Robert McChesney, associate professor in the school of journalism and mass communication at the University of Wisconsin-Madison, on the state of the media industry

Hosts: Janine Jackson and Peter Hart

CounterSpin: Many people imagine that the issues we face with news media today in this country -- the struggle between commercial and journalistic influences, the concern for the public interest amidst the business of broadcasting -- are of recent origin. Robert McChesney's 1993 book, Telecommunications, Mass Media and Democracy, is a landmark because it shows that that is not the case, filling in the history that is often missing in media criticism debates. CounterSpin spoke with Bob McChesney about the most monumental recent change in the media landscape, the Telecommunications Act of 1996-- legislation whose impact is certainly being felt, even though it is still not widely understood. We talked about a number of other things as well, including the much-vaunted future of TV.

The Telecommunications Act of 1996 was the most important piece of media legislation since the Communications Act of 1934, which had been the basis of most of the rules governing the airwaves. Nevertheless, in the lead-up to the passage of Telecom '96 it was hard to find any information about it in the mainstream press. There's no shortage of coverage of programming and celebrities, but reporting on this massive overhaul of the system governing who controls the media was almost always consigned to the business pages, and mostly consisted of cheerleading for the Act's passage.

The Telecommunications Act of '96, explained the Washington Post in February of that year, removes regulatory restrictions that have prevented local and long distance telephone companies from competing against one another, it paves the way for further competition in the cable television industry and gives broadcasters freedom to enter new businesses and purchase more television and radio stations. The New York Times also spoke of freeing media companies from decades of restrictions, what the paper had earlier described as regulatory barriers that were increasingly outdated and according to many experts harmful to competition and consumers.

Papers didn't often explore just how relaxing limits on ownership was suppose to increase competition, and when the Act instead provoked a torrent of consolidation in the telecommunications industry, mainstream media appeared downright surprised. They now spoke of the Act as having been intended to spur competition, despite its ironic results.

Our next guest might have warned the corporate press corps about likely results of the '96 Telecommunications Act, he is Robert McChesney, associate professor in the school of journalism and mass communication at the University of Wisconsin-Madison and the author, most recently , with Ed Herman, of The Global Media: the New Missionaries of Corporate Capitalism. Welcome back to CounterSpin Bob.

Robert McChesney: My pleasure to be here.

CS: To hear mainstream media tell it, we had to overhaul telecommunications laws just because they have been on the books too long. What were the real reasons behind Tel-com '96?

RM: Well the real reasons, and actually these were pretty frankly stated in a lot of the business accounts, were simply that the changes in technology, specifically the rise of digital technologies, the use of computer language across media and communications, really changes the whole notion of media and communications technologically. Because once everything shifts to the bits and bites of electronic and digital communication, then the traditional barrier between traditional media sectors, radio, television, even telephony, sort of fall by the wayside and it becomes at a certain point sort of silly to have different industries and your all really doing the same thing.

I think that was the technological foundation for needing a new telecommunication law, and at that level it's a very legitimate enterprise, it was really a perfect time (the 1990s) to have congress re-asses the nature of our media and communications system and sort of re-appraise which direction it should go in view of really the striking technological possibilities before it, the most stunning example of which would be the internet. Now in a democratic society the way this debate would have gone on would have been something like this; there would have been public hearings, maybe all around the country to let people participate, there would have been different positions formulated, they would have said: here is the technology, lets decide what our alternatives are to use them, probably during election years different candidates or parties would have run on different positions, it would have been part of the public debate, and then eventually people in congress would have had hearings and a formal vote and some law would have passed and it probably would have been a law that reflected to some extent the interest values and concerns of the citizenry, that's how it works in a democracy.

CS: It sounds like maybe it didn't work that way(chuckle). I did read that this was the most lobbied bill in history, so there was a lot of activity in congress in the lead-up. But what was the process really like?

RM: Well the process was virtually the exact opposite. There was zero public involvement what so ever and a quit conscious effort by members of congress and the powerful lobbyists behind the law to keep it totally outside of the public view. It was a tremendous fight that went on over the spill, but the fight was exclusively between the lobbyists from the four or five main communication industries that were effected: cable broadcasters, satellite, over the air broadcasters, long distance phone companies and local phone companies and the computer software firms.

These five or six industries each were squaring off to try to get the best terms in the new law so there firms and there industries would get the best possible outcome. But that was the extent of what the fight was over.

Between them, these lobbyists, these industries, as you pointed out, they spent a colossal amount on lobbying, they also spent massive amounts giving campaign contributions to all the relevant members of congress and the Committees and House and Senate that heard and condrased the legislation.

In short, it was just a real cash windfall for the political class on capital hill, but it was a total blackout for the population. They had no participation. As you mentioned earlier, it would have been impossible for an American to follow this law. It simply was uncovered in the press.

I want to underscore a crucial point about this law: It is really the last statement Congress is going to make formally on the future of communication for arguably generations, and by future communication we're talking about not just radio and television and now what's going to be digital TV, but really the internet, the whole range of utilization of digital communication across our society, the whole central nervous system of our society. So this is the last chance to have a fundamental public hearing on it, and then the anti-democratic implications of it become a lot more clear, and the main lobbies that were fighting for this law, they were really conscious about trying to make sure there was minimal public involvement.

In fact what was interesting was in January of 1996 shortly before the bill passed, if you were to go back and look at the New York Time business page, the Wall Street Journal or any of the trade press, the consensus of opinion in all of the media was the law could not pass, the divisions between the various super-powerful lobbyists and industries were so great that they couldn't agree on a compromised deal. And then two weeks later the bill passed almost unanimously in house and senate and was sighed by president Clinton and was a law.

CS: Interesting.

RM: Well the reason for that is real clear. What happened was basically the lobbyists got together and said, "Look, let's get this thing passed, because right now we're going in to an election year, and the last thing we want is this to be a live issue through 1996 with people running for president." And I think they probably remembered that in 1992 Ross Perot had run and as a gadfly had sort of raised a stink about NAFTA, and suddenly NAFTA and GATT, the World Trade Organization, which both parties had sort of agreed to race right through Congress without a lot of debate, became a public issue. I think the communications industry was well aware that they did not want that to happen to their law which was really written for their interest.

CS: So they were almost afraid that the public might interfere in the process.

RM: Absolutely. I think they didn't want to give the public the crazy idea that it was their communications system. They wanted starting assumption of all the debates of the Telecom Act, as they were and have been since, that the media, the communications industry belong to two dozen huge corporations, and they're the rightful owners and that fact should never be disturbed by anyone.

CS: Well, let's just to be clear about it, we talked about all the money and all the resources that were put into it by media companies, what did it buy? What did the Telecommunications Act of '96 give these companies?

RM: Well, it depends on the industry or the sector, but the idea that this law was about establishing really competitive industries where firms would go into a competitive market sort of like a corn farmer faces in Iowa is absurd. If this law had anything about establishing competitive market these firms would have never let it see the light of day, let alone get passed. It was about loosening markets which is quite a bit different then making them competitive and in fact what we've seen since 1996 is the rational thing firms are going to do in sort of uncertain times, and these are uncertain times, is that they try to build up their protective armor by getting bigger and bigger and reducing any threat of competition. In 1996, the time it passes, there were seven regional Bell local operated companies that are called baby Bells even though they're enormous companies, today there are four and the number is shrinking, it may well get smaller them that. AT&T is now in the process of merging with TCI, General Telephone and Electric is going to be swallowed up by one of those four baby Bells, Bell Atlantic, the whole system has gotten incredibly consolidated. And there will be some competition that will come out of this, in fact I think it's safe to say that within five years there will be competition for telephone service, for internet access, but it's not going to be the sort of competition that Milton Freedman and Dan Quail and Jack Kempt lecture us about all the time where you got thousands of hungry young ontrapernures coming in and lowering prices and improving quality and saving the day, instead what you'll get is in a lot of these markets is instead of having monopolies you'll have a dueopoly or maybe three companies dividing up the market and the identities of these companies will be from the select groups, so maybe it will turn out that the telephone companies will be able to compete to offer internet access in television, like wise the cable companies can offer internet access and telephone service, but in each market it's still going to be a very tight nit olegopoly or dueopoly in any case, and the owners of all the industry will be the same people who got this law passed.

CS: Bob, I wanted to ask you a question about this media were on now radio. Radio is relatively inexpensive so one would think that independent or local ownership might be a little more common, but since the Telecom Act that is actually not the case at all, would you describe the dynamics of radio ownership now?

RM: Sure, in terms of the Telecom Act and media there are two areas where the criminal nature of the Telecom Act becomes the most apparent, one is radio, the other is digital TV. In the case of radio what the Telecom Act did explicitly is that it loosened up the ownership requirements for stations, so a single company could own up to eight stations in a market—a city or community—which really relaxed the number stations again, believe it or not it wasn't too long ago that radio companies were restricted to owning some small number like ten or fifteen radio stations total, well now you can own up to eight in a single market and what's happened since 1996 in the United States is there's been a little short of like an Oklahoma land rush on radio stations in this country. Over half the commercial radio stations have been sold, usually by small firms to medium firms, medium firms to large firms, and large firms to two to three enormous giants that have come to dominate American radio broadcasting. In the fifty largest markets in this country, usually three companies in each of those markets will have at least half of the stations and half the audience and twenty five of the fifty largest markets their going to have eighty percent or more of the stations or markets. Now this is a lot of numbers and some say(sounds like?) "well what does that matter?" Well what it matters is this, radio as you pointed out is the least expensive to buy a radio, least expensive to transmit of all the electronic media, the cost of production are radically lower radio than they are for television for example, it's ideally suited for local content, community controlled, local involvement, there is no reason why this has to be some highly capitalized industry, like the Hollywood film industry might be, and instead what's happened thanks to the Telecom Act is that radio has become highly centralized and concentrated because what happens with these large companies like Chancler Radio or CBS that own two or three or four hundred stations is they own maybe eight stations in thirty or forty different markets. Well if you got forty markets do you really need to have forty different music directors? No, one music director is just fine out of the central office. If you got eight stations in a market do you really need eight news departments? No, that's bad business, one will do fine. You make a lot of money consolidating at the labor side, centralizing and regimenting your content and that's exactly what's happened and the irony of radio today is even that it's the most centralized and regimented media, even though it should be the most local, it's become the most centralized and regimented, and on Wall Street the response to what's happened in radio is little short of euphoric, I mean you read in the trade press and investors and Wall Street analysts are just jumping up and down in delight because the profits these companies are making with these little monopolies are simply unprecedented in radio, they're screaming in delirium they're so exited(chuckle, chuckle).

CS: Bob I want to ask a question about the FCC, which in theory should be one place where media activists could go to pose these kind of questions or raise concerns. At the beginning of this month we got news that the FCC was looking to force some broadcasters to sell of stations, they were going to go forward with a proposal to limit the ownership requirements to, I think four in one market would be the maximum and you would have to sell off beyond that, and then literally days later we got news that the FCC had reversed its position, they weren't that gung-ho about the proposal and it turns out that they had met with lobbyists from ABC/Disaney, is this typical of how the FCC works? And if so, where do media activists fit into this?

RM: Well, it is regrettably quite typical of how the FCC has worked throughout its 64-year history. In effect the is closely monitored by the NAB, by the commercial broadcasting lobby, the National Association of Broadcasters and all the other relevant industries it regulates. so whenever they do anything that effects them those lobbyists are right on top of it, the general really doesn't know much about this or getting any information about it, over time what's happened is the FCC, instead of being a regulator of the commercial broadcasting industry, has become more its mentor and guide, it really protects the interests of the industry. Now occasionally you get some gadfly of goof ball appointed to the FCC who gets the crazy idea in their head that they are actually suppose to represent the public and not represent these companies (chuckle, chuckle). And when that happens you always see without exception this process that I described take place, that's happened in the case you just mentioned. What will happen is the gadfly will announce some sort of idea for reform to improve the system on behalf of listeners or viewers and at that point the lobbyists will go to capital hill where they will got the politicians, which they pretty much own and operate, to then threaten to hold hearings if the FCC does not back down, this is what happened with this case too, the ownership requirements you were just talking about, and then the member of congress will scream and yell and say "how dare the FCC overstep its bounds and do stuff that's not in the law that created the FCC." Now of course the FCC is never criticized when it oversteps its bounds on behalf of the behalf of the commercial broadcasters, that's perfectly okay, it only happens on the rare occasion they get the crazy idea that they might represent the public. In fact the current head of the FCC, Bill Conard, has three times, and he's only been in there like a year or year and a half, has three times had congress threaten these hearings that they've overstepped their bounds and each of these three occasions he's actually thought about doing something that would benefit the people of this country.

CS: And when congress threatens those hearing, they're ostensibly hearings about this or that particular proposal, but they always carry this weight about—"were not really sure the FCC even needs to exist."

RM: Yeah, it's always about, "You're about to lose your job, pal."

CS: Nice little commission you got there, it would be ashamed if anything were to happen to it.

RM: Its kept on a very short leash, which means for media activists, we can't look to the FCC as being much of a forum for dealing with public interest grievances because their always going to be the end of the leash of congress and that's going to be the leash of the NAB and the powerful interests that dominate our media. The moral of the story, the lesson for us, is what we have to do is get outside the belt line and get all the people who are getting screwed over by this corporate media system engaged, informed and active on these issues so then we can counter this organized money with organized people, organized bodies, then I think we might get some results, but until then we don't have a prayer.

CS: Well let me ask you one final, forward-looking question Bob McChesney, the latest thing on the horizon of course is digital TV, we're starting to hear about that, and we know that there is a commission that is supposedly going to be considering what the public interest obligations of broadcasters will be in this new digital universe. Can you talk for the few minutes we have remaining about you impression of the Gore commission and the digital TV future?

RM: Sure, well the Gore commission which is suppose to come up with the public service obligations, the broadcasters will have to pay in order to get free spectrum has already been dismissed as a joke. It's report is being released December 18th and on December 7th the LA Times saw the preliminary copy report and editorialized the Gore commission was a joke, it was a fiasco, it clearly a pawn of the commercial broadcasting industry and it's really a sad state of affairs, but the really important issue here isn't just the Gore commission, it the broader issue of digital TV and this is I think, as I said earlier is probably the most criminal aspect of the Telecom Act of '96, it shows just how corrupt and undemocratic this law really is. As we switch from analog, what we currently have, out type of terrestrial TV which is called analog, to digital TV, a computer language is the basis of transmission, it will require entirely new equipment for broadcasters, we'll have to have new TV sets or new converters and it really changes the whole nature of the TV experience, cause once we go to digital TV there's really going to be very little difference between out TV sets and our personal computers, internet access will be easy to get because it will be in the same language, it's a radical change in television, not just with the quality of the picture, but in just what you can do with TV and the nature of the TV experience. In fact there's almost no similarity between traditional TV and digital TV. Now in a sane society, or democratic society, this is exactly the moment at which a society would have public hearings and debates and say "what do we want to do television now that its going digital? Who should be entitled to digital broadcasting? Who should be entitled to do it? What do we want to do with this great new technology?" For example, the same amount of spectrum space in an American city today you might get four or five or six channels over the air, with digital technology, using that exact same amount of spectrum you can get in five years forty to sixty channels. So do we want to let forty to sixty different people broadcasting, or do we want to let the same four or five people who broadcast currently each have ten channels for free. That was sort of the decisions that we had to make. What is interesting in the Telecom Act was that this is such a hot potato issue that the National Association of Broadcasters actually snuck a clause into the law forcing the FCC to give them the spectrum to do digital broadcasting for free, and it was snuck in the law really with no debate what so ever, no congressional hearings, no talk about it what so ever, it was such a scandal that Bob Dole who was then the senate majority leader for the republicans threatened to hold up the entire law because he thought that was a rip-off to give what's valued at fifty to one hundred billion dollars worth of spectrum for nothing in return.

CS: Bob Dole: public defender (laughter).

RM: Well what happened was that Dole was finally pulled aside by the corporate lobbyists and Newt Gingrich and they were told look, this is an important law we got to get it through, and he backed down, but Dole got his one sort of gift or consolation was he was given an oral promise that the FCC would hold public hearings before they would give away any digital spectrum, so there will at least be some chance for the public to weigh in on this issue. Well the law passes in February '96, Bob Dole is running for president at the time, three months later he is twenty or thirty points behind in the poles and he resins his seat in the senate. He is immediately replaced by Trent Lott, former college classmate of the president of the National Association of Broadcasters, Eddy Fritz, and a complete stooge of the broadcasting industry and Trent Lott's first act as senate majority leader in June of '96 is to write to the FCC and say that he doesn't to hold these public hearings and insists that the FCC immediately give out all the spectrum to the existing commercial broadcaster so they can start doing digital broadcasting. Now at that point, the sort of handful of liberals in the FCC and the White House are sort of concerned about what a scandal this is and get the Gore commission created which is suppose to then set up voluntary standards for the commercial broadcasters to justify their getting this free gift of spectrum to do digital broadcasting and the Gore commission is voluntary, its made up of commercial broadcasters, a handful of public interest advocates, some academic types, and the whole thing has been—if you've ever seen the movie of Geary(?) Wrath of God, which is about sort of this explorer in Latin America who is on this sort of mission of going nowhere where everyone knows your going to die—the Gore commission has been somewhat similar to that (chuckle, chuckle). From the very first meeting it has been sort of this unraveling fiasco of absurdity, and finally what happened by the last couple of meetings is that instead of the Gore commission becoming a decision like what could the broadcasters do in the public interest to justify getting this gift, the Gore commission came down to what other things can we give the commercial broadcasters so they will do something more for us, I mean the actual gift of spectrum wasn't even debated, then it was like letting them raise there add rates to politicians and then maybe they'll give some free time in addition to that, the whole thing came down to concessions to give the industry to get them to do public service. It was a complete joke, as I said the LA Times on December 7th lamb basted it, only someone who has owned shares in these companies could see this as anything but a cruel joke. But its a telling story that this Gore commission exists today as the only public hearings or public debate about the future of communication in this country, the closest thing we've had to a debate over the future of the internet, because, as I said, digital TV and the internet are really quite closely connected, and whoever controls digital TV really has the inside track on a lot of the internet experience from us Americans, we've peaked out pretty much about forty percent of American households with PCs, everyone's got a TV and in five or ten years everyone will have a digital TV or a converter in their TV and then they will be using their TV with the World Wide Web access much like they use the internet. So if your one of the handful of companies that dominates digital TV, your going to have definitely an inside track on the internet. So these hearings that the Gore Commission held had the potential to be just the sort of debate, ideally, that the democratic society needs on who's going to control our media and communication in the next generation or two and instead they've become, regrettably, just a farce.

CS: All right then, we're going to unfortunately end on that note for the time being, of course what we're trying to do in alternative media is provide some of that debate that we're not getting on just these issues. I would like to thank you very much for joining us for this special program, we've been speaking with Bob McChesney, his most recent book, with Ed Herman, is The Global Media: the New Missionaries of Corporate Capitalism.