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annals of communications
The New Yorker - February 13, 1995

selling the air

Who will control the airwaves? This year may see a decision, and the battle is on between the new Congress and the F.C.C.--and its chairman, Reed Hundt.

by ken auletta

To decision-makers in the communications business, government--not titans like Bill Gates and Rupert Murdoch--is the true powerhouse. Not since the Communications Act of 1934, which authorized the federal government to license radio and television stations to use the public airwaves, has the government become entangled in so many momentous communications issues. Reed Hundt, the chairman of the Federal Communications Commission, which was established by the 1934 act, says that 1995 "may be the most important year in the history" of American telecommunications.

There are at least three good reasons for believing that this is true. First, there is the F.C.C. auction of wireless-spectrum licenses, which began on December 5th last year, and includes everything from cellular phones, through pagers, to hand-held wireless computers that will fax and phone and send E-mail. The many rounds of bidding--which initially were to conclude at the end of January--will perhaps stretch into the spring. "The auction is a metaphor for everything we're doing," Hundt said on the day the auction started. The auction will generate tax revenues, but the more wireless companies bid to win licenses, the more they must charge customers to recoup their investment.

The second momentous event will be telecommunications legislation that, if it is passed, could unshackle everyone in the business, freeing broadcasters of restrictions and inviting telephone companies into the video business, say, and cable companies into the telephone business; long-distance telephone companies into local service, and local companies into long-distance service; electric companies into telephone and video services. Such deregulation is not a simple matter. A long-distance telephone company, for example, could not hook up local customers without access to the wiring system of a local or region-al phone company, without agreement on the cost of such a connection, and without provision for a government appeals process to adjudicate disputes.

The third--and least noticed--event this year will be the F.C.C.'s issuing of guidelines for what is variably called advanced television (ATV), digital television (DTV), and high-definition television (HDTV). With the arrival of broadcasting equipment that transmits TV signals the way computers do and of technology that allows over-the-air signals to be compressed into a smaller megahertz space than they now occupy, six or possibly even seven new channels will exist for every channel that currently exists. Technology has offered new choices, but government must now decide among them. Do existing stations get the new channels, or do the channels go to new broadcast bidders?

In Washington, rhetoric and reality often conflict. Publicly, every industry tells Congress that it favors rigorous competition--two or more arteries going into every home. Not for a moment does Hundt believe it. Despite promises from the telephone companies to jump into the cable business, and from the cable companies to jump into the telephone business, he said, "all the industry plans added together--and approved by us, if they are--really mean that two years from now the maximum number of households with more than one wire will be only eight per cent."

Privately, every sector of the communications industry deluges the F.C.C. with petitions to keep competitors at bay. Michael Katz, the F.C.C.'s irreverent chief economist, observes, "TV broadcasters say, 'We want free markets, but we don't believe that the government should use markets to sell us spectrum.' TV broadcasters have their own definition of a free market--'Give it to us free and we'll market it.' Radio broadcasters say they favor free markets, but they ask the commission to block competition from entrepreneurs who want to use satellites to deliver radio services. The local telephone companies say, 'Get out of our way and let us into the video-dial-tone business.' Then you say to them, 'How about letting the electrical utilities into telecommunications?' They say, 'Don't let them in!' The cable companies say, 'Don't let either of them in; they'll use their captive-monopoly rate bases to compete unfairly.' Yet they want no pricing regulations for themselves. The long-distance telephone companies say we should let them into the local telephone business, but they don't want the local companies in the long-distance business. So all industries say, 'Get out of our way--but regulate our rivals.' "

The only way to end the standoff and see the battle joined, Hundt said, is, first, for government to eliminate the legal impediments to competition, and, second, for it to create "a third force"--a force like an F.C.C. auction of spectrum space. Yet Hundt knows that to create a third force Washington must be able to overcome a deep ideological division.

THE ideological division was on display at the Postal Square Building, in downtown Washington, in December, when several hundred government officials and representatives of wireless companies appeared for the opening of the spectrum auction. Representatives of twenty-nine F.C.C.-approved bidders--mostly alliances of cable and telecommunications companies--were also present. In person, or by computer or telephone, they would soon begin entering and amending their bids on ninety-nine spectrum licenses in fifty-one markets across the country. They listened to Vice-President Al Gore praise the auction and propose that, if the auction generated more than the ten to twelve billion dollars that the government was already counting on to help reduce the federal deficit, the additional money could be used to help transform American society by subsidizing a wire to link "every single classroom in the United States of America to the information superhighway."

Reed Hundt heartily applauded Gore's proposal. Edward Markey, Democrat of Massachusetts, then the outgoing chairman of the House Commerce Committee's Subcommittee on Telecommunications and Finance--who had suggested during the ceremony that funds from the auction could be used to subsidize public broadcasting as well--also rose to applaud. But, while Gore was speaking, Senator Larry Pressler, of South Dakota, who as a result of the Republican election victories last November is now the chairman of the Senate Commerce Committee, did not join the approving chorus; he kept his eyes fixed on the floor, yawned occasionally, and applauded tepidly. In his own remarks, Pressler stressed the idea that such spectrum auctions had been proposed by Republicans, and added that, in his view, "the Washington regulatory bureaucracy" remained the enemy of true reform. But communications policy, he implied, was no longer to be handled as a family affair between old school friends like Gore and Hundt (they had been classmates at St. Albans School, in Washington) and between a Democratic Administration and Democratic congressional chairmen. No longer was there to be an unspoken agreement on shared assumptions, such as the assumption that government should actively referee market forces.

Listening to Pressler's remarks and spending a week as a visitor to Hundt's office suggested to me how dramatically the political landscape has shifted since November. Within hours of the auction's start, Hundt and his staff were working the telephones to placate Republicans. On December 6th, at a daily morning staff meeting at F.C.C. headquarters, the commission's chief of staff, Blair Levin, drew up a list of phone calls that Hundt should make to business leaders urging support for Gore's proposal. Levin told Ruth Dancey, Hundt's executive assistant, that Hundt should also call Senator Pressler and Representative Jack Fields, of Texas, the Republican who was to replace Markey as chairman of the House Subcommittee on Telecommunications and Finance. Levin had learned that Pressler was angry that he had not been told of Gore's proposal to wire classrooms before it was made.

Hundt arrived at his office that morning at nine, looking as if he had got up late, dressed hastily, and forgotten to comb his wavy black hair and cinch up the knot of his tie. He conferred with Levin, took a seat at his desk, and dialled Representative Fields. Fields was not in, so Hundt asked for Michael Regan, the House Commerce Committee's counsel, whom he knew as a fellow St. Albans alumnus. Fields had been invited to sit on the stage during Gore's speech, but other business had kept him away, so Hundt started the conversation with Regan by recapping Gore's proposal. They needed to be able to speak frankly, Hundt said. "None of us should look to have this issue be the defining difference between Democrats and Republicans," he went on, and added that Gore wanted bipartisan cooeperation for his proposal.

Hundt was preoccupied with the Republicans. He realized that after the election sweep in November they had an appetite for battle with the Democrats, but he nonetheless hoped that telecommunications policy would be amenable to a truce. The 1994 Congress, in a bipartisan effort, had come close to passing legislation that would have lifted certain federal regulations in order to increase competition among the industries with communications access to the home--local and long-distance telephone companies, cable, computers, wireless, direct-broadcast satellites, broadcasters, and the electric utilities. Hundt's hopes for a bipartisan approach this year suffered a setback on January 9th, however, when Republicans who spoke during hearings that Pressler was conducting to shape new telecommunications legislation suggested, as Pressler had in December, that government--and, by implication, Reed Hundt--was the enemy. The Senate Majority Leader, Robert Dole, disparaged the Democrats as too timid. "The marketplace, not government, should pick the winners and losers," he said. Senator Conrad Burns, of Montana, asserted that Republicans were for "equality of opportunity, not equality of results." Those sentiments were expressions not of policy but of frustration. By contrast, a twenty-page draft blueprint of principles for new telecommunications legislation, which Senator Pressler has circulated among Republican members of his committee, requires that government guarantee "universal service" for telecommunications which is "affordable" and whose rates are "comparable" in rural and urban areas, and insists that "rural and high-cost areas should have access to advanced health care, education, and economic development."

Some of the language in Pressler's draft could have been written by an activist Democrat. Still, there are serious issues dividing the parties. "The whole burden of proof has shifted," Martin D. Franks, CBS's chief Washington lobbyist, said recently about the new political lineup in Washington. "Larry Pressler and Jack Fields are saying, 'Tell me why regulations should stay.' " While Democrats and Republicans do agree on many things, there remains the basic philosophical divide between government as spectator and government as referee.

REED HUNDT himself is a believer in government. The G.I. Bill of Rights paid for his father's law-school education, at the University of Michigan. Hundt recalls that his parents were "solidly liberal," and they voted for Norman Thomas in the 1948 Presidential election. His father was a lawyer and, later, an administrative-law judge. The family lived in Falls Church, Virginia, and moved to Washington when Reed was thirteen. They struggled to pay his tuition so that he could go to St. Albans, where he met Al Gore.

Hundt graduated from St. Albans in 1965, and in the fall of that year he entered Yale. He became the executive editor of the Yale Daily News and was the first to publish the cartoons of Garry Trudeau. After graduating, he taught school for two years. Then he enrolled at the Yale Law School, where he became friends with his fellow-student Bill Clinton. Of his selection as F.C.C. chairman, in 1993, Hundt joked, "I owe this job to lots of hard work and to fortunate seat assignments in high school and law school."

In 1975, Hundt joined the Los Angeles office of Latham & Watkins, where he had an eclectic practice, devoted mostly to representing business in antitrust cases. In late 1979, he moved to the Washington office of the firm and there helped build a communications practice, becoming a partner in 1983. Hundt did pro-bono work, taking on civil-rights cases for the N.A.A.C.P. Legal Defense and Educational Fund, and representing poor death-row inmates. "He's a child of the sixties," his wife, Dr. Elizabeth Katz Hundt, who is a psychologist, observed recently. She said she had always known that the law did not satisfy "his wish to contribute and to give back in a larger sense to society"--a wish that was "imparted to all of us by John Kennedy."

In 1992, Hundt served as an economic adviser for his two former schoolmates, Clinton and Gore. When Clinton's original choice to head the F.C.C. declined, Gore proposed Hundt. He was nominated on June 29, 1993, confirmed by the Senate on November 19th, and sworn in by Gore as the twenty-fifth F.C.C. chairman on November 29th.

As chairman, Hundt is one part traditional Democrat and one part new Democrat. At first, the industries that came before the F.C.C. heard only the voice of traditional liberalism--of government as activist. Soon after Hundt was sworn in, he stirred up broadcasters and cable programmers by criticizing TV violence, warning that if television did not police itself government might do the policing. He also pledged that the F.C.C. would aggressively penalize broadcast stations and cable systems that did not follow the commission's equal-opportunity rules for minorities and women. Un-like his Republican predecessors at the F.C.C., he emphasized industry's public-trust obligations--to teach children, to provide news. In February of 1994, after a congressional clamor over rising cable rates, Hundt and the commission voted to roll back the rates by seven per cent, on top of a cut of as much as ten per cent the year before--a move that prompted cheers from consumer groups and invective from industry.

What Hundt didn't see at first--until last November, at least, whenthe F.C.C. voted to relax some cable rules--was that the goals of the commission and Congress were in conflict with one another. Both wanted to offer consumers relief from onerous cable fees, yet at the same time they expected the cable companies to invest in creating more channels and programming, although they would have less cash with which to do so. The F.C.C. wanted to decrease the concentration of ownership in the cable industry and assure more cable channels for newcomers, but smaller cable companies, since their cash was reduced, couldn't borrow capital and were bought out by the giants. J. Bruce Llewellyn, who headed a group of minority investors with a twenty-per-cent interest in Garden State Cablevision, a small cable company, and who in January sold his stake in the company to Comcast and another partner, said, "The small guys can't take a cut in cash flow. So the small guys are selling out and the big cable systems are getting bigger."

"Everybody talks competition and liberalization, but the reality is different," says Eli Noam, the director of the Institute for Tele-Information, at Columbia University, and a former member of the New York State Public Service Commission, who was an early supporter of Hundt but has been disappointed in Hundt's F.C.C. "The question is not people's commitment to principle but what they actually do," Noam says. "When it comes to what they do, I don't see much deregulation that the F.C.C. has accomplished." He notes that the original 1934 Communications Act was only forty-six pages long, whereas the proposed 1994 telecommunications bill, an amendment to the 1934 act, was some two hundred pages long. Noam believes that the length of the 1994 bill had less to do with actual need than with congressional habit--"the approach of trying to forestall any conceivable negative effect, instead of waiting for bad things to happen and then dealing with them."

Of course, competition without rules can become anarchy, like a football game played without a referee. "Without technical rules to govern the radio spectrum"--for mobile phones and beepers and broadcast stations--"you'd have interference," the chief of the F.C.C.'s Office of Plans and Policy, Robert Pepper, told me. Could a wireless-telephone user from Chicago use her portable phone in Washington if wireless systems were not compelled to allow interoperability? If there had been no 1992 Cable Act, with its provision for "fair access to programming," cable would not have allowed its programs to be sold to a vibrant new delivery system--direct-broadcast satellites. Moreover, without government-required subsidies remote rural and suburban homes would not have relatively inexpensive telephone service, and the Internet would not have sprouted, either.

BOTH the inevitability and the clum- siness of the F.C.C.'s role in overseeing communications policy were apparent during a meeting that Time Warner executives had with Reed Hundt on December 8th. The meeting concerned a proposal from Liberty Cable, in Manhattan. Liberty (backed by local telephone companies) wanted the right to provide cable service to individual apartments by using cable that competitors--principally Time Warner--had already installed. F.C.C. rules, which were written with single-family houses in mind, stipulate that any competitor wanting to tap into a household's wiring system can do so only "at or about twelve inches" outside the home, because the junction box that connects such a house to the main feeder line is usually located a foot from the building. Liberty had appeared before Hundt a week earlier to propose that the F.C.C. amend this rule so that it could tap into an apartment building's cable wire, which is often connected to a junction box located in a stairwell, far more than a foot away from any given unit. If the rule was not amended, Liberty argued, it would have to rewire apartment buildings, adding to the costs and making it more difficult for Liberty to attract new customers.

Led by Richard Aurelio, the president of Time Warner's New York City Cable Group, a delegation of five Time Warner officials showed up at Hundt's office. The Time Warner executives sat on two worn beige couches facing Hundt, who had taken off his jacket and slid into an armchair. After some polite banter, the subject switched to what Time Warner saw as unfair competition from Liberty Cable. "To me, the proposal to change the demarcation"--the twelve-inch line--"is the ultimate outrage," Aurelio, a bearlike man, with gold-framed eyeglasses and a dark mustache, said in a surprisingly hushed voice. "It bestows on our competitors, in Manhattan alone, a one-hundred-million-dollar gift." He ticked off some other outrages. "We feel it's the taking of property," he said, for Liberty would be piggybacking on Time Warner's wires. Liberty already had certain advantages, he said. Unlike cable franchises, Liberty beams its signals from transmitters on the roofs of tall buildings to satellite dishes on the tops of smaller individual apartment buildings, and therefore is not burdened by the cost of tearing up city streets to lay cable, or of paying a municipal franchise fee, or of agreeing to wire every school, library, and government building and to set aside public-access time and "provide universal service," so that every community in the five boroughs will have access to cable--all costs that Time Warner volunteered to pay under its franchise agreement. Meanwhile, Aurelio said, Liberty is seeking to wire only the best buildings in the richest borough--skimming the cream, as he put it.

"What do you expect them to do?" Hundt asked. "Isn't that what you're doing on the telephone side? You picked Rochester, not Elmira."

One of Time Warner's Washington lawyer-lobbyists, Arthur Harding, of Fleischman & Walsh, said that a look at one of the junction boxes that house a building's cable wiring would strengthen Time Warner's claims. An engineering executive, Larry Pestana, thereupon stood up and displayed a wooden box that was about two feet high and three feet wide and deep. He showed that the thick wires inside would have to be pulled out and connected to Liberty's own box if Liberty's request was granted.

"You should know that they have taken over some of our wires and they've never offered to pay us," Time Warner's counsel, Robert Jacobs, said of Liberty.

Hundt pointed out that Liberty had said it was willing to pay a fee to be connected to wire that Time Warner had laid, just as Time Warner would have to pay a fee to a Baby Bell for access to telephone customers.

When the meeting had gone on for half an hour, Hundt said, "I'd like to make a suggestion. My staff needs to know how you plan to do the telephone business. We need to treat you as a new entrant into the telephone business, just as we treat Liberty as a new entrant into your business. Second, get back to us on how Liberty should compensate you." Hundt went on, "There's more here to learn than I can learn in half an hour. I can't take it all in. But I want you to understand that we're looking for some principle of fairness that allows them"--Liberty--"to compete. My sense now is that we don't have enough information to make a judgment."

"If competition is good, the only way to achieve competition is by having at least two wires," Jacobs said.

Not necessarily, Hundt replied. Some proposals to allow phone companies to enter the cable business would permit them to use the same wire.

Two companies sharing a wire wouldn't work, Aurelio said. It would be "a nightmare for consumers," because there could be signal leakages, and if something went wrong each company would blame the other.

After the meeting, Hundt told me that he thought the F.C.C. would inevitably be drawn into such issues as Liberty's request. It was, in fact, much the same issue that the commission would face when long-distance tele-phone companies petitioned to connect to local wires, or local companies to long-distance wires.

Aurelio was uneasy about the meeting. "It boggles my mind that they get into such details," he said in the hallway after leaving Hundt's office. "Talk about micromanaging! But he's showing an openness. He wants to learn."

I asked how the F.C.C. could keep from micromanaging, since both Time Warner and Liberty had requested a factual ruling.

He knew that the commission had to rule, Aurelio said, but what troubled him was that Hundt was getting personally involved in details that ought to be adjudicated by the technical staffs. " 'Micromanagement' is the wrong word," he said. "What I'm really saying is that, given the global ramifications of this issue, it was not prudent for him to rush into a decision on this without his staff understanding all the technical details of what wire goes where."

Hundt obviously came to agree with Aurelio, because within days he decided to delay a decision, and had his legal office convene a meeting on January 18th of representatives from Time Warner, Liberty, and the various wired and wireless trade associations. The F.C.C.'s five commissioners are currently reviewing the case.

ONE of the most consequential mat- ters that will soon cross Hundt's desk--what to do about high-definition television--was the subject of another meeting in Hundt's office, on Decem-ber 8th. The commission's director of technology policy, Saul T. Shapiro, entered with both good news and bad news. The good news, he said, was that there had been a historic breakthrough.

Early in 1987, the broadcasting community in the United States had resigned itself to the likelihood that HDTV sets under development in Japan would be marketed here, and that the quality of the picture would be so alluring that consumers would abandon the TV sets they had, compelling the TV stations and the networks to make huge new investments in high-definition cameras and other equipment. The issue then had been "pretty pictures," Hundt says, and the prob-lem was that the image on an analogue-television screen--the sort that we had then and still have--was composed of about five hundred horizontal scanning lines, while high-definition pictures would use double this number. To continue using the analogue system to send high-definition pictures would have required both new equipment and more spectrum. Broadcasters feared that some stations would lose their spectrum space to HDTV.

Alarmed, the Reagan-Bush Administration, though it had denounced government-directed industrial policies, adopted an industrial policy to protect the broadcast industry. It wasn't called that, though. In September of 1987, the F.C.C. established an Advisory Committee on Advanced Television Service to devise an American alternative. In May of 1993, companies backing four alternative systems formed an alliance and decided to develop a single system, called ATV.

By last December--this was the good news that Saul Shapiro announced to Hundt--there had been so many technological breakthroughs that "calling it high definition isn't even appropriate anymore," Shapiro said. The ATV system would consist of digitized signals, and, because of advances in digital compression, the system would be able to offer six or seven channels, with resolution equal to conventional analogue television, in the airwave space now occupied by one channel. Or a broadcaster could choose to offer remarkably crisp high-definition television over a single channel. "Technology is no longer a bottleneck," Shapiro announced. "The key for us is: What is our policy?"

That was where the "bad" news came in. The policy and its political implications would be far-reaching. The broadcast spectrum had traditionally been so limited that when the F.C.C. was formed its chief mission had been to ration it. The government had used this scarcity argument ever since to justify imposing certain public-trust obligations--news, children's programming, and community programming--on the holders of the rare licenses. But now Shapiro reported that instead of facing scarcity, instead of being forced to choose winners and losers, the nation was on the verge of abundance. "We must explore the policy implications of this," an excited Hundt told his staff at the end of the meeting with Shapiro. The decisions about allotting the extra channels would probably crystallize this summer, he said.

The competition could be fierce, because the stakes are enormous. By way of contrast, the aim of the wireless auction that began on December 5th was to sell a hundred and twenty megahertz of spectrum; ATV dwarfs that, with the equivalent of two hundred megahertz of spectrum. A day after the meeting with Shapiro, Hundt said, "The public-policy issues are who gets the extra spectrum and how do they get it. And, after you deal with that, the question is what do they get to do with it. In the course of asking these questions, someone has to stand up and say, 'Here's the public interest.' Yesterday's briefing told us we could take one channel and get six or seven channels. Should one of these be reserved for the local community? Should one be reserved for children's programming? Should one of these be for an all-news channel--a local CNN? These are all possibilities." So are channels reserved for culture, or transmitting data, or the Internet, or home shopping, or interactive distant learning, or games, or gambling.

The question remains: Is this extra spectrum space to be a gift, a sale, or a trade?

A MORE immediate clash preoccu- pied Hundt--a petition by NBC to force Rupert Murdoch's Fox television network, which was aggressively cutting into NBC's market, to reduce its level of foreign ownership or to allow American networks to seek foreign investment without limits. The NBC petition claimed that Murdoch's Australian corporation holds majority control of Fox, and thus violates the law that limits foreign ownership of a broadcast company with an F.C.C. license to twenty-five per cent. Murdoch, in a letter to Hundt, said that NBC's motive was to thwart "robust competition." Hundt's F.C.C., which had been reviewing the question of Fox's foreign ownership by the time of NBC's petition, issued a confidentiality order.

Already, there are signs that the challenge to Murdoch will embroil the F.C.C. in a political fight. Senator Pressler and other Republicans have complained about the F.C.C.'s "gag order" (which has been softened to cover only certain documents). In the late fall, Murdoch made the rounds, meeting with Speaker-designate Newt Gingrich and with other Republican leaders who share his conservative views. Two weeks before the November elections, Murdoch's TV Guide, the largest-circulation weekly publication in America, printed as an advertisement the Republican "Contract with America." According to Haley Barbour, the chairman of the Republi-can National Committee, Gingrich wanted to run the ad, and the com-mittee paid three hundred thousand dollars for it. A move that was more widely noticed was that HarperCollins, which is owned by Murdoch, agreed to pay Gin-grich a four-and-a-half-million-dollar advance to write two books. (Murdoch insists that he was unaware of the book deal, and Gingrich claims he did not know that Murdoch owned HarperCollins.) Understandably, Murdoch has not restricted his visits to Republicans. In November, he paid a call on Hundt and F.C.C. staff members to speak about the prospects of ATV. In early De-cember, Hundt showed me a postcard he'd got from "my new best friend." It was a Christmas card showing Murdoch in a yellow sweater on his boat, flanked by his wife and their son, daughter, and son-in-law.

Beyond Murdoch, there are other questions that await the attention of Reed Hundt and of Congress--particularly subsidy questions. Should government permit the telephone companies to have current customers pay to cross-subsidize the cost of starting up video services? Should government impose universal-service obligations on video services, as it does on phone service? And what would universal service mean in that case--that customers can have access to all services, or that services must be affordable to all? Should all taxpayers subsidize tax credits to in-crease opportunities for minority ownership? Should government support public broadcasting--as Representative Markey and former F.C.C. Chairman Newton Minow, among others, have proposed--by diverting proceeds from the spectrum auctions? Or, with channel choices proliferating, should government get out of the public-broadcasting-subsidy business altogether? That is the view of Senator Pressler, who says that the Corporation for Public Broadcasting should be sold, to save the two-hundred-and-eighty-six-million-dollar federal subsidy.

Hundt says he hopes that one day there will be so much competition that he will work himself out of a job. If the Republicans have their way, that day may arrive sooner than Hundt desires. One version of Senator Pressler's blueprint of telecommunications legislation contains a proposal to "downsize the F.C.C." And Gingrich's advisers have urged him to introduce legislation to abolish the F.C.C. and rely instead on existing antitrust laws to prevent monopolistic practices.

The bipartisan consensus has unquestionably been weakened. Back on December 9th, however, in a staff meeting that Blair Levin conducted in Hundt's office, the flame of optimism for a political coming together still glowed. Robert Peck, the deputy director of the F.C.C.'s Office of Legislative and Intergov-ernmental Affairs, reported that Vice-President Gore had scheduled a meeting to discuss a common approach to telecommunications issues on January 9th, and that Senator Pressler and Representative Fields would participate. The goal, he said, would be to enunciate a bipartisan statement of principles.

Neither Pressler nor Fields nor any other congressional Republicans appeared at Gore's meeting. That was the day Pressler had scheduled the hearing of the Senate Commerce Committee: the Republicans had decided to formulate their own legislation separately and then pressure the Democrats to go along with it. Senate Republicans who had protested the F.C.C.'s Murdoch gag order now imposed a gag order of their own, banning staff members from talking to lobbyists or the press about telecommunications legislation. On January 19th and 20th, House Republicans held an off-the-record meeting with the executives of communications companies.

Although the Democrats were in danger of becoming specta-tors, Hundt remained undaunted. He told me in mid-January that he re-mained optimistic. "The problems here are less likely to be between Democrats and Republicans than between entrenched businesses," he declared. The real obstacle to reform, he said, comes not from the government but from business--from captains of industry who complain about bureaucrats but then act like them. (c)

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