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Politics and Economy:
Transcript: Mergers and Monopolies
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BILL MOYERS: At a popular New York store the other day, we asked some shoppers for their opinions about cable television. Uncharacteristic for New Yorkers, their responses were unanimous.

SHOPPER 1: For me, isn't really worth shelling out 40 or 50 dollars a month.

SHOPPER 2: I think it's expensive for what I'm getting, I really do.

SHOPPER 3: If it was more choices, maybe the price would be lower.

MOYERS: Consumers are complaining loudly and often about cable TV these days. The Federal Communications Commission says cable prices increased 7.5% last year, far faster than the rate of inflation at 2.7%. And that's been the trend for years. Gene Kimmelman runs the Washington office of Consumer's Union.

GENE KIMMELMAN, CONSUMER'S UNION: Since 1996 rates have shot up about 43%. That's almost three times faster than inflation.

MOYERS: Consumer advocates fear it's going to get worse, especially with the impending merger of cable giants AT&T Broadband and the Comcast Corporation.

SENATE HEARING (FROM TAPE): This committee will come to order…

MOYERS: In a Senate hearing this week, that merger came under Congressional scrutiny. Democrats and Republicans alike were skeptical.

SENATOR HERB KOHL (D-WI): We have been asking ourselves over and over again, how is this good for consumers?

SENATOR MIKE DEWINE (R-OH): This trend towards further media consolidation is troubling.

KIMMELMAN: We've never seen a cable merger where rates have gone down. As a matter of fact, the larger the cable company becomes, the government data show that the higher the rates go.

MOYERS: AT&T Broadband is already the largest cable company in America. Comcast is currently number three. Their marriage would result in the biggest cable company ever, with local systems in 17 of America's 20 biggest cities, and a presence in 41 states.

KIMMELMAN: You get a company with ownership and influence over cable systems serving more than 30 million households in this country now this is more than 40 percent of the entire cable market.

MOYERS: The FCC's own numbers show that cable competition is already scarce. There are over 10,000 cable markets in America, but in only 368 of them does the cable operator face what the FCC calls an "effective competitor." In other words, in over 9600 markets, consumers are basically at the mercy of monopolies.

Public interest advocates say cable mergers not only drive up prices for consumers, they dry up the flow of ideas.

ANDREW JAY SCHWARTZMAN, MEDIA ACCESS PROJECT: The proposed merger threatens the diversity of the marketplace of ideas.

MOYERS: Andrew Jay Schwartzman runs the Media Access Project, a First Amendment watchdog.

SCHWARTZMAN: Any company which shares a large portion of ownership of mass media gains tremendous power over advertisers, over the video programming markets and over competition with other telecommunications providers.

MOYERS: As cable companies grow larger, Schwartzman says, they begin to restrict access to their systems, demanding exorbitant payments or restrictive conditions to carry programming. One example: when NBC wanted to put its channel "CNBC" on cable, they had to sign an agreement with cable companies that it wouldn't be a general news service like CNN. Why? Because CNN is owned by a big cable company that didn't want the competition.

SCHWARTZMAN: The proposed merger will reduce the number of companies that can produce video programming, and it will also place much greater editorial control in hands of one company. This means that there will be fewer editorial voices. The civic discourse of our nation will be adversely affected.

KIMMELMAN: There is no government oversight of what is offered to the consumer over the cable system. It's up to the cable company.

MOYERS: Then there's the possibility of restrictions on internet access. In time, cable lines are expected to become the preferred means of connecting to the Internet. But cable companies have the power to pick and choose what sites you can access.

KIMMELMAN: In the same way the cable company controls what channels the consumer receives, in the Internet world, the cable company is in a position to package programming, the high speed connection, the content you can get off the high speed connection and give preferential deals to their own affiliates or anyone they wanna cut a deal with.

MOYERS: At this week's Senate hearing, the heads of AT&T Broadband and Comcast said not to worry; they are committed to fair pricing and open access. But, say critics, they've heard it before.

SCHWARTZMAN: Absence of competition brings monopoly power and the kind of cable television service we've all become used to. "If you don't like it, forget it. Because we're the cable company!"

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