mykeystrokes.com

"Do or Do not. There is no try."

“Getting The Sports Moguls Off Our Backs”: The Subsidy-Bloated Profits Generally End Up In The Pockets Of The Owners

It was not out of a sense of decency that the National Football League recently let go of its tax-exempt status. You see, as a tax-exempt organization, the NFL had to disclose Commissioner Roger Goodell’s compensation — $44.2 million in 2012. That seemed an excessive sum for the head of a “nonprofit” freed from having to pay any federal income tax. Now the NFL can keep it secret.

Tax exemption is a subsidy. The taxes the NFL money machine didn’t have to pay, everyone else had to pay. Thanks go to former Sen. Tom Coburn (R-OK), Rep. Jason Chaffetz (R-UT), and Rep. Elijah Cummings (D-MD), for railing against such unsightly deals.

But that’s not the only good news for citizens tired of being milked by billionaire sports moguls. Consider Verizon’s decision to let customers buy TV packages that do not include ESPN or other sports channels.

An explanation: Animal Planet and Food Network are not why TV bills are so ludicrously high. What drive them up are the enormous fees the sports channels extract for their programming.

ESPN alone tacks an estimated $7 on monthly bills. By comparison, USA Network adds less than $1.

An interesting calculation: If every month you put $7 into an investment with an annual return of 4 percent, you’d have $1,027 after 10 years. These things add up.

It was not charity that prompted Verizon to let its customers buy a smaller base package of channels, plus extra bundles containing the channels they actually watch, at lower cost. Every month, thousands of Americans — incensed by their monthly TV bills and now able to get most of what they watch from the Internet — have been “cutting the cord,” that is, dropping their cable, satellite, or fiber-optic TV service altogether.

Anyhow, ESPN has dragged Verizon Communications into court. The sports network, the Disney empire’s most lucrative business, claims that Verizon broke a contract requiring that ESPN channels be part of its basic offerings. Verizon says that any of its customers can obtain ESPN through a bonus bundle at no additional cost and that therefore it is included.

Never did I think I’d say this, but I am rooting for my pay-TV provider.

On to another reason to cheer. President Obama’s proposed budget would ban the financing of professional sports stadiums with tax-exempt bonds. Such bonds lower borrowing costs for the zillionaire team owners. Currently, 22 NFL teams play in stadiums financed by tax-exempt bonds, as do 64 professional baseball, basketball and hockey teams.

Why would tax-exempt bonds — created to help cities, towns, and states pay for needed infrastructure — go to benefit mega-businesses? Because the team owners have succeeded in conning locals to see sports arenas as economic magnets pumping money into their weary tax bases.

Lots of studies contradict this self-serving propaganda. First off, the economic activity generated by the teams often pales next to the concessions wrenched from the taxpayers. Secondly, many of the dollars spent at the games are dollars that would have otherwise been left at local businesses, such as restaurants.

Furthermore, the subsidy-bloated profits generally end up in the pockets of the owners and their magnificently paid players — who promptly take them out of town. With all due respect to Cleveland, one doubts that LeBron James spends many of his millions there.

Ending tax-exempt bonds for sports arenas might reduce our elected officials’ temptation to sacrifice their taxpayers in return for good tickets to the game. That would be the best outcome.

They who love professional sports should pay for them.

 

By: Froma Harrop, The National Memo, May 7, 2015

May 16, 2015 Posted by | Corporate Welfare, National Football League, Nonprofit Organizations | , , , , , | 1 Comment

“Coming Soon, The United States Of Comcast”: Comcast Time-Warner Merger Will Create Orwellian Monopoly

In George Orwell’s 1984, the world is divided into three totalitarian superstates, but in the world of broadband and cable television only a single company may soon reign supreme. Comcast announced today it has agreed to acquire Time-Warner, its largest and only significant competitor in the cable and broadband business.

Some financial analysts are claiming Verizon will still provide stiff competition to the new mega-company. “Verizon is offering video service in the most markets Comcast is participating in,” a Yahoo Finance reporter declared. But Verizon’s FiOS service is available to only 15 percent of Comcast’s existing customers, and in the fall 2011, Comcast and Verizon reached an agreement that solidified Comcast’s control over the non-wireless industry. In exchange for parts of the wireless spectrum that Comcast owned, Verizon agreed not to expand its FiOS network, which offers far superior service to that of Comcast or Time-Warner.

The combined company would now serve about thirty percent of the cable television market. That doesn’t seem large until you realize that it would have a virtual monopoly in 19 of the 20 largest media markets. (Here’s a useful map.) It would also serve over half of the customers who buy “triple-play” cable-telephone-broadband services. (I haven’t seen figures on the companies’ high-speed internet penetration, but according to the National Broadband Plan, only about 15 percent of consumers have a choice of more than one plan.) The companies claim that the merger wouldn’t threaten consumers because they operate in different markets. But that’s ludicrous. The merger would replace two monopolists (that is, very large companies with monopoly power over a market) by an even more powerful single monopoly, even better equipped to discourage competition.

Large companies, even monopolies, are not necessarily contrary to the public interest if they are strictly and intelligently regulated. But in the wake of the 1996 telecommunications act (which idiotically assumed that deregulation would lead to competition) and a pliant Federal Communications Commission, the big telecom companies have progressively avoided regulation. As a result, they are already committing many of the abuses that come with monopoly power, and if the new merger passes muster, will do so with a vengeance.

Monopolies make it more difficult for new entrants to compete. As a result, they allow the larger companies to raise prices without fearing a loss of market share. Since deregulation in 1996, cable prices have risen at about three times the rate of inflation. According to a study from the Free Press, prices for expanded cable service (what most consumers purchase) went up five percent from 2008 top 2013 –almost four times the rate of inflation. Monopolies also allow companies to neglect service to consumers. The American Customer Satisfaction Index rated Comcast and Time-Warner the two worst cable and broadband companies.

Monopolies can also have a corrosive effect on related industries. The big cable companies have been able to squeeze cable content providers—even to cut off access to customers, as Time-Warner did with CBS last fall.  If they also own content providers, as Comcast does, they can harm rival content providers—as Comcast seems to be doing to Netflix.

Monopolies also slow innovation, because companies have less incentive to replace older equipment. That was a major argument for the breakup of the old AT&T telephone monopoly in 1982. According to a report from the New America Foundation’s, Open Technology Institute, the United States has lagged behind other countries in the price and quality of its broadband service. The American city with the highest quality internet is Chattanooga, Tennessee, which gets its service from a municipally owned provider.

Under the new merger, the new company—let’s call it Xsanity—will be in an even stronger position to raise prices, neglect service to its customers, squeeze content providers, harm rival content providers and slow innovation. If local, state or national officials attempt to police them, the single big company will have even greater clout. Of course, Comcast will promise to keep prices down, enforce net neutrality, and spur innovation. There is reason, however, not to take these promises seriously.

When Comcast and Verizon were seeking FCC approval of their agreement in 2011, they promised that they would create a technology/research and development joint venture. Comcast Executive Vice President David Cohen told a Senate Subcommittee that “by enhancing the Cable Companies’ and Verizon Wireless’s own products and services, the Joint Venture will … spur other companies to respond, perpetuating a cycle of competitive investment and innovation.” Two years later, the two companies abandoned the joint venture.

In short, the only beneficiary of these merger will be Xsanity’s management and stock holders. Consumers will get screwed. The American telecom/broadband industry, already lagging behind South Korea and other upstarts, will fall further behind. Of course, the FCC or the Justice Department could block the merger. But what has happened before does not inspire confidence. Obama’s Justice Department did threaten to block the merge of AT&T and T-Mobile, USA, but Comcast has strong ties to the administration—Comcast’s CEO Brian Roberts is one of Obama’s golfing buddies and Cohen has been a major fundraiser—and in the past, the administration has been soft on the company. The FCC approved the merger of Comcast and NBC and the agreement between Comcast and Verizon.

The merger of these giants on the top of American business—not simply insulated from regulation but with the power and money to block any future attempt at regulation—is an awful prospect to contemplate, but it could well come to pass.

 

By: John B. Judis, The New Republic, February 13, 2014

February 16, 2014 Posted by | Cable Companies, Telecommunications | , , , , , , , , | Leave a comment

“Court Sanctioned Discrimination, Again”: Big Monopolies Are Now Free To Ruin The Internet

Countries like China or Russia, with centuries-long traditions of authoritarian rule, revert to their past practices when confronted with any kind of novelty. The United States, with its tradition of frontier free marketism, reverts to the laissez-faire when confronted with the new. But the result in both cases is the same: the radical constriction of popular democracy and freedom. A case in point is yesterday’s Appeals Court ruling on net neutrality.

The question is this: Can internet providers like Verizon and Comcast allow some web companies to provide better (that is, faster) service to their customers than their competitors by paying a higher price to the providers? Can Amazon knock an upstart by providing better service to its customers by paying off Verizon? Or can the Heritage Foundation’s web site provide better service than, say, that of the Economic Policy Institute by paying higher prices to Verizon? In 2010, the Federal Communications Commission (FCC) ruled that internet providers could not discriminate among web sites in this manner. Yesterday, the Appeals Court ruled that they could. That’s an obvious blow to consumers, who will suffer the usual effects of monopoly; but it could also be a blow to free speech on the internet.

The obvious villain is the Appeals Court, but the damage was actually done earlier. In 2002, the FCC under chairman Michael Powell—the son of Colin Powell and reputedly an extremely decent person, but also a doctrinaire pro-business libertarian in the mold of the Koch brothers—issued a ruling that internet companies were “information services” and not “telecommunications companies.” That seemingly innocuous decision on wording held momentous consequences, because it meant that the internet could not be regulated like the public utility that it is. Phone companies, for instance, can’t by law provide static-free service to callers from a wealthy suburban area (at a price), but barely audible service to callers from the inner city, because they are regulated like a public utility. By the FCC’s ruling, internet providers could discriminate, and in 2005, the Supreme Court affirmed the FCC’s right to make this invidious distinction.

Obama’s first appointee as FCC chairman, Julius Genachowski, understood the damage that Powell’s ruling had done, and sought to undo it. In May 2010, Genachowski announced that he was redefining cable as a telecommunications service.  That would have opened the door to re-regulating it. The cable and wireless industry stepped in.  “He felt himself to be in a difficult position,” Susan Crawford, the author of Captive Mind and an expert on communications law, recalled.  She said Genachowski feared that it would “be World War III. And the president didn’t need World War III.”  So in December 2010, Genachowski announced that he would not attempt to counter Powell’s definition. That left any attempt to regulate broadband—including the net neutrality standards that the administration adopted—open to a court challenge. Verizon then proceeded to challenge the FCC’s right to set net neutrality standards, and yesterday it won, and the FCC and the American people lost.

Powell was happy about the ruling. He is now the President of the National Cable & Telecommunications Association in Washington, the industry’s chief lobbying arm. “It’s ironic that the big winner coming out of the court’s decision could end up being the one person who wasn’t a litigant—the consumer,” Powell declared. It’s unclear whether Genachowski’s successor as FCC chair, former industry lobbyist Tom Wheeler, will challenge the ruling. But if he doesn’t, and the ruling stands, the FCC can kiss goodbye its power to regulate the internet and the protect the rights of citizens and consumers against avaricious monopolies.

 

By: John B. Judis, The New Republic, January 15, 2014

January 16, 2014 Posted by | Monopolies, Net Neutrality | , , , , , , , | Leave a comment

“Bob Woodward Is Still Useless”: The Fetishization Of Compromise And The “Magical President” Theory Of Governance

Remember that long New York Times Magazine “tick-tock” (“tick-tock” is an asshole phrase for “long article about how an important thing happened involving lots of interviews with observers and participants”) about the debt ceiling deal falling apart? And then that Washington Post one? And remember how we all basically know exactly what both sides thought of the other, and how all the accounts of the negotiations collapsing amount to partisan Rorschach tests in which each side thinks the other bears responsibility for the breakdown? Well, Bob Woodward is finally bringing us the definitive (unnecessary, redundant, pointless and late) account of this thing that we have read so many accounts of already. Aaaand it turns out that both sides are to blame for everything, always.

The book is out Tuesday. Naturally, the Post was allowed to run a news story detailing some of the book’s juicier bits before the book’s release. Likewise, various other news organizations got their hands on embargoed copies (by going to bookstores and buying them early) and served up their own summaries. And so any interesting nuggets of information in this book will have been endlessly chewed over by the time the thing is officially on sale.

Not that there’s that much nugget material! The New York Times:“The book highlights problems that are well known in Washington, but Mr. Woodward manages to get the president, Mr. Boehner and their inner circles to talk about them.” Quite the journalistic coup!

The Times goes on, in a slightly catty fashion:

Last summer’s bitter budget negotiations have been hashed over in several lengthy news accounts and Mr. Woodward’s is the most exhaustive, although it is not clear how much new information, if any, he has uncovered.

The big “revelation” is that President Obama chews Nicorette and John Boehner drinks merlot. Merlot! That’s a sissy big-city effete liberal drink. Oooh, merlot, I bet that’s real refreshing after you’re done mowing your lawn (and weeping).

More revelations (that have already been reported elsewhere): Pelosi and Reid don’t work well with the president. Eric Cantor constantly undermines Boehner, and they hate each other. Everyone — Democrats and the entire GOP leadership — thinks the Tea Party people are insane. Everyone in Washington is super petty and very easily offended!

The book reflects the surreal Washington consensus surrounding the importance of immediate deficit reduction in as regressive (“tough”) a fashion as possible. All Serious People agree that it is Very Important that we rein in “entitlements” in the midst of a prolonged and disastrous employment crisis and that it is a tragic thing that we missed an opportunity to get some retirement ages raised last year, to Save The Economy. And a major theme, of course, is that Obama didn’t use his magic president powers hard enough.

The problems of a bitterly divided government, one involving dozens of choke-points for any legislative proposal and with one arm being presided over by a guy with absolutely no control over the large apocalyptic death cult wing of his party, are of course all described as failures of President Obama to “lead.” Why couldn’t he “lead” John Boehner to “lead” the fanatics in the House to do something none of them had any interest in doing??? Why couldn’t he “lead” John Boehner to call him back when Boehner was too scared to call him back because he knew he didn’t have the authority or power to promise enough votes to pass anything???

From the Post:

In his final chapter, Woodward faults both Obama and Boehner for their handling of the fiscal crisis, concluding that “neither was able to transcend their fixed partisan convictions and dogmas. Rather than fixing the problem, they postponed it. … When they met resistance from other leaders in their parties, they did not stand their ground.”

He has tougher words for Obama. “It is a fact that President Obama was handed a miserable, faltering economy and faced a recalcitrant Republican opposition,” he writes. “But presidents work their will — or should work their will — on important matters of national business  … Obama has not.”

This is rich. The fetishization of compromise for the sake of compromise — merit or lack thereof of “each side’s” position wholly ignored! — plus the Magical President Theory of governance. Presidents should “work their will … on important matters of national business,” according to the guy who co-wrote “All the President’s Men” and “The Final Days.” What a wonderful combination of meaningless and craven that “work their will” construction is. Bob Woodward refuses to acknowledge the limits of a president’s power but also thinks the president has a responsibility to exceed them in the name of accomplishing a policy shift that few Americans (and not even a majority in Congress) actually want.

(The other lesson is that economic hostage-taking will never actually be punished, especially if it’s successful. Screw the economy to win a political battle over tax rates, and Democrats will be attacked for not acquiescing to large enough cuts in programs for the poor! And now here come the hacks like David Feith using the book to pin the defense cuts in the hilarious sequestration deal on the White House.)

The book also apparently features yet another entry in the “Obama fails to talk to CEOs in a way that they find sufficiently deferential” genre. This time it’s the CEO of Verizon, a corporation that is pretty much horrible.

From the Post:

In the same vein, Woodward portrays Obama’s attempts to woo business leaders as ham-handed and governed by stereotype. At a White House dinner with a select group of business executives in early 2010, Obama gets off on the wrong foot by saying, “I know you guys are Republicans.” Ivan Seidenberg, the chief executive of Verizon, who “considers himself a progressive independent,” retorted, “How do you know that?”

“Who considers himself a progressive independent.” Oh, sorry, I guess it was very rude to assume the rich, union-busting telecom CEO is a Republican and not a made-up vague other thing. IT GETS WORSE:

Nonetheless, Seidenberg was later pleased to receive an invitation to the president’s 2010 Super Bowl party. But he changed his mind after Obama did little more than say hello, spending about 15 seconds with him. “Seidenberg felt he had been used as window dressing,” Woodward writes. “He complained to Valerie Jarrett, a close Obama aide … Her response: Hey, you’re in the room with him. You should be happy.”

Thank god Bob Woodward is around to make sure the American people know the truth about whether or not the CEO of Verizon had fun at the White House Super Bowl party.

Anyway thank god this horrible deal collapsed. Good work squabbling and fighting, vile partisans!

Hey, remember when Bob Woodward said a Biden/Hillary VP switch was “on the table” and then it turned out that his source was apparently Mark Penn, who has nothing to do with this administration because he is a reviled grifter? Because no one will bring that up when Woodward makes the rounds to promote this new book.

 

By: Alex Pareene, Salon, September 10, 2012

September 14, 2012 Posted by | Election 2012 | , , , , , , , , | Leave a comment

   

%d bloggers like this: