Regulators: Whose Side Are they On?

By Valerie Milano

In an ideal universe, government telecommunications regulators would make decisions based on what would best serve the public they are mandated to protect from unfair business practices, while promoting competition and social inclusiveness. However, in the real world, it often appears to be a case of the big business fox guarding the consumers’ henhouse.

FCC commissioner Jonathan Adelstein

It could be argued that since the repeal of the Financial Interest and Syndication (Fin-Syn) rules in 1996 — which required 25 percent of primetime programming to be produced by independent studios — consumers have seen innovative programming choices decrease as independent producers, and their independent voices, have struggled to survive. Jim Kraus, Carsey-Werner’s president of Domestic Television pointed out, “Even though the networks claimed that they would keep themselves open to independent production, they really have gone the way of producing their own shows and thereby securing any downstream syndication and cable selling opportunities.”

Federal Communications Commission (FCC) regulators have also had a chilling effect on content via the fines levied against material subjectively deemed “obscene.” Ironically, consumers on both sides of the issue seem unhappy with the FCC’s fines.

The Parents Television Council (PTC), whose stated mandate is to protect children from “sexual, violent and profane” content on TV, instituted a campaign against the Commission “for failure to enforce regulations,” according to PTC board member Tim Winter. “We support stations getting fined and having their licenses revoked for repeated offenses,” he said.

Stephen Rohde, First Amendment attorney and former president of the American Civil Liberties Union (ACLU) said: “Fining or taking away a license is censorship. You have in place now a mechanism that is pre-emptive. Often, censorship is invoked in the name of protecting children… To have adults judged by the standards of children is problematic,” he said.

Darlene Lieblich, vp, Standards and Practices for Fox Cable Networks concurred, “I have spent much of my professional life protecting the American public from content that wouldn’t raise an eyebrow anywhere else in the industrialized world. A word or phrase taken out of context can be incorrectly labeled obscene. Sometimes I truly wonder who are we protecting…and from what.”

NBC Entertainment president Kevin Reilly wondered, “How can we, as a network, get into some of that explosive quality that we’ve had historically with ER and Miami Vice and Hill Street Blues?  How do we regain that turf again?  It’s a tricky environment with the political mood of the country and the FCC,” he said.
FCC commissioner Michael Copps, has spoken forcefully about the potential long-term ramifications of deregulation. “This is the people’s property we are dealing with. We’re talking about public airwaves and how they should be utilized to advance the interests of our citizens. I’d like to see a real, honest-to-goodness license renewal process” predicated on the public interest. Instead of just making renewal a rubber stamp process, Copps said the FCC should institute “a comprehensive look at how a station has discharged its public responsibilities over the term of its license. Properly designed, this process would avoid micro-management, but still achieve the desired public interest results.”

FCC commissioner Jonathan Adelstein concurred. “Since the FCC’s charge is serving the public, the FCC has a legal and moral obligation to inform the public, especially on so important an issue [as deregulation and its ramifications].”

Democratic California Congressman Xavier Becerra, who currently serves as chairman of the Congressional Hispanic Caucus’ Technology, Communications and the Arts Task Force, worried about how regulators affect images seen on television. “Diversity within media includes ethnic, racial and gender concerns. It’s not just about getting big; it’s about a few white guys getting bigger. I hope the entire FCC recognizes this… It was Congress that created the FCC to manage the public airwaves and protect the public interest. Perhaps Congress will have to take a review of the FCC,” he said.

And it may be the case that what consumers want — or think they want — is not beneficial in the long run. For instance, the current push toward regulators forcing MSOs to offer family tiers may have unanticipated consequences.

“Family tiers are a horrible thing for the cable industry,” stressed cabler Black Entertainment Television (BET) CEO Debra Lee. “BET would not exist today if there were a-la-carte or family tiers. And, you know, my personal feeling is, back in the day when there was CBS, NBC, and ABC, and those were the only three TV networks, they had to appeal to a mass audience and that’s why you didn’t have diverse programming. The one thing that cable programming and the cable industry have done is allow diverse programming to prosper, so that diverse programming networks could exist. And the worst thing that could happen to all the achievements of the cable industry would be for a-la-carte or family tiers to really take hold.”

Sometimes the impact of regulators’ decisions doesn’t become apparent until it hits consumers’ bottom lines. Opponents of the pending AT&T-BellSouth merger say it will ultimately prove to be a win for the Telcoms but a loss for the public. When the merger goes through, the newly joined conglomerate would control a majority of access to America’s telephone infrastructure. That would give it the muscle to raise the cost for competing broadband companies to lease lines. Because regulators have steadily loosened rules on how Telcoms determine pricing, there is a concern that AT&T may force smaller competitors out of business, which in turn means fewer choices for consumers and inevitably higher rates.

In October 2006, consumer advocacy groups appealed to the FCC to adopt media ownership rules that encourage diversity and competition. “Our data blows holes in past FCC arguments for loosening media ownership limits,” Gene Kimmelman, policy vp for Consumers Union said in a press release. “The facts are straightforward. A vast majority of Americans still rely on locally owned television stations and newspapers as their most important source for local news and information. Cable and Internet are no substitutes.”

“There is simply no evidence that supports permitting further media consolidation — no justification in law, economics, or social policy,” added Mark Cooper, director of Research for the Consumer Federation of America. “The cornerstone of the FCC’s argument to relax ownership limits is that consolidation is in the public interest. The evidence to the contrary is very clear. Stations that consolidate don’t produce more news — they produce less. And diversity of news and opinion from the most influential media declines. The record is clear. More consolidation hurts our democracy without any discernible benefits.”