Archives: Media Ownership

Consumers Union Calls on President Bush

Consumers Union calls on President Bush to bring a new leader to the FCC who will deal with consumers' real, everyday problems in getting more choices and competition for phone, Internet and TV services.  We also hope the President will make sure the FCC challenges bias and consolidation among media companies that undermines the presentation of diverse points of view in our democracy.

Consumers Union on the Resignation

"Consumer groups praised Powell for two regulatory changes. The first, done with the Federal Trade Commission, set up a "do not call" registry that restricts telephone solicitations. The second fostered competition among cell phone companies by permitting customers to retain their phone numbers when changing providers.

But the groups also sharply criticized Powell for a variety of other policies that they said led to higher prices and reduced competition. They said his policies had the effect of introducing some competition for services being sought by wealthier consumers, like high-speed Internet service, while neglecting the needs of the less affluent.

'During his tenure, cable rates have risen almost three times faster than inflation, satellite prices are beginning to similarly rise, broadband prices have increased, and there has been enormous consolidation in the wire line and wireless services,’ said Gene Kimmelman, a senior director of public policy at Consumers Union.

'Powell was more concerned about preserving competition for wealthy people, people who already have broadband, people who have video service,' Kimmelman said. 'The people who used to rely on the long-distance companies, who want more choices for their cell phone carrier, they were left out in the cold.’"

– New York Times (January 22, 2005)

"Before he leaves, Powell said he planned to tie up some loose ends on the transition to digital television and answer lingering questions about what regulations apply to new services like Internet telephone service.

The FCC chairman has received praise from most companies for his approach. But consumer groups have criticized him for attempting to allow media conglomerates to grow bigger and reducing competition among wireless providers.

'I think he's left an enormous mess on the table where the majority of consumers face inflated prices and diminished competition due to his policies,’ said Gene Kimmelman, senior director of public policy for Consumers Union.

Powell expressed some regret that he was unable to finish new media ownership rules. An appeals court put on hold his attempt to allow media companies to own more television stations as well as own a newspaper, television station and radio outlets in a single market."

– Reuters (January 22, 2005)

"Gene Kimmelman, Washington director of Consumers Union, who fought Powell's media-merger and telecommunications rules, said his handling of the media rules is his 'signature mistake.’

'Powell came in claiming he was going to really improve the integrity of the agency, which consisted of more rigorous analysis, particularly more careful economic analysis,’ Kimmelman said. 'By his own standards, he has truly failed.’

Powell also fought to relax restrictions on high-speed Internet connections belonging to cable companies such as Comcast Corp. and phone carriers including Verizon Communications Inc. Forcing the companies to rent their equipment to competitors such as EarthLink Inc. at regulated rates discourages spending on network upgrades, he argued."

– Bloomberg (January 21, 2005)

Consumer Groups Weigh In

"But Andrew Schwartzman, chief executive of the Media Access Project, a nonprofit public-interest group focused on telecom and media issues, reflected the mixed legacy: While lauding Mr. Powell's goal of speeding development of new technologies, Mr. Schwartzman criticized him for giving the largest companies unfair advantages over newcomers, saying, 'He had the wrong mechanism -- letting the big boys do it.'"

– Wall Street Journal (January 24, 2005)

"'He made a deal with the huge corporations and killed competition from competitive carriers and small Internet service providers, ' said Mark Cooper, telecom policy director for the Consumer Federation of America."

– Chicago Tribune (January 22, 2005)

"Powell turned the FCC into more of an intellectual chamber of commerce than an agency whose duty is to watch the giants under its mandate," said Jeff Chester, executive director of the Center for Digital Democracy, a media watchdog group."

– Washington Times (January 21, 2005)

''But Robert McChesney, a critic of the corporate media and Powell adversary, said in a statement: 'His tenure was marked by some of the lowest moments in the history of the FCC. . . . Powell's record has been one of avoiding the public he was meant to serve. He had to be dragged kicking and screaming to the few public hearings he attended, yet he made countless appearances before industry groups and trade associations.''' [Free Press] 

– Washington Post (January 21, 2005)

Other Articles of Interest

"FCC Chairman Powell plans to resign, ending what has often been a controversial tenure as he tried to push the telecom and media industries into an increasingly deregulated world." 

– Wall Street Journal (January 21, 2005)

"Beyond the indecency battle, Powell oversaw a number of significant policy moves: notably, the digital-television transition, the rollout of advanced Internet capabilities and the radical redrawing of the telephone landscape. An admitted gadget geek, Powell pushed for the rapid expansion of cell phone and wireless communications networks, calling them tools of democracy.

He also was at the center of a 2003 fight over new media ownership rules that attempted to loosen some rules governing the size and reach of companies while tightening others."

– Washington Post (January 22, 2005)