The House voted overwhelmingly Friday to deregulate the sprawling $700 billion telecommunications industry. And, if critics and the Clinton administration are right, special interests are in the money, and consumers had better beware.
In a stunning turnaround, lawmakers agreed to a provision that would put censoring devices, the so-called “Violence chip,” into TV sets a measure many consumer groups had been pushing for.
But the bill’s largest effect on consumers is expected to be higher cable and local telephone service charges.
“This bill does nothing for consumers,” said Rep. Jim Moran, D-Va., “except for the V-chip.”
The V-chip appeared destined to fail. Lawmakers first passed a much weaker version “encouraging” the broadcast industry to study the issue. That proposal was designed to keep the broadcast industry happy and give members political cover from angry constituents who want their kids watching less sex and violence on television.
Then Rep. Ed Markey, D-Mass., a V-chip proponent, caught the Republican leadership by surprise. Using an arcane parliamentary procedure, he forced a vote solely on the V-chip. Lawmakers switched their votes, and his amendment passed 224-199.
The sweeping telecommunications bill, which passed 305-117, goes further than a companion Senate bill to unshackle the telecommunications industry.
For the first time, it would allow TV networks and cable, telephone and newspaper companies to cross into each other’s once-guarded territory and set up their own services or buy up other companies.
Supporters say the bill spurs competition in an industry where monopolies now rule, and it makes way for the information explosion of the 21st century - a world of 500 TV channels and a host of electronic, video, telephone and computer online services.
“Consumers get competition, which means choice, in local television, cable, and I see a great deal related to broadcast,” said Rep. Jack Fields, R-Texas, one of the bill’s chief authors. “Consumers become the focal point of everything, with all these companies competing for their business. This is consumer empowerment at its best.”
But President Clinton has threatened to veto the bill unless it is altered to better benefit consumers.
“Two hours ago, the president walked out of a meeting on political reform and said this bill shows why we need political reform,” said Greg Simon, an administration official.
Consumers’ sources of information - TV networks, cable and radio stations and local newspapers - may, for the first time, be owned by the same company. Moran calls it the “Citizen Kane” provision, referring to an old Orson Welles movie of a media magnate who controlled all public opinion in his city.
Vice President Al Gore on Thursday called these media concentration and other provisions “abhorrent to the public interest.”
“One person owning the majority of the media outlets in a community is a threat to the very system of democracy upon which our society is built,” Gore said in a statement. “And it is wrong.”
And, in what some call a critical “sleeper” issue that could quickly raise consumer ire, the bill sets the stage for erection of 100-foot towers for cellular phones in neighborhoods across the United States.
There will be nothing consumers can do about the towers - the bill pre-empts local laws, and waives communities’ rights to deny or delay permits for the unsightly structures on aesthetic or environmental grounds.
The bill allows TV companies to directly own stations in more markets nationwide. Currently, TV networks are prohibited from owning groups of stations that reach more than 25 percent of the viewing market nationwide. The bill passed Friday bumps that limit to 35 percent - a move that will ease the massive mergers between ABC and Disney and Westinghouse and CBS announced earlier this week.
House Republican leaders initially wanted to expand each TV company’s potential reach to 50 percent of the market nationwide.
The bill completely deregulates the cable industry 15 months after it goes into effect, overturning Congress’ 1992 cable regulation that curbed prices and rate hikes. An amendment to tie rate hikes to inflation failed Friday.
It also allows local telephone companies to get into the lucrative long-distance market and opens the local phone market to competing companies.
But AT&T and other long-distance companies complained bitterly that the bill - which was rewritten behind closed doors before it reached the House floor - lets local Bell companies into the $69 billion long-distance market while still maintaining their local monopolies.
Consumer groups, who were far outnumbered in the halls of the Capitol by scores of telecommunications industry lobbyists, have other complaints.
“The bill delivers on deregulation, but it doesn’t deliver on the competition,” said Brad Stillman, with the Consumer Federation of America. “It allows the most likely competitors to collaborate and buy each other out. These buy-outs benefit corporations, not consumers.”
And, Stillman said, more mergers will only mean fewer companies and fewer voices in the marketplace of ideas. “It’s like when you go to a flea market. There are lots of stalls, but they’re all selling the same merchandise.”
This sidebar appeared with the story: NO CENSORSHIP ON NET By a vote of 420 to 4, the House Friday passed an amendment that expressly prohibits Internet censorship by the government. The “Internet Freedom and Family Empowerment” amendment to the House communications bill appears to conflict directly with an amendment to the Senate version of the same bill.
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