The Multinational Monitor

JUNE 1996 · VOLUME 17 · NUMBER 6


E D I T O R I A L


Taming the Telecom Giants


The story of the Information Revolution is the tale of a revolution betrayed.

Rapidly evolving information technologies contain near-boundless potential for a more democratic media, a richer diversity of voices over various telecommunications conduits, a new emphasis on community- and education-oriented media programming and more participatory program development.

The potential of mass media, however, has not been realized. Only the internet and some forms of radio (public and college stations, talk radio) stand as a partial exception to the general proposition that, for all the new information technologies have changed the forms by which programming (or, more broadly, "content") is delivered, the programming itself has not changed at all.

While government deregulation has been a major contributing factor, the overarching cause of the narrowing of the media conversation at a time when new technologies could spark a cacophony of voices is industry concentration.

Faster than new technologies are developing, telecommunication companies are buying each other, merging or entering into joint ventures. Most disturbing is the trend for a blurring of the division between carriers and content providers, and a similar blurring of the division between carriers in different forms of media.

Consider the television/video sector alone:

In over-the-air television broadcasting, Westinghouse, owner of the largest radio network, recently bought CBS. Disney, a major content provider, acquired ABC.

In cable, Time Warner, which already owns the fledgling Warner broadcasting network, has completed a deal to buy Turner, the parent company of CNN, TBS, TNT and others.

Time Warner is the second largest cable operator in the United States, and the largest individual shareholder in Time Warner is TCI, the largest cable operator. Together the two companies control roughly a third of the U.S. cable industry.

If Time Warner is permitted to take control of Turner while TCI remains a large shareholder, the Time Warner-TCI block will potentially be able to impose an enormous barrier to entry against, say, a competing cable news network, by denying it access to one third of cable-wired homes.

New forms of video delivery could theoretically challenge the television media oligopoly, but corporate goliaths have snatched them up.

Direct broadcasting satellite technology -- now used only by Direct TV/USSB in the United States -- could provide an alternative to broadcast and cable concentration. Unfortunately, only eight companies control the available satellite channels in the United States, with only a relative handful of channels unassigned. One of the largest of those companies, Echostar, is now planning to merge with DBSC; that merger would give Echostar control over approximately one third of the DBS frequency distributions. Two of the other DBS players, cable's TCI and telephone's MCI, are discussing a joint venture which would further concentrate the market.

Another emerging video alternative is Open Video Systems (OVS), a means to deliver video programming over telephone lines which only local telephone providers are in position to provide. Some measure of community and non-commercial use and control could be afforded by regulations requiring the phone companies to allow community and nonprofit organizations to distribute programs over OVS channels at a discounted rate. The Federal Communications Commission (FCC) has refused to adopt such a rule, however.

The initial industry and regulatory structure within which new technologies come on line is likely to direct their social and technological evolution.

Realizing their democratic potential will require a return to some recently discarded or lifeless FCC regulatory approaches, such as requirements for public interest and children's programming, and community access channels.

But it will also require a much more profound, two-fold challenge to the video broadcasting industry.

First, there must be a revitalization of antitrust enforcement, and the imposition of heightened antitrust rules for the telecommunications industry which is so vital to the well-being of democracy itself. Among these should be rules prohibiting companies from owning multiple carrier forms, and a flat prohibition on cross-ownership between video carriers and content providers.

Second, publicly owned and operated networks -- networks more democratic, more participatory, more accessible and more independent than PBS -- should be created.

One approach is Ralph Nader's proposal for an Audience Network. Nader has urged that Audience Network, a national, nonprofit membership organization, be given control over one hour of prime-time television and one hour of drive-time radio on every commercial channel, every day. The Audience Network, run by an elected board, would air programs in these one-hour spots, and rent some back to commercial networks for income.

Another, more far-reaching approach, not incompatible with the Audience Network concept, has been suggested by Professor Eban Moglen of Columbia University. Moglen calls for the phasing out of commercial over-the-air broadcasting, and for allocating all over-the-air frequencies to educational and community-based programming.

The time for creative thinking on these matters is now. Opportunities lost at the onset of the Information Revolution may be lost forever, as the forces of reaction capture and divert its energy and potential.

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