The federal bureaucrats who oversee the nation’s airwaves are a low-key group. They rarely make the airwaves themselves unless they do something wacky. You may recall their spat with radio shock jock Howard Stern, or the time they fined the Fox Network over the antics of pottymouth Nicole Ritchie on national television. And who can forget the brouhaha over Janet Jackson’s (ahem) you know what?
But the five members who make up the Federal Communications Commission (FCC) do more than play national scold. They are a powerful group that has tremendous sway over the nation’s televisions, telephones, radio, and, increasingly, the Internet. With little more than a year to go, the Bush administration is in its twilight, yet the three Republicans who call the shots at the FCC (by law two commissioners must be from another party) will likely make or influence several monumental decisions.
The question is whether we can we trust them to truly act in the public interest. I have my doubts and small business owners should as well.
The FCC is leading the discussion over the need for a comprehensive national broadband strategy. It’s about to auction off a portion of the radio spectrum that will pave the way for a “third” national broadband channel that will be totally wireless. It’s studying how the concentration of media ownership is affecting competition and local radio and television programming. And it’s also overseeing the conversion of television from an analog to a totally digital broadcast system.
At a recent hearing on Capitol Hill, FCC Chairman Kevin J. Martin and other commissioners talked a good game. Their testimony was filled with high-minded pronouncements about promoting broadband access for all, and tackling the industry giants that have a stranglehold on radio, television, and other media. But their actions tell a different story.
Of course, much of the FCC’s recent inanity occurred under former Chairman Michael Powell. Media critic Tom Shales called Powell a “pompous and imperious” ideologue. Most infamously, Powell led the Bush administration’s 2004 campaign against obscenity over the airwaves. Besides making the U.S. an international laughing stock and Stern an unlikely hero for defending free speech, it cowed the networks so badly they refused to run such movies as Saving Private Ryan simply because it contained obscenities.
But, as Shales noted, that episode was mere buffoonery compared with Powell’s “tireless efforts” on behalf of giant conglomerates and big media. “Powell [is] a dilettante who invariably sides with the moneyed minions of Big Broadcasting on the major issues, the ones likely to have the most lasting effects,” he wrote. That’s where my chief concerns lie, and that’s where the FCC has punished small businesses the most.
While Powell is gone, his replacement is every bit a Republican ideologue, albeit a more understated one. Before joining the FCC, Martin was a special assistant to the president for economic policy, served on the Bush-Cheney transition team, and was deputy general counsel for the Bush campaign. Although the FCC is an independent agency, the chairman, as anyone in Washington will tell you, is merely an instrument (or lightning rod) for policy that emanates from the White House.
When it comes to telecommunications, two seminal developments paved the way for the current revolution — the breakup of Ma Bell, the national telephone monopoly, in 1984, and passage of the Telecommunications Act of 1996. The former set the stage for competition, and the latter was supposed to level the playing field. But the Bush administration has been waging a counterrevolution ever since it gained office.
In the last two years, the FCC has signed off on three significant telecom mergers: SBC-AT&T and Verizon-MCI in October 2005; and the AT&T-BellSouth merger in December 2006. Since then, the now mega-telecom providers have been putting the squeeze on small competitors. In fact, the Small Business Administration’s Office of Advocacy was concerned enough to petition the FCC to review its actions.
Under the Telecom Act, the FCC is required to “promote competition and reduce regulation” to lower prices and raise the quality of services for consumers. But COMPTEL, an organization that represents small telecom companies, says the difficulties they now face are so “egregious” they amount to a “market failure.” Hardest hit, according to the SBA, have been consumers and small businesses in rural areas.
Setting policy is certainly the FCC’s prerogative, but what big businesses can’t get through the front door, the administration often makes available through the back door. In 2004, Verizon asked the FCC to exempt its broadband services from traditional common carrier regulations, which meant it would no longer have to provide smaller competitors with access to the network at wholesale prices.
Verizon petitioned the FCC under an arcane provision of a 73-year-old law that allows businesses to seek “forbearance” from government regulations. Small business groups and the Office of Advocacy opposed the move, so the FCC simply did nothing. Under the law, if the agency fails to act in a set period of time as it did here, the forbearance is automatically granted. It’s a nice, tidy transaction; no need for pesky public comments or public deliberation, and there’s no written record to hold the FCC accountable!
According to the SBA’s Advocate, the action violates the Regulatory Flexibility Act (RFA), which requires agencies to consider the economic impact of regulatory decisions on small businesses. Under pressure from several small business groups, the FCC relented last month and agreed to open the record for public comments.
When it comes to broadband, the FCC has utterly failed to live up to the Telecom Act. Cable and DSL providers now control 96 percent of the residential broadband market, in what even Commissioner Jonathan Adelstein frets is a “stagnant duopoly.”
By international standards, the nation’s broadband service is substandard and expensive. We no longer even rank among the top 10 nations in terms of availability, cost, or speed. To say we need a national strategy is an understatement.
But let’s wait until the next president is elected and remakes the commission before we create one. Given this administration’s track record, this is no job for a lame duck.