Monopoly Money

On January 28, 2004, the five members of the Federal Communications Commission came to San Antonio for a public hearing on the importance of localism in media.

Michael Powell, then-chairman of the FCC, defined localism as "the responsiveness of a broadcast station to the needs and interests of its community," and added that the promotion of this concept was "one of the highest principal reasons the FCC regulates broadcast television and radio in the first place."

Powell certainly talked a good game, but recent events argue that the Bush-era FCC has consistently valued the financial benefits of media consolidation over the public-interest needs of local communities.

In 2001, the FCC greenlit NBC's purchase of Spanish-language network Telemundo, and two months ago NBC rewarded that decision by announcing a plan to regionalize Telemundo's news operations in Texas, Arizona, and the West Coast, leaving San Antonio (and six other major Latino markets) without a locally based news operation. `See "Tele-Regional," December 6-12.`

In recent months, news has also surfaced that Powell's FCC supressed two reports warning about the negative effects of media consolidation. In response, 34 congressional Democrats appealed in writing to FCC Inspector General Kent R. Nilsson to investigate the supression of these documents.

The first hidden study, issued in 2003, concentrated on the decrease of diversity among radio-station owners, while a draft working paper released the following year examined the relationship between media consolidation and local news coverage. It found that locally owned television stations air more local news than their non-locally owned competitors.

Concerns about the FCC's indifferent attitude toward consumer interests come into play with a pending commission decision on AT&T's proposed merger with BellSouth. Watchdog groups such as the American Civil Liberties Union and the Center for Digital Democracy have decried the buyout, arguing that it makes an already monopolistic AT&T so powerful that it will be beyond the constraints of free-market competition. They've also expressed concerns about AT&T's disregard for net neutrality as the telecom giant plans to branch into more multimedia services, and media reports that both AT&T and BellSouth handed over customer records - without a court order - to the federal government to assist the National Security Agency's spying program (BellSouth officials have denied participating in the program).

On June 5, the ACLU filed a statement with the FCC, urging the commission to "investigate whether the applicants have violated federal laws regarding the privacy of their customers' communications."

The FCC has been deadlocked over the AT&T-BellSouth merger, with two Democrats opposing the deal, two Republicans supporting it, and a third Republican, commissioner Robert McDowell, recusing himself from the debate because he previously worked for the lobbying group Comptel, a staunch opponent of such mega-mergers. On December 8, however, FCC counsel Samuel Feder ruled that McDowell's employment history did not constitute a conflict of interest, and freed the commissioner to vote on the merger. Commission Chairman Kevin Martin, a Republican, lobbied for McDowell's right to vote on the merger, perhaps assuming that Martin's deciding vote will allow AT&T and BellSouth to clear the FCC hurdle.

Telecommunications company Global Crossing has refrained from condemning the merger, but has appealed to the FCC to put in place an arbitration system that will protect competitors that need to purchase special-access circuits (generally used by businesses with major telecommuncations needs) from AT&T-BellSouth. AT&T has adamantly opposed Global Crossing's arbitration plan.

"We believe that the merger exacerbates a pre-existing problem," says Paul Kouroupas, vice president of regulatory affairs for Global Crossing North America, Inc. "AT&T, in and of itself, is dominant in the special-access market in the region that they operate. Their territory is so large already from a series of mergers. And now they're buying BellSouth. The merger now brings two-thirds of the country under control of AT&T. What's a purchaser to do?"

Kouroupas says Global Crossing does not take issue with the merger itself, but simply what it sees as the potentially dangerous effect of the deal on the industry.

"You look at all these mega-mergers over the years, and have any of them really worked that well?," he says with a laugh. "So let 'em merge, let 'em fight over the corner office, let 'em figure out what to do with the two networks. That ties them up. Bigger is not always better."

The "bigger is not always better" mantra would surely draw nods of agreement around the offices of KVDA, San Antonio's Telemundo station. On December 29, the station's news team will be dismantled, by decree of corporate owner NBC Universal. The station will be left with only one reporter and one camera person, and the station's news broadcasts will subsequently emanate from a regional production center in Fort Worth.

One Telemundo employee, speaking on condition of anonymity, describes NBC's announcement as "heartbreaking" for local staffers, adding, "The whole sentiment at the station was, 'Nothing's going to happen to us. We're already small enough as it is.'"

The Telemundo staffer describes a shell-shocked, thoroughly demoralized staff that's skeptical of the regionalized-news plan and no longer feels motivated to show up for work.
"We thought that we were doing great, 'cause we saw our numbers going up," the employee says. "There'd be some days when the margin between our ratings and Univision's was only a couple of points. That made everybody ecstatic. We were proud of what we were doing. And then the announcement came, and we said, 'Great, there goes all our effort.'"

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