Is Big Really Bad? Well, Yes

By Victor Navasky

The other day a friend of mine was clearing out his attic, and he came across a copy of a 1967 newspaper called the World Journal Tribune. Its name was an amalgam of three defunct New York City newspapers, each of which had possessed a sharply defined identity. But by the time they morphed into the World Journal Tribune, its identity was as meaningless as its name.

So I was amused to read in an account of the press conference announcing the merger of Time Warner and America Online how AOL's Steve Case, who usually wears khakis and a denim shirt, put on a suit for the occasion, while Time Warner's Gerald Levin, who used to be a conservative dresser, showed up without a tie. The identity blur begins.

Then came the happy news. While I was naively prepared to believe the main purpose of the merger was to make more money for shareholders, all present assured us that the new entity was there to serve the public interest. Case: "Ultimately, this is about serving consumers." Levin: "The values that we feel we can leave as a legacy...have a lot to do with the social destiny of people everywhere."

Not only that, but because this was not a merger between two companies in the same field--cyberspace being something new under (or rather beyond) the sun--they foresaw no antitrust problems, even though the $165 billion takeover is the biggest in history. "This thing is instantly available everywhere...so it's my view that this is kind of a clean break with the past," said Levin. "I don't see a regulatory problem." He is undoubtedly right as a predictor of government (in)action. Which is to say the takeover will probably be the beneficiary of the Robert Bork-Chicago School efficiency theory of antitrust, which bloomed with Reagan and his deregulators.

Besides, editorialists at both the New York Times and the Washington Post tell citizens worried about media diversity and consumers worried about their pocketbooks to relax. This is a merger of cyber apples and earthbound oranges. AOL already has 20 million customers (about half the market) for the dial-up services that link computers to the Internet. Time Warner is already the world's biggest media conglomerate. Joining the two won't substantially increase either's share of its market. As the Post put it, "Down the road, there may be reasons to fear the muscle of AOL Time Warner ... But our sense is that in the near future the new company does not endanger consumer choice or competition."

Of course, the problem has precisely to do with "down the road"--two or three mergers down the road. Never mind that AOL's Case had been agitating for an FCC rule mandating nondiscriminatory access to Internet service providers (known as open access). Now that AOL has bought its own access, he seems to be saying that no governmental regulatory intervention is necessary. Good old AOL Time Warner will provide open access voluntarily.

Let's assume that Case, Levin, Ted Turner and Bob Pittman are the benign presences they appear to be. The problem has to do with putting the structure in place now for what will certainly happen later. It has to do with what media critic Ben Bagdikian prophesied more than a decade ago: that fewer and fewer corporations would come to dominate the media environment, resulting in the free-enterprise equivalent of a Ministry of Culture. It has to do with mega-communications conglomerates that are already bigger than the economies of countries whose monopolistic information policies we condemn as a violation of democratic values. It has to do, in other words, with the evil potential of bigness--what happens when the power to exercise total control over the information available to the American public passes from the benign to the malign.

This is not a new idea. As the historian Richard Hofstadter wrote, when Congress debated the Sherman Antitrust Act in 1890, its leaders shared "an awareness of the economic foundations of politics. In this respect, the Sherman Act was simply another manifestation of an enduring American suspicion of concentrated power." For Senator John Sherman the antitrust law was an important means of "maintaining freedom." The concentrated power of trusts amounted to "a kingly prerogative," and he argued, "If we will not endure a king as a political power, we should not endure a king over the production, transportation and sale of any of the necessities of life."

The day after the takeover, the Times ran an editorial noting that corporate behemoths are a danger in a country that permits them to buy influence. Its solution: "The remedy to this political threat is not to scuttle mergers but rather to fix campaign-contribution laws."

I am second to none--pace Senators Bradley and McCain--in my devotion to campaign-finance reform, but please. Candidates are beholden to big media because of the power big media hold over them. The remedy to this blight on our democracy is not bigger behemoths. In order to maximize consumer choice, it may make sense to ask how many widgets it takes to make a competitive widget market. But the same question doesn't really make sense for companies dealing in news and ideas. If anything, government should raise the bar before approving mergers among such mega-entities.

Victor Navasky is publisher and editorial director of the Nation and a professor of journalism at Columbia University