Who Should Pay for FCC to Play? A Recent Report about Industry-Sponsored Trips for FCC Officials Has Raised Eyebrows, but a New Provision Would Put Commission Travel on the Tab of Taxpayers
Byline: Vanessa Pierce, INSIGHT
There has been an unprecedented backlash since the June 2 decision of the Federal Communications Commission (FCC) to deregulate media ownership. A bipartisan coalition in the U.S. House of Representatives voted 400-21 to roll back the broadcast-ownership provision of the new rules. This rule says a single company may not own TV stations that consume more than 45 percent of the market (formerly it was 35 percent). A Senate committee agreed, added further caveats in S 1046, and sent the matter to the floor.
Sen. John McCain (R-Ariz.), chairman of the Senate Commerce, Science and Transportation Committee, meanwhile threw something else into this roiling mix, adding a provision to the FCC Reauthorization Act (S 1264) that would prohibit members of the telecommunications industry from paying for the expenses of FCC officials attending the industry's special events. McCain's decision to add the provision was based in part on a report by the nonpartisan Center for Public Integrity (CPI), an investigative-journalism group, that claims $2.8 million was spent over eight years by the telecommunications industry, universities and international organizations to send FCC officials to trade shows and conventions held at vacation destinations. The report also suggested a questionable relationship between these travels and the June 2 ruling by the FCC.
Critics of big media say concern about multimillion-dollar ingratiation is legitimate since the changed ownership restrictions could result in market monopolies. The FCC claims the report is "misleading" and denies any wrongdoing.
It is important carefully to review the CPI report and evaluate it for fairness and balance because S 1264 is based partly on it and, if it is passed, taxpayers would be the ones footing the bill for the travels of FCC officials to major media-industry events.
The CPI report, called Well Connected: A Report on the Frequent Travels of the FCC and Other Telecommunications Issues, documents trips costing more than $250 that were paid for by sources other than the FCC and identifies 2,500 "industry-sponsored" trips during the last eight years. Most trips were to destinations such as Las Vegas, New Orleans and New York City. Project Manager John Dunbar tells Insight that CPI spent three years investigating the telecommunications industry as a whole and that its federal regulator, the FCC, deserves similar scrutiny.
According to FCC spokesman Richard Diamond, it is not uncommon for commission officials to travel as part of their oversight function. The trade shows and conventions tend to be attended by industry executives and personnel with a wide variety of viewpoints. Traveling to attend these events is important because it "gives us the opportunity to get outside the [Washington] Beltway and hear from people about the real effects of [FCC] policy in the real world," he tells Insight. Traveling is routine among all the regulatory agencies and each has to comply with the federal law that specifies the procedures for accepting payments from outside sources. It was just happenstance that the FCC was the target of this investigation, and the report does state that the "trips appear to have been legal under government guidelines."
Nevertheless, the CPI report has raised public concern and critics on both the left and right tend to worry about chummy relationships between regulators and the industry they oversee. One of the apprehensions is that wining, dining and other entertainment seems to be linked to these events. The report cites one event in which the Consumer Electronics Manufacturers Association spent more than $45,000 to bring 27 FCC officials to an electronics show in Las Vegas, where they were housed in the glitzy Bellagio Hotel & Casino. "It's silly to say [FCC officials] don't lose some of their objectivity when they are being wined and dined like they are at these industry events," says Mark Cooper, director of research at the Consumer Federation of America. He told CPI investigators, "You would have to be superhuman not to." The report also says that although officials usually serve as speakers or panelists for one session at these conferences, they tend to stay for the entire event.
Diamond says that not all these travels are to elegant affairs. He points to the $150,000 worth of documented travels of FCC Office of Plans and Policy chief Robert Pepper as an example of how the report might be misconstrued. Pepper averaged one trip per month during the eight-year period, with each averaging 2.5 days and including many international ventures. A five-day trip to the U.S.-China Telecommunications Policy and Regulatory Forum in Beijing cost around $1,400. A simple search on Expedia.com for a similar trip to China turned up one costing about $1,300 for a round-trip ticket and four-night stay at the award-winning Shangri-La Hotel. Needless to say, Pepper didn't stay at the Shangri-La. Taking jet lag into consideration, such a trip is physically exhausting, and under federal guidelines officials cannot fly first class unless a medical condition requires it.
Pepper tells Insight the report has the facts right but the context is missing. For example, Pepper was at the FCC during the entire eight years of CPI's analysis, putting him at No. 1 on the "top-spenders" list, whereas others followed by the report were not there the entire time. Also, he says, if the $150,000 total is broken down it shows he used about $1,500 a month for trips, a sum completely compatible for oversight travel by a hardworking regulator.
Dennis Wharton, senior vice president of corporate communications for the National Association of Broadcasters (NAB), defends the FCC. He says that although NAB is the top sponsor of the travel freebies, according to the CPI report, it favors rollback of FCC Chairman Michael Powell's liberalization of ownership rules. NAB spent around $190,000 to take 206 FCC officials to its events during the eight-year duration, and it had what Wharton considers a good reason. As he puts it: "If you sit behind a desk in Washington all day you don't have a good idea of the industry you regulate." The NAB, which represents TV and radio stations nationwide, has been holding its annual convention in Las Vegas for nearly 20 years, according to Wharton. He says the convention has been held there because it can accommodate the event with more than 750,000 square feet of floor room and is less expensive than comparable facilities in New York City or Chicago. Though the report shows other industries do convene in more expensive cities, the NAB convention is held in the spring when Wharton says Las Vegas provides "a nice venue for broadcasters after a long cold winter."
Moreover, a breakdown of expenditures by the NAB of $190,000 on travel for FCC officials, spread over an eight-year span, provides a different picture. The numbers indicate that the association averaged a total expenditure for these travels of $922 per official in eight years about $115 per year.
Nonetheless, the CPI report has become a factor in McCain's decision to prevent the communications industries from paying for FCC travels to major conferences. "Although [the trips are] perfectly legal and it is often appropriate for FCC officials and staff to attend such conventions, conferences or meetings, it should be without the appearance of impropriety," McCain said in a press release. "Therefore, the bill authorizes the commission sufficient funds to pay for their own travel costs in the future." Which means, say critics, that now taxpayers pay for these trips.
The fiscal 2003 budget for the FCC is $275 million. Six million dollars will be added to the national debt, bringing next year's budget for this regulatory agency to $281 million, and the budget will be increased incrementally each year (nearly $300 million in 2005, $319 million in 2006 and $335 million in 2007). The Senate Commerce, Science and Transportation Committee could not tell Insight exactly how much actually will be allocated for FCC travel expenses. That is something the commission will determine later. The McCain proposal states that the increases are for "unreimbursed travel ... increases resulting from adjustments in salary, pay, retirement, other employee benefits required by law and other nondiscretionary costs, for each of such years." Right now the bill is awaiting action. It has been favorably reported out of committee and a spokesman for the Senate committee tells Insight that its passage looks promising.
The FCC says it is not worried about how this legislation will affect its fact-finding travels. After all, traveling will continue. Nor has McCain called for hearings to investigate FCC travels or asked the General Accounting Office to explore for more details.
Vanessa Pierce is a summer reporter for Insight magazine.…
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Who Should Pay for FCC to Play? A Recent Report about Industry-Sponsored Trips for FCC Officials Has Raised Eyebrows, but a New Provision Would Put Commission Travel on the Tab of Taxpayers. Contributors: Not available. Magazine title: Insight on the News. Publication date: September 2, 2003. Page number: 23. © 1999 News World Communications, Inc. COPYRIGHT 2003 Gale Group.