The Reluctant Planner

FCC Chairman Michael Powell on indecency, innovation, consolidation, and competition.

Nick Gillespie, Jesse Walker & Drew Clark from the December 2004 issue

(Page 3 of 9)

Reason: Let's move to the very political issue of the media ownership rules.

Powell: We're not talking about media ownership. We're talking about broadcast ownership. I'm troubled by the continued approach in which media that are extremely competitive with each other--media that compete for news, information, resources--are nonetheless cut up and categorized differently and then get entirely different regulatory regimes.

Reason: Can you give a quick example?

Powell: One of the biggest firestorms was over this national cap [on what percentage of the national television audience a single owner can reach], whether it was 35 percent [the former cap], 45 percent as we suggested, or 39 percent, which Congress picked. Going to 45 percent means maybe one to two more stations per network in the United States. That's all that means. So a broadcast network is only allowed to reach with its product 45 percent of America.

But why can cable reach 100 percent? Satellite television can reach 100 percent. The Internet reaches 100-plus, if you want to go outside the U.S.

Reason: So why 45 percent? Why not 46 percent? Why not 100 percent?

Powell: This is where it's not just an academic argument. If Congress wants, as the 535 representatives of the American public, to say we're going to draw a limit, they can draw a limit. They can delegate that authority to an institution like this one, whose duty it is to follow the limit. And no matter what my personal view is, I'm not going to debate whether there should be a limit.

Reason: If Clear Channel suddenly owns six, seven, or, under a different regime, a dozen radio stations within the same market, is that something people should worry about?

Powell: Yeah, absolutely. It's something the commission worried about. It's rarely reported, but we tightened the radio rules. I hate when people describe my views as laissez faire, because I don't think there's any such thing. Capitalism would not work without the rule of law, and it would not work without certain understandings about rules and limitations.

I'm an antitrust lawyer. I completely accept that concentration at some measurable level becomes anti-competitive and harmful to the American consumer.

Reason: Can you give an example of that?

Powell: There's Standard Oil.

Reason: Most of the revisionist histories of Standard Oil show that by the time it had its maximum market penetration, it was actually charging less for oil.

Powell: You may know more about the specifics of Standard Oil than I. But I do believe in the cases and the theories that show that at a certain level of monopolistic control people can extract monopoly rents and affect output in a way that harms the American consumer.

I think the United States, more than any other nation in the world, has got antitrust right. The presumption is business is OK. The presumption is mergers are not in and of themselves bad. People forget that monopoly isn't even illegal. The only thing we're looking for is whether the monopoly actually causes anti-competitive effects that are measurable on consumers. I've worked at the antitrust division. I've seen cases where we believed unequivocally that it did. You can find them. You could find the price increases, you can find the data that would demonstrate that and that you needed to do something about it.