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One Stop Shopping.......
- To: email@example.com
- Subject: One Stop Shopping.......
- From: Heiko Recktenwald <firstname.lastname@example.org>
- Date: Sun, 17 Oct 1999 22:17:58 +0200 (CEST)
- Comment: This message comes from the debate mailing list.
- Sender: email@example.com
So zwischendurch, passt irgendwie vielleicht auch auf One Stop
Billing, weniger Wettbewerb, alles wird teurer.........
From: Robert Weissman <firstname.lastname@example.org>
A Bleak Week for Communications Democracy
By Russell Mokhiber and Robert Weissman
It was a bleak week for communications democracy in the United States.
In what would be the largest merger in corporate history, MCI WorldCom
announced its $115 billion proposed takeover of Sprint. The banner
headlines on the MCI-Sprint merger overshadowed the same day's news that
the number one radio chain in the United States, Clear Channel, proposed
to take over the number two chain, AMFM, in a $23 billion deal. Then, two
days later, the Federal Communications Commission (FCC) announced its
approval for the merger of local telephone service providers SBC and
Wall Street seemed happy with all of the mergers. Stock prices went up,
and the investment banks that brokered the deals will surely collect
But citizens are not likely to make out as well.
Long-distance prices have been tumbling, especially in recent months. The
driving force leading to five-cent Sundays, seven-cents-a-minute calls and
other discounted prices has been the competition between AT&T, MCI and
Sprint. With MCI and Sprint a single entity, there is every reason to
expect the price cuts to slow or perhaps halt together.
The $72 billion SBC-Ameritech merger, announced more than a year ago but
just now approved, creates a similar problem in the local telephone
market. The break up of AT&T created seven regional bell local phone
companies. The merger of Bell Atlantic and Nynex, plus the mergers of
Southwest Bell, Pac Bell and Ameritech (now combined into SBC) have
dropped the number to four. There is virtually no competition in local
phone service provision now, but the ongoing spate of mergers means that
direct competition, if it ever comes, will be much less intense than it
would otherwise have been.
There is no question that eliminating or precluding future competition is
a driving force behind the telecom mergers. An even bigger factor,
particularly in the MCI-Sprint merger, may be the companies' desire to
provide a full-range of telecommunications services -- long-distance,
local calls, cellular service and internet access.
The companies says that such one-stop shopping will benefit consumers by
making their life easier. But the difficulty in managing separate
providers for long-distance, local, cellular and internet service is
minimal, so there is very little potential consumer gain. The real effect
on consumers of these bundled packages is likely to be price-gouging, with
consumers paying more for the whole package than they would if they were
able to shop separately for each component.
The one-stop shopping issue highlights as well an even more profound
challenge posed by the telecommunications merger wave. The very fact of
such a high level of industry concentration will give the giant
telecommunications companies immense control over determining the shape of
the telecommunications infrastructure. At stake will be matters such as
the accessibility of high-speed internet access.
So too does concentration on the radio spectrum vector the future of radio
in a worrisome direction. Post-merger and after likely divestitures, Clear
Channel is expected to control 850 radio stations. Clear Channel and
Infinity, a division of CBS and the other major radio chain, would
dominate the commercial radio spectrum. Their national reach would give
Clear Channel and Infinity significant advantages over rivals in courting
advertisers, which makes it almost inevitable that much more industry
concentration is soon to follow.
Almost as certainly, that concentration is likely to increase what
University of Illinois Professor Robert McChesney calls the
"hypercommercialism" of the medium. It will promote even more
homogenization among commercial stations and a further shrinkage of
democratic space. And it may well affect the fashion in which radio and
internet technologies converge.
There is a grouping of industry analysts, not all of them tied to
communications companies, who dispute the dangers of corporate
concentration. Perhaps their favorite argument is that the Internet will
obviate concerns about concentration in the communications industry. But
this claim fails to deal with the multitude of ways in which industry
concentration will shape the future of the Internet itself.
Can the regulators be counted on to act in furtherance of democracy and
block the newly announced mergers? The same regulators who blessed the
marriages of SBC and Ameritech, Vodafone and AirTouch, Bell Atlantic and
Nynex, CBS and Infinity, Disney and ABC, TimeWarner and Turner? Maybe not.
Although he raised concerns about the MCI-Sprint proposal, FCC Chair
William Kenard also followed up the merger announcement with the
statement, "We are certainly not per se against consolidations,
particularly those that achieve the kinds of economies of scale that can
help consumers." How "economies of scale" are achieved in the merger of
companies already worth tens of billions of dollars remains a mystery.
But although the regulatory process is supposedly apolitical, regulators'
backs tend to stiffen when citizens cry out for action. As always, bursts
of democratic energy are the best way to stave off corporate incursions on