Page 5 of
5 SUPER CAPITALISM, SUPER
IMPERIALISM PART 1: A Structural
Link By Henry C K
Liu
cleared away for more efficient
and cost-effective administration of the important
rules that would remain. Congress largely went
along with this updating trend, and initiated a
few deregulatory moves of its own to make
regulation more effective and responsive to
contemporary conditions.
Reagan's
anti-government fixation The Reagan
administration under Federal Communications
Commission (FCC) chairman Mark
Fowler in 1981 shifted deregulation to a
fundamental and ideologically-driven reappraisal
of regulations away from long-held principles
central to national broadcasting policy
appropriate for a democratic society. The result
was removal of many longstanding rules to permit
an overall reduction in FCC oversight of station
ownership concentration and network operations.
Congress grew increasingly wary of the pace of
deregulation, however, and began to slow the pace
of FCC deregulation by the late 1980s.
Specific deregulatory moves included (a)
extending television licenses to five years from
three in 1981; (b) expanding the number of
television stations any single entity could own
from seven in 1981 to 12 in 1985, with further
changes in 1995; (c) abolishing guidelines for
minimal amounts of non-entertainment programming
in 1985; (d) elimination of the Fairness Doctrine
in 1987; (e) dropping, in 1985, FCC license
guidelines for how much advertising could be
carried; (f) leaving technical standards
increasingly in the hands of licensees rather than
FCC mandates; and (g) deregulation of television's
competition, especially cable which went through
several regulatory changes in the decade after
1983.
The 1996 Telecommunications Act
eliminated the 40-station ownership cap on radio
stations. Since then, the radio industry has
experienced unprecedented consolidation. In June
2003, the FCC voted to overhaul limits on media
ownership. Despite having held only one hearing on
the complex issue of media consolidation over a
20-month review period, the FCC, in a party-line
vote, voted 3-2 to overhaul limits on media
concentration. The rule would (1) increase the
aggregate television ownership cap to enable one
company to own stations reaching 45% of our
nation's homes (from 35%), (2) lift the ban on
newspaper-television cross-ownership, and (3)
allow a single company to own three television
stations in large media markets and two in medium
ones. In the largest markets, the rule would allow
a single company to own up to three television
stations, eight radio stations, the cable
television system, cable television stations, and
a daily newspaper. A wide range of public-interest
groups filed an appeal with the Third Circuit,
which stayed the effective date of the new rules.
According to a BIA Financial Network
report released in July 2006, a total of 88
television stations had been sold in the first six
months of 2006, generating a transaction value of
$15.7 billion. In 2005, the same period saw the
sale of just 21 stations at a value of $244
million, with total year transactions of $2.86
billion.
Congress passed a law in 2004
that forbids any network to own a group of
stations that reaches more than 39% of the
national television audience. That is lower than
the 45% limit set in 2003, but more than the
original cap of 35% set in 1996 under the Clinton
administration - leading public interest groups to
argue that the proposed limits lead to a stifling
of local voices.
Newspaper-television
cross-ownership remains a contentious issue.
Currently prohibited, it refers to the "common
ownership of a full-service broadcast station and
a daily newspaper when the broadcast station's
area of coverage (or "contour") encompasses the
newspaper's city of publication".
Capping
of local radio and television ownership is another
issue. While the original rule prohibited it,
currently a company can own at least one
television and one radio station in a market. In
larger markets, "a single entity may own
additional radio stations depending on the number
of other independently owned media outlets in the
market".
Most broadcasters and newspaper
publishers are lobbying to ease or end
restrictions on cross-ownership; they say it has
to be the future of the news business. It allows
newsgathering costs to be spread across platforms,
and delivers multiple revenue streams in turn.
Their argument is also tied to a rapidly changing
media consumption market, and to the diversity of
opinions available to the consumer with the rise
of the Internet and other digital platforms.
The arguments against relaxing media
ownership regulations are put forth by consumer
unions and other interest groups on the ground
that consolidation in any form inevitably leads to
a lack of diversity of opinion. Cross-ownership
limits the choices for consumers, inhibits
localism and gives excessive media power to one
entity.
Professional and workers' guilds
of the communication industry (the Screen Actors
Guild and American Federation of TV and Radio
Artists among others) would like the FCC to keep
in mind the independent voice, and want a quarter
of all prime-time programming to come from
independent producers. The Children's Media Policy
Coalition suggested that the FCC limit local
broadcasters to a single license per market, so
that there is enough original programming for
children. Other interest groups like the National
Association of Black Owned Broadcasters are
worried about what impact the rules might have on
station ownership by minorities.
Deregulatory proponents see station
licensees not as "public trustees" of the public
airwaves requiring the provision of a wide variety
of services to many different listening groups.
Instead, broadcasting has been increasingly seen
as just another business operating in a commercial
marketplace which did not need its management
decisions questioned by government overseers, even
though they are granted permission to use public
airways. Opponents argue that deregulation
violates a key mandate of the Communications Act
of 1934 which requires licensees to operate in the
public interest. Deregulation allows broadcasters
to seek profits with little public service
programming.
Clinton and
telecommunications deregulation The
Telecommunications Act of 1996 was the first major
overhaul of US telecommunications law in nearly 62
years, amending the Communications Act of 1934,
and leading to media consolidation. It was
approved by Congress on January 3, 1996 and signed
into law on February 8, 1996 by President Clinton,
a Democrat whom some have labeled as the best
president the Republicans ever had. The act
claimed to foster competition, but instead it
continued the historic industry consolidation
begun by Reagan, whose actions reduced the number
of major media companies from around 50 in 1983 to
10 in 1996 and 6 in 2005.
Regulation
Q The Carter administration increased the
power of the Federal Reserve through the
Depository Institutions and Monetary Control Act
(DIDMCA) of 1980 which was a necessary first step
in ending the New Deal restrictions placed upon
financial institutions, such as Regulation Q put
in place by the Glass-Steagall Act of 1933 and
other restrictions on banks and financial
institutions. The populist Regulation Q imposed
limits and ceilings on bank and savings-and-loan
(S&L) interest rates to provide funds for
low-risk home mortgages. But with financial market
deregulation, Regulation Q created incentives for
US banks to do business outside the reach of US
law, launching finance globalization. London came
to dominate this offshore dollar business.
The populist Regulation Q, which regulated
for several decades limits and ceilings on bank
and S&L interest to serve the home mortgage
sector, was phased out completely in March 1986.
Banks were allowed to pay interest on checking
account - the NOW accounts - to lure depositors
back from the money markets. The traditional
interest-rate advantage of the S&Ls was
removed, to provide a "level playing field",
forcing them to take the same risks as commercial
banks to survive. Congress also lifted
restrictions on S&Ls' commercial lending,
which promptly got the whole industry into trouble
that would soon required an unprecedented
government bailout of depositors, with tax money.
But the developers who made billions from easy
credit were allowed to keep their profits. State
usury laws were unilaterally suspended by an act
of Congress in a flagrant intrusion on state
rights. Carter, the well-intentioned populist,
left a legacy of anti-populist policies. To this
day, Greenspan continues to argue disingenuously
that subprime mortgages helped the poor toward
home ownership, instead of generating obscene
profit for the debt securitization industry.
The party of Lincoln taken over by
corporate interests During the Reagan
administration, corporate lobbying and electoral
strategies allowed the corporate elite to wrest
control of the Republican Party, the party of
Lincoln, from conservative populists. In the late
1980s, supply-side economics was promoted to allow
corporate interests to dominate US politics at the
expense of labor by arguing that the only way
labor can prosper is to let capital achieve high
returns, notwithstanding the contradiction that
high returns on capital must come from low wages.
New legislation and laws, executive
orders, federal government rule-making, federal
agency decisions, and think-tank propaganda, etc,
subsequently followed the new political landscape,
assisting the implementation of new corporate
policies and practices emerging from corporate
headquarters rather than from the shop floor.
Economists and analysts who challenged this voodoo
theory were largely shut out of the media. Workers
by the million were persuaded to abandon their
institutional collective defender to fend for
themselves individually in the name of freedom. It
was a freedom to see their job security eroded and
wages and benefits fall with no recourse.
Note 1. Das Kapital,
Volume One, Part I: Commodities and Money,
Chapter One: Commodities, Section I.
Next: PART 2: Global war on labor
Henry C K Liu is chairman of a
New York-based private investment group. His
website is at http://www.henryckliu.com.
Head
Office: Unit B, 16/F, Li Dong Building, No. 9 Li Yuen Street East,
Central, Hong Kong Thailand Bureau:
11/13 Petchkasem Road, Hua Hin, Prachuab Kirikhan, Thailand 77110
