Molly Ivins August 19

AUSTIN — Rip-off update: You doubtlessly recall that when the Telecommunications Act of 1996 was passed, both our pols and our telecom execs swore to us it would increase competition, drive down prices and touch off "an Oklahoma land rush" of new companies jostling into the field, each and every one dying to offer us a "buffet" of new services. Here we are, 18 months later, and the wonders of deregulation have encouraged monopolization and raised prices. Surprise! Hello, sucker.

Mergers involving telephone, cable, long-distance and broadcasting companies topped $103 billion less than a year after the act was signed, and that was before some of the biggest mergers yet. Meanwhile, cable TV rates rose 7.8 percent, local phone rates went up 0.9 percent and long-distance rates were up 3.7 percent within the year, according to the Bureau of Labor Statistics.

My favorite wholly owned subsidiary of the telecommunications industry, Rep. Billy Tauzin of Louisiana, chairman of the House telecom subcommittee, blames all this on Reed Hundt, retiring chair of the Federal Communications Commission. "I hope the next chairman will help reinvent the FCC, downsize it and make it more friendly to users and the economy," said Tauzin. I am seriously considering nominating the man for Nincompoop of the Year, despite the already crowded field.

Hundt has annoyed the telecom bidness by trying to cut cable rates, open local phone systems to competitors, require broadcasters to air educational shows for children and bar TV ads for hard liquor.

Last week, Hundt suggested that Congress pass new laws designed to resolve the legal battles stemming from the FCC's decisions since the law went into effect. "We need a faster, cheaper route for getting the legal issues of competition resolved," said Hundt. This moved a lawyer for GTE in the audience to tell Hundt that such a move would be "totalitarian." Throw the phone companies out of court? What is this, tort reform? Horrors.

The New York Times noticed a another nugget of broadcast news. Both the Sinclair Broadcast Group and ABC Television have decided not to use that nice additional space on the broadcast spectrum that Congress gave them — gave them — for high-definition TV.

You may recall that for 10 years, broadcasters lobbied Congress for free room on the spectrum so they could beat the Japanese and the Europeans into HDTV.

It was supposed to be a question of national security: Who knows what would happen if the Japanese beat us on HDTV? So Congress, which does appreciate those generous campaign donations from the broadcasters, up and gave them the new spectrum space. Even Bob Dole, never a fighting populist, said the giveaway was unconscionable and that the spectrum should have been auctioned off, as was done in the case of the cellular industry.

But you see, if the broadcasters use the new spectrum space for HDTV, for super-clear pictures and sound, that would use up all the space on the spectrum that each broadcaster was allotted. Whereas if that space is divided into four or five regular channels, with all kinds of special services like financial or sports data, why, then every broadcaster will have a little mini-cable company and they can charge for the services. So you see, instead of the broadcasters paying you for the use of your publicly owned airwaves, you'll have to pay them instead.

Don't care for that notion? Then I suggest you start making campaign contributions, too, in the form of public campaign financing, and get these hogs out the creek.

Lest you think we are picking on broadcasters, let us note for the record that merger mania continues across the board. According to the Christian Science Monitor, corporate mergers and acquisitions in the United States this year are off to their fastest start ever — more than 2,000 announced every three months.

The entire aerospace defense industry has been shrunk to three companies. We have exactly one airliner maker left, Boeing. And with deregulation in both utilities and financial services yet to come, we can expect even more concentrations.

What's going on here is not so much the creation of monopolies as the birthing of cartels. The new euphemism for it is "convergence," having nothing to do with harmonic hippie happenings. Convergence is neither a vertical nor a horizontal monopoly, but a sort of corporate affinity group. Naturally, the justification for all this is global trade — got to have bigger companies so we can compete with the Japanese, you know. Perhaps, or perhaps the mega-companies can just use their new market clout to stay home and exploit regional monopolies.

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Molly Ivins is a columnist for the Fort Worth Star-Telegram.

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