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Copyright 2002 St. Louis Post-Dispatch, Inc.  
St. Louis Post-Dispatch (Missouri)

February 26, 2002 Tuesday Five Star Lift Edition


LENGTH: 614 words



IN 1996, a Republican Congress passed -- and a Democratic president signed -- a sweeping new law that overhauled communications policy in the United States. The intent was to let anyone get into any part of the communications business that he wanted to, and to let anyone who was already there compete in any market against any other.

The law affected local and long-distance phone service, cable and broadcast TV, radio and Internet communications. But because big telephone and broadcast firms had a huge head start, the law was to be phased in slowly. Congress ordered the Federal Communications Commission to make sure everyone was playing by the same rules.

But six years later, and one year after the Bush administration brought its free market priorities to Washington, that "go slow" approach is under assault. The FCC has begun taking the shackles off big telephone companies. And last week, cable and broadcast companies learned that their regulatory restraints may come off, too.

The U.S. Court of Appeals for the District of Columbia -- often seen as second only to the U.S. Supreme Court in its influence -- told the FCC that its wait-and-see approach would no longer be tolerated. The court struck down an FCC rule that had prohibited cable companies from owning local television stations in markets they served. And the court told the FCC to reconsider a rule that prohibited broadcast networks from owning stations that served more than 35 percent of the nation.

Still pending before the same court is a third FCC rule, one prohibiting a broadcaster from owning more than one station in a market unless there are at least eight other independent stations in the market. The FCC is also considering waiving the rule against companies owning broadcast stations and newspapers in the same market. The clear signal is that if the FCC doesn't deregulate, the court will.

From a business point of view, the economies of this are obvious; advertising rates can be controlled, programming costs lowered and competition can be bought out or crushed. Indeed, the court ruling last week set off a wave of speculation about mergers and acquisitions in the communications business. Companies will have to get big to survive.

The public's stake in this -- not that many in Washington seem too concerned about that -- has to do with the quality of the communications services consumers receive, and the number of sources they come from. If the FCC follows the court's prodding, the same company could wind up owning the only newspaper in a market, one or more of its television stations, its cable service and eight or more radio stations. That means the public will be getting news from fewer sources.

Michael K. Powell, the new chairman of the FCC, is sensitive to the argument that a free society needs many voices -- a sensitivity not shared by Congress or the appeals court. But Mr. Powell is a free-market advocate, as are the two other Republicans on the five-member panel. Given the constraints of the Telecom Act, and the impatience of the court that is interpreting it, there may be little Mr. Powell can do to stop the monopolization of the media.

But it's worth remembering that the Telecom Act was passed during the heady days of the "Republican Revolution," when deregulation was seen as panacea for the nation's ills. Since then, there has been trouble with energy deregulation and airline deregulation, not to mention the Enron scandal. Congress should revisit the subject of competition in the communications business, and soon. The marketplace of ideas is too important to democracy to leave to the vagaries of a balance sheet.

LOAD-DATE: February 26, 2002

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