Constituency of One for FCC Chair

 

His Royal Highness, Bushy, of course. There aren’t many government officials who can keep their jobs when they are unpopular with the Congress, with the citizenry, and with the industry being regulated.

Today, the Federal Communications Commission is set to ram through two measures likely to roil the media and telecommunications industries and deepen political dissatisfaction with the agency’s chairman.

Kevin Martin, a 41-year-old Republican, has already drawn heavy criticism with his determination to pass a rule making it easier for media companies to own both newspapers and television stations in the top 20 markets. The five-member commission is expected to pass that rule and another saying that no single cable company can serve more than 30% of the nation’s cable subscribers.
[snip]
In a highly partisan capital, Mr. Martin is unusual in that he is coming under attack by members of both parties and several industries. The cable restriction, for instance, has stoked the anger of an industry that expected an orthodox laissez-faire Republican as chairman, only to find an aggressive regulator.
[From Industry Seethes as FCC Sets Curbs]

Mr. Martin’s only government experience seems to be his work on the Shrub’s 2000 Presidential Campaign, and on Kenneth Star’s impeachment theater.

Mr. Martin worked as a telecommunications lawyer in private practice and briefly assisted independent counsel Kenneth Starr in 1997 during the Whitewater probe. Later, he left Washington for Austin, Texas, joining then-Texas Gov. George W. Bush’s presidential campaign. Mr. Martin’s wife, Cathie, whom he met at Harvard Law School, also worked on the campaign.

In 2001, the newly elected Mr. Bush appointed Mr. Martin as an FCC commissioner. His wife worked for Vice President Dick Cheney for several years before moving to the White House’s communications office.

Despite what Amy Schatz asserts in the article, there aren’t many consumer groups who think Mr. Martin’s tenure is worth celebration. There might be some consumer groups who are members of the Christian-Taliban who celebrate Martin’s quest to “clean the smut out of the airways”, and protect our precious ears from dangerous words like fuck and shit, but these consumer groups don’t have the support of most of the nation. The only group who would praise Mr. Martin on the record is Consumer Union’s Gene Kimmelman, for some reason:

Consumer groups are among those who offer kind words for Mr. Martin. “He’s been as accessible as any chairman in the past 25 years to consumer interests. He’s reached out for input,” says Gene Kimmelman, vice president for federal and international affairs at Consumers Union.

Is indecency on cable really what is important?

Soon Mr. Martin’s concerns about indecency on television began to steer him into conflict with the cable and broadcast-TV industries. His staff proposed record fines against broadcast networks for showing racy programming. Mr. Martin suggested that the FCC should fine broadcasters for each instance of a profanity used during a show, instead of just one fine per broadcast.

Mr. Martin pushed for a fine in cases of inadvertent broadcast of profanities, such as an incident involving U2 singer Bono during a live broadcast of the Golden Globes awards. This summer, a federal appeals court sided with the broadcasters and tossed out the agency’s decision.

Mr. Martin has suggested that indecency laws should apply to cable programming, prompting an outcry about free speech. Profit-spinning cable shows such as “The Sopranos” and “Real Sex” on HBO are rich in profanity and sexual images.

Note that Mr. Martin doesn’t have much support:

Intense lobbying in Congress, the FCC and the White House paid off, as a stream of lawmakers began calling the FCC and sending letters decrying Mr. Martin’s plan. Internally, several FCC commissioners complained about the data Mr. Martin’s staff relied on in the report. Ultimately, Mr. Martin was forced to drop his proposal.

“Because we didn’t agree to [a-la-carte pricing] early in his tenure, I believe, and I believe the evidence is overwhelming, that he embarked on a punitive regulatory regime on the industry,” says Mr. McSlarrow, the cable association president. He says private enterprise is “more likely to get it right than someone who’s never been in the business world.”

The media-ownership rules up for a vote today have also sparked a backlash, this time in Congress as legislators complain Mr. Martin is rushing the issue onto the agenda. Yesterday, a bipartisan group of 25 senators warned in a letter to Mr. Martin that they will pursue legislation to block his plan if the FCC adopts it today.

On Friday, former and current Democratic presidential hopefuls Sen. John Kerry and Sen. Barack Obama threatened to block FCC funding to implement the new media-ownership rules. Veteran Michigan congressman John Dingell, head of the House committee that oversees the FCC, said he is “rapidly losing confidence” and recently opened a broad investigation into Mr. Martin’s management of the agency.

Seems only the White House is Mr. Martin’s supporter. Remind you of anyone?
(Digg-enabled full access to the complete article here)

John Nichols of the Nation writes:

The Federal Communications Commission has, as expected, voted along party lines to approve the demand of Rupert Murdoch and other communications-industry moguls for a loosening of limits on media monopolies in American cities.

Now, the real fight begins.

There was never any doubt that FCC chair Kevin Martin, a Bush-Cheney administration appointee and acolyte, would lead the two other Republican members of the commission to a 3-2 endorsement of a move to begin dismantling the historic “newspaper/broadcast cross-ownership” ban which has long served as the only barrier to the buying by one powerful individual or corporation of newspapers, television and radio stations and other media outlets in a community.
[Click to read more FCC Votes for Monopoly, Congress Must Vote for Democracy]

WaMu and Bankruptcy Reform

Reserved Light

Atrios linked to this news tidbit about how Blowback’s a bitch

Washington Mutual Inc. got what it wanted in 2005: A revised bankruptcy code that no longer lets people walk away from credit card bills.

The largest U.S. savings and loan didn’t count on a housing recession. The new bankruptcy laws are helping drive foreclosures to a record as homeowners default on mortgages and struggle to pay credit card debts that might have been wiped out under the old code, said Jay Westbrook, a professor of business law at the University of Texas Law School in Austin and a former adviser to the International Monetary Fund and the World Bank.

“Be careful what you wish for,” Westbrook said. “They wanted to make sure that people kept paying their credit cards, and what they’re getting is more foreclosures.”

Washington Mutual, Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. spent $25 million in 2004 and 2005 lobbying for a legislative agenda that included changes in bankruptcy laws to protect credit card profits, according to the Center for Responsive Politics, a non-partisan Washington group that tracks political donations.

The banks are still paying for that decision. The surge in foreclosures has cut the value of securities backed by mortgages and led to more than $40 billion of writedowns for U.S. financial institutions. It also reached to the top echelons of the financial services industry.
[From Bloomberg.com: Exclusive]

Prior to the 2005 reforms, if one had to choose between defaulting on a credit card and defaulting on a mortgage, the choice was pretty obvious. Not so much anymore. I wonder which of the 75 Senators who voted Yea would change their vote now? (Hillary Clinton abstained for some reason)

News America vs the World

News America has a dark reputation in the in-store media arena as well.

Tatsuda IGA

News Corp.’s trouble in aisle three – Jul. 20, 2007:
For months now, Rupert Murdoch’s quest for Dow Jones has riveted the business world. But another juicy melodrama is unfolding at News Corp., one that may shed some light on how the $25 billion company sometimes does business.

It involves a little-known subsidiary called News America marketing, which comprises the bulk of News Corp.’s magazines and inserts division. It produces newspaper coupon inserts, in-store supermarket ads, and the like. That may seem boring next to, say, movies or MySpace, yet, its profitability is anything but: Its 28% operating margins are the highest at News Corp., while operating profit is triple that of Dow Jones (Charts). Even more scintillating is a series of lawsuits alleging that News America used anticompetitive behavior to try to drive its rivals out of the market, and the recent emergence of a former employee who claims the company tried to pay him off to keep quiet. His lawyer: Philip Hilder, best known for representing Enron whistleblower Sherron Watkins. The saga has become the talk of the industry.

News America’s $1.1 billion in sales make it a small player by Murdoch standards, but it has a market dominance that’s unrivaled in most industries: It controls 50% to 60% of the insert market and as much as 90% of the in-store business, estimates analyst Robert Evans of Craig-Hallum Capital Group. “They are the hands-down 800-pound gorilla,” says Peter Hoyt, executive director of the In-Store Marketing Institute, a trade association.

It’s a gorilla that likes to throw its weight around, according to four separate lawsuits filed by competitors that accuse it of using illegal tactics against them.

A business acquaintance used to work at News America, and is full of stories of anti-competitive behavior and shitty treatment of employees, but of course, without hard evidence, and subsequently no involvement with this case:

But now there may be a smoking gun in the form of an ex-employee who is alleging unsavory conduct on the part of his erstwhile employer. Robert Emmel, a former account manager who worked in in-store marketing, was fired late last year; a few months later, after Floorgraphics subpoenaed him as part of its lawsuit, Emmel revealed he had kept a copy of his computer hard drive because, he said in a deposition, he “had some concerns about some of the business practices that News America had engaged in.” Just what is on those disks is still unknown, but News America isn’t taking any chances: In April the company sued Emmel personally, alleging, among other things, breach of contract and misappropriation of trade secrets. Emmel countersued under Georgia’s RICO statute.

The charges in Emmel’s countersuit read like headlines ripped from Murdoch’s New York Post. Among them: “the extortionate use of economic fear,” “theft and scheme to commit wire fraud,” and the allegation that News America broke into Floorgraphics’ computer system 11 times during one three-month span.

Emmel also alleges that News America’s president, Christopher Mixson, offered him $30,000 in “severance” after Emmel told a colleague he was weighing speaking with the state of Minnesota’s attorney general’s office, which is a co-plaintiff in one of the lawsuits. Reached for comment, Emmel would say only, “I’m a pro-justice individual.” Mixson declined to comment.

As for Carlucci, a quick look at his background suggests a man with a soft spot for tough guys and how they operate. A board member of the Guardian Angels, he has invited founder Curtis Sliwa to speak at a company meeting for several years running. And according to the Valassis lawsuit, Carlucci once tried to motivate his sales force by playing a scene from the film The Untouchables in which Al Capone crushes a rival’s skull with a baseball bat. In Murdoch’s eyes, though, Carlucci is a star: In 2005 he gave him the added job of publisher of the Post, replacing Murdoch’s son Lachlan.

(previous coverage of Carlucci and News America)