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2004-02-13

Cable Giant Comcast Bids For Disney

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Comcast, the largest cable operator in the nation, launched a hostile bid to buy the Walt Disney Company that would create a powerful media conglomerate rivalling Time Warner in size and scope. Two dissident FCC commissioners say the deal raises big concerns about the increasingly concentrated media marketplace. [includes transcript]

In a takeover play for the Walt Disney Company that stunned Wall Street and Hollywood, cable giant Comcast this week launched what’s known as a hostile bid to buy one of the biggest names in entertainment. The deal is potentially worth $66 billion and it represents the second-largest hostile bid in U.S. corporate history. A takeover of Disney by Comcast would create a powerful media conglomerate that could rival Time Warner in size and scope. It would also give Comcast control of the powerful ESPN sports cable channels.

This comes as Disney chairman and CEO Michael Eisner is under intense public pressure from dissidents and critics. It also follows the recent takeover of DirecTV by Rupert Murdoch’s News Corp. And it comes as activists continue to fight attempts by the FCC to pave the way for consolidation of media ownership. In fact, Murdoch predicted recently that over the next three years or so, three media giants would dominate the industry by combining content and distribution. He said, "There will be us, Time Warner and maybe Comcast-Disney" or whoever clinches a deal.

FCC chairman Michael Powell, the son of General Colin Powell, refused to comment on the deal, but dissident commissioners Michael Copps and Jonathan Adelstein said the deal raises big concerns about the increasingly concentrated media marketplace. Consumer advocates are saying they will fight the merger as part of the bigger battle over control of the public airwaves.

Transcript

This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We turn now to Jeff Chester, executive director of the Center for Digital Democracy. Can you talk about the significance of what could be the largest media conglomerate in the world?

JEFF CHESTER: Well, Comcast wants to be a mega, super, media monopoly. You know, monopoly flows in Comcast’s veins. It’s a very dangerous merger here, because what Comcast really wants to do — it already swallowed up AT&T last year, AT&T high speed internet. It’s the largest cable company in the United States. It’s the most powerful company, deciding what we see on cable in terms of programming. It’s the number one provider of broad band, of high speed internet in the country. In addition, it dominates 17 out of the 20 largest markets in the United States, so Comcast is in a position to really determine what people see on television, and the future evolution of the internet. It’s a dangerous proposal that has to be stopped. Of course, it’s a legacy in part of the Bush FCC, which has signaled that all these deals are acceptable.

JUAN GONZALEZ: Well, Jeff, already Comcast with AOL Time Warner are basically in control, aren’t they, of most of the cable systems around the country?

JEFF CHESTER: Comcast is more powerful. It actually forced — look, Comcast politics are reason enough, I hope, for your listeners to work with us and the coalition of groups like Free Press and Common Cause that worked on media ownership. Comcast is opposed to a policy that would insure the internet remain open and non-discriminatory. Comcast is opposed to media ownership safeguards. Comcast is opposed to cities like San Jose, California, asking for a small amount of channels to be preserved for public interest use. They are opposed to the public interest dividend. They have monopoly in every ounce of their body. They will use their power to control what we see on television, to change the internet to commercialize it more, to push Disney and advertising commercialism to kids and others. And, they’re so powerful that even Time Warner — you’re right, the second largest cable company according to press reports — Time Warner had to agree as part of the deal last year, to never compete against Comcast in the digital television programming market. If Comcast can bring powerful Time Warner to its programming knees, imagine what it will do to others, and more importantly, for the dissident, alternative, non-commercial and competitive voices that might emerge in the future, for everyone else who doesn’t have the power of a Time Warner, if this merger goes through, and the absence of serious safeguards for programming and online, our voices will be further marginalized.

JUAN GONZALEZ: And, Jeff, the ability for a cable operator to buy a television network, that previously had been prohibited. How did that develop, now — that it’s possible.

JEFF CHESTER: That’s a good point, because we are hoping that we can get congress to restore it. What happened was, look, these media ownership rules, as you know, have all been changed because of lobbying by the big companies. So, the cable industry, including Comcast, went to congress as part of the 1996 feeding frenzy on the Telecom Act and they removed a law that prevented a cable company from buying a TV station in the same town. There was still a rule on the books of the FCC. Time Warner took that to court. In 2002, the court said, FCC, you have not proved that the rule was necessary. That’s generally because under Republicans and Democrats under the FCC until recently, they have not fought for the public interests. They didn’t provide the court with information to show why it’s bad for the company that controls your cable to also control television stations. The court threw it out in 2002. FCC chair, Michael Powell, over the objections of democratic colleagues like Michael Copps, refused to restore it. Michael Powell has now set the stage for this merger. In addition to the biggest cable company buying one of the three major networks, if Michael Powell’s new rules go through — right now, they’re temporarily frozen because of a court case — then Comcast can turn around tomorrow and it could buy the Tribune company, which owns the "L.A. Times" and the — the "Baltimore Sun." It could buy "The New York Times" company. There could be all combinations. It’s really a threat to the future of programming, with digital capacity, and it’s particularly a threat to the internet, and that’s why we have to fight and stop this deal.

AMY GOODMAN: Jeff Chester, I wanted to ask you something on a somewhat related issue. We had talked to you when CBS refused to air the moveon.org anti-Bush ads during the Super Bowl. They said they don’t want advocacy adds. I’m looking at the Center of American Progress and it says, apparently while there’s insufficient sources for coverage, there’s plenty in the kitty for propaganda. The administration has launched a $.5 million advertising campaign touting the medicare law and plans to spend another $10 million on brochures. The ads were developed by a media company that has done work for President Bush’s re-election campaign and groups aligned with the pharmaceutical industry. While CBS refused the other ads, they will be running these. You originally had talked about CBS doing a favor for the Bush administration by not running the anti-Bush ads.

JEFF CHESTER: That’s exactly right. They did not run the Bush ads in part because they knew the administration could come in and change some congressional proposals that would limit the number of TV stations that CBS could own. That reminds me — you know, Comcast refused to run anti-war ads created by groups during the recent fighting in Iraq. Look, you will now have Comcast, one company, determining in the largest markets — after the merger, they say they will be in 23 of the largest markets — determining what advertising, what programming can go through. The Comcast is tied to the Bush administration. Its president is one of the $100,000-plus pioneers for the Bush re-election campaign. Comcast’s president, Brian Roberts, is giving money to Bush. Clearly, political favors are being made by the television networks in order to get favorable treatment. That may include shutting other voices out that are critical of the powers that be. So, it’s a dangerous situation, and Comcast, in particular, is a digital octopus that, you know, is insensitive to the concerns of citizens and communities and consumers.

AMY GOODMAN: I wanted to play one of the move-on ads that is now airing, while not on CBS nationally, on other networks. This is from moveon and those watching us on Democracy Now! TV on public access TV stations and Free Speech TV, they will see a lie detector going on during Bush’s statements, and for those in radio, you can just imagine that. ADVERTISEMENT: Ladies and gentlemen, President George W. Bush. GEORGE BUSH IN ADVERTISEMENT: Saddam Hussein has an advanced nuclear weapons development program. Saddam Hussein recently sought significant quantities of uranium from Africa. Saddam Hussein aids and protects terrorists, including members of Al Qaeda.

AMY GOODMAN: The ad ends with the print words: "Americans are dying for the truth." Your comment, Jeff Chester.

JEFF CHESTER: The networks and cable companies are clearly stifling debate. They have been asking to work their way with congress mostly with both parties up until recently and at the FCC, so they no longer have any obligation to air or distribute these kinds of ads or — and they’re opposed to any obligation that would require them to put the candidates on the air and not charge them for debate. You know, there’s a tiny handful as you said, Rupert Murdock said we’ll be down to three very soon. In the new revised addition of the book, "The New Media Monopoly," which is coming out in April. We are down to five or six. But that was clearly before Comcast offered to buy Disney, so we cannot have a system, whether it’s a multi-channel system and particularly internet broad band, where two or three companies that have political and commercial motivations determine what we see and what we hear and whether or not there can be this kind of diverse voices and freedom of expression. This is the time to — if this — if this deal goes through, I hope your listeners will join with us to fight and stop it and work on creating some new safeguards because if there is a new administration coming next year, we cannot be sure, and Senator Kerry has his own connections to the cable industry. We have to insure that the public policies open up for the airwaves and the administration.

JUAN GONZALEZ: Jeff Chester, one final question. The case in Philadelphia, the federal case in Philadelphia, the Promethus Radio case occured. There were hearings this week and the proposed mergers mentioned in the case. Can you give us a sense of what your — what your sense is of where that case might be heading?

AMY GOODMAN: We just have about 30 seconds.

JEFF CHESTER: We are very lucky that we have had terrific lawyers like the Media X project from Georgetown University that have represented the public interest. They came out of the case thinking that the judges understood, that the FCC’s work was flawed, and indeed, we might have a success where those rules were sent back to the FCC. There’s been great advocacy here and certainly this dramatic announcement of the merger sent a clear signal that things are out of control when it comes to U.S. media policy.

AMY GOODMAN: Jeff Chester, I want to thank you for being with us, with the Center for Digital Democracy, in Washington D.C.

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