Legalized Corruption – The Comcast Merger and the FCC

May 31, 2011

By Terry Smiljanich:

In one of the most blatant examples of just how corrupt politics has become in Washington, D.C., the head of the Federal Communications Commission, just a few months after voting to allow one of the largest corporate mergers in history, has accepted a high paying job at the new giant NBC/Comcast media company. This raises an interesting question: can we call it corruption, if it’s all perfectly legal under current rules?

The Marriage of Two Giants

Last year, two media giants decided to get married. NBC/Universal is a media and entertainment company which owns and operates television stations and networks, movie studios, and theme parks. The total value of the company last year was $32 billion. Along came Comcast Corporation, the world’s largest cable operator, home internet provider and third largest telephone company, worth $44 billion. The two companies thought that a merger would create a behemoth media entity that could rule the airwaves.

One Major Hurdle

Of course, there was a huge hurdle. They first had to convince the FCC, our watchdog for the interests of consumers and free competition for our airwaves (a limited resource that must be used sparingly), that such a marriage was a good thing for the country, as well as their respective bottom lines. So hearings were held and hard questions asked and answered.

One of the five FCC commissioners making this important decision was Meredith Attwell Baker, family friend of the Bush’s and former telecommunications lobbyist, recently appointed to a “Republican seat” (yes, these seats are assigned based on political affiliations) by President Obama at the start of his administration. Previously, as a regulator with the Commerce Department, Commissioner Baker had already become a friend of Comcast based on her support of its fight against the FCC regarding net neutrality rules.

On a 4-1 vote, the FCC decided that letting two of the largest media companies merge and consolidate their businesses was “good for America.” It will come as no great surprise that Commissioner Baker was a solid vote for the merger of these two giants.

The Revolving Door ”Pay-off”

It should also come as no surprise that just four months after voting for this lucrative merger, Commissioner Baker left after serving just two years of her five year appointment. What could have lured her away from such a fine government post? She became “Senior Vice President of Government Affairs” (i.e., highly paid lobbyist) for NBC/Universal. Even for some jaded Washington insiders, this blatant example of a revolving door between government jobs and corporate jobs was almost too much.

Due to the uproar caused in some circles by this switch from public regulator to corporate bigwig, Congress will investigate, so we can all breath a sigh of relief. Republican Chair of the House Oversight and Government Reform Committee, Representative Darrell Issa (CA), has asked the FCC to explain the departure of Commissioner Baker. Here’s a firm prediction you can take to the bank: Comcast and Senior Vice President Meredith Baker will state that any and all discussions about coming to work for the merged giant occurred only after the merger vote had been taken, and thus no rules were violated. A few members of Congress will tut-tut and bemoan the infamous revolving door problem, and the news will become quickly forgotten.

We have gotten so used to the open air corruption that is commonplace in our government, to the buying of Senators and Congressmen, the clear love affair regulators have with big corporations and antipathy to the average consumer, that such stories as the Comcast merger no longer give rise to outrage. It’s just business as usual.  As someone once said: “Every country has the government it deserves.” If you don’t like what you see, America, quit voting the way you do year after year.