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1. Telecommunications Deregulation: Closing Up America’s “Marketplace of Ideas”

SOURCE: CONSUMER PROJECT ON TECHNOLOGY, 7/14/95, “Federal Telecommunications Legislation,” an Internet newsletter*; Authors: Ralph Nader, James James Love, and Andrew Saindon.

SYNOPSIS: America’s “marketplace of ideas,” upon which our democracy rests, began shutting its doors in the summer of 1995. The harbinger of the bad news for the public was aptly titled the Telecommunications Deregulation Bill, which moved through both houses of Congress. As the name implies, the bill eliminates virtually all regulation of the United States communication industry.

As tends to be the case with most anti-consumer legislation, the bill stealthily moved under the guise of “encouraging competition”—but will, in reality, have the opposite effect of creating huge new concentrations of media power.

The most troubling aspect of the bill allows easing-and outright elimination-of current anti-trust regulations. In what the New York Times described as “a dazzling display of political influence,” the nation’s broadcast networks scored big in the House version of the bill by successfully getting the limits on ownership eased so that any individual company can control television stations serving up to 50 percent of the country. The Senate version of the bill provides for a more modest 35 percent coverage.

The legislation also dismantles current regulations which limit the number of radio stations that can be owned by a single company. Currently no one single company can own more than 40 stations.

It also would lift the current FCC ban on joint ownership of a broadcast radio or TV license and a newspaper in the same market—allowing a single company to have 100 percent control over the three primary sources of news in a community.

Consumer advocate Ralph Nader warned, “Congress is moving the law in the wrong direction, toward greater concentration and fewer choices for consumers, all under the guise of ‘greater competition.’ Laws and rules that limit cross-ownership and concentration not only enhance competition, a putative goal of the new legislation, but they also serve important non-economic goals, by promoting a greater diversity of programming, and enhancing opportunities for local ownership.” Nader also said the predictable result of placing even greater power in the hands of fewer giant media moguls will be less diversity, more pre-packaged programming, and fewer checks on political power. “That these provisions are being included in legislation that is being sold as pro-competitive is particularly galling.”

Also galling was the major media’s almost complete and utter avoidance of the “monopoly ownership” factor in their reporting of the bill’s progress in Congress. The threat to the nation’s “marketplace of ideas” from mega-media monopolies has been a nomination to Project Censored several times in the past.

SSU Censored Researcher: Justin Twergo

COMMENTS: Speaking for the authors, James Love thought that “local newspapers did a poor job of explaining the nature of the concentration and cross-ownership issues, particularly cross-ownership issues such as the possible ownership of local newspapers, broadcast licenses and the telephone company.” He continued, “Network television was owned by firms that had much at stake in the legislation, and aside from ‘Nightline’s’ show with Tom Shales, I did not see the type of reporting that seemed appropriate, given the issues. However, the general question of the appropriateness of several mergers, ABC/Disney, CBS/Westinghouse or Turner/Time-Warner, did seem to get a fair amount of play, but without much emphasis on the legislative debates. The New York Times had a couple of very good editorials on the legislative proposals, but the news reporting on the issue, from the Times or the Washington Post, did not dwell much on the concentration issue, aside from the occasional reporting of a Presidential veto on this issue. I must say that the cross-ownership questions were rarely addressed, even though they are extremely important, and relevant to the newspaper industry. For example, no one in the media would even acknowledge that there was a debate over cross-ownership for wireless spectrum, such as satellite or PCS licenses.”

Love felt if the public were better informed about the issue, it might bring about some reforms in the opposite direction of the legislation. “Instead of encouraging greater concentration and more monopoly power,” he suggested, “we might see policies that promote greater diversity and more competition. That would benefit the public in a number of ways.

“The interests which benefit the most from the lack of debate over policies about concentration and cross-ownership are the large corporations which own telecommunications and media businesses, as well as some players who want a chance to sell their firms to the larger players. Newspapers benefit, because they would be allowed to purchase broadcast licenses. Cable and telephone companies benefit, because both would have greater freedom to enter into new deals, and both want the opportunity to acquire the new wireless spectrum that could someday offer troublesome competition. Broadcast license holders would be easier to sell and acquire, and they would have more opportunities to develop greater market power in local markets.”

Love concluded it would be helpful if the press could generate greater interest in the media concentration decisions being made by Congress and the FCC for the future of telecommunications in the U.S.

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