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OCTOBER 2002 |
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FCC Rejection of Hughes-EchoStar Merger: A Victory for Rural
America!
The National Grange and rural America achieved a major victory
on October 10th when the Federal Communications Commission (FCC) voted 4-0 to
reject the proposed merger between Hughes Electronic Corp. and EchoStar Communications
Corp. This proposed merger would have resulted in the two major providers of Direct
Broadcast Satellite (DBS) being merged into a single entity. This is the first
time the FCC has voted to directly oppose a merger of telecommunications companies
since 1969! Since the announcement of this merger back in December 2001, the National
Grange has been instrumental in making the Federal Communications Commission,
the Department of Justice and the Congress aware of the detrimental impact this
merger would have on rural consumers.
The
National Grange feels strongly about this issue because rural Americans do not
have access to cable TV services. With cable TV providers limiting their services
to the more lucrative urban and suburban markets, rural consumers must rely on
satellite services for multichannel video program distribution (MVPD) that can
be attained through the two major providers of satellite TV, Hughes and EchoStar.
Merging these companies would create a monopoly, eliminating any benefits rural
consumers can attain as a result of competition. "Without competition, rural Americans
would be faced with higher prices, reduced services and less choice in programming
which in effect gives rural Americans the message of "take it or leave it" in
terms of MVPD service," said Leroy Watson, director of legislative affairs of
the National Grange. FCC
Chairman Michael Powell was in agreement when he said; "The case against approving
the transfer application is particularly compelling with respect to residents
of rural America who are not served by any cable operator. Those Americans would
be left with only one choice for the subscription video service, now and in the
foreseeable future." FCC Commissioner Kevin Martin stated:" I support today's
decision not to approve this merger because of the potential anti-competitive
impact on consumers, particularly those consumers in rural America." Commissioner
Kathleen Abernathy noted, in part: "The record developed thus far demonstrates
that this proposed merger will likely harm consumers by eliminating a viable competitor
in every market, driving up prices and decreasing innovation and quality of service..[T]
he proposed merger will substantially increase the level of concentration in an
already highly concentrated market. It would at best be a merger to duopoly in
markets where cable is available, and at worst a merger to monopoly in markets
where there are no other competitive multichannel video programming providers."
Perhaps
Commissioner Michael Copps voiced the most persuasive argument against the merger
and its potential effects on rural communities. Commissioner Copps stated: " The
overwhelming input I have received from rural America-by no means uniform but
certainly preponderant- is that this agreement has the potential to wreak great
havoc across our towns and farms and valleys. 'Not necessarily so', say some,
but the future of rural America must never be subject to a roll of the dice from
the [Federal Communications] Commission because a few believe that somehow such
an unprecedented combination of commercial power will be dedicated to rural development.
That is playing fast and loose with too many Americans whose future is challenging
enough without our foisting upon them a monopoly that could further erode their
well-being and independence. I am simply not convinced that the evidence in the
record before us supports a finding that allowing the transaction to proceed would
bring those benefits. And therefore, based on my analysis of the evidence that
has been presented, I do not believe that the Applicants have met their burden
to demonstrate that this merger would serve the 'public interest, convenience
and necessity'."
top National
Grange Supports Passage of the Energy Policy Act of 2002
The National
Grange enthusiastically supports the House version of the Energy Policy Act of
2002, otherwise known as H.R. 4. This bill contains provisions that would open
up 2000 acres of the coastal plain of the 19-million-acre Arctic National Wildlife
Refuge (ANWR) for oil and gas exploration. The 1.5 million-acre coastal plain
may contain between 5.7 and 16 billion barrels of recoverable crude oil, with
a mean estimate of 10.4 billion barrels, plus similarly large quantities of natural
gas equivalent to approximately thirty years worth of oil imports from Saudi Arabia.
In addition, oil obtained from the refuge could replace imports from Iraq for
up to seventy years! Although
it may take several years for production to begin in ANWR leaving only a small
portion of land open for exploration, environmentalist groups claim that production
would have a negative impact on the environment. They've expressed concerns that
this would result in the destruction of pristine wilderness; threaten caribou
herd and cause widespread environmental degradation. These concerns are mostly
unfounded and exaggerated. The coastal plain is not considered wilderness; it
contains an Inupiat Eskimo village along with the remains of several military
bases. Oil production would not threaten the wilderness areas in question and
despite environmentalist concerns, the caribou herds have flourished during oil
production and the rights of the Inupiat living there would not be violated. In
fact, they would reap benefits by sharing the royalties from oil and gas production.
Passage of this bill would also allow for more than $33 billion in tax incentives
for promotion of "clean coal" technology and renewable sources of energy. By supporting
the Energy Policy Act of 2002, we can allow the production of abundant and affordable
energy to flourish, benefit all Americans and become more self-sufficient.
top National
Grange Attended at the APT & HTBC Breakfast Briefing: "Making Competition
Work for All Americans"
On September 18th the Alliance for Public
Technology (APT) and the High Tech Broadband Coalition (HTBC) cosponsored the
breakfast briefing, which was the second in a breakfast series, to address the
issues of accelerating deployment of advanced broadband services and ensuring
access for underserved communities. Leroy Watson, Legislative Director of National
Grange, serves on the board of directors for APT. The
program featured keynote address by FCC Commissioner Kevin Martin and a moderated
discussion with policy experts. Commissioner Martin recognized the enormous potential
economic and social benefits of broadband technologies such as e-business, e-education,
telemedicine, and so forth. He also mentioned two principles that should be achieved
for the wider deployment of broadband: "More reliable regulatory environment and
reduced financial burden to internet service providers", Mr. Martin said, "will
encourage the deployment of broadband." Strategic Policy Research Principal John
Haring, one of the discussion panel, asserted that broadband facilities-based
competition, which would be promoted by intensive investment with streamlined
regulatory, should be spurred and governmental subsidies are needed especially
for rural communities.
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"Emergency
Agricultural Assistance Act of 2002" is Necessary to Sustain Agricultural
Economy
The National Grange, along with several other rural and public
interest organizations, signed a letter urging Congress to support emergency assistance
to agricultural producers who suffer production losses due to natural disasters.
This legislation was introduced to the House is the "Emergency Agricultural Disaster
Assistance Act of 2002," otherwise known as H.R. 5383. This bill provides emergency
assistance for agriculture producers who have suffered crop and livestock production
losses as a result of the natural disasters that have occurred during the 2001
and 2002 production years. Although
the U.S. Department of Agriculture (USDA) recently announced the release of $752
million to livestock producers suffering from drought-related losses, there are
still significant needs in the agricultural industry being unmet. It is necessary
for Congress to adopt a comprehensive relief package that benefits all producers.
We must honor our commitment to helping those who have suffered from a variety
of natural disasters, including hurricanes, tornados, fires, frost, floods, pests
or drought. Weather related disasters have reduced both production levels and
product quality; as a result the livelihoods of farmers and ranchers suffer from
circumstances that are beyond their control. Because the economy and the livelihoods of America's farmers and ranchers are
subject to such volatile conditions, it is necessary for Congress to provide disaster
assistance comparable to that adopted by the Senate. By supporting the "Emergency
Agricultural Disaster Act of 2002" we do our part by enhancing the prosperity
of our agricultural economy.
top West
Coast Port Shutdowns Detrimental to U.S. Agriculture
In a recent coalition
letter to President George W. Bush, the National Grange, along with 89 other agricultural
and trade organizations, urged the President to use his authority to reopen the
West Coast ports that have recently been shut down. The negative impact this is
taking on the agricultural economy is continuing to grow, adding further distress
to an already weak economy.
The International Longshore and Warehouse Union (ILWU) instigated the shutdowns
because of disputes over pensions and other employee benefits. The ILWU is also
demanding control and influence over the possible development of new jobs resulting
from enhanced technology. According to the Pacific Maritime Association (PMA)
the ILWU has caused over 135 illegal shutdowns over the last two years. These
shutdowns have cost the shipping industry over $150 million, with the costs being
absorbed by the shipping company customers (i.e. agricultural producers) and their
consumers. Over
the last couple of weeks, the lockouts have had a devastating effect on U.S. agriculture.
These ports handle half of the United States' agricultural exports, with more
than half consisting of perishable goods. Beef and pork producers were faced with
the threat of running out of freezer space for their products, bringing production
to a halt and forcing them to lay off a large number of workers. More than half
of U.S. agricultural exports to Asia consist of chilled beef and pork products.
The United States was faced with the threat of losing these markets to the Australian
beef industry. Feed, grain and wheat products along with other perishable goods
are typically shipped to docks via rail, this lockout is creating a surplus of
these products. Farmers will be hurt as a result of leftover products being sold
to local markets at lower prices in addition to causing a significant deterioration
of product quality.
As
of October 11th, dockworkers were ordered back to work. The termination of the
lockout is a result of the Taft-Hartley Act, a law that allows federal intervention
in labor disputes. In a mere two weeks, the port shutdowns have cost manufacturers
and retailers more than $1 billion a day in addition to a backlog of products.
There was also the risk of losing these valuable markets to foreign competitors,
if these lockouts were allowed to proceed, the U.S. would have jeopardized these
vital partnerships that they've worked so hard to establish, with little to no
hope of re-establishing trust. Agriculture Secretary Ann Veneman expressed it
best when she said; "The West Coast ports play a crucial role for international
commerce, especially for U.S. agricultural products moving into foreign markets.
I applaud President Bush for taking action to get exports moving again and urge
the parties involved to resolve their differences quickly so that our customers
around the world can be assured a reliable supply of U.S. food and agricultural
products."
top National
Grange Testimony Encourages Rural Broadband Deployment
On October 3rd,
the National Grange submitted a statement to Senator Ernest Hollings, Chairman
of the Committee on Commerce, Science and Transportation discussing the necessity
of government intervention regarding broadband deployment to rural areas. This
statement was written in response to a briefing held earlier that week titled "The Government's Role in Promoting the Future of the Telecommunications Industry
and Broadband Deployment" hosted by the Committee on Commerce, Science and Transportation. This statement
presented the National Grange with not only an opportunity to express their concerns
regarding this issue but to make the Committee aware of the relevance the Grange
has had to rural America over the last one-hundred years. The National Grange
supported a similar cause over a century ago, that issue being free mail delivery
to rural Americans. The Grange provided a legislative voice for rural Americans
and started a tradition of influencing policies that contribute to the quality
of life for rural communities. The
benefits that broadband can provide to rural America are numerous yet current
restrictions are making deployment difficult if not impossible. Most rural Americans
obtain their online services through phone companies that are subject to strict
regulations existing under the Telecommunications Act of 1996. Because of these
restrictions, phone companies have little incentive to invest in the data networks
necessary for broadband deployment. Proposals submitted by phone companies for
things such as "tax breaks" and "loan guarantees" are insufficient; current regulations
must be lifted in order to provide the broadband business with any incentive to
extend services to rural areas.
Broadband
services can benefit rural Americans in a number of ways, such as facilitating
the improvement of health care, public safety, government services and education;
enhance the competitiveness of small business and provide farmers with the ability
to monitor the weather, check crop prices, learn about the latest farm programs
and assess the needs of agricultural consumers. Like the fight for free mail delivery
nearly a century ago, broadband deployment will provide rural Americans with new
choices and tools to improve the quality of their lives and connect them to the
rest of the world. This is why it is vital that restrictions are lifted so that
broadband deployment can flourish, allowing rural Americans fully enter the 21st
Century.
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