Saturday, March 10, 2007
Wednesday, March 07, 2007
Last week, Spanish-language broadcaster Univision Communications Inc. agreed in principle to pay an unusually steep $24 million fine for violating the Children's Television Act, which requires broadcasters to show three hours of educational programming a week, Federal Communications Commission officials said. In exchange, the FCC will approve Univision's sale to a consortium of private-equity groups for $12.3 billion. Univision declined to comment on the proposed consent
It's the largest fine assessed by the FCC against a company, far exceeding the $9 million fine slapped on Qwest Communications in 2004 for violating FCC rules and the $3.6 million indecency fine proposed against CBS and its affiliates last year for an episode of the crime drama "Without a Trace."
There is one word describing this action: extortion. It is illustrative of the type of arbitrary power that so-called government regulatory agencies exert and that is prominent in most instances where private-sector companies need to seek approvals for actions such as mergers. There is no statutory relationship between the Children's Television Act and the FCC's power to sign off on mergers in the communications industry. But it makes the connection by arbitrary fiat.
And the action is arbitrary. Does one know what particular statute will be used to hold up merger approval? Your guess is as good as the guess of the executives at Univision. As the article states, "The FCC has rarely taken action against broadcasters for not meeting educational requirements for kids' television." Now, however, it sees fit to levy it's largest fine in history over a statute that it has rarely enforced. That is the very definition of arbitrary.