Answering The Critics

We member of the CCFB recognize that not everyone will agree with our viewpoint or proposal, and so we would like to offer some responses to our potential critics.

• Some people might say that the current system is fine. Hundreds of millions of homes across America receive cable television and other broadcasting and media services in an efficient, and certainly abundant manner.

  Well as we have already outlined in the previous sections this is not the case. The current system IS flawed. Many Americans are over-charged for their cable service, and because of deregulation of telecom companies, there are no competitors in their area. This allows the media conglomerates in particular municipalities to simply buy-out any local competition and put rates at whatever level they see fit. They in effect destroy the normal market forces that would keep prices low. This also applies to phone companies with regards to DSL service. Now while our current proposals do not address these problems, they will begin the process of correcting them.

• Certain critics would state that if you reclaim the digital broadcasting spectrum and auction it off, then the same media conglomerates that control it now will simply buy it all up. What is more, it might even facilitate large monopolies.

  While this is certainly a possibility it would not be any worse a situation than presently exists. The passage of the 1996 Telecom Act, as stated in previous sections had lead to massive consolidation, mergers, and the formation of monopolies. If the same media conglomerates who dominate broadcasting now were to gain control of the spectrum it would still be better than the status quo, because at the very least the federal government would receive an estimated $70 billion from the auction. With our present national deficit at record highs, this added revenue would be most welcome. Another possible way to address this potential risk is that you set percentage caps for how much of the spectrum any one corporation could control, and that any mergers would not entitle them to more of a percentage. You could also reserve a modest amount of the digital broadcasting spectrum, say 10% nation wide maybe less if need be, to smaller more local broadcasters.

• Another very popular concern is that if media conglomerates are required to pay for their use of the digital broadcasting spectrum then they will simply pass on the cost to their costumers.

  This, like in the previous concern, is a possibility. However, in the original formulation of the Telecommunications of 1996 the give away of the digital spectrum was simply supposed to be a loan to entice broadcasters to switch over to a universal digital format. Since broadcasters have generally not held up their side of this bargain, digital broadcasting is generally reserved for high-paying premium cable customers, and have also decided to broadcast in several different digital formats, the current number is twelve, there is no reason for the government to hold up its side of the bargain. Furthermore, as Larry Irving, Assistant Secretary of Commerce for Communications and Information House Commerce Committee, has testified, “The original plan was to loan the digital spectrum to broadcasting companies, only for it later be returned and auctioned off.” Since broadcasters are certainly aware of this being the original intent of the federal government they have no justification to increase their rates. To ensure that this does not occur, the federal government could attach an eligibility requirement that before a broadcaster is able to bid on the spectrum they most agree to not increase rates for their customers beyond a nominal percentage (1%) a year and not above a certain percentage cap (to be decided within Congress) as a result of costs from the auction.