Clinton Threatens Veto of Telecommunications Reform Bill

Strategic Insights -

The U.S. President Bill Clinton expressed his strong concern that the House of Representatives' telecommunications reform bill will promote monopolies and concentration of media power among fewer people, citing the recent mergers and acquisitions in the industry as evidence. A day after Walt Disney's $19-billion deal to buy Capital Cities/ABC Inc. and just hours before Westinghouse Electric Corp.'s acquisition of CBS Inc., Clinton stated that the bill "would allow fewer people to control greater numbers of television, radio and newspaper outlets in every community." He warned that he will veto the bill unless significant provisions are deleted or revised.

Key Takeaways:

  • The House of Representatives' telecommunications reform bill promotes mergers and concentration of media power among fewer people, despite its intention to level barriers to competition.
  • Clinton expressed concern that the bill will allow a single owner to acquire television stations that can reach 50% of the country, limit competition, and harm consumers in rural areas.
  • The bill will permit regional Bell telephone companies to offer long-distance services before real competition emerges in local service, potentially harming AT&T Corp. and other long-distance companies.
  • The bill will deregulate cable programming services and equipment rates before cable operators face real competition, upsetting Clinton's goals for the bill.
  • Special interests, including AT&T Corp. and long-distance companies, are fighting over details in the bill.
  • Lawmakers are still trying to expand the bill's reach in a key House panel.

Statistics:

  • The proposed deal between Walt Disney Co. and Capital Cities/ABC Inc. is valued at $19 billion.
  • The Westinghouse Electric Corp.'s acquisition of CBS Inc. was announced just hours before Clinton's warning.
  • 50% of the country's television stations could be owned by a single owner under the House bill's provisions.
  • The House bill allows an unlimited number of radio station acquisitions in every community.

Sources:

  • Reuters News Agency article "Clinton Threatens Veto of Telecommunications Reform Bill"
  • Associated Press article "Clinton Criticizes House Telecommunications Bill" (note: no exact date provided, but attributed to Washington DC on a certain day)
  • White House statement: "Statement by the President on the House Telecommunications Bill"