About Me 0011: Making Money Without

You're probably reading this on junk. And I'm not talking about newsprint - industry woes aside, that's high-quality stuff. But if you're on a computer or an iPad, and you're not plugged into an Internet jack in the wall? Junk, then.

But it's not your MacBook or your tablet that's so crummy. It's the spectrum it's using.

Spectrum, in the words of FCC Chairman Julius Genachowski, is the economy's "invisible infrastructure." It's the interstate system for information that travels wirelessly. It's how you get radio in your car, service on your cellphone and satellite to your television. It's also how you get WiFi.

But not all spectrum is created equal. "Beachfront spectrum" is like a well-paved road. Lots of information can travel long distances on it without losing much data. But not all spectrum is so valuable.

In 1985, there was a slice of spectrum that was too crummy for anyone to want. It was so weak that the radiation that microwaves emit could mess with it. So the government released it to the public. As long as whatever you were doing didn't interfere with what anyone else was doing, you could build on that spectrum. That's how we got garage-door openers and cordless phones. Because the information didn't have to travel far, the junk spectrum was good enough. Later on, that same section of junk spectrum became the home for WiFi - a crucial, multibillion-dollar industry. A platform for massive technological innovation. A huge increase in quality of life.

There's a lesson in that: Spectrum is really, really important. And not always in ways that we can predict in advance. Making sure that spectrum is used well is no less important than making sure our highways are used well: If the Beltway were reserved for horses, Washington would not be a very good place to do business.

But our spectrum is not being used well. It's the classic innovator's quandary: We made good decisions many years ago, but those good decisions created powerful incumbents, and in order to make good decisions now, we must somehow unseat the incumbents.

Today, much of the best spectrum is allocated to broadcast television. Decades ago, when 90 percent of Americans received their programming this way, that made sense. Today, when fewer than 10 percent of Americans do, it doesn't.

Meanwhile, mobile broadband is quite clearly the platform of the future - or at least the near future. But we don't have nearly enough spectrum allocated for its use. Unless that changes, the technology will be unable to progress, as more advanced uses will require more bandwidth, or it will have to be rationed, perhaps through extremely high prices that make sure most people can't use it.

The FCC could just yank the spectrum from the channels and hand it to the mobile industry. But it won't. It fears lawsuits and angry calls from lawmakers. And temperamentally, Genachowski himself is a consensus-builder rather than a steamroller.

Instead, the hope is that current owners of spectrum will give it up voluntarily. In exchange, they'd get big sacks of money. If a slice of spectrum is worth billions of dollars to Verizon but only a couple of million to a few aging TV stations - TV stations that have other ways to reach most of those customers - then there should be enough money in this transaction to leave everyone happy.

At least, that's some people's hope. Some advocates want that spectrum - or at least a substantial portion of it - left unlicensed. Rather than using telecom corporations such as Verizon to buy off the current owners of the spectrum, they'd like to see the federal government take some of that spectrum back and preserve it as a public resource for the sort of innovation we can't yet imagine and that the big corporations aren't likely to pioneer - the same as happened with WiFi. But as of yet, that's not the FCC's vision for this. Officials are more worried about the mobile broadband market. They argue (accurately) that they've already made more beachfront spectrum available for unlicensed uses. And although they don't say this clearly, auctioning spectrum to large corporations gives them the money to pay off the current owners. But even so, they can't do that.

"Imagine someone was given property on Fifth Avenue 50 years ago, but they don't use it and can't sell it," says Tim Wu, a law professor at Harvard and author of "The Master Switch." That's the situation that's arisen in the spectrum universe. It's not legal for the FCC to run auctions and hand over some of the proceeds to the old owners. That means the people sitting on the spectrum have little incentive to give it up. For that to change, the FCC needs Congress to pass a law empowering it to compensate current holders of spectrum with proceeds from the sale.

One way - the slightly demagogic way - to underscore the urgency here is to invoke China: Do you think it's letting its information infrastructure stagnate because it's a bureaucratic hassle to get the permits shifted? I rather doubt it.

Of course, we don't want the Chinese system. Democracy is worth some red tape. But if we're going to keep a good political system from becoming an economic handicap, there are going to be a lot of decisions like this one that need to be made. Decisions where we know what we need to do to move the economy forward, but where it's easier to do nothing because there are powerful interests attached to old habits. The problem with having a really good 20th century, as America did, is that you've built up a lot of infrastructure and made a lot of decisions that benefit the industries and innovators of the 20th century. But now we're in the 21st century, and junk won't cut it anymore.

Mike Huckabee featured a canned interview with Sean Hannity on his show this weekend as part of a year-end retrospective in which they discussed the Tea Party. The amusing part came when they discussed Teh Awesome Power of the Tea Parties, which Hannity identified with the American people themselves. Both of them argued vehemently against the notion that the Tea Parties were mere corporate Astroturf.

Completely absent from the discussion, naturally, was any mention whatsoever of the role played by Fox News. And while the role of astroturfers like FreedomWorks and Americans for Prosperity in fact was indispensable, none of them came close wielding the sheer energizing and organizing power that having a national "news" network openly propagandize for a movement can bring.

As John and I explain in Over the Cliff: How Obama's Election Drove the American Right Insane (pp. 121-127):

It costs advertisers thousands of dollars to air a single thirty-second commercial on a few cable stations for a week, even in relatively cheap rural markets. To advertise nationally on Fox News – the ratings leader in cable news – costs hundreds of thousands of dollars, even millions if the ads air often enough and in prime-time programs.

So what Fox News offered up the organizers of the tea parties -- and the conservative movement opposing Obama’s presidency -- was something you couldn’t measure in dollars and cents, because not only did Fox air a steady onslaught of “tea party” promotional ads, they embraced the outright promotion of the events in their news broadcasts and on their “opinion shows.” Their on-air personalities as well as their websites took an active role day after day and night after night promoting and urging the Fox audience to join in the tea party protests. Media Matters, a non-profit organization that tracks the conservative media documented 63 instances where Fox News anchors and guests openly promoted the tea parties and discussed them as a legitimate news event.

Initially, there was a lull; there was only passing mention of the tea parties on Fox again for the two weeks after Van Susteren’s show. Then, on March 16, three Fox anchors – Glenn Beck, Bret Baier, and Bill O’Reilly – featured segments discussing the tea parties, again in glowing terms. O'Reilly told his audience that "big government spending protests are taking place all over the country. The latest in Cincinnati, where about 5,000 folks showed up, showed their displeasure with the Obama's administration money strategy. These gatherings are being dubbed tea parties."

But it was Beck in particular who most avidly embraced the tea parties, making them his own pet cause. Some of this had to do with the ease with which the tea-party themes – an embrace of small-government philosophy, with an anti-tax and pro-gun fervor thrown in for emphasis – melded with the populist themes Beck was already exploring in depth on his show. On March 13, he had hosted a special one-hour program themed “You Are Not Alone” that was most notable for some of Beck’s most maudlin crying jags, including his oft-lampooned sob, “I just love my country – and I fear for it!” The show – like Beck’s later Tea Party promotions – featured broadcasts from specially gathered audiences in locations around the country who wanted to join Beck’s cause of “standing up to big government”. Its purpose was to launch Beck’s “912 Project” – named dually after Beck’s wish to bring the country back to “where we all were on the day after 9/11,” as well as the “9 Principles and 12 Values” Beck espoused, drawn from a 1972 book titled The 5,000-Year Leap, by far-right conspiracy theorist W. Cleon Skousen, which Beck promoted on his show and website.

After March 16 – when Beck noted the tea parties mostly in passing – the tea-party themes began to meld seamlessly with Beck’s “912 Project”. On March 18, Beck remarked: "People are starting to get angry. These tea parties are starting to really take off." On March 20, Beck began making the connection explicit. Once again denouncing the Missouri law-enforcement report on right-wing extremism, he connected the “extremists” described therein to the tea partiers:

But if you're concerned about the government, you're considered dangerous now in America. More than 160,000 Americans have already signed up to be part of our 9/12 Project, "912project.com," since we launched it a week ago -- 163,000 people have signed up. Who are these people? They're people just like you that are just concerned about our government and they're concerned about our country.

You know, are they militia members? Yes. Yes, sure they are, along with all the other people that are now on the tea parties nationwide. There is one here in Orlando, Florida. Tomorrow is supposed to be huge.

He mentioned the Orlando tea party warmly on March 23 as well, and then on March 24, Beck hosted two of the event’s tea-party organizers, Lisa Feroli and Shelley Ferguson, saying: "I have been telling you for weeks that you've got to stand up. And a lot of people around the country are doing these tea party things. But please, make them about principles, not about the parties. Make them about the principles."

Beck continued promoting the show each night through the rest of March. On his April 2 program, he announced that he would be hosting a special tea-party broadcast on April 15: "Tax Day, two weeks away. All right. More Americans are fed up with the nonsense in Washington both left and right. They are holding tea parties on April 15th. In this show, I can now announce that we're going to have our program live from the only place in America where I think it really, really makes sense - the Alamo. Plant your flag, America. It's in San Antonio, Texas. We will see you there on Tax Day!"

Beck was only leading the way for the other Fox anchors. A few days later, on April 6, he announced that not only would he be hosting his San Antonio “Tax Day tea party” on the 15th, but so would Neil Cavuto, Sean Hannity, and Greta Van Susteren, who planned to do similar broadcasts from respective tea parties in Sacramento, Atlanta, and Washington the same day. Fox was planning to flood the airwaves with tea-party protests.

Beck was prolific in promoting the tea parties. Between March 16 and April 14, Beck urgently implored his audiences to take part in the Tax Day protests a total of 17 times (out of a total of 21 shows). One of the more piquant episodes came when he hired a motivational speaker and sometime actor named Bob Basso to dress up in colonial costume and pretend to be Thomas Paine, embarking on a tea-party-loving rant:

The time for talk is over. Enough is enough. Your democracy has deteriorated to government of the government, by the government, and for the government. On April 15, that despicable arrogance will be soundly challenged for the whole world to see. Our friends will applaud it. Our enemies will fear it.

In an unprecedented moment of citizen response not seen since December 7, 1941, millions of your fellow Americans will bring their anger and determination into the streets.

… Your complacency will only aid and abet our national suicide. Remember, they wouldn't dare bomb Pearl Harbor, but they did. They wouldn't dare drive two planes into the World Trade Center, but they did. They wouldn't dare pilot a plane through the most sophisticated air defenses in the world and crash into the Pentagon, but they did. They wouldn't dare pass the largest spending bill in history, in open defiance of the will of the people, but they did!

Beck’s fellow Fox hosts did their best to keep pace. Sean Hannity featured segments on the tea parties a total of 13 times between March 12 and April 14, while Neil Cavuto’s afternoon business-oriented show featured a total of ten segments devoted to the protests during that same time. Nor were the “opinion shows” the only ones to do so: Another 15 or so tea-party promotional segments ran those weeks on such “news” shows as Fox and Friends, America’s Newsroom , and Special Report with Bret Baier.

Fairly typical was a March 23 broadcast in which America’s Newsroom anchor Bill Hemmer directed people to a list of tea party events on FoxNews.com and promised to "add to [the list] when we get more information from the New American Tea Party." Likewise, on the March 25 edition of Special Report, host Bret Baier said that the tea parties are "protests of wasteful government spending in general and of President Obama's stimulus package and his budget in particular." Another America's Newsroom broadcast on April 6, Fox contributor Andrea Tantaros described the protests: "People are fighting against Barack Obama's radical shift to turn us into Europe." Fox News also aired on-screen text stating that the "Tea Parties Are Anti-Stimulus Demonstrations."

Despite the obvious anti-Obama bent of all these protests, Beck and other Fox hosts worked hard to present the tea parties as “non-partisan,” bringing on guests who were either disappointed Democrats or conservatives still angry with the Republican Party too. Yet the nonstop drumbeat around the protests made clear that they were primarily in response to Obama administration policies.

The March 24 segment of America’s Newsroom promoting the tea parties was a classic instance of this. In it, Hemmer interviewed a man named Lloyd Marcus who was president of the National Association for the Advancement of Conservative People of Color, who told Hemmer that he previously "was on a 40-city 'Stop Obama' tour". Marcus' wrote a song, posted on FoxNews.com, which made clear that this was about Obama:

Mr. President!

Your stimulus is sure to bust.

It's just a socialistic scheme,

The only thing it will do

Is kill the American Dream.

You wanna take from achievers

Somehow you think that's fair.

And redistribute to those folks

Who won't get out of their easy chair.

We're havin' a tea party across this land.

If you love this country,

Come on and join our band.

We're standin' up for freedom and liberty,

'Cause patriots have shown us freedom ain't free.

So when they call you a racist cause you disagree,

It's just another of their dirty tricks to silence you and me.

Indeed, Fox News’ website was rich with tea-party promotion, as were its affiliated sites like the new FoxNation site, which tried to act as a sort of “information central” for the tea parties, with numerous links discussing and promoting the protests. One link, titled "Find a Tea Party!", directed readers to a Google Maps page for "2009 Tea Parties." Another link to you to a YouTube video headlined, "The Trillion Dollar Tea Party Video!", which featured Tampa Bay Area Tea Party organizers explaining why viewers should "join your local tea party." For those who couldn’t make it, Fox News announced that viewers could also attend “a virtual tax day tea party” at FoxNation instead.

Sean Hannity’s website at Fox featured a graphic with links to a message board discussion: "This thread is for the sole purpose of getting the word out about organized tea party events around the country. If you know of a planned event, please post the information here." Hannity’s producers wrote a blog post on his site proclaiming, "Get your Tea Party Tees at CAFE PRESS and wear them on April 15!" There were also "some helpful links" to AtlantaTeaParty.net and TaxDayTeaParty.com.

Then there were the promotional ads. In the 10 days leading up to the April 15 protests, Media Matters reported that Fox News aired 107 ads promoting them.

At times, Fox tried to deny that this deluge of glowingly sympathetic “reports” and barrage of commercials on the tea parties actually constituted promotion of the event. On the morning of the protests April 15, Fox and Friends broadcast, host Steve Doocy told his audience that “Fox is not sponsoring any of them, but we have been covering them.” This was a peculiar (not to mention disingenuous) remark, considering that Fox had repeatedly run onscreen graphics describing the events at which its anchors were to appear as “FNC Tax Day Tea Parties.”

Of course, this history will never be aired on Fox -- especially now that Rupert Murdoch denies promoting the Tea Parties.

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Monday, January 10, 2011

Making Money Without

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