The New Media Monopoly

By Timothy Karr, AlterNet. Posted March 9, 2006.

The race is on to control the future of American media. Unfortunately, those vying for the prize are a limited cadre of corporations hostile to the public interest.

On one hand, there are the remnants of the 1984 breakup of Ma Bell -- four formerly Baby Bells that now dominate the multibillion-dollar marketplace for telecommunications. Over the past 10 years, these have rapidly morphed into massive corporations by swallowing up smaller competitors and positioning themselves atop the heap.

AT&T's announcement earlier this week that it plans to acquire BellSouth is a stunning development in the unrelenting shift toward fewer choices and bigger companies -- essentially stitching back together the monopoly that ruled telecommunications three decades ago.

The aim of AT&T's $67 billion merger is to assemble a new behemoth to dominate the "triple play" of modern communications: voice, video and data. In the near future, all new media -- telephone calls, radio, television or the web -- will travel via a broadband connection to your home. The corporations that control this network are racing to gobble up as many competitors as possible before consumers complete the new media shift.

Left behind, of course, is the American public. As large telecom companies merge and jockey for position with the cable industry over the most lucrative broadband markets, the communities at the edges have been left on the wrong side of the digital divide.

According to the U.S. Census Bureau, nearly 60 percent of households with incomes over $150,000 annually have broadband access, compared to just 10 percent of households with incomes below $25,000.

These corporations have done a lousy job rolling out their services to rural areas and low-income urban communities they've deemed unprofitable. As a result, America has fallen from third to 16th place in penetration of high-speed internet services per capita.

But even those who can afford to pay for connectivity are increasingly subject to limited choices at higher prices. According to a Free Press report late last year, the number of Americans who have only one or no choice of broadband provider is near 50 percent.

Meanwhile, the cost of broadband in other countries has dropped dramatically as speeds have increased. On a per megabit basis, U.S. consumers pay five to 25 times more than broadband users in France and Japan. Nations such as South Korea, Finland, and even Canada have much faster internet connections at a lower cost than what is available here.

Not only are Americans being offered limited choices at higher costs than other countries, the cable and telecom companies that control access to the "pipes" now want to control the content and services that are delivered to customers.

Consumer advocates and internet rights groups are especially concerned about AT&T chief executive Edward Whitacre's outspoken resistance to the principle of "network neutrality," a standard that ensures all users can access the content or run the applications and devices of their choice without discrimination from internet service providers.

"I think the content providers should be paying for the use of the network," Whitacre told the Financial Times earlier this year. "Now they might pass it on to their customers who are looking at a movie, for example. But that ought to be a cost of doing business for them. They shouldn't get on [the network] and expect a free ride."

In December, BellSouth's William Smith told reporters that he would like to turn the internet into a "pay-for-performance marketplace," where his company could charge for the "right" to have certain services load faster than others.

What this would mean for you is higher costs, fewer choices and less control.

AT&T, Verizon, Comcast and others could block you from viewing a favorite podcast or blog, cut off internet phones unless we use their service, or force you to download MP3s from their company store by slowing access to outside music sites. The profit motive of a few corporations would supplant the freedoms of all users, determining which features end up shaping our digital future.

These types of corporate schemes discriminate against those of us who rely on the internet as an accessible tool to spread new ideas, spark innovation and encourage dissent.

Now AT&T executives are asking regulators at the Justice Department and Federal Communications Commission to rubber stamp their merger. They argue, incredulously, that bigger is better for consumers.

At a moment marked by America's precipitous decline in the global ranks of communications leaders, the Justice Department and FCC should correct our problems -- not exacerbate them. This merger must be stopped.

Add your voice against the AT&T merger by sending letters to federal regulators and your representatives here.

Timothy Karr is the campaign director of Free Press, the national media reform organization.

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