Former FCC Chairman Reed Hundt says the Comcast/NBCU merger is a vertical one and doesn't see any problems with
it; former FCC Chairman Michael Powell says the Supreme Court has been "irresponsible" in not giving the FCC more guidance on indecency enforcement; and former Chairman Kevin Martin says his one policy regret is not
getting to do more about cable's prices and bundling of service.
And they all agree that the only reason the FCC did not get rid of broadcast-newspaper crossownership rules was
politics, since the all agreed they ought to go. Powell said the market was corrupted by those political calculations and their impact on outcomes.
Those were just some of the observations from the three, gathered for a roundtable discussion for C-SPAN's
Communicators series (http://www.c-span.org/series/communicators.aspx).
Hundt, who pointed out that he was an antitrust lawyer for 20 years, said that he saw the Comcast/NBCU merger as
a vertical one that does not pose the kind of risks that can be present in some horizontal mergers. "This is a vertical merger. I never thought it raised any serious issues and, frankly, I haven't seen anyone in public office in the last year say that there were," he said.
Kevin Martin, who is representing deal opponent Bloomberg, begged to differ. "The fact that you have the largest
cable operator in the country that would also be owning one of the competitors in the business news space, for
example, I think raises concerns for their competitors," Martin said.
When asked whether the FCC's newspaper broadcast cross-ownership rules make any sense in today's marketplace,
Hundt said no, and the others agreed. "There is no more incoherent collection of rules than the media ownership
rules," said Powell, whose attempt to rewrite them was stayed by the court.
Hundt, who had said he was answering for everyone, pressed his colleagues on why the rules never passed.
"Let's the three of us tell the truth about why not any one of us got rid of the newspaper/broadcast
crossownership barriers. "None of us thought the rule made sense," admitted Hundt," why didn't we just get the
eraser and get rid of them." Martin pointed out that his loosening of the rule actually did go into effect. Bt
Powell eventually came up with Hundt's the right answer: "Politics."
"That's the only reason," said Hundt. Noone disagreed.
"Remember one thing," said Powell, providing more insight on how the regulatory sausage was made. "These other
industries are of mild interest to the Congress, media is their lifeblood. If I were being completely frank, one of the things you run into is if you run for office in Texas and you are mad at the Dallas Morning News because they are editorializing against you, it will be over your dead body they get to buy a television station. This market is completely corrupted by the political calculations that go on and are associated with what the outputs of transactions would be."
Powell said he was sure all of them had had "surreal" conversations with a congressman about the media ownership rules. "And the only way you could make sense of it was that, if it were liberals, 'I'll be damned if the Fox
network is going to gain one more ounce of authority,' and if it's conservatives, they are no more pure when it
comes to certain newspapers and certain combinations," Powell said.
Martin pointed out that then-Senator Obama had objected to his loosening of the newspaper-broadcast cross-ownership rules, and that now the administration was defending those rules in court.
Hundt also talked openly about pressuring then CBS chief Mel Karmazin to pay the FCC's million dollar indecency
fine for Howard Stern. Karmazin drew praise at the time from First Amendment sectors for standing up to the
commission. But Hundt made it clear of the kind of pressure Karmazin was under.
The fine against CBS was pending when Hundt got to the commission, he said, explaining, "So I called up Mel Karmazin, who was running the business that Howard was in, and I said 'You know, Mel, you know, you and I can't have a productive conversation during my time as the FCC chair if your not going to pay this fine, because as far as I
am concerned you are basically a scofflaw.' So, we had this very direct, very pleasant conversation and I thought it was absolutely clear that Mel had agreed that 'yes, I want to be a good citizen, we're going to pay the fine.' He walked right out and they appealed it and we never had a productive conversation because it was nothing but hammer and tongs in court, and there was a reason. Howard Stern thought it was much more fun to go on the radio and say FCC chairs ought to get cancer and die, which he did say, and much more fun to have his extremely jacked up audience to get even more jacked up about the whole idea that there was this terrible government that was going to deny them the right to hear sexual innuendo no the radio. That was much more fun than actually being part of a sensible culture."
Powell revealed his reaction to watching the Janet Jackson Super Bowl mishap, for which his FCC eventually fined
CBS. He said he turned to his wife and said: "Tomorrow is going to really suck." Powell said that one of the
biggest problems in dealing with the indecency rules is with the Supreme Court.
He called the distinction between broadcast TV and other media "increasingly tenuous." He said that consumers
aren't making the distinction. "The idea that we have different First Amendments for each of those media
depending on how they are used...is untenable. Frankly, I will be even more direct. I think the Supreme Court
has been irresponsible in not taking a case that would help the commission and the government understand what
the proper parameters of the First Amendment are in the modern context, and not vague references back to the
'60's... I found that made my job very, very difficult."
Martin hammered on the cable industry per a familiar storyline, talking about rising cable rates and promoting a
la carte. Hundt said that in the wake of the Citizens United case, the FCC should step in and require more
extensive disclosures on political ads, something the Congress failed to do. "The FCC, I would assert, has the
power to require that broadcasters not run any political advertisements unless those advertisements reveal where
the money is really coming from," he said.
Powell said that the way the
FCC regulates does not make any sense anymore, that services have
merged thanks to IP technology and other tech convergence, and that
regulating them according to the old silos make for
a "competent agency that spend all its time in court." He said the
statute is a constant source of grey areas and that regulation is a slow process in a market that moves very fast.
He said the rise of the
bit-to-bit world should hasten the fall of those regulatory silos. "We
are regulating on who you are and where you came from, not what you are
doing [today]," Powell said.
