Channel surfer

Tobacco’s guy is also the man behind the telecommunication industry’s megamergers.

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Tom Bliley (R-Virg.) is so tight with the tobacco industry he’s known as the “Congressman from Philip Morris.” Upon becoming chairman of the House Commerce Committee in 1994, Bliley announced he would end congressional investigations into tobacco during his watch. And he’s kept his word: Despite numerous allegations of tobacco industry malfeasance, this Congress has held only one tobacco hearing — on smoking on airlines.

Less widely appreciated, however, are the services Bliley performed for corporate telecom giants in shepherding the telecommunications bill through the House. In 1995, Bliley was the happy recipient of $53,450 from media and telecommunications PACs, including Fox, Disney (which owns ABC), AT&T, MCI, Sprint, and Bell Atlantic. It was money well earned.

Although the telecommunications bill was not a part of Newt Gingrich’s “Contract With America,” it was far and away the most important legislation passed by this Congress. The bill will affect the life of nearly every American. But the people did not clamor for it, there was no national debate on its merits, and the television sets of the land — where most people receive their information — remained notably silent on the subject.

Why? Because the telecommunications industry largely wrote the law itself, and paid for it with massive donations to politicians of both parties. (During 1995 alone, long- distance and regional telephone companies gave members of Congress more than $4 million.) Although there was a certain amount of colorful (though largely unreported) infighting among the corporate players over how to divide the swag, the public didn’t even have a seat at the table. And it shows.

On February 1, when Congress passed the bill, Bliley proudly declared, “Today, we have broken up two of the biggest government monopolies left: the monopolies in local telephone service and in cable television.” Not quite. In fact, the telecommunications bill is arguably the most anti-competitive, monopolistic legislation passed since William McKinley occupied the White House.

1) The bill supposedly brings the magic of the marketplace into play by allowing long-distance phone companies to compete for local customers and letting regional Bells enter the long-distance business. That’s only half-right. The regionals will go into long-distance (where there is already enough competition to give consumers options). But, for technical reasons, long-distance companies will find it nearly impossible to enter regional markets without leasing the lines from the regional Bells. Consequently, the regionals will largely retain their monopolies.

Perhaps more significantly, the telecommunications bill makes it easier (and vastly more lucrative) for the regional Bells to buy one another, thus becoming still larger monopolies. Soon after the bill’s signing, Bell Atlantic and NYNEX announced they were merging, as did SBC (formerly Southwestern Bell) and PacTel. After these mergers, the number of regional Bells will shrink from seven to five.

2) Congress also did a large favor for cable television companies, which are virtually all regional monopolies (a state of affairs the bill does nothing to remedy). In 1992, public outcry over the cable companies’ predatory billing practices led to FCC regulation. The telecommunications bill reverses this legislation, deregulating all cable companies within three years. Once again, the regional cable monopolies will charge whatever the market will bear. (The telecommunications bill supposedly rectified this situation by allowing phone companies to get into the cable business. But the phone companies lost all interest once the bill passed. So much for competition.)

3) Despite Bliley’s best efforts, TV broadcasting companies haven’t managed to walk off with $70 billion worth of public airwaves — yet. In 1991, the FCC assigned each of the major networks and regional stations a second broadcast channel for free, so they could bring high-definition TV to the American people. Since the companies never went into HDTV (and have no intention of ever doing so), they presumably ought to give back the channels, which are public property — or pay for them. The stations, however, have decided they want to keep the channels for free. Tom Bliley, flush with their campaign contributions, has decided he agrees. Although his attempt to put a provision to this effect into the telecommunications bill failed, so have all efforts to make the broadcasters give the channels back. Congress will “revisit” the issue at a later date; meanwhile, the public has yet to see its $70 billion.

4) Finally, the tele-communications bill undoes six decades of anti-monopoly laws erected in the public interest. For example, it allows networks to increase the number of stations they can own, laying waste to local competitors left and right. The bill also got rid of the law that prevented an individual or company from owning more than 40 radio stations (though it’s hard to come up with a reason why anyone would need more). Now a single individual could legally own every radio station in the country.

In short, Bliley and his colleagues on both sides of the aisle made sure everybody came away happy — except for the American people, who were not invited to take part in the negotiations.


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