering a message somewhat less consistent with that of Dole but consistent with that of the Republicans, managed in 14 congressional districts to outspend both of the candidates running for Congress. At that point, one has every reason to believe that that message is getting through. We've studied the impact of the issue advocacy in that election and found that it had some capacity to mobilize voters. The message was clear enough and decisive enough and tipped the message balance enough that it had an effect on the margins. It's also important to note from the research that Doug is absolutely right. The source of the message is rarely identified by voters. When we showed voters ads and did not tell them what we were going to ask, and then afterwards asked, "by the way, who was the sponsor, that is who paid for the ad?" over 80% of the time voters couldn't tell us and drew the inference that the sponsor was, if it was an attack ad, the opposing candidate; if it was an ad that said nice things about someone, the candidate himself. The final thing that's important to note about this from the research is that in 1998, the attack function in politics shifted to issue advocacy. As a result, the attack messages were there in the same rough proportions that they'd been in past years, but they weren't being carried by the candidates themselves. That's, in fact, the tendency we're beginning to see this year.

TERENCE SMITH: John Carroll, we saw a moment ago the cookie lady, who is sort of emerging as one of the mini celebrities of this early campaign. What's her story?

JOHN CARROLL: Well, she apparently saw one of the ads for Businessmen for Sensible Priorities, a group started by Ben Cohen of Ben & Jerry's. And their pitch is essentially, let's shift some money from the Pentagon budget over to education; it's a better priority. She saw the ad. It motivated her to go out and be active. And now she goes where the candidates are, and she hands out cookies with little pie charts on them. Apparently baked goods are the theme here. And she essentially tries to mobilize people to join in that effort to pressure candidates. And you notice that all of these ads, and as Kathleen said, they can't advocate for you to vote or not vote again for someone, but they advocate for calling them. And this call to action is especially, I think, potent for the advocacy groups that are trying to push a specific issue as opposed to just attacking a candidate. If I could add one thing about the AFL-CIO. It's interesting. They did spend $35 million in 1996. I think they batted around .500 as far as their candidates went, the ones they backed, but they are not doing this kind of advertising this time around. They've moved much more toward organizing and grassroots movements. I think they see the limitations or the ceiling, perhaps, of what these ads can accomplish.

TERENCE SMITH: Or at least they're not doing it yet. Doug Bailey?

DOUG BAILEY: Let me just make that point. I think the timing is important to understand here. In the early primaries where candidates are sort of going door to door and it's retail politics, all advertising by issue groups or by campaigns is less effective than it is later on when the people don't really know the candidates. I think that you may well see some AFL-CIO advertising down the road a little bit at a point in April or May when both parties have picked their nominees and, predictably, the Democratic Party candidate nominee is out of money, and the Republican candidate, George Bush, is not out of money. Then there is a need for somebody to step in and fill that void, and that may be the AFL-CIO.

TERENCE SMITH: And Kathleen, this is the famous soft money that we hear so much about?

KATHLEEN HALL JAMIESON: This is the famous soft money, and it can be used by the parties very effectively in order to communicate a coherent party message. That's actually whathappened in 1998. Money that in past election cycles would have been spent by issue advocacy groups appeared to have stayed with the parties, and as a result was used to create a very coherent message about the differences between Republicans and Democrats. And so the functions differ dramatically depending on who the sponsor is and whether you can even identify the sponsor. After all, one could be a completely anonymous group making up a name and tagging these ads with it. There's no disclosure requirement here.

TERENCE SMITH: Any idea how much money, Kathleen, we're talking about in the course of a campaign on special interest and issue ads?

KATHLEEN HALL JAMIESON: We anticipate that in this election cycle the issue advocates will outspend the presidential candidates by at least two to one. That's not simply in broadcast. That's in other forms of communication.

TERENCE SMITH: John Carroll, I suppose that in addition to getting around the money restraints, this is also a way to attack your opponent, or to have your opponent attacked, and not take the blame for it.

JOHN CARROLL: Well, that's one of the interesting side effects of this, I think. There have been situations where candidates have gone to an interest group and asked them to stop advertising against that candidate's opponent because of sort of the boomerang effect. When the negative ads went out, just as Doug and Kathleen were saying, the... sort of the backwash comes on the candidate who is on the other side. And he's saying, "please don't do this, because it's hurting me more than it's helping me." And there have been groups that have refused to do that, and there have been groups that have toned, I think, their message down.

DOUG BAILEY: I really would be interested to know, terry, whether the Bush campaign either directly or indirectly communicated with the Americans for Tax Reform people to soften their ad on McCain, because they clearly changed ads to show a still, I think, overdone ad, but a much softer version. Who encouraged them to do that?

TERENCE SMITH: It is a fact that Governor Bush denied responsibility for that ad publicly. Kathleen, you were going to say something.

KATHLEEN HALL JAMIESON: Yes. We have one clear historical instance in which an outside group, the National Republican Senatorial Campaign Committee, came into a race, Bostwich Vs. Wellstone, on behalf of Bostwich against Wellstone, and created a backlash against Bostwich that benefited Wellstone. And so this is a very real concern.

TERENCE SMITH: Well, there's the evidence that they actually do make a difference. Doug, they can?

DOUG BAILEY: Oh, absolutely, and make a difference in another way, not just as an impact against or for a candidate, but to set an agenda. I think we haven't talked enough, frankly, about the cookie mom and the Ben & Jerry's ad. Frankly, if the cookie mom was also offering some Ben & Jerry's, it would be the most popular campaign in America. But they are attempting to take an issue that does not appear in the polls as a significant issue and force it into the campaign and try to get the campaigns to react to it. And that is a perfectly legitimate agenda-setting kind of function.

TERENCE SMITH: Right. All right. That's great. Doug Bailey, Kathleen Hall Jamieson, John Carroll; thank you all three very much.

JIM LEHRER: A reminder that Terry and his crew as a regular NewsHour feature will be monitoring and reporting on political ads throughout the election campaign.

RECAP

JIM LEHRER: Again, the major stories of this Wednesday: Tonight on the NewsHour, the heads of America Online and Time Warner said they're more confident than ever about merging. Steve Case and Gerald Levin said they're not worried about sharp drops this week in their company's stock. And the U.S. Supreme Court ruled police may stop and question people because they ran at the sight of an officer. We'll see you online and again here tomorrow evening. I'm Jim Lehrer. Thank you and good night.