Gigantism

During the period for public input to the Federal Communications Commission, the Writer’s Guild of America, representing labor and market standards for “more than 8,000 professional writers
working in film, television and new media, including news and documentaries,” delivered a 90-page filing in opposition to Comcast’s proposed purchase of Time- Warner Cable, which can be read here on fcc.gov. This new ,proposed merger comes in less than a year and a half after Comcast’s purchase of NBC/ Universal. The pressure is on for corporations to own content as well as the delivery systems by which that content is consumed, but the more deals like this take place, the greater that pressure grows, in a kind of self-fulfilling prophecy.

In the rush for total, end-to-end control of programming is the question of a free and open internet. Developed by government funding, as with the broadcast airwaves before it, the internet is increasingly being considered as the property of massive corporations to do with as they please. This Feb. 23 article from The Washington Post, “Comcast’s deal with Netflix makes network neutrality obsolete,” does a great job of explaining what’s at stake, and why, in the world of IP-based traffic subsumed by the private interests’ mandate to grow.

I grew up in the era when the anti-trust laws enacted in the wake of the Populist Movement tended to be observed, rather than “observed in the breach,” which seemed to become the new US political consensus during the Reagan era, though massive consolidation in the case of media companies and other industries, such as oil, had already begun to noticeably pick up momentum in the 1970s, as with the controversial merger of Time, Inc. and Warner Brothers (later to become “AOL/Time-Warner” in the dot-com boom period of the 1990s).

In the 1980s, the economy went into full-tilt destabilization, with a massive wave of bank failures and corporate bankruptcies, the deregulation and subsequent looting of the Savings & Loan industry, jobs-offshoring, mergers, acquisitions, hostile takeovers, and much else. Lots of companies became easy prey as takeover numbers left the “millions” figures behind and became buyouts worth billions and tens of billions. It appeared anti-monopoly laws were a dead letter; there seemed to be no enforcement any more. Companies could grow as large as their directors wished; they could be, and sometimes were, quickly stripped down and liquidated, with billions in quick capital pouring into the private accounts of their directors or CEOs. The notion that they had been formed to provide a public good became publicly ridiculed; the idea that there was even such a thing as the common good was laughed off by the Administration and the power players of the economy.  These changes were intended to produce permanent changes in American society, and they seem to have worked. Politicians with their hands on the levers of power can play along and be rewarded, or seek to stem the tide and be castigated out of office by tidal waves of smear campaigns funded by the deepest of deep pockets. And any “Davids” seeking to enter into competition in any particular markets were faced with the existence of far larger, far richer “Goliaths” than in a century, since the Robber Baron era sparked by the building of the railroad lines.

Let’s review what WGA researchers Ellen Stutzman, Laura Blum-Smith, Emily Sokolski, and Marvin Vargas have to say about the proposed merger of two gigantic cable companies in our own day.

Regarding competition in video programming, their commentary proceeds from the thesis that the enterprise already ” lacks sufficient competition at all levels. This outcome is a result of deregulation and consolidation through vertical and horizontal mergers. Broadcast, cable and pay TV networks are owned by a handful of companies. The Government Accountability Office (GAO) reports that seven companies control 95% of viewing hours on television,” and that “four companies control two-thirds of
the multichannel video programming distributor (MVPD) market…90% percent of consumers access broadcast networks through an MVPD [paid cable, as opposed to the old method of “free” airwaves broadcast] subscription” (As a yardstick for the progress of deregulation and consolidation, at the time of the original “Time-Warner” merger in the ’70s, commentators were alarmed that the number of companies owning big media in the USA had already shrunk into the range of 50-something.)  “Cable and telephone, or telco, MVPDs,” the WGA filing goes on to say, “provide broadband Internet access, which puts them in control of the only platform that could add competition to the media marketplace. The Internet service market is also concentrated, with four companies controlling 68% of the broadband market. In addition, roughly one in three Americans has only a single option for Internet service fast enough to stream videos.”

By way of competition and choice, the WGA authors point out, “Netflix and Amazon began offering original drama and comedy series directly to consumers. Press reports indicate Xbox
and Playstation will be the next online providers to offer such programming,” giving writers a couple of new outlets to sell to.

But, since “the proposed Comcast-Time Warner Cable merger would threaten competition by giving Comcast control of one-third of the cable television and Internet service markets,” they recommend “the FCC [take] action to limit anti-competitive behavior and lower barriers to entry. Such necessary measures include imposing independent programming requirements for television networks, promulgating open Internet rules that address treatment of traffic by ISPs as well as throughout the Internet backbone, expanding the definition of an MVPD, enforcing merger conditions and preventing further media consolidation.”

Deregulators in the 1980s infamously referred to television as a mere household appliance, a “toaster with pictures.” For more than 30 years, across Republican and Democratic presidential Administrations and Congresses, it has been the norm for big, rich business interests to have their way with regulatory agencies and the courts.  The WGA brief points out, specifically, an instance where the usual claims that accompany deregulation are debunked after the necessary legal changes are made to permit it.  Getting the opposite result from the sales rhetoric of deregulation has been the norm, actually. “The repeal of the Financial Interest and Syndication Rules (Fin-Syn) in 1995 led to the consolidation of studios and networks. At the time of the repeal, the broadcast networks argued that increased competition from cable networks justified retiring the rules. The proliferation of cable channels, however, has not increased competition: seven companies, five of which own broadcast networks, are responsible for 95% of all television viewing in the United States. These seven companies – CBS, Disney, Discovery, NBCUniversal, 21st Century Fox, Time
Warner and Viacom – create and distribute the majority of content seen on broadcast and cable.”

Well, reputedly, John D. Rockefeller once stated, “Competition is a sin.” If so, we can see that government, for practically forty years, has been singing from the same hymnal. “…independent programming has been in decline since the repeal of Fin-Syn.8 We have moved from an era in which the majority of programming was independently produced to one in which independent content has been all but eliminated. Today, the majority of primetime  programming on broadcast television is produced by CBS Corporation, Comcast-NBCUniversal, Time Warner,
21st Century Fox and the Walt Disney Company. These media companies own the studios that produce the content, the broadcast networks that distribute the content and, with the exception of Time Warner, many of the local stations that broadcast the network.”

This kind of trend has been, perhaps, the most monopolistic effect of the deregulatory era, the allowance of single business entities to allow ownership and control of product starting with the production and moving along all the way through its promotion and distribution.

The WGA researcher’s  comments are categorized into perceived impacts (backed up by statistics and analysis of specific examples of the impact on program production) in the business categories of Video Programming Competition and Video Distribution Competition, followed by some Public Policy Recommendations.  What I have quoted here so far is all contained in just the first five pages of their 90-page filing, which is loaded with many more specifics to make their case.

Toward the end of their weighty, fact-packed testimony, the WGA authors add: “Comcast must also be forced to comply with the conditions regarding localism and diversity in programming. Comcast was required by the FCC to file quarterly reports detailing the news and information programming aired on its stations in
order to establish compliance with the requirement to air additional original, local news and information programming on the NBC and Telemundo owned and operated local stations.  However, a Free Press study of the first report filed by Comcast found that the company failed to  provide the required information regarding the programming, such as descriptions of each program, and inflated the calculation of local programming time by including  commercials. Comcast’s professed commitment to diverse and independent programming has been shown to be similarly pallid. While Comcast was required under the merger conditions to add ten new independently owned and operated channels to its digital tier, the channels added to date exhibit a dearth of the kind of robust, scripted and original programming that would make them
successful competitors and true additions to the market. These additions of local and diverse programming offer little to consumers and less to creators.”

The WGA filing concludes:

“While the ways in which consumers can access video content has increased, the story remains the same: a few large and powerful companies control the video distribution market.
Through vertical integration, media companies have all but eliminated independent programming. A few large distributors control the MVPD market and as ISPs, they also control
Internet distribution. Because the Internet is currently a more open platform, it offers the possibility of reintroducing independent content, competition and choice for consumers. The rise of services like Amazon Prime and Netflix demonstrate what is possible if the Internet is kept open. But, the past is prologue. Left to their own devices, media companies will consolidate and
eliminate as much competition as possible. However, if the FCC institutes meaningful measures including the ones outlined in this filing, the media marketplace of tomorrow can tell a different
story: one that offers more vibrant and innovative choices to consumers.”

Another way of illuminating the dangers of corporate communications gigantism,  a video called “The Internet Must Go,” was produced, in 2012, as an entertaining commentary on what’s happening to the internet, and what some people evidently intend to happen to it.

The corporate attempts to obliterate the doctrine of Net Neutrality, the rules that have made the Internet free and open for our use so far on a “level playing field” in the “marketplace of ideas,” continue legislatively, as well, and they are apparently backed by an Administration which promised support for Net Neutrality. See (and please sign) this CREDO Action petition.

As depressing as the habitual squabbling in Washington, DC may be,  “bi-partisan agreement” seems to be far worse. When it comes to corporate power, and its unlimited growth with the blessings of government, “they” seem to get what “we” pay for.

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