• The New Digital Divide
• Net Neutrality
• Community Connections
• Big, Bigger, Media

(Transcripts of video clips are at the end of the document.)

Backgrounder: The New Digital Divide "The Net at Risk" explains why America lags so far behind the rest of the industrialized world in broadband access to the Internet. Industry watchdogs say it is a history of broken promises to bring the "information superhighway" to every U.S. home and business. Once a technology leader in the Internet revolution, the United States has fallen into the teens in the world rankings of Internet access for its citizens. In some places-among them Japan, Iceland, Korea, and the former Yugoslav republic of Slovenia-consumers get Internet connections that are significantly more powerful than what is available in the U.S. for the same price most Americans pay. Why? ... [more]

Class Is in Session...
"The Net at Risk," Internet scholar and media critic Robert McChesney describes the development of the Internet as the type of revolution that has come along only two or three times in all of human existence. It is the culmination, he contends, of a revolution that began with the birth of language 60,000 years ago. McChesney is not alone in equating the digital revolution with major historical shifts like the industrial revolution, which changed nearly every aspect of life-including political systems, economic power, gender roles, and where and how we live.

When you look at what we are able to do online now that we could not do even a few years ago, you can see examples of the potential of this new technological enterprise. Students can complete a university degree online. Employees from around the world collaborate on projects. People can be encouraged to take a greater role in democracy through the ease of online voting. Doctors in urban areas can diagnose patients in rural areas or consult with colleagues on difficult cases. Parents can keep on top of their child's homework and be in contact with their teacher. Aspiring authors can avoid publisher rejection letters and go straight to their readers online. Computer professionals can often repair their client's software glitches virtually. Users can even lend their expertise to the community-generated online encyclopedia Wikipedia. And anyone with a computer can become a broadcaster, movie producer, journalist, or musician.

The Internet is pretty remarkable to those who remember this scene from the World's Fair less than 50 years ago.



But for a whole generation, it's nearly impossible to imagine a pre-Internet world. Even the thought of being tethered to a telephone line is a distant memory, if it's a memory they have at all! Ben and Becca, ages 11 and 9, sat in the back seat of their aunt's car sending instant messages from their iBooks to their father using the wireless connection accessible from the driveway of their home. They were first confused, then indignant when they lost their connection as the car pulled out of the driveway. They assumed that the Internet was like air or water. To them, it is something that should always be there. On demand! At will! 24/7! And, many adults return from other countries surprised at how unconnected their U.S. lives seem in comparison.

The truth is that they can have the kind of 24/7, instantaneous, on-demand access they expect-in dozens of other countries. Just not here in the United States, the birthplace of the Internet. (Find out about communities setting up their own municipal networks.)



Here's a quiz Question: What do South Korea, Hong Kong, the Netherlands, Denmark, Canada, Switzerland, Taiwan, Belgium, Iceland, Sweden Norway, Israel, Japan, Finland, and Singapore have in common?

Answer: All have a higher percentage of inhabitants hooked up to broadband than the United States, and many of them are adding a greater percentage of their population every year than we are. Only 11.4 percent of the U.S. population had broadband subscriptions in 2005, compared with more than double that amount in the Republic of Korea.



The international divide

In this country we often talk of a digital divide between those who have access to technology and those who do not. Indeed, this technological divide between rural and urban, wealthy and poor, persists. And when it comes to an international digital divide, the U.S. as a nation falls closer to the "have not" side of the equation than our economic rivals in every measure of broadband-subscribership, price, speed, and investment.

We still have the largest number of broadband subscribers in the world, but we lag behind other countries in the number of subscribers per capita, or what is referred to as "broadband penetration." This is an important measure of our economic competitiveness.



Plus, we are adding new broadband users at a slower rate than many countries, thus losing ground in broadband penetration. In March 2005, we ranked 17th in broadband penetration among countries surveyed. By March 2006, we had dropped to 20th place. In our increasingly online world, high-speed broadband has a direct impact on a nation's ability to roll out products faster, more efficiently, and more effectively.

Broadband has the potential to become the vehicle for distributing all forms of data-telephone, television, radio, and the Internet-making it an indispensable part of economic, personal, and public life. Even if you don't know what a megabit is, you'll likely still be startled to learn that most Japanese can access a high-speed connection that's more than 10 times faster than what's available here, for just $22 per month. And that's not all. They are now rolling out ultra-high speed access that is more than 500 times faster than what the Federal Communications Commission defines as "broadband." This chart illustrates where the U.S. ranks internationally when it comes to speed and price.

So what exactly is broadband and why does it matter?

Broadband, or high-speed, Internet access is made possible by a series of technologies that give users the ability to send and receive data at volumes and speeds far greater than traditional telephone lines. In addition, broadband is "always on." No waiting for those clicks, beeps, and whirring sounds before you are connected! Even more important, you can send and receive data at the same time. Broadband technology can be delivered by cable, digital subscriber line (DSL), wireless, fiber, and satellite.

Fiber-optic cables are long, thin strands of glass that transmit bursts of laser light and carry information faster than any copper wire. The tiny glass fibers connect homes around the world to the information superhighway -- around 40 times faster than the broadband most Americans get from their cable or phone company.

Broadband is especially important nowadays because content on the Web is becoming sophisticated and increasingly includes video and audio applications. Users can interact with historical characters in virtual settings, families can share videos online, company employees can teleconference from far-flung areas of the world, and doctors can collaborate with colleagues on difficult diagnoses-these are just some of the amazing online opportunities that contribute to our economic, educational, and social well-being. But sending and accessing such data also requires large "pipes." Anyone who is still relying on telephone modem connections with a speed of 56K (that "click, beep, and whirring" technology) will grow old waiting for much of the new content to download.

Broadband is not just a convenience. It is important to our economy. In 2002, Gartner Inc., a research and advisory firm, found that implementation of "true" broadband (10 Mbps)-considerably faster than what most Americans use-could bolster the U.S. GDP by $500 billion a year because of new jobs, new technologies, new equipment, and new software designs.

Where's the fiber?

There are plenty of ideas about why the United States is lagging behind but very little agreement. Here are just a few of the perspectives.

In "The Net at Risk," telecom industry watchers Bruce Kushnick and Tom Allibone of Teletruth a consumer advocacy group which has published an e-book, $200 Billion Broadband Scandal, fault the telephone companies for not fulfilling the promises they made in the 1990s to provide fiber-optic connections to households. Had their grand plans been implemented, 86 million customers in the United States would have received much faster service than is currently available.



Some organizations, like Free Press, a nonpartisan media policy group, say the United States is falling behind because it does not have a comprehensive national broadband policy. While the American approach of promoting competition by broadband providers may have yielded some new investment in the long-haul market and the local business market, our investment in broadband facilities for local residential customers remains far lower than in other countries.

Some critics fault the Federal Communications Commission (FCC). The federal Telecommunications Act of 1996 requires the FCC to determine whether "advanced telecommunications capability (i.e., broadband or high-speed access) is being deployed to all Americans in a reasonable and timely fashion." If it is not, the legislation directs the FCC to "take immediate action to accelerate deployment of such capability by removing barriers to infrastructure investment and by promoting competition in the telecommunications market."

The FCC reports on its progress and consistently asserts that this goal is being met, that advanced telecommunications capability is indeed being deployed on a reasonable and timely basis to all Americans. But critics disagree, citing America's continuing drop in international broadband-penetration rankings, the comparatively low speed the FCC uses to define "broadband" (200 kpbs), and the use of zip codes as a measure of success-when only one broadband subscriber in a particular zip code constitutes regional "penetration."

Too much regulation?

Some, like the Cato Institute think tank, oppose making the FCC more proactive when it comes to broadband deployment. They argue that the Telecom Act is flawed and that Congress and the FCC should completely deregulate the telecommunications industry. According to the Cato Institute, "the Telecom Act is a statute at war with itself … Congress attempted to engineer a illogical balancing act between the contradictory goals of promoting increased competition and that of preserving the regulatory status quo." (Learn more about media regulation)

What next?

Congress has taken up the issue of broadband access, the impact of telecommunications regulation, and new technologies on broadband deployment. Some say it's about time, while others worry that regulations will not be strategic, well-thought-out, or result in prescriptive action. Clearly this will be an important issue to watch in the coming year. Stay apprised of the deliberations in Congress over the pending telecommunications legislation. (Learn more about net neutrality legislation)

Discussion

• How has the Internet impacted your life?
• How do you foresee the Internet having an impact on you in the future?
• What do you wish for when you think about the online world?
• When you hear that other countries are implementing broadband with faster speeds to a higher percentage of their population than the United States, what concerns does that raise for you?
• Can you imagine, or have you already experienced, any impact from our declining status?
• Have you traveled abroad and experienced higher broadband speeds or wider coverage?
• If we were to develop a national policy, how should we go about it, and what should it include?

NARRATOR: '…Someday, people may want to see, as well as talk, over the telephone. What we are doing here is trying out one model of a picture phone - a new dimension in telephoning…

RICK KARR: The World's Fairs of the 1960s promised progress ... and a space-age future ... but we're still waiting.

END VIDEO:

Fiber-optic networks could revolutionize ...How we learn.

They could also change our democracy for the better. For example, you could go online to participate in a town council meeting -- not just listening and watching high quality video, but actually participating - joining in, asking questions. So that everybody who's actually at the meeting could see and hear you. And not only that…

at the same time your spouse could be using the line to watch a film in high-definition video, with surround sound…and you could record yet another program ... While one of your kids uses the line to gab with a friend ... And another does homework on the World Wide Web. And there'd still be power to spare.

END VIDEO

BRUCE KUSHNICK: In Korea and Japan, you can get 100 megabit services in both directions for about $40.

RICK KARR: That's one hundred times as fast … for the same price.

END VIDEO

(Transcripts of video clips are at the end of the document.)

Backgrounder: Net Neutrality The debate is hot, the language heady, the metaphors many. Op-ed pages alternately bemoan "The End of the Internet" or curse "Net Neutrality Nonsense." Allegations fly about the stifling of free speech, the holding back of progress, corporate hegemony. Indeed, network neutrality has become something of a cause celebre in the digital world, pitting a slew of high-profile Internet content providers and consumer-advocacy groups against major phone and cable companies, and federal lawmakers against each other ... [more]

Class Is in Session...
Remember dial-up access? The buzz on the telephone line and then the long wait for the Web page to load? Today the mere memory of that slowness seems painful. Yet even with new technology and high-speed access, many of us still find our patience tested when we have to wait more than a few seconds for sites to load.

But the large cable and phone companies who provide broadband access say that unless there is major change in the capacity of their networks and the way in which data is transmitted, long waits will be the order of the day. The growing number of Web sites and bandwidth-heavy content on the Internet, they say, threatens to clog the entire system, making everything load more slowly.

So they want to upgrade the system. Good news, right? Well, not to everyone. Upgrading the system is an expensive proposition, and who will pay for it-and how they will pay-has divided Internet users and forced the battle into the national political spotlight. The telecom companies want Web sites that send large packages of data-generally sites that include video, audio, and other multimedia applications-to pay more. That, they insist, is how they'll finance a more robust Internet system.

So what if some sites take longer to load than others because they didn't pay a premium for the network operator to put their data in the fast lane? Would consumers have the patience to wait it out, or would they jump ship for the faster loading competitor's site? What would this new tiered system do to sites that don't have the resources to play ball? Would the telephone and cable companies play fair and charge every site the same fee, or would they slap exorbitant tolls on sites whose content they don't like? What's more, the companies that deliver internet connections to most homes are increasingly in the business of generating content, as well, so supporters of neutrality worry that they'll be in a position to privilege their own content over competitors. For example, if AT&T decided to start its own online auction site, neutrality supporters say, the firm's customers might find themselves unable to use eBay -- unless Congress protects net neutrality. Get a brief introduction to the debate from the video.





These are the issues being debated by Congress and these are the issues we will consider in this session of the MOYERS ON AMERICA Citizens Class. It is an important and contentious issue. And there is much at stake.

In this Citizens Class, you will learn more about the issues at the heart of this debate, and have an opportunity to contribute your ideas about what should be considered in a sound telecommunications policy. In addition to this discussion guide, we encourage you to read Net Neutrality: Background and Issues, a report to Congress prepared by the nonpartisan Congressional Research Service, the office which provides information on important issues to representatives and senators. (Read Broadband Internet Regulation and Access: Background and Issues)(PDF)

We also have invited two guest bloggers who are telecommunications experts with different ideas on what they think our telecommunications policy should be. Just as Congress does when it invites experts to testify on pending legislation, this class is your opportunity to pose questions to further your understanding of the issues and possible consequences of various policy options. Much like they would do in giving testimony on the Hill, our guest bloggers will be monitoring the questions you pose at the end of this page and will respond].

Read through this brief guide and think about the questions you would need answered before developing new telecommunications policy. Some of the questions you will want to consider:

• Is regulation needed to guarantee that all data sent over the Internet is given equal access and nondiscriminatory treatment-that is, net neutrality?
• Should network operators be allowed to charge higher rates for Web sites that use heavy bandwidth technology, like voice and video?
• Who should bear the cost of overhauling the Internet infrastructure to meet the growing demand for high-speed, reliable data transfer?
• Is the Internet so indispensable to the success of our economy, our culture, and our nation that it should not discriminate or be regulated in the same manner as other utilities?

• Some contend that the consolidation and diversification of broadband providers into content providers has the potential to lead to discriminatory behaviors which conflict with net neutrality principles.
• The increase in the number of packets going out will eventually exceed the limitation of the existing networks. The telecom industry says it will invest — if there's no neutrality — in a multibillion dollar overhaul of the Internet infrastructure to accommodate the growing demands on its pipes, raising the question of who should pay.
• The technology has changed in such a way that it is possible for network operators to treat some classes of traffic differently from others.

• The only way to maintain the Internet as the open and free space we have come to appreciate is for government to prevent telecommunications companies from charging extra fees to heavy users.
• More specific regulatory guidelines may be necessary to protect the marketplace from potential abuses which could threaten the net neutrality concept.
• Some people fear that discriminatory practices would be the result if broadband providers become content providers or have the option to control how the content is delivered.
• The two-tiered system proposed by the network operators would violate their First Amendment rights because those who could pay would get preferential treatment.
• A tiered pricing system could pose a barrier for people who are developing new Web sites, or offering new services, or providing other content for download. They might have to pay more to get the top-level access to the broadband pipes, and that could limit the possibilities for new companies and individuals who want to develop more sites and services online.
• There is little competition in the broadband market since most consumers have limited options. At best, consumers in larger markets can choose between cable or telephone connections. In smaller markets, there may only be one choice. This removes the incentive for the network operator to avoid discriminatory practices that harm consumers or aggressively seek to benefit consumers. Since network operators don't have competition, they could engage in discriminatory practices that increase profits but harm consumers. Without the option to take their business elsewhere, the consumer would be at the mercy of the network operator.

• In an article in the National Law Journal, Randolph J. May, a senior fellow at the Progress and Freedom Foundation in Washington, DC, argues that net neutrality legislation would violate the First Amendment rights of network service providers like Verizon and Comcast because it would restrict them from exercising their own right to free speech.
• Action to ensure unfettered access to the Internet is unnecessary. To date, neither the cable operators nor the telephone companies providing broadband Internet services have blocked, impaired, or otherwise restricted subscriber access to the content of unaffiliated entities. Passing net neutrality laws would be just blind response to a harm that may never materialize.
• Existing laws and FCC policies are sufficient to deal with potential anti-competitive behavior.
• Net neutrality regulations would have negative effects on the expansion and future development of the Internet.
• Telecommunications companies should have the right to charge heavy users more to offset the costs of building greater broadband capacity. They own the means of transmission.
• They should be allowed to charge data-heavy sites more than others so that those of us who don't download lots of data don't get socked with higher user fees? Heavy sites cause traffic congestion that affects the ability of others to use the Internet and should therefore pay more.
• Data-heavy content providers or Web sites should have to pay more to use the cyber-highways just as commercial transporters pay more for trucks that do more damage to the highways than regular vehicles.

• What principles should drive our policies regarding technology in this country and how do those principles support our technological position in the world?
  
  
• Read the Congressional Research Service report "Net Neutrality: Background and Issues." What additional facts do you need to know or questions do you have for our guest bloggers?
  
  

Citizens Class: Community Connections

Is wireless internet access a civic right?

(Transcripts of video clips are at the end of the document.)

Backgrounder: Community Connections In Lafayette, Louisiana, residents and officials took on their phone company, BellSouth, and their cable company, Cox Communications, and built their own high-speed fiber network after the firms refused to bring true broadband connections to their community. Both telcom giants lobbied the state legislature to block Lafayette's plan, citing unfair competition. Ultimately, lawmakers put it to a vote to let residents decide. The measure allowing the community-built network passed overwhelmingly. BellSouth then filed suit, delaying construction by more than a year, before losing their case in court. There are hundreds of Community Internet and municipal broadband projects underway or in the planning stages in the U.S. But there are also 14 states that either prohibit cities and towns from building their own networks or have passed laws that make it more difficult ... [more]

Class Is in Session...
The United States — as discussed in the New Digital Divide Citizens Class — has fallen far behind much of the world in broadband penetration, and our broadband connections are significantly slower than those in many other countries.

But that's not the worst of it. Some rural communities, like Lafayette, Louisiana, that couldn't get high-speed Internet from their cable or telephone company simply decided to build networks themselves. And then the backlash began, with large commercial providers lobbying state legislatures and filing suit in court to stop local communities from doing what these telcom giants allegedly wouldn't do themselves. And now, there are several bills in Congress addressing the issue —one would protect the right of local communities to set up such networks — others which would make them nearly impossible.

Here, we'll explore community Internet and municipal networks extending broadband service to rural communities and meeting the goals of universal service. We'll also learn about legislation affecting municipal networks and how you can track what is happening in your community on this front.



New community internet networks-like the one in Lafayette-crop up across the country every day. This new technology is making it possible for cities and towns to improve access to information, provide education and job training, enhance public safety, foster technological innovation, and bolster local economic development.

Communities are connecting their residents to the Internet through fiber, wireless technology and "mesh networks," which transmit broadband signals through antennas throughout the city. Rural areas, often deemed unprofitable by broadband providers, are now joining the Internet revolution, taking advantage of wireless services by doing it themselves. Some of the benefits of community Internet are universal affordability, public access, community development, and competitive advantages.

Jim Baller, an expert on public broadband and the attorney who represented Lafayette, has made the case that public electric utilities are ideally positioned to play an important role in building the national information infrastructure. They follow the ethic of universal service and their participation could increase competition in the delivery of telecommunications and information services. Further, they have historically filled the gaps left by private enterprise and served as yardsticks for measuring the reasonableness of prices and quality of services. In 1932, Franklin D. Roosevelt charged, "Where a community, or a city, or a county, or a district is not satisfied with the service rendered or the rates charged by the private utility, it has the undeniable right as one of its functions of government … to set up … its own governmentally owned and operated service."

Bumps in the Information Superhighway
The problem with these community Internet networks is that they frequently encounter significant roadblocks. Big telcom companies have lobbied to prevent municipalities from offering broadband service. More than a dozen states now have laws on the books restricting municipal broadband. Five states approved anti-municipal broadband measures in 2005 alone or added on to their current restrictions. But in nine other states, attempts to restrict community Internet projects were either defeated or delayed indefinitely.

Congress is currently considering reforms to the telcom laws, and community Internet is on the agenda. The Lautenberg-McCain Bill (S. 1294), for example, would "preserve and protect the ability of local governments to provide broadband capability and services," ensuring that local communities everywhere can decide for themselves how to best serve the technology needs of their own citizens.



But two other bills, one in the Senate and one in the House, would be detrimental to community Internet projects. In the Senate, Nevada Republican John Ensign introduced The Broadband Investment and Consumer Choice Act, S. 1504, a bill which would require local governments wishing to offer broadband services to ask the private provider for permission. Existing municipal projects would be grandfathered in, but would not be able to expand services. In the House, Texas Republican Pete Sessions introduced H.R. 2726, "Preserving Innovation in Telecom Act of 2005," a bill which would prevent any city in the country from providing their citizens with Internet access if a private company offers service nearby. The bill would prohibit municipal wireless projects in any locale where a private provider serves 10 percent of the population or above.

Discussion

• The nonprofit Free Press promotes community Internet as a public service and tracks relevant state and federal legislation. Check out your state on their site. Does your state impose legal barriers to community Internet projects? Do you live in one of the states that successfully held off a bill?
  
  
• As we saw in the story about Lafayette, sometimes community Internet or municipal broadband projects may be the only option for some communities. What is the status of broadband in your community? Have you been satisfied with the services that you receive? Do you feel that you have adequate options?
  
  
• Do you think that Internet connectivity should be provided in the same way services are provided by public utilities? Is access a right?

JOEY DUREL: We have an out-migration problem with our young people from Louisiana. And I felt it was time for politicians to quit talking and do something.

RICK KARR: Something like building every home and business in town its own fiber-optic connection to the information superhighway.

DON BERTRAND: We see-- telecommunications in the way of Internet, in the way of fiber connectivity as something that should be available to everyone.

STEPHEN HANDWERK: Just like water, sewer, electricity, telephone. I mean it all falls into that same lump.

JOEY DUREL: I think this is a tremendous-- opportunity for small business and to attract business here.

RICK KARR: Lafayette's phone company, BellSouth, and its cable company, Cox Communications, told residents that they'd have to wait a decade or longer for better internet connections - like the ones they take for granted in Tokyo.

STEPHEN HANDWERK: Up until recently, the majority of the parish only had one-way communication on their cable, so they could download information. However, but to be able to send any information, they had to be able to connect through a phone modem.

JOEY DUREL: …if we didn't do it this community would not get it for 20 or 30 years, who knows?

RICK KARR: Joey Durel is the City/Parish President of Lafayette. He calls himself a progressive Republican ... Who sees no reason why local government shouldn't provide services that the private sector won't.

JOEY DUREL: You know, there are things that are gonna be available three, or four, or five years from now, that nobody has even thought about yet, and-- and that's gonna happen. And Lafayette will be-- uniquely positioned to take advantage of that, unlike most of the country.

RICK KARR: So what the city decided to do was build its own fiber network ... Through its municipal power and water company, Lafayette Utility Systems ... Or LUS.

Terry Huval is the utility's director.

RICK KARR: A lot of people think of the Internet as being sort of the triumph of-- the marketplace - the triumph of entrepreneurship. Why would a public utility need to get involved with the Internet?

TERRY HUVAL: The community wanted to have competitive options for telephone and-- mainly cable television service. Cable television service drove us even to look at this. Because people were so dissatisfied with the cable TV company continuingly going up on their rates.

RICK KARR: When the city-owned utility started to build its own small fiber network ... Looping around town to link up its generators, substations, and offices ... Huval had an "a-ha!" Moment:

TERRY HUVAL: That's what created the vision of saying, "We can do something special for our community, for the people that own this utility system."

END VIDEO

Citizens Class: Big, Bigger Media

Do you think that media consolidation is a problem?

(Transcripts of video clips are at the end of the document.)

Backgrounder: Big and Bigger Media Media ownership rules are again a topic of debate on Capitol Hill, as the rules come up for a review and Republican Kevin Martin undergoes hearings to reconfirm him as chairman of the Federal Communications Commission. Senator Barbara Boxer grilled Martin about an FCC study on local media ownership, which found local reporting decreased markedly after the Telecommunications Act of 1996. In 1984, the number of companies owning controlling interests in America's media was 50 — today that number is six. Critics of media consolidation say it has led to fewer and fewer voices being heard — and a marked decrease in local news coverage. Some media watchers are worried that the much touted "free for all" of the Internet will go the same way. Proponents of "net neutrality" worry that the cable and telecom companies providing the bulk of Internet connectivity will use new fee structures, which may favor some content providers over others. Phone and cable companies have a near monopoly over Internet service. More precisely, it's a 'duopoly' - which means that in more than 90 percent of American homes in the U.S… [more]

Class Is in Session...
In 1941, the federal government regulated the ownership of media outlets to ensure a broad spectrum of opinion. The Local Radio Ownership Rule, National TV Ownership Rule stated that a broadcaster cannot own television stations that reach more than 35% of the nation's homes. Many other regulations followed as the American media landscape changed. In the 1980s the climate changed in the U.S. -- fewer federal regulations became the order of the day under President Reagan. (View a timeline of media regulation.)

Then came the Telecommunications Act of 1996, signed into law by President Clinton. It is generally regarded as the most important legislation regulating media ownership in over a decade. The radio industry experienced unprecedented consolidation after the 40-station ownership cap was lifted. Clear Channel Communications now owns 1200 stations, in all 50 states, reaching, according to their Web site, more than 110 million listeners every week. Viacom's Infinity radio network holds more than 180 radio stations in 41 markets. Its holdings are concentrated in the 50 largest radio markets in the United States. In 1999, Infinity owned and operated six of the nation's Top 10 radio stations.



Then in 2003 ownership limits came up for review again -- media companies wanted ownership rules relaxed further. Among the proposed changes: allowing greater cross-ownership in media markets (newspapers and broadcast stations, radio and television stations) and caps on television and radio stations ownership raised in large markets. In addition, the FCC proposed that a single entity could own television stations reaching up to 45 percent of the national viewership, an increase from 35 percent.



In 2003, Barry Diller, the man who created Fox Broadcasting and ran ABC Entertainment, Paramount, Vivendi Universal, spoke out against the rule changes to an industry group - and to Bill Moyers. (Diller is currently chairman and CEO of USA Interactive, itself an empire of informational services from the Home Shopping Network to Ticketmaster.)

What about the fairness doctrine?

Critics of consolidation fear that the fewer the owners the fewer the voices on the airwaves. Several recent cases -- among them Sinclair Broadcasting's decision not black out names and faces in an episode of NIGHTLINE which listed the names of U.S. soldiers killed in Iraq - have media watchers saying conglomerates have too much power over the message heard.

The Communications Act of 1934, as amended, called for stations to offer "equal opportunity" to all legally qualified political candidates running for office. In 1949, the FCC adopted the "fairness doctrine," a policy that viewed station licensees as "public trustees" and, as such, responsible for addressing controversial issues of public importance. The key requirement was that stations allowed opportunity for discussion of contrasting points of view on these issues.

By the 1980s, many stations saw the FCC rules as an unnecessary burden. Some journalists considered the fairness doctrine a violation of the First Amendment rights of free speech and free press; they felt reporters should be able to make their own decisions about balancing stories. In order to avoid the requirement of presenting contrasting viewpoints, some journalists chose not to cover certain controversial issues at all. In addition, the political climate of the Reagan administration favored deregulation. When the fairness doctrine came before the courts in 1987, they decided that since Congress did not mandate the doctrine, it did not have to be enforced.

(You can also see how the major news stations prioritize the news by visiting the Tyndall Report. Andrew Tyndall has watched the major broadcasts for six years.)

What happens to local media?

Another key worry surrounding media consolidation is that as ownership of newspapers, radio and television stations are concentrated in fewer hands - a vital connection to the local community is lost. NOW WITH BILL MOYERS and correspondent Rick Karr told a cautionary tale about the risks of media consolidation to local communities.

The story, broadcast in April 2003, starts in Minot, North Dakota where a train derailment spilled two hundred and ten thousand gallons of ammonia and a toxic cloud. Authorities wanted to get the word out to Minot residents: stay indoors and avoid the area near the derailment. So they tried to get in touch with six local commercial radio stations.

All six of those commercial stations — out of a total of seven in Minot — were owned by one huge radio and advertising conglomerate: Clear Channel Communications and had replaced live local programs with shows recorded in far-off studios that only sound local.

But what does this mean for the internet?

Lots of lobbying and advertising money is being spent on net neutrality and ownership rules in DC. In 2006, the FCC approved the sale of substantially all of the cable systems and assets of Adelphia Communications Corporation to Time Warner Inc. and Comcast Corporation. And, in July 21, 2006, BellSouth shareholders approved the $67 billion sale of the company to AT&T, which would further expand the latter company's reach in the telecommunications sector and place Cingular under a single owner.

In addition, the Supreme Court ruling on the Brand X case put cable modem service providers in the class of information provides, not telecommunication service providers - which come under fewer regulations - and are not bound by common carriage rules. At the bottom of the ruling? Cable broadband providers don't have to share their lines with competitors. A ruling which some say will further hamper the spread of high-speed service throughout the nation. (See more on the new digital divide.)

Discussion

• Do you think that media consolidation is a problem?
  
  
• Do you feel like you get enough local news coverage?
  
  
• Do you know who owns your local media outlets?

BILL MOYERS: Why now? Why did you choose this moment to speak out on media conglomeration?

BARRY DILLER: Well, I don't know. Maybe because, you know, all the forces are, so to speak, gathered. What's happened is, is that this oligopoly that was attempted to be prevented by regulation over the last 30 years. You know? 30 years ago, three companies controlled 90 percent of everything we heard or saw. And that was a bad idea. Now four companies, five companies control 90 percent of everything we see.

BILL MOYERS: Oligopoly. That's your word. I mean, that's a very strong word.

BARRY DILLER: Well, it certainly isn't an exaggeration.

BILL MOYERS: What do you mean by it?

BARRY DILLER: What I mean is, is that is that a very… a handful of companies are in charge of everything both vertically and horizontally that you get to see through a screen, a television screen not a computer screen. And I think… what I do think has to come along with that are rules and regulations that will make it so. That what we do not have in this country is a media and communications business that has no other voices in it. No air in it.

BILL MOYERS: Has that happened?

BARRY DILLER: Sure.

BILL MOYERS: I mean, you stated in your speech that ten years ago independent producers in Hollywood created 16 new television series. Last year, only one.

BARRY DILLER: Uh-huh.

BILL MOYERS: Is that the consequence of oligopoly?

BARRY DILLER: Sure it is.

BILL MOYERS: How so?

BARRY DILLER: Well, if you have… if, in fact, you have companies that produce, that finance, that air on their channel and then distribute worldwide everything that goes through their controlled distribution system. Then, in fact, what you get is fewer and fewer actual voices participating in the process. Used to have dozens and dozens of thriving independent production companies producing television programs.

Now you have but, you know, less than a handful. What has caused that? What's caused that is the forces of consolidation and consolidation. And I am not saying that those forces are bad and that the results are evil. What am I saying is that with that I think comes the necessity to say, "Well, you can't own all your programs." Well, you can't own every voice there is to own.

There should be some restraints. And more importantly, what's happened to broadcasting is that broadcasting really used to be… it used to have a very clear public service quotient. And it's more or less now. And it's been lost. Now, you know, I mean, other things have been lost too. But this perfect balance which was fear. Fear that your license would get taken away from you.

Plus a real sense of public service responsibility. That those airwaves actually belonged to the public. You used them. You profited from them. But you had to keep it in balance. That was a healthy environment. And in that environment, of course, mistakes get made, excesses happen. But they rebalance themselves. Today, after Mark Fowler says…

BILL MOYERS: The FCC… Chairman of FCC in the Reagan Era.

BARRY DILLER: In the '80s.

BILL MOYERS: Right.

BARRY DILLER: Who says, you know, a television is a toaster. It's just there for marketing. All that goes away. So…

BILL MOYERS: You sell a lot of toasters on television.

BARRY DILLER: Yeah, I do. I'm happy to continue to sell toasters. But, in fact, that's not what these mass engines of communication which are so vital. You know, they're so influential in everything. They have to have other aspects of responsibility and balance in order to do what they should be doing.

BILL MOYERS: Could a young Barry Diller make it today? A young Ted Turner? Could there be a new ESPN? A new CNN?

BARRY DILLER: Almost impossible.

BILL MOYERS: Why?

BARRY DILLER: Because, again, there is, you know, given the levels of concentration, if you're a new player, you have a new idea, you know? Ted Turner started with TBS which was a rundown Atlanta television station that he got to Superstation status. But he was still a tiny, little player when he said, "You know, I've got this idea for a 24 hour, you know, news network."

Of course everybody thought he was crazy. Everybody thought that it was hopeless. And, but what he did in individual sellings, he sold cable system after cable system on this idea. He got backing from a whole group of people to start what was then just a stand-alone. I mean, he didn't have very much than that.

That can't happen today. It can't happen today because if you knock on the door of these entities, they say well, first of all, you know, it's not independent by definition 'cause we'll own it. You know? There's no chance you can own it. That's gone now. So as the stakes rise, you know, that becomes virtually impossible.

BILL MOYERS: Where does a young, bright upstart go with an idea?

BARRY DILLER: Somewhere else. You know, you don't, you know, look. In media and in entertainment and in certainly in journalism, I mean, if you've got a great idea, an idea will out. It'll just be owned by one of the large and concentrated players. I mean, that is…

BILL MOYERS: Five of them now.

BARRY DILLER: That is, it's reality. Yeah. So, and it's not that that's just altogether horrible thing. But what I do think is these five players who believe they are living in a justifiably unregulated universe should have enough regulation, enough regulation — not that strangles them by any stretch — to stop these absolute forces of complete vertical and horizontal integration.

BILL MOYERS: Is this a change of heart for you? I mean, you've run huge companies. You run one now. If I remember correctly, when Disney bought ABC you said, "This is a great transaction."

BARRY DILLER: Yeah.

BILL MOYERS: What's different now?

BARRY DILLER: Well, I think what's different now are a couple of things. The first thing that is different now is that the… I had hoped when I… that the regulatory process would tightly follow consolidation and concentration. And that, in fact, what would not happen is that we would not be living in an area where it is considered, you know, antique and, you know, stupidly liberal to have, you know, regulations, you know?

Laissez-faire. Let it all mix. Well, the fact is that unless… my feeling is that if regulation had kept with this. If, in fact, we had not gone and raised the caps on broadcasting on what any one person could own in broadcasting, if, in fact, we had said in this Communications Act of '96 that we would actually impose real public service obligations on broadcasters and not toss them out. I mean, much of this would… consolidation would have happened. But it would have allowed other voices to come in. It would have allowed… again, it would have just simply stopped complete vertical and horizontal development.

BILL MOYERS: You mentioned the Telecommunications Act of 1996. The chairman of the FCC, the Federal Communications Commission, said at that time — and he was a Democrat… Here's what he said. "The new law is intended to begin the era of genuine competition."

BARRY DILLER: Yeah.

BILL MOYERS: And you say just the opposite has…

BARRY DILLER: Well, it was.... That what happened is, is that instead of the competition that was supposed to get more voices and all of those things, in fact, this, you know, I think dangerous oligopoly reconstituted itself in ways that nobody thought that thought would happen at the time.

And so what I think now is as the FCC is thinking about increased tossing more and more out. But instead they think about this issue for not only broadcast but the cable business which is now, you know, a cable business. One little…

BILL MOYERS: …dominating.

BARRY DILLER: …one little... You know? I don't know. Five, ten years ago there were thousands and thousands of cable operators, you know? Serving their local communities. Now, there are three big ones and three mid-size ones. And no one else essentially. So, and the…

BILL MOYERS: And the consequence is?

BARRY DILLER: Still, the consequences are in any completely concentrated area, the consequences have to be that when you get that kind of size that, in fact, it has to restrain the ability of any new player. It gives them such buying power. It gives them such overwhelming power in the marketplace that, in fact, everyone has to do essentially what they say.

END CLIP

RICK KARR, NPR CORRESPONDENT: In January of last year, a train derailed in Minot, North Dakota. Two hundred and ten thousand gallons of ammonia ...and a toxic cloud ... spilled out of it.

Authorities wanted to get the word out to Minot residents: stay indoors and avoid the area near the derailment. So they tried to get in touch with six local, commercial radio stations.

All six of those commercial stations — out of a total of seven in minot — are owned by one huge radio and advertising conglomerate: Clear Channel Communications. It's been buying up radio stations across the country and replacing their live, local programs with shows recorded in far-off studios that only sound local.

CLEAR CHANNEL DJ: "I'm Becky Wight -- have a great weekend!"

RICK KARR: Minot authorities say when they called with the warning about the toxic cloud, there was no one on the air who could've made the announcement. Clear Channel says someone was there who could have activated an emergency broadcast. But Minot police say nobody answered the phones.

Clear Channel owns more than twelve hundred radio stations nationwide; they have an audience of over one hundred ten million listeners a week. Critics of the company say that its way of doing business is symptomatic of what's wrong with the American media today — that it's grown too big for the public's good.

SEN. BYRON DORGAN (D-ND): "We're headed in exactly the wrong direction. In these areas you need to have your foot on the brake, not your hand on the throttle."

RICK KARR: At a recent hearing of the Senate Commerce Committee North Dakota Democrat Byron Dorgan used the Minot incident as a warning: that as large media companies — like Clear Channel — buy up the last remaining independent media outlets across the country, the public suffers.

SEN. BYRON DORGAN (D-ND): I think all of us ought to be concerned when we see this massive concentration occurring

RICK KARR: Dorgan grilled Federal Communications Commission Chairman Michael Powell over a phenomenon that's redrawn the landscape of the American media over the last decade.

SEN. BYRON DORGAN (D-ND) (FROM TAPE): "Do you not agree, for example, that if you had moved last month to Minot, North Dakota, and all of the commercial stations in that city are owned by one company, that there's been a diminution of competition? That it's diminished, that it's not beneficial to the consumer to have no competition among the radio stations, commercial stations, in Minot? Would you agree with that?

MR. POWELL (FROM TAPE): Yes, I would agree it's a problem.

RICK KARR: The problem's known as "media consolidation" ... multibillion-dollar media conglomerates growing larger and larger ... as they buy up their competitors ... and independent broadcasters ... and then centralize their operations. Critics of consolidation say it's happening at the expense of local communities ... and journalism.

RICK KARR: Consolidation started in earnest in 1996 after Congress passed a bill that set aside most limits on how much of America's broadcasting industry big media firms could own. Since then, almost a third of the country's radio station owners have been bought out by conglomerates.

Then there's television: more than three-quarters of Americans now watch channels that are owned by just six companies.

And those companies own dozens of the best-known names ... across the media. Just one example: Viacom ... Owns CBS... ...UPN ... MTV ... BET ... Nickelodeon ... Showtime ... Paramount Pictures ... thirty-nine local TV stations ... the nation's second-largest radio chain ... more than a hundred thousand billboards ... more than four thousand Blockbuster stores ... And the venerable publishing house Simon and Schuster.

And that's just a partial list.

FRANK BLETHEN, PUBLISHER AND CEO, THE SEATTLE TIMES: If we go out 20 years from now with the same pace of concentration of media ownership we've had for the last 20 we will not have a democracy. There's simply no way.

RICK KARR: Frank Blethen is a newspaper publisher and a critic of media consolidation. He represents the fourth generation of his family to run the independent daily THE SEATTLE TIMES.

He says consolidation hurts the public and its only benefit is to the bottom lines of a few media conglomerates.

FRANK BLETHEN: The CEO's get compensated not on their journalism, not on the Pulitzer prizes they win, not on some investigative piece that pisses off a major retailer. What they get compensated for is did you lay enough people off and reduce your news content enough and raise your prices enough so that the stock price went up. If you care about journalism, if you care about your local communities, and if you care about democracy you're not in it for the maximum dollar.

END CLIP