The Bullying Pulpit
In the first quarter of the year, about 100,000 people each month decided they were fed up with what broadcast radio stations were feeding them. They were fed up with the same songs played dozens of times a day, fed up with car dealers screaming at them in commercials. So, these people signed up for XM Radio, a pay-radio service broadcast by satellite. This year, XM added something new to its more than 100 channels of music and talk -- local traffic and weather information.
That new development was too much for the powerful broadcasting lobby, which sees the local market, and local ad revenue, as its own. Rather than recognize a weakness in their programming and try to find a way to hang on to their listeners, the broadcasters instead went to their friends in Congress as part of a campaign that would restrict consumer choice.
As a result, Rep. Charles "Chip" Pickering, R-Miss., and Rep. Gene Green, D-Tex., with little fanfare, introduced H.R. 4026, the Local Emergency Radio Service Preservation Act of 2004. It's the type of a bill that's unfortunately quite common, but illustrates one of the fundamental weaknesses of our economy that you won't hear discussed in the presidential campaign.
There are some American industries that are just plain afraid to compete in the marketplace. For all of the talk in favor of "the free market" and doing what's best for consumers, this bill is the poster child for the ability of one industry to try to use Members of Congress to put the screws to a competitive industry
It would be unfair to pick solely on this legislation, or these House members, for this bill. This kind of thing happens all the time, although more generally under the cover of a bunch of discrete little knife fights in the darkness of the legislative alleyways. Commercial banks and credit unions have been fighting for decades. In the latest incarnation, banks want credit unions to be taxed, and unveiled "Operation Credit Union" to fight for that on the Hill. The credit union national association responded with an outraged letter to Capitol Hill. In the Medicare and drug bills, doctors were pitted against hospitals, nursing homes against home health agencies, with each group's lobbyists pushing for its piece of the pie.
Not All Lobbying Is Equal
Let's draw some lines. Just as there are different degrees of crimes, there are different degrees of lobbying. Not all murders, for example, are equal. There is first degree, second degree, manslaughter. Not to draw the analogy too finely, but lobbyists have different roles. Some times it's to play defense to stop the government from doing something they perceive would be harmful to their company. Sometimes it's to grub up some favorable tax advantage or policy. The "Healthy Forests" legislation, drawn up by the timber lobby, allows more logging. The "Clear Skies" legislation, drawn up by utilities, allows for more pollution. The energy legislation contains a bail-out for the nuclear power industry. Each tax bill contains goodies for somebody because in Washington, everyone is a "special interest." Hollywood tries to use legislation to mandate how consumers can use digital content by requiring special technology to be installed in consumer electronics.
The only thing is, some "special interests" are more special than others, and they use their bullying pulpits to kneecap the competition rather than simply to bag another set of goodies. That attitude underscores the fundamental unwillingness to recognize the reality of the marketplace.
That attitude of trying to screw the other guy extends to our judicial system too. Again, to pick an example, the telecommunications industry may be the most litigious in the country. Virtually every decision by the Federal Communications Commission is taken to court. The U.S. Supreme Court has been called in to judge arcane accounting issues. Telephone companies couch their arguments in these cases around legitimate economic issues, with millions of dollars at stake. But at their root, it's all with the same goal in mind -- to hang on to market share and consumers not by improving products or prices or services, but by using the legal system to stick it to your competitors.
The Pickering-Green bill is a prime example because of the cosmic irony involved. It's because of the broadcasters' success in lobbying that they find themselves asking a rising Republican star like Pickering, who formerly worked for Sen. Trent Lott, R-Miss., the old college chum of Eddie Fritts, the president of the National Association of Broadcasters, to introduce this bill.
The Agony of Victory
Broadcasters got much of what they wanted in the 1996 Telecommunications Act when many of the ownership restrictions on radio were lifted. The result was the unprecedented consolidation of stations, which in turn lead to the increased homogenization of stations, which in turn lead to many listeners being turned off of radio and looking for other outlets. The Internet is one, and there's not much radio broadcasters can do about that. But satellite radio was something they could attack, as they did for years at the Federal Communications Commission, arguing that if satellite radio were allowed to offer local content, then the broadcasters would be harmed. There's no subterfuge here, it's all in the Pickering-Green bill that's packed with language about the importance to society of local broadcasters and how the satellite services were supposed to be national in scope, but that those services instead have announced plans for local traffic and weather.
Their bill requires the FCC to conduct a rulemaking to consider whether satellite radio should be able to offer locally oriented services, taking into account such neutral issues as "the impact of locally oriented satellite radio services on the viability of local radio broadcast stations and their ability to provide news and other services to the public" or "the ability of digital audio radio satellite service licensees to afford listeners the same emergency and other information as is afforded listeners of local broadcast radio stations."
The satellite services in question, XM Radio and Sirius Radio, have between them about 1.8 million subscribers nationwide, a mere drop in the ratings bucket for radio stations. The New York public radio station, WNYC, has about the same number of listeners. The satellite services do plan to offer local traffic and weather in some markets, not by offering specific channels to specific markets, but by offering it on a national scale, thus meeting the letter, if not the spirit, of a "national service. You would be able to hear XM's Washington information in any of the other cities it serves.
That's not good enough for the broadcasters, who successfully squashed a plan a few years ago for Low Power FM (LPFM) stations on the basis that these community outlets would cause interference with radio stations and maybe, just maybe take away some of their audience. Rather than compete with the satellite services by offering innovative programming, the broadcasters are simply trying to squash them. It's common, and it's unseemly.
The one miniscule sign that the culture of the legislative and judicial rub-out may be weakening came from, of all institution, the Federal Communications Commission. It issued a Rodney King-like statement asking the warring parties in the telecom industry to try to get along and work out their differences on how competitors should have access to the local network through negotiations, rather than through more litigation. The local telephone companies and AT&T, their mortal enemy team captain, have until Apr. 6 to decide whether they will play nice. Don't hold your breath, however. Even if talks take place, the outcome will be challenged in court.
Art Brodsky is a long-time Washington reporter and editor.