FTC Bows Out


January 19, 2002


BOB GARFIELD: Opponents of media concentration were staggered late last week by news from the Federal Trade Commission that it might soon be ceding oversight of media mergers to anti-trust specialists in the U.S. Department of Justice. The plan was due to be announced at a news conference Thursday, but last minute protests from Capitol Hill have stalled the process for now. The FTC has been seen as the most consumer-friendly government watchdog on these matters. Now such proposed mergers as the AT&T Comcast Cable Systems deal will be scrutinized by political appointees in the Bush administration's Justice Department and by Michael Pal's [sp?] Federal Communications Commission, both ideologically predisposed to more concentration, not less. Joining us now is Jeff Chester, executive director of the Center for Digital Democracy in Washington. Jeff, why is the FTC preferable to the Justice Department when it comes to the media merger issue.

JEFF CHESTER: Only the FTC has shown recently that it fully understands the impact that these big media conglomerates might have on the Internet, on competition, on programming -- and so for example, when the FTC reviewed the merger last year of AOL/Time Warner, it developed a series of safeguards that neither the Justice Department nor the Federal Communications Commission would have likely enacted. So the FTC has simply been the stronger watchdog. The FTC is an independent agency. There are 5 commissioners with different political backgrounds, and they're much more receptive to the concerns of consumers and small and medium sized businesses. At the Department of Justice it's sort of one-stop shopping -- you see the key presidential appointee. They look at these mergers in a very narrow way. They're much more susceptible to political influence than the Federal Trade Commission.

BOB GARFIELD:So for an independent watchdog organization like the Center for Digital Democracy and other groups like yours, this is a bombshell.

JEFF CHESTER: This is clearly an attempt, I think, by the Bush administration to remove the only government agency that might create some safeguards to restrain the power of these big media conglomerates. I think the Bush administration and some of the media companies understood that in the review of the AT&T Comcast merger coming up for example consumer groups would have found a much more receptive place at the Federal Trade Commission -- the FTC understood what would be at stake. Certainly we would not be able to obtain that same kind of regulatory rigor at the Department of Justice.

BOB GARFIELD: Jeff AT&T and Comcast -- what's at stake?

JEFF CHESTER:This merged powerhouse will dominate what we see on television and how we receive information on line. If the Bush plan goes through and the Federal Trade Commission no longer has a role on media mergers, then indeed AT&T Comcast will simply go through approved without any kind of restrictions or safeguards, and I don't think it's a coincidence, frankly, that this decision is coming down before the merger is reviewed. I think that, that AT&T and Comcast and others understood that consumer groups and others would have access at the Federal Trade Commission, at the FTC, had that experience in AOL/Time Warner, so it understood what it was at stake. By removing the Federal Trade Commission from this regulatory process, the Bush administration has assured AT&T and Comcast that their merger will go through unimpeded.

BOB GARFIELD: All of your hopes rest with the Congress at this point, I gather.

JEFF CHESTER:Yes. If the Congress doesn't insist that the status quo remain, then we will be able to do absolutely nothing in the merger of Comcast and AT&T.

BOB GARFIELD: All right, Jeff. You have been Chicken Little for some good while now. Has the sky fallen in?

JEFF CHESTER:I think the sky's about to hit the ground. The Bush administration is dismantling decades-old rules that have restrained the size of these media giants. They're about to declare a policy that would in essence say the Internet doesn't have to be run as an open network any more; so a handful of giants really two -- AOL/Time Warner and AT&T/Comcast with Microsoft as its partner will be dominating much of what we see and hear, and it looks like the public will have very little recourse unless we can put some teeth back in the anti-trust process.

BOB GARFIELD: All right. Jeff Chester, thanks very much.

JEFF CHESTER: Thank you very much, Bob.

BOB GARFIELD: Jeff Chester is the executive director of the Center for Digital Democracy. [MUSIC]