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SEARCH RESULTS - STORY
The 'Big Brother' who never was
AOL Time Warner was never as dangerous as some critics suggested
 
Matt Welch
National Post
The Associated Press
Despite forecasts of "the end of an independent press" when AOL merged with Time Warner, it has not become the media monster predicted. But that does not mean there is no cause for concern with regard to other media conglomerates, especially as U.S. media-ownership rules may be eased.
 
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LOS ANGELES - When the Berlin Wall and a half-dozen Communist regimes fell in 1989, long-toiling dissidents were right there, appearing on live television, speaking at massive pro-democracy rallies and taking the reins of provisional post-totalitarian governments.

Yet their self-appointed counterparts in the United States were strangely silent last week, despite the momentous near- collapse of the entity they have variously described as "Big Brother," "the end of an independent press" and the harbinger of a "new totalitarianism."

What was this beast that nearly swallowed the world's oldest democracy? AOL Time Warner Inc., which on July 18 suffered an accounting scandal, a 5% drop in its already-battered share price and the resignation of disgraced chief operating officer Bob Pittman.

Suddenly, the standard-bearer for the scary-sounding media-business fads of "synergy" and "convergence" was admitting defeat and talking openly about a new strategy of "dis-aggregation." Big Brother was revealed to be little more than a holding company for various media divisions that despised each other.

It was a far cry from Jan. 11, 2000, when America Online's takeover of Time Warner was greeted with a chorus of boos and calls for anti-trust intervention by dozens of journalism professors, political columnists and media analysts.

The sight of the dominant Internet-access provider merging with the owner of Time, CNN, Warner Music and Time Warner Cable set off a boomlet of apocalyptic hyperbole.

The merger press conference had barely finished when Tom Rosenstiel, director of the Project for Excellence in Journalism, warned The Associated Press about "a new era in American communications that sees the end of an independent press." Hartford Courant columnist Susan Campbell thundered against "the monopoly of ideas that rests in the wicked little hands of a sullied few." Two days later, columnist Robert Scheer, writing in the Online Journalism Review, groused it was time to "forget the Internet as a wild zone of libertarian freedom."

The gloom was not limited to south-of-the-border universities and newspapers. Donald Gutstein, a communications lecturer at Canada's Simon Fraser University, told The Toronto Star's Mitch Potter on Jan. 12 the merger was "grim news for Canadian expression, frankly. AOL Time Warner and whatever ubiquitous combinations of companies that follow will come at us through every possible medium. We can't stop them."

Many of these ominous complaints were groundless on their face: No division or product line in the new company, with the exception of AOL's free instant-messaging service, came within screaming distance of cornering 50.1% of any market (a decent enough definition of the word "monopoly"). And the low cost and ease-of-use of the World Wide Web virtually guaranteed that an independent press -- not to mention the hacker-anarchist-libertarian bloc -- would have the kind of access to publishing their forebears would have gladly died for.

So why dredge up these bogus predictions? Because the Federal Communications Commission (FCC) -- the U.S. government body that oversees the newspaper, broadcast, cable and telecommunications industries -- is preparing its most ambitious overhaul of media regulations since at least 1996, the year of the landmark Telecommunications Act. That law, which radically altered the media and telecom landscape in the United States, sailed through Congress without significant public opposition ... except from the very same people who were warning us about AOL-Time Warner's "brave new world." This time, ironically, they may be closer to the truth.

With the latest round of corporate scandals in the United States -- including massive bankruptcies and accounting-fraud investigations at the long-distance companies WorldCom and Global Crossing -- recent scrutiny of the Telecom Act has focused primarily on its provisions for the telephone industry, which is in a shambles (AT&T, for example, announced a second-quarter loss this week of nearly US$13-billion).

My own local cable monopoly, Adelphia Communications, had its owners hauled off to jail on fraud charges just this Wednesday. The FCC, which normally spends its time saying yea or nay to mergers, has found itself in the awkward position of having to make sure the collapse of such companies as WorldCom does not do things like wipe out half the Internet (which runs through WorldCom's backbone).

But to the media consumers I know, the most noticeable effect of the Telecom Act was the way it transformed commercial radio into something no longer worth listening to. Before 1996, no company could own more than 40 radio stations in the entire country, or more than four in a single market (two each on AM and FM). Now, companies can own up to eight stations in one city, an in charge of sweeping reforms at the FCC is cause for alarm in and of itself.

Yet there is no Big Brother here, and there won't be -- such overheated language serves mostly to cry wolf. There are, however, a handful of drunken uncles crashing about, handing out twenties to the referees. In a season of corruption scandals, demanding they play fair is simply a matter of self-protection.

 Copyright  2002 National Post
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