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Copps Concerned About Media Consolidation and Deregulation and Cites the Need for Net Neutrality

WASHINGTON, July 14, 2010- Federal Communications Commissioner Michael J. Copps fears that industry consolidation will overlook public interest and damage the country’s media landscape.

Speaking at a forum concerning the Comcast/NBCU merger at Northwestern University Law School on July 13 Copps feels like this merger is unique, and said “While in some respects it is similar to transactions that we have witnessed before, in other important ways it is new and novel,” since the merger includes broadband and the internet.

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WASHINGTON, July 14, 2010- Federal Communications Commissioner Michael J. Copps fears that industry consolidation will overlook public interest and damage the country’s media landscape.

Speaking at a forum concerning the Comcast/NBCU merger at Northwestern University Law School on July 13 Copps feels like this merger is unique, and said “While in some respects it is similar to transactions that we have witnessed before, in other important ways it is new and novel,” since the merger includes broadband and the internet.

According to the commissioner, the fairness assurances and conditions made in the Comcast/NBCU proposal are not adequate, especially when the future of the internet is concerned. He said we cannot trust decisions to be made in the industry by those without public policy consideration. By doing so, he said Americans would “lose the media and we set ourselves up to lose everything else.”

In the last few decades, he said public interest has been overlooked by the government as industry consolidation was encouraged. He blamed the combination of “bad private choices and equally horrendous public policy choices” for these damages. Copps said the FCC, the agency charged with protecting consumers, has allowed serious harm to come to localism, diversity, and competition, which are the basic tenants of public interest.

Michael J. Copps

In addition to public interest, Copps examined the adverse impacts of “heedless deregulation” on society in the last decade. Using the news and information industry as an example, he said that consolidation and newsroom cut-backs, combined with the FCC’s disregard for public interest, has not revived the news business. Instead, he said it “condemned us to less real news, less serious political coverage, less diversity of opinion, less minority and female ownership, less investigative journalism, and fewer jobs for journalists.” He said we are close to putting democracy in danger by denying our country the news and information and civic dialogue it depends on.

However, Copps said there is much promise to be found in the internet, calling it “America’s Great Enabler.” He said every issue facing the United States has some type of broadband component in its solution. Therefore, we need to keep the Internet open and dynamic in order to avoid the problems currently facing traditional media sources.

He wants consumers and industry to know what their protections and rules are online, and to enact some type of forum where problems can be fixed when the rules are unclear or broken. In response to criticism that this type of system is government meddling for too bureaucratic, Copps said this would merely be consumer protection, which the FCC was designed to promote and oversee.

He also delved into the topic of promoting diversity, one of the FCC’s central tenants. He said that diversity online, which includes all varieties of content, opinion, and format, is essential to keeping an open internet. However, he also focused on diversity ownership, saying that minorities make up 34 percent of the population but only own 3.15 percent of the full-power television stations. Only 5.8 percent of television stations are owned by women, who make up 51 percent of the population.

Therefore, minorities’ interests, specific challenges, and their contributions do not have adequate channels through which to receive attention. Copps said “shortchanging ownership diversity is shortchanging our civic dialogue.”

Overall, he was pleased that FCC Chairman Genachowski has set up a review proceeding for the Comcast/NBCU merger that includes in-depth investigation and consideration. He also thanked members of Congress and members of the press for the involvement and attention they are giving to the proceedings. He asked the public to stay involved in these types of debates and discussions because the future of the country will depend upon the type of media that it will have.

Lindsey is working with BroadbandBreakfast.com through an internship with the National Journalism Center. She graduated from Virginia Tech with a degree in professional writing. She has worked in Virginia Tech's public affairs department, and she was an assistant editor of one of the college's news-magazines. Lindsey is from Chatham, Va.

Antitrust

Consolidation, Bloat, and a Waning American ‘Brand’ Hurt the Economy, Says Tim Wu

He argued that fundamental changes must be made to restore peoples’ faith in an American system that works for everyone.

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Photo of Tim Wu from January 2017 on Wikipedia Day used with permission

WASHINGTON, January 26, 2022 –White House Special Assistant Tim Wu said Wednesday that the U.S. economy is over-consolidated and bloated in the middle.

Speaking at an event hosted by the Institute for Local Self-Reliance, Wu, a member of the National Economic Council with a portfolio over Technology and Competition Policy, argued that that the “American dream” has suffered major setbacks in recent decades.

Wu, who is credited with coining the term “net neutrality” and a longstanding critic of telecom monopolies, has more recently become an outspoken critic of big technology companies.

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“We can see very vividly how fragile this concentrated economic system we built has been and how poorly it is working for the whole country,” Wu said.

“Our country has become too centralized. It is too national in its character – in terms of where businesses are location – too centered on consumption, as opposed to production.

“Too many of the [economic] returns go to too few people who often live very far away from the communities they serve.”

Hearkening to the post-World War II decades in which Western nations endorsed significant government intervention in the economy as part of social democracy, Wu said that America is “relearning the virtues and merits of a mixed economy – that is the truer American tradition of small and medium business – market structures where [people] can all survive and prosper; what [President Joe Biden] calls ‘an economy that works for everyone.’”

Can elements of a new form of social democracy be revived in a technology-drenched age?

Wu distilled his criticisms to three primary points: Too many industries have become too consolidated, a bloated “middleman” economy has emerged, and the “American brand” has diminished.

“We have all seen so many industries consolidate into just the ‘big three’ or ‘big four,’” Wu said. “That is a traditional problem that I think extracts a lot from the economy.”

Wu went on to explain the “middleman” economy – a rise of a “highly concentrated middle layer” across many industries. This bloat on the processing end takes place somewhere between the inception of a product or service and the consumer is extracting too much revenue, Wu said.

“When you think about monopoly – which is just high prices – it leads to this problem where the middlemen have power over their suppliers and are able to squeeze their suppliers and also often able to squeeze their employees,” Wu said. This is “a new kind of problem for the economy, and one that we need to face.”

ILSR’s Stacey Mitchell and Tim Wu.

What is the ‘American brand’?

Wu’s final point related to what he referred to as the “American brand.”

“There has been a real sense that the sense of opportunity that has been the ‘American brand’ has diminished,” he said. “The statistics are a little depressing that confirm this.”

75 percent of U.S. industries are controlled by fewer companies than they were 20 years ago, Wu said. He pointed to mergers that skyrocketed in the 1980s and predicted that 2022 will feature a record number of mergers.

“These are real challenges and I just want to assure you that the administration of the White House is very focused on [them] and we see it not just in terms of the economy, but in terms of the Democratic soul of this nation,” Wu said. “Freedom and opportunity are not trivial things when it comes to describing what democracy is all about.

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Social Media

Vague Social Media Laws Create Fear in the Middle East. Can Encryption Tools Help?

Experts discuss how social media is being treated in the Middle East and how to respond.

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Chris Meserole, senior fellow at the Brookings Institution

WASHINGTON, January 25, 2022 – Far from being the savior of democracy in the Middle East, four experts said Monday that social media, and government regulation of it, is beginning to hurt civil rights activists.

The world is witnessing an increase in laws restricting social media access and hence regulating freedom of speech, especially in the Middle East, agreed the panelists, speaking at a Brookings Institution event.

Dina Hussein, the head of counterterrorism and dangerous organizations for Europe, the Middle East, and Africa at Facebook, and Chris Meserole, a senior fellow at the Brookings Institution, stated that too many countries are passing vague laws about what is and isn’t allowed on social media.

These new laws are purposefully unclear, they said. This new strategy has made it easier for the government to take down posts and restrict critics’ internet access while leaving up the posts of supporters and government officials.

These laws also spread fear within the regime because the vagueness puts anyone at risk of being arrested for something they post, they said.

When asked what can be done, Hussein said that Facebook promotes honesty through a website that focuses on Facebook’s own transparency and raises awareness of other countries’ laws for their users. In addition, Facebook is personally working to support civil rights activists in the areas of the world that are implementing such laws, Hussein said.

Encryption to avoid surveillance

Meserole said that democratic governments should not be fighting “fire with fire.” Instead, he wants civil rights groups in the Middle East to strengthen their ability to operate without social media. Many activists rely on social media to build their bases and spread their message. So, Meserole emphasized that as the authoritarian regimes increase their abilities to watch, manipulate, and censor social media, democratic governments should invest in technology that will help those who are fighting for civil rights encrypt their media or work outside of the surveillance of government.

Another concern of the guest speakers was the rise in online misinformation and the trend of authoritarian regimes making new accounts to promote their message rather than trying to censor the language of the opposition.

Some people wonder why these groups don’t just eliminate media within their countries. Meserole’s answer is that the government has it is own various benefits to having social media, and so they pass vague internet laws that allow them to have more legal control instead.

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Antitrust

FTC Mum on Microsoft-Activision Deal, Proposes Review of Merger Guidelines

The deal would elevate Microsoft in an even more favorable position in the games-as-a-service market.

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FTC Chairwoman Lina Khan on CNBC last week

WASHINGTON, January 24, 2022 – As Federal Trade Commission Chairwoman Lina Khan does media rounds this past week, she has refused to comment on last week’s news that Microsoft has agreed to buy video game making giant Activision-Blizzard for nearly $70 billion.

As per policy, the FTC and the Department of Justice, which on Tuesday jointly held a press conference on merger reform on the same day of the announced consolidation, said they could not comment on the deal, which would increase the Xbox maker’s gaming market share and allow it to better compete with Japanese behemoth Sony.

During the press conference, Khan, installed as chairwoman in June as an already outspoken critic of certain big tech practices, announced that the organizations would be launching a review of merger guidelines. Khan stressed that the current guidelines do not adequately protect consumers and promote competition in the era of the digital economy.

“While the current merger boom has delivered massive fees for investment banks, evidence suggests that many Americans historically have washed out with diminished opportunity, higher prices, lower wages, and lagging innovation,” she said. “These facts invite us to assess how our merger policy tools can better equip us to discharge our statutory obligations and halt this trend.”

She reiterated those goals on a CNBC interview on Wednesday. The purchase of the highly influential Call of Duty franchise maker will have to go through her office. It also presents another stress test for the office, as it is already engaged in an existing lawsuit against Facebook practices. Both Facebook and Amazon have asked for Khan to be recused from investigations in their companies because of her past positions on them.

The deal would significantly expand Microsoft’s Game Pass platform, which offers free games to play for a monthly subscription. Microsoft announced on the day of the proposed deal that Game Pass surpassed 25 million subscriptions.

“Upon close, we will offer as many Activision Blizzard games as we can within Xbox Game Pass and PC Game Pass, both new titles and games from Activision Blizzard’s incredible catalog,” said Microsoft Gaming CEO Phil Spencer said in a statement.

Despite its numerous successful intellectual properties, Activision Blizzard has been marred with scandal in recent years. In 2021, the company was sued by California Department of Fair Employment and Housing for promoting a “frat boy” culture, whereby female employees were not only allegedly discriminated against, but also subjected to sexual assault and misconduct.

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