The FCC approved the merger of Comcast and NBC in January of 2011. Now, Meredith Attwell Baker, one of the five acting FCC commissioners at the time, has announced that she will step down from her post at the FCC to lobby for the giant that she helped create. Michael Copps was the only member to vote against the merger citing, “For any transaction that comes before this Commission, our statutory obligation is to weigh the promised benefits against the potential harms so as to determine whether the public interest is being served. There are many potential harms attending this transaction-even the majority recognizes them. But all the majority’s efforts-diligent though they were-to ameliorate these harms cannot mask the truth that this Comcast-NBC joint venture grievously fails the public interest.”
Baker, an Obama appointee, also had concerns back in 2009 when the initial proposal was made but voted in favor of the merger anyway. The potential benefits to consumers appear to favor a smaller underserved low-income population while setting the stage for a price hike for services and more limited programming for the majority of the market it currently serves. On the list of “voluntary” commitments the media giant included:
· Broadband Adoption and Deployment. Comcast will make available to approximately 2.5 million low income households: (i) high-speed internet access service for less than $10 per month; (ii) personal computers, netbooks, or other computer equipment at a purchase price below $150; and (iii) an array of digital-literacy education opportunities. Comcast will also expand its existing broadband networks to reach approximately 400,000 additional homes, provide broadband Internet access service in six additional rural communities, and provide free video and high-speed Internet service to 600 new anchor institutions, such as schools and libraries, in underserved, low-income areas.
The proposed regulatory oversight does not inspire confidence when the commissioners are allowed to jockey between making the laws and then working for the companies that they vote in favor of. It wasn’t long ago that the chief financial officer at Boeing, Michael Sears, was sentenced to four months in prison for illegally negotiating a job for a former Air Force procurement official that showed the company favoritism in the past. Michael Sears exchanged personal favors with the Air Force procurement official and then influenced the hiring of that official at Boeing while she was still employed with the government. Their actions were in violation of a federal law that prohibits defense acquisition officials from negotiating a job with a company in which they have contract negotiations. This conflict of interest was exposed by the National Legal and Policy Center. Their goal is to expose corruption and work toward a common level of ethical behavior through education and legal action. They cite specific elements of their mission as incorporating character, morality, and common sense.
Another recent example of poor government oversight
Let’s not forget what a stellar job the SEC did when investigating Bernard Madoff’s ponzi scheme. The SEC investigator, Eric Swanson, gave the company a clean bill of health after many whistleblowers stood against him. Swanson later married Bernard’s niece, Shana, before the ponzi scheme was exposed to the public and shareholders. It took ten years of whistle blowing to finally expose that fraud. These relationships are textbook examples of conflicts of interest and at a time when business ethics are stressed more than ever in academia. What a joke.
The FCC voted on December 18, 2007 to loosen the ban on cross-media ownership. This allows newspaper publishers to buy television and radio stations in the two largest media markets. The law is reviewed every year. Media based institutions often survive on advertising fees which could potentially lead to the station or outlet having influence over different types of corporate interest. Some of the information, which is then broadcasted via these different outlets, can be greatly biased in favor of those corporations that support the media institution. This then affects the information that consumers receive and may prevent the viewer from receiving unbiased news as well as other types of programming. Competition among free markets is a good thing for the end user because it promotes quality and accuracy of the information and programming that is broadcasted. When there is a concentration of ownership then certain people or corporations will be in control of the content that is broadcasted. This may bring into question the accuracy and legitimacy; for example, of news reports and other information based programming.
A recent report from the broadband analytics firm Sandvine recently found that Netflix uses more bandwidth than any other website or service in North America. As much as 30% of all internet usage during primetime viewing hours is dedicated to Netflix traffic. Last year, Comcast argued for net neutrality rules when it came under fire for prioritizing BitTorrent peer-to-peer networking traffic. Now, however, they are opposed to net neutrality regulation in large part because of the market share position of Netflix. More consumers are moving toward the Netflix service that offers a far superior service at a fraction of the price. The problem is that they are using the infrastructure owned by Comcast to do so. Comcast is now considering charging customers a premium for services based on data usage.
Previous statements made by Obama in 2008:
· “I strongly favor diversity of ownership of outlets and protection against the excessive concentration of power in the hands of any one corporation, interest, or small group. I strongly believe that all citizens should be able to receive information from the broadest range of sources.”
· “There is a clear need in this country for the reinvigoration of antitrust enforcement. — to step up review of merger activity and take effective action to stop or restructure those mergers that are likely to harm consumer welfare.”
Obama told the Wall Street Journal in January of 2011:
· He intends to issue an executive order initiating a review to “make sure we avoid excessive inconsistent and redundant regulation,” focusing on rules that “stifle job creation and make our economy less competitive.” He also suggested future regulations must do their job “while promoting economic growth.”
Los Angeles Times, May 20, 2011: Comcast executive hosts Obama fundraiser in June. On June 30th, President Obama will attend a fundraiser at the home of Comcast executive David Cohen. The invitations describe the event as a “reelection campaign inaugural dinner and photo reception.”
Audacity of Hope, let me introduce you to my friend, Reality.