YES, IT WILL.

Steve Mizrach Mass Communication and Society October 28th, 1998

The passage of the Telecommunications Act of 1996 produced a large amount of positive and negative acclaim. However, in all the hoopla, the true significance of the bill got lost. Supporters of the bill heralded the fact that it was the first major reform of telecommunications legislation since the 1930s, and thus was an effort to update the laws of our republic for our new age of information. Detractors of the bill focused on one key provision - the Communications Decency Act - and the "chilling" effect of censorship it would have on free speech on the Internet. They succeeded in getting this portion of the bill struck down as unconstitutional.

In the meantime, amid all the hoopla, a lot of key facts seem to have been overlooked by the media. One was that whole portions of the Telecom Act had been written entirely by telecom industry lobbyists. This was an unprecedented event in the history of public policy in America. Another was that the Telecom Act authorized a wholesale selloff of something which is one of the nation’s few remaining public resources - the electromagnetic spectrum or "airwaves". Broadcasters were allowed to buy new spectrum allocations for digital television for next to nothing, as long as they agreed to start broadcasting in digital format by 2006. However, despite governmental efforts, the broadcasters were given this spectrum without any reciprocal requirements.

They refused to agree to giving free airtime for public political campaigns, refused to broadcast in HDTV format (preferring to use their new digital channels for targeted advertising rather than a better picture quality), and refused to honor longstanding public service requirements such as updating the Fairness Doctrine for the Internet era, or creating quality educational programming for children. Instead of agreeing on a single digital advanced television (ATV) standard, broadcasters beginning this year are going to start broadcasting their signal in a breathtaking 16 different formats - some progressive, some interlaced, some with 480 lines, some with 1080 lines, some compatible with computer monitors, others not. Good luck buying one set that will pick up all these different formats; you can thank the FCC and NIST for not using their power to guarantee that a standard was used.

Another little known aspect of the bill is that it increases the FCC’s powers to wipe out small-scale broadcasting -- what gets affectionately known as "pirate radio," or micropower radio/TV. These small stations, such as Black Liberation Radio, or Stephen Dunifer’s Free Radio Berkeley, often make it their mission to cover the local issues that larger stations ignore. Amateur radio groups that asked for spectrum to increase their ability to use new allocations for person-to-person communication (packet radio, etc.) were not given anywhere near the consideration that powerful broadcasters were. Local communities were stripped of their power to regulate the siting of cellular towers and to collect fees from telecom plant on public rights of way. Once again, the FCC has been made the tool of powerful corporate interests, while striking down the ability of grassroots people to use technology to communicate at the local level.

Already in 1995, groups like Computer Professional for Social Responsibility were warning people about the bill. They warned that it would cause rates for many telecommunications services (cable, telephone, cellular, satellite, datacom, etc.) to skyrocket since it removed regulations and caps on rate increases. They also suggested that it would widen the gap between the "info-haves" and "info-have-notes" in this country. There were no provisions in the bill to deal with the fact that minority communities in the U.S. are increasingly being "redlined" out of the Information Age. Due to their lobbying, there was one excellent provision interested into the bill - an "E-Rate" program that would take some percentage of telecom profits and put them toward increasing public Internet access through schools and libraries. Not surprisingly, this is the one part of the bill that telecom companies have been trying to get struck down!!

All this isn’t the worst part of the bill, however. The worst part is that it accelerates a process of media monopolization in our country which began in the 1980s. In the "Media Monopology" by Ben Bagdikian, first written in 1983, he described the corporate consolidation of media outlets in our country into the hands of a few multinational corporations. At that time, about 50 different companies controlled almost all of the nation’s major TV stations, radio stations, newspapers, magazines, movie studios, and book publishing houses. Today, in 1997, post-Telecom Act, that number has shrunken to ten -- and you know most of the names: Time-Warner, Disney, Viacom, Rupert Murdoch’s News Corp. Ltd., Sony, TCI, Gannett, and General Electric. Worse yet, many of thse companies are gobbling up "emerging media" outlets (software and CD-ROM production companies, Internet web sites, online services) as well. Because many of these media multinationals often have holdings in areas such as defense, nuclear power, oil, or banking and finance, critical stories on their other divisions or subsidiaries often get "censored" - not by government bureaucrats but by corporate lawyers.

Already in a scant two years, the Telecom Act has triggered a wave of telecom merger mania in the U.S. that has some people wondering if the U.S. antitrust authority is asleep at the wheel. While chasing after Microsoft and Intel, the U.S. DOJ is ignoring a whole series of other mergers with dangerous consequences for the republic. One of the more recent ones is the Worldcom-MCI merger. Even such conservative bastions as the Wall Street Journal and companies like Bell Atlantic question the deal. They see it as giving the new merged entity an unprecedented level of control over Internet pricing, peering, and routing. It would diminish competition by strangling many smaller Internet Service Providers (ISPs). But this deal is only the most recent in a wave of other attempted and completed mergers - between Time-Warner and TCI, between British Telecom and Sprint, and between "Baby Bells" such as NYNEX eager to re-consolidate now that the reasons for the 1984 dissolution of AT & T seems to have been forgotten.

The Telecom Act paves the way for lots of companies to get into each others’ business. Now, cable companies can offer data communications, phone companies can offer "video dialtone," and energy utilities can offer either service. This should in theory result in competition - spurring companies to compete in areas where they previously had no competition because outside companies were barred from getting into their business. That’s the theory; but in practice what’s happened is consolidation, just as what’s occurred in every other deregulated industry (the airlines, financial services, etc.) Bigger companies are now less restrained from swallowing smaller ones. The benefit touted for the consumer is an "all-in-one" bill where they pay for energy, communications, entertainment, etc. all at once. But the reality is that the consumer is paying higher rates for all of these things, has fewer choices, and may be getting worse service.

Ralph Nader’s Consumer Project on Technology notes that some of the effects of the Telecom Act of 1996 include:

1. Removing the numeric station cap, and raising the "audience percentage cap" (from 25 to 35 percent), on the number of TV stations or "amount of audience" that any one corporate entity can own.

2. Eliminating FCC rules that prevent all the AM and FM radio stations in a geographic area from being owned by one entity.

3. Lifting FCC restrictions that prevent one company from owning all the media outlets (newspapers, broadcast stations, etc.) in one locality.

Sure enough, what happened, literally within days of passage of the bill? A "fire sale" of acquisitions by companies. Triathlon Broadcasting bought 7 radio stations all over the country for $37 million dollars. We’ve even seen the effects locally, as radio station 97.3FM was bought by a media consortium and turned from a decent music station into the all-talk format "Sky King." Rules on cross-ownership of broadcast stations, cable systems, and newspapers in the same local market were relaxed. So what happened after the Act passed? The death rate of independent local newspapers kicked into overdrive, as they could not benefit from the "synergy" of media outlets owned by the same consortium. Today, fewer than 15 percent of local communities have two "hometown" newspapers... once again, competition is vanishing, consolidation of media outlets into giant multinational corporations is increasing.

In conclusion, the Telecommunications Act of 1996 is a bad bill, because it accelerates, encourages, and promotes processes of media monopolization and consolidation that have been occurring in our country since the 1980s. Although this bill was supposed to promote choices for the consumer, promote competition, and promote technological innovation, in all these areas, it is having the opposite effect. It reduces private citizens’ access to telecom technology, and it increases corporate control of it. As more and more media outlets are falling into fewer hands, our media environment is becoming chillingly like that of the old Soviet Union. Except that the censors and information czars are now likely to be corporate bosses rather than government bureaucrats. Regardless of who conrols the media, the simple fact is that the fewer people who have access to the means of information (the media), the more likely those sources of information are likely to represent narrower and more specific interests, rather than the public interest.

Corporate interests have already turned television into a "vast wasteland" and our radio audioscape into a robotized replay of a handful of musical recordings from the very companies that also own the stations. They’ve replaced the thoughtful newspapers of the past with the infotainment "news lite" that gets served up by vehicles like USA Today. They’ve turned our media environment into a vast closed circle, with TV talk shows promoting books promoting movies promoting musical soundtracks -- all owned by the same companies. They now threaten to turn "emerging media" technologies like digital/interactive Tv, the Internet, and digital telephony into their private preserve. Why aren’t the media reporting on all this? Well - who owns the media? The only way to arrest this process is to repeal the Telecommunications Act of 1996, or at least the provisions of it written by corporate media lobbyists.

1. Bagdikian, Ben, The Media Monopoly, Beacon Press, Boston, 1997

2. Bolter, Walter G., Telecommunications Policy for the 1990s and Beyond, M.E. Sharpe, Armony, 1990.

3. Read, William H., ed., Telecommunications: law, regulation, and policy, Ablex Pub. Corp., Greenwich, 1998.

4. Sapolsky, Harvey M., ed., The Telecommunications Revolution: past, present, and future, Routledge, New York, 1992.

5. Computer Professionals for Social Responsibility Cyber Rights! Project - http://www.cpsr.org