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Please wait until the regime has had time to consolidate its power and try your call again.
Well, I had nothing to do with it, but I approve.
This is Emanuel Goldstein, it's 10 o'clock, and that means it's time for Off the Hook.
The Telephone Keeps Ringing
And a very good evening to one and all.
This is Off the Hook, the program about high technology, low intelligence, new technology, big brother, how to use your computer, how to use your phone, how your phones and computers can use you.
It's all very interesting, all very intriguing, and it's something that no matter how hard you try, you won't be able to get away from, so you might as well learn how to work it to your advantage.
Okay, one thing that has happened.
We have a startling news development, we have a happy news development, and then we have something that's even more sobering.
And, of course, your phone calls, which always are a cheerful element to the program, which we'll be taking you a little bit later on.
The happy news is something that we talked about a few weeks ago concerning a new tax on computer services, on hooking up to the Internet, say, on running a commercial Internet provider or any kind of computer service.
New York State had imposed an additional 5% sales tax, bringing it all the way up to something on the order of 13%, something crazy like that.
And this was also levied on 800, actually 900 lines, 900 sex lines and things like that.
And basically it was something imposed on just anything technological that went over phone lines in the language of people that have absolutely no understanding of what high technology is all about.
So bulletin boards and Internet providers were included in this, and we kind of raised a big hullabaloo about that and encouraged other people to do the same.
And apparently a lot of you did, and I'm very happy to say, that they've changed their mind.
It doesn't always happen this way.
Tax people don't usually change their minds, but in this particular case they did.
According to News Dave two days ago, New York State's tax commissioner has reversed himself,
said that a controversial new sales tax on telephone lines will be imposed only on services such as phone sex lines and not on computer networks.
And to reiterate, earlier this year the legislature, actually I believe it happened on September 1st,
and we found out about it I think on August 31st,
but at that particular time the legislature approved an additional 5% sales tax on information and entertainment services delivered by telephone.
The idea was to tax 800 and 900 lines that provide entertainment.
But Commissioner of Taxation and Finance James Wetzler said the law was written too broadly and would apply not only to 900 lines,
but to computer networks that work through phone lines.
And, as we mentioned, that sparked protests from businesses and consumers affected by the tax.
After consulting with lawmakers and representatives of the telecommunications industry and listening to Off the Hook,
Wetzler has decided to impose the tax only on telephone services that are received orally.
Yeah, that's good news.
Another indication that a little phone activism definitely does some good.
So when you see something that is wrong, tell people about it.
Encourage other people to contact those in charge.
Doesn't always happen, but more times than you believe positive change occurs.
All right, something else which happened just today.
A couple of weeks ago on this program we talked about how at the 2600 offices we had accidentally,
because we weren't expecting it, received on our special caller ID test line a phone call from Virginia.
That's right.
Area code 703 and all showed up on our caller ID box.
We encouraged people to call a special number two weeks ago, especially people from out of state.
That was inconclusive.
We did not see any numbers showing up from either New Jersey or Connecticut.
As it happens now, caller ID works within the New York region, meaning area codes 516, 914, 212, 718.
I don't know if anyone has ever successfully sent one from 917, since that's really an area code for beepers and cellular phones.
I have yet to see one.
But we were not able to get anything from out of the state, except for that accidental 703 area code, until today.
Until today, when staffers were shocked to see a phone number show up on the caller ID box,
this one, even further away, this one from area code 314, St. Louis, Missouri.
And that's quite a step, and that means that national caller ID is a lot closer than we had previously thought.
We don't know why certain numbers are going through.
We don't know exactly what the situation is here, what long-distance company they use.
The people on the other end of the phone didn't really want to talk to us about that.
But it does prove that something is happening.
There is some sort of massive integration going on.
So now we know St. Louis and Virginia are at least two places where caller ID is transmitted into New York.
We don't know if it works the other way around.
Neither one of these numbers was able to be call return.
That is star 69, the service that calls you back.
So that's a rather disturbing note, because nobody really knows anything about this.
Call the phone company and ask them.
They'll say it's impossible.
Well, we have the evidence right on our caller ID box.
All right.
Last week we talked about the biggest merger in the history of the planet.
It's the merger between the nation's largest cable company, TCI, and Bell Atlantic.
Now let's tell you a little story here.
Then perhaps you can get a sense of all this.
All right.
We had the Bell system back prior to 1984.
The Bell system owned everything.
You know, they owned your telephone.
They did.
They owned your telephone.
They told you you couldn't have any extensions unless you got written permission.
They owned the wire going from your phone to the telephone pole.
They owned the telephone pole.
That's why it's called the telephone pole.
They owned the wire going from the telephone pole to the central office.
They owned the central office.
They owned the wire going from the central office out into the phone network, which connected
you to the rest of the world.
And while they didn't own the rest of the world, they came pretty close because they
owned the long distance network.
And then, of course, they owned the person's phone, who you were calling, and so on and
so forth.
Now that was evil.
That was wrong.
That was very, very scary.
And that's why in 1984 it changed.
Divestiture came about.
And a new era was born.
Yes, the sun rose on individuality and on competition.
And there were many grassroots organizations such as MCI and Sprint that raised their heads
and began to offer true alternatives.
Yeah, but apart from that, we did have a bit of competition for a little while before things
started merging together.
We didn't have competition, though, on the local level.
In fact, to this day, New York Telephone, to the vast, vast majority of people, is the
only company that you can get local phone service from.
And in the same sense, the local phone company throughout the country, no matter if it's New
Jersey Bell or Southern Connecticut, Southern New England Telephone, or what have you, they
are the only game in town.
That's a sad fact of the way divestiture has occurred so far.
Then you had cable television.
Now, cable television is something that began to appear in the area in the, I guess, the
early 70s.
And it was interesting.
You know, it provided, first of all, better reception.
And then it started providing other services.
You know, services that gave you things that you wouldn't see on regular TV, like repeats
of shows that were on years ago and things like that.
But it was good because they didn't have commercials.
But then they started to get commercials, except that now you were paying to get the commercials.
But the worst part about cable TV was that there was no competition.
That's right.
You couldn't get an alternative.
I mean, if you didn't like one particular cable company, you couldn't just order another
one.
You were stuck with them.
And if that cable company said, well, we don't want to bring you this channel because
we don't feel that there's a market for it, whether it's a satellite channel, a local
TV channel, what have you, it was their decision, not yours.
You were stuck with it.
Now, out where I live, there was a cable company, a small cable company.
And the service was terrible.
It was awful.
Awful service.
People that came from the Nazi era ran this place.
And if you complained, nothing happened.
Nothing at all happened.
Nothing ever changed.
Now, what does that prove?
That proves that no competition on any level, whether it's big or small, is a bad thing.
Whether it's run by five people or by 50 people, it's a bad thing.
And if you want some reference to this, I thoroughly suggest the Green Acres episode about the phone
company, where there is no competition and it's run by, I think, one person.
Now, no competition generally has bad effects.
So, we saw that with the small cable company that used to exist in the area in which I lived.
Then that small cable company was bought by a bigger company called TCI.
TCI became the biggest cable company in the country.
And you know what?
The service hasn't gotten any better because it's still a monopoly.
There's no competition, no place else to go.
So now, as of last Wednesday, TCI is merging with Bell Atlantic, which is a major phone company
in New Jersey and that particular part of the country, New Jersey, Pennsylvania.
Now, I don't know exactly why I feel so bad about this, but it just seems like we're going
in a big circle here.
Now, all of a sudden, the biggest monopolies are taking over the second biggest monopolies.
And what is that going to do for the poor consumer?
Phone companies running cable companies.
Not competing.
Not competing with cable companies.
For a while, there was talk about that.
There was talk about 9x providing their own cable service and Cablevision would be competing
with them.
And maybe people would have a choice and there'd be different wires running up the pole.
Now, it's going to be one big entity.
I don't know.
Something about this just doesn't sit right.
We have on the phone with us Brock Meeks, who is a reporter for Communications Daily.
Brock, perhaps you can help me enunciate a little better what my misgivings about this are.
Well, the thing that I think people should be concerned about, or should at least be giving
some thought to, is the fact that now what's going to happen is you're going to have a monopolistic
two industries that come out of a monopolistic mindset are going to control both the content,
which is the programming, and the conduit that it's delivered on.
And this has far-reaching effects that people should be concerned about.
Now, John Malone, who is the president of TCI, and Raymond Smith, who is the chairman
of Bell Atlantic, insist until they're blue in the face that this new and wonderful network
that's going to evolve out of this marriage is going to be open to all comers.
And they say it's going to be great and wonderful and that nobody is going to be denied.
It's going to be great for competition.
It's going to be great for the economy, and so on and so forth.
But the fact remains that when you have one entity that controls both the conduit that the
information flows over and controls the content that flows over that conduit, you're going to
have a problem.
Now, let's take this one step at a time.
You say that they own the content.
What exactly does that mean?
Well, TCI has a ton of programming.
Of course, they supply their cable companies with the programming.
They go out and they cut deals for certain channels and for certain programs and so on
and so forth.
So that's the content part of it.
Now, they've made no...
John Malone, when he announced the...
At the news conference to announce the merger, he made no secret the fact that Bell Atlantic
and TCI were going to be exploring opportunities to develop new content.
John Malone, I spoke to John Malone just today.
I spoke to Raymond Smith just today at a conference in Washington that I covered for Communications
Daily and asked him about this again, and they said that they were going to be focusing on
opening up the network, but they were also going to be doing content.
John Malone, who is going to be...
Who is already a billionaire from this deal, said that he's going to continue to focus on
venture capital opportunities that he termed kind of a hobby.
Those venture capital ideas are programming and content.
So when they wrap up that content, they're going to pick and choose who can come on.
So, for example, if 2600 wants to do a show about computers and so on and so forth,
and that Ray Smith may not like, John Malone may not like,
he may not give you access to his network.
And access to that network seems to be in many, many places via perhaps production facilities,
a channel, a system, even a phone call maybe.
That's true.
TCI has cable companies, cable facilities in 49 states.
Like you said, they're the largest provider.
Now, cable systems in the United States.
Now, I got Ray Smith aside and I asked him,
what's going to happen when somebody wants to put on a video dial of porn,
video porn on demand,
or somebody wants to put on a white Aryan resistance network
and says, look, they've developed this KKK network
and they want to come to the Bell Atlantic TCI network and put it on.
I said, how are you going to react?
I said, before, when we had the 976 services and the dial of porn and so forth,
they became, the phone companies became very restrictive
and how they were going to let those, how they dealt with those companies.
I said, now you keep telling me, you keep telling the public
that you're going to let this be a free and open environment.
How are you going to deal with that type of programming?
And he told me, he was straight-faced, he said,
we're going to walk a very fine line here.
We're going to have to decide, we're going to be very careful
how to decide what the appropriate type of programming is going to be.
And then there was a silence.
And I said, does that mean that you are going to censor,
that you are going to act as the information filter for who gets on your network?
And he said, again, we'll be walking a very fine line.
We're going to hold to the letter of the law,
but we'll have to make some decisions down the road.
And, of course, those decisions could be that they would set up astronomical requirements
before you could get on the network,
charge you thousands and thousands of dollars in application fees,
or make you jump through so many hoops that you couldn't get on the network.
Let's define what exactly this network is going to be.
Are we talking about a simple cable TV network,
or is this getting a whole lot bigger than that?
It's getting a whole lot bigger than that.
And this is one of the things also that hasn't been talked about much.
In fact, John Scully, the former president and chairman of Apple,
and who is now the new president of a company called Spectrum Technologies as of Monday,
which is a company that makes modems that can transfer data over cellular networks,
Scully gave a keynote speech here.
And he said, look, these type of mega-mergers are going to redefine how we think about television.
They're going to redefine how we think about the telephone.
He said, but I am not convinced that all this is a good thing.
He said, I think that there's been too much media hype about all this,
and we have to look at it closely.
This grand and glorious network is going to be much more than cable.
It will be two-way interactive.
You'll be able to send phone signals out.
This big network will become a phone company.
It will be able to deliver phone calls.
It will be able to deliver high-speed data, you know, video, full-motion video, and so forth.
But it's years and years and years away from that.
It's going to take billions of dollars just to make the cable system two-way interactive,
because right now it's not two-way.
It's just one way.
I believe they've been testing in Virginia a two-way system.
Is that correct?
Well, in Virginia, they've been testing kind of a stopgap measure to cable.
It's called ADSL, which stands for Asynchronous Digital Subscriber Loop.
It's a three-wire system that goes over your telephone line.
It's a copper line that they can push 1.5 megabits per second over that line,
which gives you VHS-quality video with compression, massive compression over that line.
But they can only deliver one stream of video and one stream of telephone.
So it's a much reduced capacity over what you can get with a TCI type of network,
which they're talking about 500 to 1,000 channels.
Well, no, I mean, the technological aspects, you know, they could be promising.
They could be interesting and have a lot of potential for all kinds of needs.
But what are the dangers as far as limiting access?
I mean, when we say limiting access to the network, I guess we mean there are a lot of different places
where we could be denied access, ways we haven't thought of today because it doesn't exist yet.
But what potentially are we looking at?
We're looking at something that's so all-encompassing that it covers every bit of technology in our homes?
Yeah, if you remember back to the old Max Headroom television shows,
which I thought were some of the best writing about the future world of the network,
where the government was the network, everybody's life revolved around the network.
This is in a real sense.
When I first heard this announcement and heard John Malone and Ray Smith talking about their vision
for what this network would become, I penciled onto my reporter's notebook,
this is just Max Headroom in real time.
What's going to happen is they want everything to happen and flow over this network,
every piece of your life from your local phone calls to your banking to work and everything.
So it sounds like, I mean, at a Terminator, what is it, Skynet?
Where they pretty much have everybody kept track of all the time.
That's right.
All the time.
And the thing that I think people should be concerned about is that you're going to have,
I mean, even though there are some, of course, great aspects to having everything hung off of the network,
but when you have everything hung off of a single network, it's the person that controls that network
that literally has their finger on the switch of that network that has the real power.
And we've seen time and time again in government that when you have people at the top exercising too much power
over too few decisions, what happens?
That bad things tend to happen.
And so when you've got people like John Malone, who is not revered greatly in the cable industry,
he's known as a heavy hand.
And as a matter of fact, TCI is being sued right now by Viacom for anti-competitive practices.
And that Viacom suit against TCI has some very sharply worded statements in it,
and these guys are not just playing around.
So Malone is known for playing extreme hardball with different cable franchises and with the networks
if they won't accept his vision of programming.
And certainly there is a long history of the telephone companies, and it's not just a Bell Atlantic,
but all the telephone companies playing hardball in the local loop with businesses,
with other people that want to get access to their network.
They're playing hardball because their vision of how that network should develop is much different than everybody else's.
So when you have, I think it's a great, it should be of great concern that we're putting a lot of power,
we're putting a lot of decision-making process over what you can eventually get on that network,
over what I can eventually get on that network in the hands of one person.
If it doesn't fit John Malone's idea of what's good for the nation,
if it doesn't fit Ray Smith's idea of what's good for the nation, we may not see it.
And I'll tell you right now, what I want to see and what I want to get access to is much different than those two guys.
Well, they're starting to sound like the villains in a James Bond movie,
except they seem to have a lot more power than that at their fingertips.
How close is this to being approved?
What kind of steps do they have to go through at this point?
To get approved?
Yeah. I assume it's not just automatic.
No, it's not automatic.
As a matter of fact, Clinton's Justice Department has said it's going to take a close look at this for anti-competitive reasons.
Now, and the FCC has more authority, already given its stamp of approval.
The interim chairman, Jim Coelho, has said it's a good thing on the surface.
Of course, they'll take a look at it.
Right, but I believe the former chairman said something against it, did he not?
The who?
I believe one of the former chairmen of the FCC said it was a bad thing.
There was a former commissioner who wasn't the chairman.
Okay, former commissioner.
Nick Johnson.
Yeah.
In fact, Nick Johnson said that this was the biggest affront to free speech in the last 200 years.
Yeah, that's sort of a negative view of it, I would take.
Yeah, Nick is one of the...
In fact, I just saw a letter today that went to the Justice Department, the head of the antitrust division,
that was co-signed by former FCC commissioner Nick Johnson, who says as his claim to fame is he's the only FCC commissioner ever to have his picture on the cover of Rolling Stone magazine.
In fact, Nick was the one that led to the...
He wrote the Carter phone decision, which essentially helped break up the monopoly in the telephone manufacturing back in the 70s.
Well, how could two fellow FCC people have such widely, I mean, really vastly different views on this?
Well, it's just different administrations, different...
One is...
One sees this as a kind of a...
The convergence of technologies.
I'm sure that the previous FCC chairman that left, Alfred Sykes, would be all for this type of a merger as well,
seeing that it will bring...
I think that they want to believe that it's going to suck information providers, it's going to suck new applications into a single network,
into a single bit pipe, and that it will, you know, be available to a broad number of people.
Now, the thing that Nick Johnson, for example, is concerned about is that there is just going to be a single bit pipe,
and that if they don't like your service, if they don't like you, if they don't like your ideology,
you're not going to get access to that, and therefore, they're going to pick and choose,
they're going to pick winners, they're going to pick losers, and...
But more from the consumer's point of view, what if you don't like them?
You have no choice. You have to use them.
You have to use them.
Now, of course, what Ray Smith and John Malone will tell you is that, well, we're not going to be the only providers.
There's going to be the network set up by U.S. West and Time Warner,
and there'll be a network set up by MCI and British Telecom,
and there'll be, of course, the wireless network that's going to go in with AT&T and Macaw.
But what's going to happen is, okay, how many people have we just named?
Four.
Well, now, if you think that just four megacorporations are going to give you competition,
well, that's what they're saying.
They're saying that there's going to be two or three lines running to your house,
and that they'll all have to compete, and that will be a good thing.
I would turn around and tell you that we have two cellular providers in every country,
and we don't have competition.
It's a duopoly, and prices still have never come down.
Now, to speak of how big these corporations are,
TCI, Bell Atlantic, there's a lot more to them than just that.
There's some sort of connection now with Paramount and the merger with QVC that's coming up.
What does that all portend?
Well, this is all John Malone's wheeling and dealing.
Of course, John Malone still owns 20% of Liberty Media Group,
and before the Bell Atlantic-TCI merger,
TCI was trying to, they had already spun off Liberty Media.
They were trying to reabsorb Liberty on just that one little deal.
John Malone stood to make $680 million.
And then, of course, now QVC, which TCI owns a part of,
is making a bid, and the TCI is backing QVC's bid for Paramount.
This is, again, this is an attempt to lock up programming.
Programming is the heart and soul of that video network.
And when you own the programming, you can charge as much as you want for it.
Again, it's all a control thing.
Well, it sounds really like it's a bit too much control here.
I'm sure most people that believe in competition, believe in individuality,
are feeling just a little bit uneasy with all of this power.
It sounds like the brave new world, really.
That's what it reminds me of, where everything is uniform,
everything is for the best.
And nobody really questions it,
and we won't really have the ability to question this when it happens.
That's right.
The other thing is that nobody,
that people pay lip service to,
but nobody ever really talks about specifics,
is universal service.
You know, we have this federally mandated law
that says that everybody has to have access to the telephone line.
I don't care who you are.
I don't care if you live in Appalachia,
or you live in downtown L.A., or in Manhattan.
You have to have access, universal access to the telephone line.
Well, that doesn't exist when we get into these converging technologies.
Now, people like Malone and Ray Smith will tell you that, oh, yes,
universal access, universal service, and so forth to these new emerging technologies
is, quote, vital to the success of the network.
But nobody tells you how to do it, or tells you how they're going to do it.
If you look at what's happening now with the fiber deployment throughout the United States,
it is the rural areas, it's the areas, the small towns that are hard to get to,
that are being left behind.
And I don't think that these companies are going to make a great effort
to push this great and wonderful network throughout the United States in a timely fashion.
And what you're going to have is a small part of the major cities and so forth,
the metropolitan areas, having access much, much sooner,
maybe decades sooner, than the rural people.
Well, supposing it was made some sort of a condition of this merger going through
that they would have to deal with it just like, you know, telephone lines.
They'd have to provide it to everybody.
Do you think that would make it more palatable?
Well, it would certainly make it more palatable to consumer groups,
and I think that they may just find themselves faced with that.
Certainly, Congressman Markey, who is head of the telecommunications subcommittee,
he's concerned about that.
And Howard Metzenbaum has already said that he's very concerned about anti-competitiveness
and that he's going to be pushing for this.
And there's going to be hearings up on Capitol Hill that are already set up.
And they're going to be called on the carpet, and they're going to be asked to explain this.
And I think that what you're going to see is any type of legislation that comes out
is going to mandate universal access.
However, all that said, I will be very surprised if that mandate of universal service has any teeth behind it.
But I'm sure, as you well know, we've had this federally mandated equal access for years and years now.
And there are pockets throughout the United States that still don't have equal access in the local loop.
There seem to be pockets here in New York.
Right.
Especially kokots and things like that.
But, yeah, that's a good example.
What is Clinton Gore's view on this, as far as you can see?
Do you think this is in keeping with the information highway?
Is this sort of what they had in mind?
Well, I don't know if this is what they had in mind.
They certainly, the initial reaction coming out of the White House is one of kind of guarded praise.
The day of the announcement that this looked like it was a good thing for the information highway.
However, he put in a small caveat that, of course, it will have to go under official review.
Clinton's Justice Department has taken a decidedly tougher stance towards antitrust.
And this whole thing just smacks with antitrust, where you go in and you buy up your competition and you make them your...
In fact, today at this conference that I covered, Craig McCullough was speaking.
He said that there's an old adage in business that if you can't beat your competition, you buy them.
And, of course, there was kind of a guarded laughter through the audience.
And the next guy to speak, of course, was Ray Smith.
And so then Ray was quick to point out that in the Bell Atlantic Service region,
where TCI has cable companies in the Bell Atlantic's region,
the Bell Atlantic has voluntarily said that they will divest themselves of those cable properties.
Now, that was kind of ironic, because Bell Atlantic is the only telephone company in the United States
now that can legally own cable companies, because they got a court decision in Virginia
where the U.S. District Court held that the cable telco cross-ownership ban was unconstitutional.
And that ruling only came, what was it, a month ago?
That was only a month ago.
They moved pretty fast, didn't they?
Pardon me?
They moved pretty fast.
They moved pretty fast.
But see, now Ray Smith will tell you, but look, we are going to, you know,
if we want to move cable in those areas, we're going to build our own cable plant.
And we won't just buy up the things because they wanted, this is, Ray Smith told me that he wanted these,
he wanted this deal to be squeaky clean as far as antitrust goes.
And so he said we didn't want there to be any problem with people saying,
oh, we were buying up these cable properties in our region and we're just going to run lines of them.
What people don't realize, and in fact what I hadn't realized until talking with him just this afternoon,
is that, yes, indeed, they fully plan on divesting themselves of those TCI cable properties.
However, those TCI cable properties have the full right and have been invited to run all of their programming over Bell Atlantic's network.
It's the same type of thing that they're doing in New Jersey for a company called Salomon Cable or something like that.
Where Salomon Cable runs all of its programming, they lease the conduit,
this is a conduit thing like we were talking about before,
they lease the conduit, the transportation vehicle from Bell Atlantic.
Now, the cable company owns all the programming, but they run it over a Bell Atlantic pipe.
So Bell Atlantic has extended that same type of service offering to all those TCI properties,
which means that rather than invest money in maintaining your cable plant,
that you just go ahead and lease the lines, you lease that fiber from Bell Atlantic.
So what do you have?
Well, you've divested yourself with the cable companies, sure, but you're still getting all that money.
And you have these nice, cozy relationships with all these cable companies still,
and you're still sucking down a whole lot of money because they're using your fiber backbone to deliver their cable programming.
We're speaking with Brock Meeks of Communications Daily down in Washington, D.C.
about the merger proposal between TCI Nation, maybe the world's largest cable company,
and Bell Atlantic, how it will affect you, how it will affect everybody in the nation.
And before we take phone calls, our phone number, by the way, is 212-279-3400,
if you have a question that you'd like to ask, I'd just like to ask one more question.
How do you think this will affect the Internet?
Well, that's a very good question because nobody really knows.
Of course, there are cable companies now that are doing experiments,
they're doing trials with delivering Internet access over cable.
And who knows?
I mean, it could be that the TCI will decide that they will only allow certain Internet news groups
and stuff to flow over their cable.
They may decide that they don't want any Internet access at all because it's too unwieldy
or they can't bill for it or something like that.
Nobody really knows.
Certainly, it can happen.
They're going to have enough capacity to have access to all the Internet.
But just how it works out, nobody really knows.
Well, do you see the present existence of the Internet being threatened?
No, I don't see the existence of the Internet being threatened at all.
Okay, that's one reassuring thing then.
All right, let's go to the phone and see if anybody has any questions concerning this.
It's 212-279-3400.
Good evening.
Hello.
I'd like to know if this merger is approved by the Justice Department,
by what year will the superhighway be built?
And also the rates, the structure, will the rates on cable TV be going up?
Brock?
Well, once it's approved and the deal itself, the two companies won't even have signed the final merger for about a year,
according to both companies.
So it'll be at least a year before we get any approval.
And after that, I don't think that anybody has any kind of idea that this is going to be something immediate.
I don't think that we'll see a full two-way interactive network until the end of the decade easily.
Now, Malone of TCI and Smith of Bell Atlantic have said that they will have the first commercial services rolled out sometime early in 1995,
but this will be only to a very minute service area,
to just a few selected areas that the companies are already running trials in right now.
And like limited places, like in Denver, and only a small pocket in Denver,
maybe 10,000, 20,000 people at most by 1995.
And also the rates on this, will the cable rates be going up?
Well, the cable rates, that's a good question.
Nobody knows.
Now, they have said that this won't affect your local service rates and so forth,
but somebody's going to have to pay for it,
and it'll be up to the state regulators to keep a lock on your telephone rates from going up.
Your cable rates, of course, have been re-regulated by the Cable Act.
However, the Cable Act doesn't touch this brand-new network.
So, in a sense, what they're creating is a kind of hybrid, deregulated network.
I mean, you're taking two now heavily regulated industries, cable and telephone.
But because you're mixing the technologies, you're creating a brand-new technological animal
that nobody really knows what to do with.
Okay, thanks for the call.
Brock, do you think there's a possible danger in the fact that it's going to take so long
before this is approved either way?
Do you think people might forget their concerns or just sort of come to accept it?
Well, I think that's a very good point.
I think that people will be like prophets crying in the wilderness,
that we should be careful, we should be careful.
And we will just kind of come to accept the fact that there is this large network
because we've just, it's happened so slowly and so gradually.
It'll be like the analogy of the frog that sits in a pan of water
and you just, you know, gradually turn up the heat
and the frog just sits there because he doesn't know he's boiling to death until finally he dies.
I was thinking...
It may be the same way with the public.
The public will just get more and more used to seeing things online
and to getting access to information via the television,
the two-way interactive services like home shopping
and some little interactive services there
and getting more and more information over the telephone network
and gradually these things will converge.
And, you know, your point is very well taken
that maybe we'll just be lulled into a false sense of security
that everything will be nice and wonderful.
Well, it's kind of the way things have happened with caller ID and call return
and the new features.
We've sort of almost gotten completely used to them.
We can't remember phone service before such things were available.
Also kind of the way Reagan Bush operated, you know,
one thing at a time until you become used to it.
But if it all got handed to you, you know, all at once,
you would have been shocked by the things that happened.
I think you're right.
So it's definitely scary and sobering.
Let's take another phone call.
Good evening.
Oh, yes.
Correct me if I'm wrong,
but won't this highway be privately owned by the cable system
and by TCI and Atlantic Bell?
That's correct, right?
Oh, yeah.
It's private, sure.
Right, so why don't they have the right to censor what they want
just like the cable company has the right to choose what channels
they're going to broadcast?
I mean, how is that different from what it is now?
Well, my concern, my concern with that, if I could just step in,
is when they're the only game in town, that makes it a little bit worse.
I mean, yes, censorship, I have no trouble with censorship
as long as there's an alternative, you know.
If the New York Post decides not to print a particular story
but the New York Daily News does, well, you know,
I'll read the Daily News instead of the Post.
Right, but what's to stop another company from starting up their own superhighway?
Well, Brock, I think you could probably answer that better than me.
Well, this is what the, this is the same argument,
your point is the same argument that the Bell and TCI make.
They say that other companies will come in
and that other companies will be offering the same type of superhighway.
U.S. West and Time Warner is probably the closest example
with U.S. West having bought, you know,
spending $3.5 billion to buy 20% of Time Warner
with the same goal in mind to create this new highway.
Well, that's all well and good if, in fact,
U.S. West decides to run everywhere that Bell, Atlantic, and TCI do.
Now, that's going to cost a lot of money,
and what these guys may do is they may decide to just balkanize
the United States telecommunications or the, you know, networked infrastructure.
And they'll let, for example, TCI is headquartered in Denver,
where U.S. West is headquartered in Denver, too,
so there will probably be competition there.
But they may say, you know, U.S. West may say,
okay, you guys, TCI, you guys can have Virginia,
and Pennsylvania will take so-and-so and so-and-so.
So there will be selected places where there will be competition,
but there may very well be places where one company says,
it's not worth it to us to go in there because you're already entrenched,
so we'll just go someplace else.
And there you won't have competition.
But certainly these companies, it's their private network,
and they can do what they want with it.
But we've seen that in a monopolistic area,
when companies have full control,
it usually doesn't work out to the benefit of the consumer.
Do you think anything like the Internet would expand
to become another superhighway, sort of,
like a group of individuals or companies would come together
and form something like the Internet
that's really not controlled by one central force?
Well, I'm not sure of your question.
You mean that private companies would get together
and form their own parallel network like the Internet?
I think he's asking if a grassroots kind of network could exist
in opposition to this kind of...
Well, not as far as not a grassroots video network
that would have the capabilities of, like, a TCI in Bell Atlantic,
but certainly there are grassroots networks
that operate on kind of a lower level,
lower speed than the Internet.
Okay.
So you're not going to get something that will deliver, you know,
100 channels of video and telephone and so forth
because it simply costs too much money
for a grassroots network to do that kind of thing.
Great.
All right.
Thank you.
Thanks for the call.
Let's take another phone call.
212-279-3400.
The program is off the hook.
We're discussing the TCI Bell Atlantic merger.
Good evening.
Anybody there?
Yes.
Go ahead.
Well, last call I had an interesting point
about the grassroots network,
and I'm not so sure about the cost being so prohibitive
in the, you know, the ensuing years.
Maybe not right now,
but as video servers become, you know,
lower in cost like everything else in the computer industry,
I would imagine you could do something like that
and have a video server
and lease time on Bell Atlantic lines or TCI lines.
Now, but here's exactly what we're talking about.
Now, this leasing time or so forth is a good idea
and you have your own video server.
However, what happens if Bell Atlantic doesn't like your service?
Well, they're making money off of your lease.
Well, what if they don't like your service?
Well, I think a good parallel to this,
look at Prodigy
and look at how they react to people that they don't like.
They either censor their posts,
they won't allow people to say something about competition.
Imagine this is one big prodigy with nowhere else to go.
What are the chances of having imposed public access time
like you have here with Time Warner and Manhattan Cable?
You've got four stations or four channels
that are just public access, free time,
and basically anything that's on the air.
Well, that would be up to Congress.
What are the chances of that?
Your guess is as good as mine.
There may be public access types of programs that are mandated,
but if I'm not mistaken,
I think that each local cable franchise board
are the ones that cut those public access channels.
And we're not talking about here,
we're not talking about local cable franchise boards
because this is going to be one nationwide network.
So it will either have to come from Congress
or it won't come at all.
Well, you know, all we have to do is think of one public access thing
that, say, AT&T is required to do,
one public access thing that NBC is required to do.
You know, there really aren't any that we have access to as people.
That's true.
Well, the Public Broadcasting Corporation
came with some kind of effort in that vein, right,
into kind of fund more network-free programming.
Isn't that...
The Petroleum Broadcasting Service, yeah.
That's, I mean, you'll see things like that perhaps,
but again, they're going to be controlled by the same companies.
Yeah, and to the point that there are the rural areas outlying,
you know, away from the fiber lines or the cable lines,
there are, you know, the possibilities of having wireless networks there,
and that's a big market for wireless today.
It's just like 30 million homes that can't get cable.
Exactly, and in fact, in the conference that I spoke about earlier
that I covered today, Craig McCaw said that this is where he envisions
his company or his combination of AT&T and McCaw Seller playing a part
in building the information infrastructure,
and that would be the wireless would be the route out to the rural areas.
But then just think about that.
You've got essentially an AT&T McCaw company that is going to,
that will have basically a lock over all the rural areas,
and that if you want to, if you live in an outlying area
and you want to get access to this information superhighway,
you're going to only have one company to go to.
That will be, it won't be McCaw Seller, it won't be Seller 1,
it will be AT&T Seller.
Right.
Well, who is the, I mean, Markey is the senator, right,
on the telecommunications?
Who is the?
He's the representative, not senator.
Representative, okay.
Who are the people that we should be, you know, keeping in touch with
in terms of voicing our opinions about getting better regulation,
or getting at least the right regulations on this new,
brave new world entity that's existing?
Well, Markey is the key guy in the House of Representatives,
and so is Rick Boucher.
He's a Democrat from Virginia.
He's also a representative.
And the Senate side, you want to send your comments
to Senator Daniel Inouye from Hawaii,
because he's the head of the Senate Communications Committee.
He's a good guy.
What's your publication?
His publication or mine?
I thought he was reporting on a conference today for some public...
Communications Daily.
Communications Daily.
Oh, okay.
In fact, Brock, are people here able to subscribe to that?
Yeah, they are, if they've got pretty deep pockets.
You can tell us how to subscribe.
If you want to subscribe, you can call our circulation offices,
and that's area code 202-872-9200,
and that's in Washington, D.C.
If you just want some information,
I'm sure that we often give out a week or two trial subscription.
You can write to the circulation desk at Warren Publishing,
W-A-R-R-E-N Publishing,
and that's at 2115 Ward Court,
W-A-R-R-D Court,
Northwest, Washington, D.C.,
20037.
And you guys don't have an electronic address?
If you want to get an electronic address,
you can send it to me,
which is
brock
at
well
dot
S-F
dot
C-A dot
U-S.
And that's
Brock, B-R-O-C-K, right?
That's correct.
Okay.
Thanks for the call.
Let's go on to another.
We have time for maybe two more.
Good evening.
You're on the air.
Hello?
Okay.
Well, they appear to be in shock.
Let's go to another one.
They have hung up.
Let's go over here.
Good evening.
Hi.
Am I in the air?
Yes, you are.
Let me turn my radio down then.
Good idea.
Drop the phone, too, while you're at it.
Oh, that's a long delay.
Okay.
Welcome back.
Yeah.
I was interested in the bulletin board tax.
I just saw it today in the Wall Street Journal that New York State has said that the tax doesn't
apply to computer services.
That's right.
They changed their minds.
Exactly who was responsible for that?
Was there somebody in the state legislature that we should be grateful towards?
I would be grateful towards all the people that made phone calls to the New York State Tax
Commissioner and to their elected representatives because, obviously, that made a difference.
I saw letters in Newsday.
I saw editorials.
When word gets out on something like that and there's an Internet community that supports them,
things happen.
They really do.
And, in fact, Brock can attest to that because he helped report a story last year concerning
the 2600 meeting harassment.
And that story wouldn't have come about without the Internet, without people communicating electronically.
There's a lot to be said for that.
And that's why it's, you know, this is something that we really cling to.
We really want to preserve because it's a very fundamental freedom of communication and the
press and all that kind of thing.
Yes, but it also wouldn't happen if there weren't some people in government who were a
little bit more like Nick Johnson and a little bit less like some of the more reactionary types.
And I wonder who they are.
Maybe we should reward those state senators and representatives who actually did pay attention
to this and did something about it.
I called my own state senator, and he said he was very interested.
And I wonder if he did anything about it.
Well, we can hope he did, but certainly if he's running for re-election, he'll mention it
in one of his ads.
Well, in your evaluation, I mean, have you been following this?
Who has, do you know of anyone in the New York State Senate or legislature that did anything
particularly commendable towards getting rid of this bulletin board tab?
Not to my knowledge.
I don't know of anybody in those organizations that really has the technical expertise to
even understand it, but I'm not saying that they don't exist.
I just am not aware of them.
I would like very much to be aware of them because perhaps they could be our conduit of
information for things like this in the future.
We need people like that, most definitely.
And if anyone out there is aware of representatives that have such abilities, please let us know
so that we can keep the communications open.
Well, my representative was Scott Stringer, and he represents the Upper West Side, and
he seemed to be very interested in it, and he said that he had gotten a couple of calls
on it.
And I guess if somebody lives on the Upper West Side, they might drop him a line to let
him know that they are grateful that he took an interest in it.
Just to let them know we're out here, too.
What's that?
To let them know that we're out here.
Yeah, you say the New York State Tax Commissioner is the one who made this decision?
He's the one that, according to the paper, reversed himself.
So I guess he can do that at any time.
He can just reverse himself.
We're glad he did.
It's nice to have arbitrary power.
Well, if it's a good thing, you know, if they make good decisions, I guess it's not
as bad as if they...
Did you contact your representatives, your state representatives?
I'm sorry?
Did you contact your state representatives?
We sent out a letter, and we encouraged other people to send out letters, too.
What kind of response did you get from your state representatives?
None.
And that's, unfortunately, usually what we get is no response whatsoever.
Same thing years ago when we tried to battle various New York telephone policies.
You know, one thing...
Getting a response is unusual, I find, you know, other than a form letter.
Um, actually, uh, Scott Stringer picked up the phone when I called.
Really?
Well, that's a very good sign.
When they pick up the phone, that's, uh, that's very promising.
Listen, sir, I don't want to cut you off, but we're out of time.
Okay.
All right, thanks for calling.
Brock, it's been, uh, it's been revealing.
It's been fascinating.
And, um, it certainly is, uh, kind of a scary look at the future if this, uh, Bell Atlantic
TCI deal goes through.
Do you think it will?
Um, oh, yeah.
I don't think that there's any, there'll be any problem with it going through.
I think, uh, as a matter of fact, within, uh, the next, uh, well, I think by the, by
December, we will see the last two, uh, baby bells come on board.
We, we, we, we have, uh, we have Ameritech left to go that hasn't made any kind of cable
or media deal.
And, uh, we've got the, uh, uh, the juggernaut out in the West Coast, Pacific Bell hasn't
done one either.
But, uh, my sources tell me there that, uh, uh, Pacific Bell is ready to go in, in probably,
uh, uh, three to three to six weeks.
And, uh, Ameritech, um, don't know.
They're moving, they're moving slower, but certainly before the end of the year.
And, uh, as we saw today in, uh, the Wall Street Journal, Time Warner, I mean, uh, U.S.
West is talking to another cable company and that, that, uh, that deal will happen within
four weeks too.
And can you, can you tell us what the other, uh, baby bells are, are acquiring or thinking
of acquiring?
Well, the other, they're, the Ameritech is, is, is Ameritech and Pacific Bell both, um, are
looking at, uh, at, at buying either all of or a majority stake in, um, uh, cable companies.
Don't know, don't know which ones yet, but, um, uh, you, you're going to see it.
It won't, it won't be a small deal.
And how about 9X?
Um, 9X I think is, is, uh, uh, well, Tom Taki, who is our vice president of 9X, told me
that, uh, they've got a short list for, uh, for a cable deal and, uh, you know, everybody
says that they're talking.
I don't think 9X will be the next one to leap because they made the, uh, the big investment
in, uh, Viacom.
Uh-huh.
Well, 9X is still working on cutting over crossbar and things like that, but they'll, they'll get
there one day, I'm sure.
Brock, thanks very much for being with us tonight and for, uh, for talking, uh, about this, uh,
this issue.
I'm sure we'll be in touch again in the future as, um, as things change.
And, um, again, thanks for talking to us.
Sure, anytime.
Okay.
That's, that's going to just about, uh, do it for us here tonight, uh, off the hook.
We'll be back again next week with another fun-filled, exciting program.
You never know what's going to happen next in this industry, and that's what makes it
so exciting, I guess.
Stay tuned for the news.
This is Emmanuel Goldstein.
See you next week.
Oh, I cut myself while shaving, now I can't make a cough.
It could be yet much worse, but if it could, it would.
Bum, did it bombed for the best, expect the worst.
I hope that's understood.
Bum, did it bombed!
Bum, did it bombed!
You ended up recording!
Bye.
Good evening. In the news tonight, the deal struck to bring democracy back to Haiti is
quickly unraveling. The president's drug czar faces tough questioning from Senate Republicans.
And in New York, the school asbestos crisis seems to get deeper and deeper. With these and other
stories, I'm Jose Santiago in New York with Verna Avery Brown in Washington, and this is the news
for Wednesday, October 20, 1993. First to these headlines topping the news. It's finally over.
The trial that arose out of the L.A. uprising in April 1992 came to a close today as the jury
reached one final verdict. Lisa Martinez has more from the downtown Los Angeles criminal courthouse.
It was a victory today for the defense in the Reginald Denny beating trial. When the first batch
of verdicts were read on Monday, the jury appeared hopelessly deadlocked on one of the most serious
charges against Damian Williams, attempted murder related to the attack on trucker Reginald Denny.
But this morning, the racially diverse panel of 10 women and two men found Williams not guilty of
attempted murder. The jury, however, remained deadlocked on the assault with a deadly weapon
count against Henry Watson, and the judge in this case, John Outerkerk, declared a mistrial.
The judge immediately ordered Watson's release from county jail. Reaction from the defendants
and their families, as expected, was jubilant. On hearing the not guilty verdict, a smiling
Damian Williams reached out and hugged defense attorneys Wilma Shanks and Edie Fall. From
Mrs. Watson came shrieks of joy when the mistrial was declared. And attorney Edie Fall told reporters
how the two defendants feel today about the incident at Florence and Normandy.
I apologize to Mr. Denny for what he has suffered. He did not deserve it. He's a good man, and we're praying for him.
Reaction throughout metropolitan L.A. is mixed, but for the most part, there is a sense of relief.
As inner city council member Mike Hernandez put it, this has been another phase in the healing process
of Los Angeles, and it's time now to secure the future of our city. For Pacifica Network News,
this is Lisa Martinez in Los Angeles.
There are reports of a deal in the works in Haiti to keep the exiled President John Bertrand Aristide's
October 30th return on schedule. J.P. Slavin reports from Port-au-Prince.
Prime Minister Robert Malvell is preparing to appoint two new cabinet ministers from Haiti's Devalier camp.
There are other parts of the deal in the works, but the entire package is still being negotiated.
Malvell is reportedly making the deal to satisfy the demands of armed resistance here to Aristide's return.
Army Commander Lieutenant General Raoul Sidras is holding talks with Haitian parliamentarians today.
Sidras wants parliament to pass a sweeping amnesty law before he says he will retire.
The U.S. embassy said today the Haitian are-