Telecom for Dummies

By Cynthia Cotts, Village Voice. Posted September 5, 2001.

By necessity, most news reports about media consolidation are so dry and technical, they put even the most attentive readers to sleep. But while we slumber, the Bush administration is busy ceding huge chunks of the once-public electronic media to a handful of corporate execs. And when the moguls achieve market domination, they will no doubt exploit it by jacking up the price of our cable, Internet, and phone service, and running competitors and critics out of business.

Given the speed of this consolidation—and the sudden flush of TV ads by Time Warner, AT&T, and Verizon—even the most apolitical of media watchers should take a minute to study how and why this game is being played. What follows is a brief (and by no means definitive) guide to the players and concepts involved.

Michael Powell: When it comes to media moguls, we tend to think of News Corp. chairman Rupert Murdoch and Viacom's Sumner Redstone. But arguably the most powerful man in media, this year's red-hot center, is Michael Powell, the Bush-appointed chair of the Federal Communications Commission.

Son of Secretary of State Colin Powell, the 38-year-old former army brat is a diehard with a pro-business agenda. In speeches, Powell has called regulation "the oppressor" and declared the FCC's original mandate—serving the public interest—to be "about as empty a vessel as you can accord a regulatory agency."

FCC: Powell's turf is the subject of cover stories in the September issue of Mother Jones and the Voice in July, both by Brendan I. Koerner. In Mother Jones, Koerner writes that the FCC was founded in 1934 to protect consumers from monopolies and price gouging. But this year, the private sector's desire to reverse that mandate has found a champion. Under Powell, the five FCC commissioners hobnob with corporate "clients" on expenses-paid trips to Cancun and Madrid—when they are not issuing decisions that will promote their clients' monopolies and price gouging.

Kathleen Abernathy: Powell's commissioner is a Bush-appointed Republican lawyer and former lobbyist for several telecom companies. According to fans, the 45-year-old wife and mother is an "extremely well-liked individual" whose goal is to make the FCC more "customer-friendly."

Astroturf: Slang for think tanks with innocuous-sounding names like Alliance for Public Technology and Keep America Connected. While these groups churn out ads and studies that purport to represent the interests of rural and minority consumers, in fact, they are funded by a consortium of telecom companies that are hell-bent on deregulation for their own benefit.

Cross-ownership rules: Traditionally, these rules were meant to ensure that no single media company would control too many properties in the same market, but today they are more honored in the breach than in practice. In July, the FCC suspended one such rule so that Murdoch can now legally own two TV stations and one newspaper in New York. The decision was zapped by a New York Times editorial, which called it a threat to media diversity and a spur for "other news organizations to explore the acquisition of multiple outlets in the same geographic area."

Ernest Hollings: This South Carolina Democrat and chair of the Senate Commerce Committee is the most outspoken critic of deregulation on Capitol Hill. In a hearing two months ago, he mocked Viacom's Mel Karmazin for suggesting that FCC regs are seriously hurting profits in the broadcast industry. Hollings has since introduced a bill that would enforce current regs and require the FCC to conduct a study of the market before it abolishes any more restrictions on media consolidation.

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