The MacNeil/Lehrer NewsHour

MR. MAC NEIL: Good evening. I'm Robert MacNeil in New York.

MS. WARNER: And I'm Margaret Warner in Washington. After our summary of the day's news, we go first to the Senate battle over defense spending. Democrat Carl Levin and Republican Dan Coats debate the issue for us. Then we explore the House battle over telecommunications reform with two congressmen and two specialists in the field. Finally, Charlayne Hunter-Gault has the last of her conversations about the future in cyberspace. NEWS SUMMARY

MR. MAC NEIL: Hurricane Erin churned across the Florida panhandle today, edging its way into Alabama. The storm crashed into Pensacola, packing heavy rain and wind gusts up to 100 miles an hour. Downed power lines, uprooted trees, and toppled street signs were left in its wake. It was the first time in 69 years that the eye of a hurricane has passed over the city. The National Weather Service said the storm center then crossed into Alabama. It's now moving on a Northwesterly track and is expected to hit Southern Mississippi tonight and Central Louisiana tomorrow. Erin has been blamed for two deaths. Five people are still missing at sea. Margaret.

MS. WARNER: President Clinton expressed concern today about the prospect of a widening war in the former Yugoslavia. He was responding to reports that the Croatian army is preparing to battle rebel Serb forces to regain control of Croatia's Krajina region. The move is also expected to relieve pressure on the Bosnian Muslims, who are under siege from Serb forces in the border town of Bihac. Mr. Clinton was asked about the possible Croatian military action during a photo session at the White House.

PRESIDENT CLINTON: What we have cautioned the Croatians about is widening the war. We don't want to see a widening of the war. We understand their desire to relieve the pressure on Bihac, and, of course, that is a commitment that the United Nations has made as well, so we hope that whatever is done can be done without leading to a wider war. One of the prime objectives of the United States has been to try to confine the conflict to its present dimensions.

MS. WARNER: Croatian government and Croatian Serb leaders were called to Geneva today for a UN-mediated session aimed at averting war. We have more from Paul Davies of Independent Television News.

PAUL DAVIES, ITN: Nothing was expected from the Geneva peace talks, but the fact that the Croatian government representatives spent seven hours at the same table as the rebel Serbs who still control 1/5 of Croatian territory is being seen as some course for optimism. Neither team of delegates was high power enough to call of the massing armies, and the Croats show no sign of doing so. But the UN mediators seesome cause for hope. THORVALD STOLTENBERG, U.N. Mediator: I feel we had a lot of progress during today's meeting. That is the reason why I will continue tomorrow. PAUL DAVIES: On the front line there is no talk of compromise. The Croatian people have been promised that their army will recapture the Krajina, the area inside Croatia which has been a stronghold for rebel Serbs since 1991. With 100,000 Croatian troops massed for battle, their leaders are demanding nothing less than the capitulation of the Krajina Serbs. Fearing a war that could quickly spread beyond present battle lines, European airlines are already suspending flights to the Croatian capital, Zagreb, which has previously been a target for Serbian reprisal attacks.

MS. WARNER: Later, Croatian leaders called the talks a failure, and a top Croatian general said his forces were ready to attack.

MR. MAC NEIL: The Senate voted today to speed construction of a new anti-missile defense system. By a three-vote margin, the Senate defeated a Democratic move to cut $300 million from a project to defend the United States against long range missiles. The amendment was part of a defense spending bill debated today on the Senate floor. Some opponents charged a new system would violate the 1972 ABM Treaty with Russia and re-ignite the arms race. Others said it was too costly. Supporters said new threats made the system necessary.

SEN. ROBERT SMITH, [R] New Hampshire: Twenty nations have acquired or are acquiring weapons of mass destruction and the capability to deliver them: Iran, Syria, North Korea, Libya, China, to name a few. That ought to put the fear of God in us, just that.

SEN. BYRON DORGAN, [D] North Dakota: The statement's been made that my position is I don't want to defend America's cities against a very real threat. Total nonsense, absolute nonsense. My position is we shouldn't be spending money we don't have on something the Secretary of Defense says we don't need.

MR. MAC NEIL: We'll have more on the defense bill after the News Summary.

MS. WARNER: The House of Representatives is set to pull an all- nighter tonight before starting its summer recess tomorrow. Among the major items left, debate and vote on a sweeping overhaul of the telecommunications industry. The legislation which the Senate has already passed in similar form would allow long distance telephone, local telephone, and cable television companies to compete in each other's markets, among other things. We'll have more on the story later in the program.

MR. MAC NEIL: A Palestinian man was extradited from Jordan to the United States today to face charges in the World Trade Center bombing. Twenty-four year old Nijm is accused of driving rental vans packed with explosives into the building's garage. Authorities believe he was involved in planning the attack as well. Family members in Jordan told reporters Nijm was innocent and wanted to return to the United States to clear his name.

MS. WARNER: In economic news today, the Union Pacific Corporation said it will buy the Southern Pacific Rail Corporation to form the largest railroad in North America; the sales price, $5.4 billion. And the Commerce Department reported that factory orders fell .2 of a percent in June. It was the fourth decline in five months. That's it for the News Summary. Now it's on to guns and butter, telephones and television, and the future of cyberspace. FOCUS - HOW MUCH IS ENOUGH?

MS. WARNER: First tonight, a new chapter in the fight over military spending, this time with a new twist. In this year's budget battles, the new Republican majority in Congress is seeking more money for defense than the Pentagon has asked for. The administration asked for $258 billion for defense for next year, but the House authorized $9 billion more than that. The bill the Senate is now debating with add $7 billion to the Clinton budget. Much of the increase would go for new weapons systems, such as ships, tanks, and airplanes. Both bills would also add extra funds to speed up the development of a ballistic missile defense system. Now for our own debate, we hear from two senior members of the Senate Armed Services Committee: Republican Dan Coats of Indiana and Democrat Carl Levin of Michigan. Welcome, Congressmen. Sen. Coats, why do we need to spend more for defense than the Pentagon, itself, has asked for?

SEN. DAN COATS, [R] Indiana: [Capitol Hill: Well, I think you have to put this in historical context. Even with the additional $7 billion, we will be spending 2 percent less, almost 2 percent less than last year, and it will be the 11th straight year of decline in defense spending. Republicans believe that the Department of Defense under this administration has asked for too little, has decreased defense spending too fast, too far, and we need to restore some of that. But it's still a cut, and there's been a 33 percent decrease in defense spending since the top level of 1985. And so defense has done its part in trying to meet the new needs of the new world order after the fall of the Berlin Wall and in terms of getting to a balanced budget. It's other programs that haven't been cut; defense has done its share.

MS. WARNER: Sen. Levin, you have opposed this position, but why?

SEN. CARL LEVIN, [D] Michigan: [Capitol Hill] Well, the Pentagon is telling us they don't need the extra money, that many of the add-ons they have not asked for, including some of the ships, did not ask for the B-2 bombers, but the House added money for the B-2 bombers, so many of the add-ons are things which the Pentagon does not want, and you can't just talk about an abstract number. It's what that number is spent on and what we are spending it on for the most part are things which the Pentagon has not asked us to do. And that's very wasteful; we can't afford to do that when we have a huge budget deficit. Other countries have significantly reduced their defense budgets more than we have proportionately with the end of the Cold War. Today we embarked on a whole new project which is to trash the ABM treaty so-called, which has allowed us to get reductions in offensive nuclear weapons, thousands and thousands of weapons being eliminated because we have not gone into the defensive systems. Today the Senate decided, well, we're going to commit ourselves now to certain additional defensive systems for long range missiles that are going to cost us another 40, 50 billion dollars even if it works.

SEN. COATS: Margaret--

MS. WARNER: Yes.

SEN. COATS: --let me just elaborate on my earlier answer. It's not a question of what the Pentagon didn't want. The Pentagon had to fit what the budget level number that the administration gave it, had to fit that into their budget that they submitted to the Senate and to the Congress. When asked the question, the chiefs that came before us, Sec. Perry and others, said we could use more money but budget level won't allow us to spend more, and so these are our priorities under the number that the President has given us. They're happy to get the additional funds. We asked everybody that came before the committee: What would you do if you had extra money?They listed these priorities. We know we're right on the edge of being able to fulfill the two regional conflict strategy that the administration has endorsed, and many say we can't fulfill that, so the $7 billion--

MS. WARNER: Explain that.

SEN. COATS: --goes to needed defense items. It's not just a frivolous spending.

MS. WARNER: And just to explain the two regional conflict strategy, that is the strategy that the U.S. could fight two major regional wars at the same time.

SEN. COATS: Yes. And many doubt that we're going to be able to accomplish that strategy, given the President's budget level and the President's--the preparedness for defense. Now if the administration wants to change that strategy, they should announce that they're going to change that, but that's their defined strategy, and I don't believe they provided the resources to allow the military to do that.

SEN. LEVIN: And of course, if you ask any government agency, do you want more money and can you use it, the answer is going to be yes. The Republicans want to add $7 billion here in the Senate to the Pentagon budget. If the Pentagon were asked, do you want $20 billion, I presume they'd give you a wish list of things, but when you go down the items and ask the Pentagon, do you want more B-2 bombers, they say, no, and yet, the House adds money for B-2 bombers. And we just can't spend money that way. We have too big a deficit. We cannot afford to have money in a budget which is not requested by the agency.

MS. WARNER: And what specifically, Sen. Levin, do you feel this extra money is going to that really isn't needed?

SEN. LEVIN: Well, the newest one today, which is about a $40 billion commitment, is for what are called defenses against long range ABM systems. Now this has a basic problem of trashing a treaty which we've had with the Russians for about 25 years called the Anti-Ballistic Missile treaty. That undermines that treaty unilaterally, and the Russians are going to respond. According to Gen. Shalikashvili, a top military officer, Chairman of our Joint Chiefs, he says is the likely result of what we did today is that the Russians are now going to stop eliminating all these offensive nuclear weapons which they had been dismantling. We face 8,000 nuclear weapons still on Russian soil, and we want to try to get rid of them, and what our top general is telling us is the best way to get rid of them is to continue to work with the Russians cooperatively in this treaty regime and not to pull the rug out from under it by acting unilaterally. The Senate today acted unilaterally, and it's going to cost us $40 billion for very little added capability.

MS. WARNER: What about that point, Sen. Coats, that by going ahead and speeding up this development of this system, you're going to trigger the Russians to spend more, which will make us have to spend more?

SEN. COATS: What Republicans are trying to accomplish and, in fact, it's been supported by members from both sides, is an attempt to provide a missile defense system against accidental launch, rogue nation launch. There is a proliferation of ballistic missile technology around the world. There's a capacity by more than 20 nations to obtain and have weapons of mass destruction. The world is a different place than it used to be. The ABM treaty was originally entered into with the Soviet Union. When the two nations, the two superpowers had a stand-off against each other, that treaty was valid back in 1972. The world has changed since then. We believe that it's important to provide a missile defense system against Iran, Iraq, North Korea, or whoever, including Russia, former Soviet Union provinces, that have ballistic missile technology. We think it's important to protect troops in the field. We think it's important to protect the American people. We saw a graphic demonstration of that in the Persian Gulf during Desert Storm. If Israel had not had that protection, who knows what that war would have turned into and what American involvement would have been.

MS. WARNER: Do you agree with Sen. Levin who said that though the vote today just involved an extra $300 million that, in fact, it's a really commitment to spend some extra $40 billion over several years? Do you agree with that figure?

SEN. COATS: No, I don't agree with the figure. We have set up a, a provision in the law that we passed, or as part of this bill, that will require a one-year review of the ABM treaty, a cooperative effort with the Russians. Frankly, it's in the Russians' best interest to develop a defensive missile system. They have some threats on their borders from breakaway provinces or from Iran or Iraq or other nations that might possess these weapons, and I think we can sit down with the Russians and work this out, but to be tied to a treaty that was enacted in 1972, designed to deal with a completely different problem, I think it's, it's foolish to say we're locked into that. Let's negotiate that. Let's modify it, so that each nation can possess a defensive system to protect itself against unwanted--

SEN. LEVIN: Great to say sit down with the Russians, but the trouble is today we trashed unilaterally a treaty that we worked out with the Russians, and then we want to sit down with them.

MS. WARNER: Sen. Levin, let me ask both of you about something neither of you has mentioned but many outside critics have. Sen. Levin, how much of this additional spending is just good old fashioned pork?

SEN. LEVIN: I think a lot of it is home state. If you look at the add-ons, there are, for instance, ships that come from home states.

MS. WARNER: Home states of Senators on these committees.

SEN. LEVIN: A lot of this is home state add-ons. There's no doubt about that. For many home states, the B-2 bomber is a home state add-on--for many states. But I think all Senators and all members do that. The question is whether or not it adds any capability, and if you ask the Pentagon, does it add--do you want the B-2 bombers, they say, no. Yes, the origin of that is a lot of home state, home state money, which is going to be spent.

MS. WARNER: Sen. Coats, how do you feel about this question of whether a lot of this is just good old fashioned pork, a kind of jobs program for Senators who are on these committees?

SEN. COATS: Well, I don't agree with that at all. There may be and there always has been some add-ons for members from "home states." But, frankly, the Armed Services Committee is made up of members who represent states that have a very significant military presence. Now, the B-2 bomber, I asked the chief of staff of the Air Force, I said, if you had additional funds, do you think the B-2 bomber, additional B-2 bomber capacity is, is important? He said, of course. He said, we had to make a choice, given the budget that we had, it was a choice between a new fighter, the F-22, which is under development, or the B-2. He said, we couldn't afford both. Would we like to have more B-2 bombers? Yes, we would. Is it more desirable to have two? Our defense strategy shouldn't be driven just by budget numbers or some limitation placed on by the, by the Office of Management & Budget. It ought to be driven by the threat that we face. A strong national defense is in our best interest.

MS. WARNER: Senators, with all due respect, let me just--

SEN. LEVIN: And the Defense Department has said they do not need any additional B-2 bombers to meet the threat.

MS. WARNER: Okay. Sen. Coats, let me just ask you this one thing, though. You're saying that the 5 billion extra dollars that your committee added in weapons systems, 4/5 of that goes to projects in states represented by members of your committee or the defense appropriations subcommittee. Now you're saying that's just a coincidence?

SEN. COATS: No. What I'm saying is that because states like California, Texas, and other states are the home of a lot of defense production and a lot of bases and a lot of military personnel, naturally, Senators from those states seek to be on the Armed Services Committee, just like members from Kansas and Indiana and agricultural states choose to be on the Agricultural Committee, so naturally, whatever we added, would go to states that probably are represented. Now, Carl and I are from Michigan and Indiana. We are not big defense states. We probably don't have that much extra, because we don't have that many industries and military bases within our state. But the items that were added were added at the request of the Pentagon if they had the additional money. Of course, they're taking the administration's view. They have to defend the administration's top budget line. But when you ask them what do you need for the future to ensure that the United States is a strong military presence, they list the items--and this is where most of the money went. Frankly, a lot of it went to housing. Housing and barracks for our troops are in dilapidated state. Yes, that housing is in states of members from Georgia and Texas, but that's where the bases are.

MS. WARNER: We only have a few seconds left. Sen. Levin, I wanted to let you back in here.

SEN. LEVIN: The short answer to your question is it is not a coincidence, it is very obvious there is a connection. Even if you look at all the money that is spent for the National Guard, almost all of that money goes to projects which help the states which are represented by members on the Armed Services Committee. It is not a coincidence, and it is very obvious that the money which has been added mainly benefits the states that are represented by members either in the House or in the Senate. That's the short answer to your question. The Pentagon--

MS. WARNER: I'm afraid--thank you very much--we only have time for the short answer. Thank you both very much.

MR. MAC NEIL: Still to come on the NewsHour tonight, telecommunications reform and the future in cyberspace. FOCUS - MAKING CONNECTIONS

MR. MAC NEIL: Next tonight, media mergers and media law. In the marketplace this week, two big deals shook the communications business, while in Washington, the House of Representatives takes up a major overhaul of the rules that govern that business. The most hotly debated provisions of the House bill concern the ground rules for companies providing local and long distance telephone service. On the one hand, the legislation would quickly allow the local Bell Companies to enter the long distance business. But long distance carriers and others, such as cable companies, complain they would have to wait longer to compete with the Baby Bells for local phone service. In addition, the bill would let the phone companies into the cable business, and it would remove price controls on cable TV, accept for basic service. Moreover, it would lift nearly all restrictions on the number of radio and TV stations a single company could own, the only limits being that one company could not own more than two stations in any one market or a total number of stations that reached more than 50 percent of the nation's households. It was in this atmosphere of pending deregulation that two huge mergers were announced this week. Westinghouse bid $5.4 billion to buy CBS and the Walt Disney Company's 9 billion takeover of Capital Cities/ABC. This week's deals accelerate the trend towards consolidation in the media industries. Concern about so much media concentration and other issues led President Clinton earlier this week to threaten to veto the telecommunications bill.

PRESIDENT CLINTON: I do think it would be an error to set up a situation in the United States where one person could own half the television stations, particularly if we took the federal government out of--all the federal agencies out of any kind of maintenance of competition or any maintenance of competitive environment.

MR. MAC NEIL: Now we get the views of two members of Congress and two outside observers. Thomas Bliley is a Republican from Virginia and chairman of the House Commerce Committee. Edward Markey is a Democrat from Massachusetts and sits on that committee. Benjamin Barber teaches political science at Rutgers and is the author of Jihad Vs. McWorld: How the Plant is Both Falling Apart and Coming Together. He joins us from Albany, New York. And Gregory Sidak served as deputy general counsel of the Federal Communications Commission in the Reagan administration. He's now a fellow at the American Enterprise Institute. Congressman Bliley, do you have veto-proof support for the bill in its present form?

REP. THOMAS BLILEY, JR., Chair, Commerce Committee: [Capitol Hill] Well, I don't know. You get--veto-proof support takes an awful lot of votes. I would gather if final passage follows on the basis of the rule last night, we probably don't. We had about 250 some votes for the rule. If we get that on passage, that would not be veto-proof.

MR. MAC NEIL: Congressman Markey, how do you read it, and is the President's opposition going to force changes in the bill?

REP. EDWARD MARKEY, [D] Massachusetts: [Capitol Hill] Well, I think that the President's statement that he would veto the bill in the current stage that it's in, combined with the merger mania of this week, CBS and Westinghouse and Disney with ABC, has catapulted this entire issue above the fold on the front pages of every newspaper in America. And I think as a result, the American viewer, consumer, taxpayer, is taking a much closer look at these issues, and the more they learn, I think is the greater the leverage the White House is going to have to get the changes which they think are necessary to protect consumers, children, and competition in the media marketplace of the 21st century.

MR. MAC NEIL: You are offering several amendments. Are they roughly the changes the White House would like to see in the bill?

REP. MARKEY: It is much of what the White House is concerned with. It's not the entire list of concerns which the President has mentioned.

MR. MAC NEIL: Describe what you want to do in brief terms, how you want to change the bill.

REP. MARKEY: In very brief terms, I will be making three amendments sometime most likely after midnight tonight on the floor of the United States House of Representatives. I think we should be debating it in the light of day, but it is going to be taken up in the middleof the night. But the amendments will do three things: One, it will provide a violence chip that will give parents the ability to block out excessive violence and sexual programming that they think is inappropriate for their adolescent children. We think they should have that protection. It will provide protection for cable rate payers. This bill deregulates cable rates even where there is still a monopoly in an individual city or town. We keep rates under control as long as there is a monopoly. If their competition arrives in a community, regulation disappears, but in most of America right now, 97 percent of all communities, it's still a monopoly. And finally, there's a provision in the bill which allows a single company to own the only newspaper in town, two television stations, every radio station, and the entire cable system for that city or town. That is absolutely wrong, too much concentration, and I have an amendment out on the floor that helps to limit that so that we have more protection against media monopolies controlling cities and towns across this country.

MR. MAC NEIL: What is the prospect for those amendments, would you say, Congressman Bliley?

REP. BLILEY: Well, I think that the vote on the cable re- regulation probably will not--the vote will defeat the amendment. I don't think that the vote is there. It came up in the Senate. It was defeated overwhelmingly. It came up in subcommittee and full committee of our Commerce Committee. It was defeated rather soundly. I would say that on the V-chip and on the broadcast, it will be closer, a much closer vote. My own feeling is, is on the broadcast, on page 153 of the bill, the FCC has the authority if you own a newspaper, you own a cable, you seek to acquire a broadcast station that community, they have the right to deny the license.

MR. MAC NEIL: Even under the new bill you're talking about?

REP. BLILEY: Under the bill that came out of the committee, and that part is not changed.

MR. MAC NEIL: Vice President Gore described that provision of your bill today as a threat to the very system of democracy upon which our society is built. What would you say, Congressman Bliley, to him?

REP. BLILEY: I would say send me some legislative language, Mr. Vice President. We'll be glad to look at it. There's only one provision in the bill that the administration sent up legislative language on, and that was on the question of foreign ownership. And we, myself, Congressman Fields, Congressman Oxley, Congressman Dingell, worked very closely with the administration, and we have largely satisfied their concerns in this area, so I say if you have concerns with the bill, send up the legislative language, we'll try to work with you to get this bill in the best possible shape.

MR. MAC NEIL: Let me--

REP. MARKEY: May I interject for just a second--

MR. MAC NEIL: Yes.

REP. MARKEY: --and point out that while the FCC may be able to intervene, there is a presumption that it's okay to own a newspaper, two TV stations, every radio station, and the cable system in an individual community. If that happened, it would be unprecedented in the history of the country, it would make Citizen Kane look like an underachiever, and the Vice President is correct in focusing upon this as a real danger to our whole history of diversity and a multitude of voices able to debate issues at the local level.

MR. MAC NEIL: Congressman--

REP. BLILEY: May I just say this? It would be beyond comprehension for that situation to develop and the FCC not to intervene.

MR. MAC NEIL: All right. On to the business--Congressman Bliley, on to the business that has caught so much attention the last week because the long distance companies have mounted such a huge lobbying effort. Since the Republican leadership changed the bill to favor, at least as the public sees it, the regional Bells more, explain the change briefly and its effect and why the Republican leadership made that change.

REP. BLILEY: The Republican leadership didn't make the change. Congressman Fields and I made the change in negotiations with the regional Bells.

MR. MAC NEIL: I thought Speaker Gingrich made the change.

REP. BLILEY: No, no. Speaker Gingrich was not in on the meeting. We made the change. But let me say this, that what happened is when the bill passed out of the subcommittee, there were cries of alarm from the regional Bells, as well as long distance. Congressman Fields and I met with 'em, representatives. We agreed one of the provisions was about entry into each other's business. And we agreed on a question called simultaneity, i.e., a simultaneous entry, and then the long distance people said, well, we would like three words put in here as deal with facilities based competitor, and they looked harmless enough to Congressman Fields and myself, and we agreed to that, only to find out later under the terms of communication law, that meant that a facilities-based competitor would have to have the whole state wired and be in competition statewide before one would be allowed to get into long distance.

MR. MAC NEIL: In language we can understand, that means that, as I read it, that the local phone companies don't have to have viable competition now before they can get into the long distance business, is that--

REP. BLILEY: No. They have to have--they have to have a facilities-based competitor offering both business and having both business and residential customers, and they have to have the switching equipment throughout the state that would enable some other competitor or the same one to offer the same service in the other regions of the state.

MR. MAC NEIL: How do you see it, Congressman Markey, this controversy between the big--the long distance companies and the regional Bells?

REP. MARKEY: Well, the battle between the very wealthy and the very rich. I think five years from now, to be quite frank with you, the only real change for consumers will be that they'll have one more company that will have ads on every night trying to convince you to switch over to their long distance company. The far more important things that are in this bill are the issues that I just referred to. And when Mr. Bliley pointed out that the FCC would look at these media concentration issues, the truth of the matter is, is that if Bob Dole or Phil Gramm becomes President of the United States, the only thing the FCC will become is a rubber stamp, since the President of the United States wants these kinds of conglomerates to be allowed to be put together. So I don't think anyone watching the show should kid themselves. We are entering a brave new world, where a small number of very large media conglomerates will be able to sit astride this country, owning dozens of television and radio stations and newspapers, along with their networks, their studios, cable systems, and all of the decisions will be made by those small number of companies; unless we put specific restrictions that ensure that we have more localism, more diversity in this bill, the future is one that looks a lot like the past, back in the 1930's, that only had a couple of networks, that did not have the kind of diversity which we have today.

MR. MAC NEIL: On that note of media concentration, let's bring in our outside observers. Mr. Sidak, if deregulation encourages mergers like those we've seen this week, is the future going to be a good one for American consumers of communications, or only good for the creators of communications?

J. GREGORY SIDAK, American Enterprise Institute: It depends on what kind of merger you're talking about. In mergers between competitors or horizonal mergers, as they're known in anti-trust jargon, are mergers that potentially can reduce competition and lead to higher prices and less innovation. But those aren't the kinds of mergers that have been announced this week. The Disney merger is, is a vertical relationship between a producer of programming and a distributor of programming. I don't see that increasing media concentration at all. Before these announcements, we had four major TV networks, including the Fox network. After these announcements, we still have four major networks, so I see no increase in concentration there. Also, I think it's important to bear in mind that no matter what happens tonight with the Telecom legislation, we will still have the antitrust laws on the books, and the antitrust laws are very clear about mergers that concentrate economic power and lead to the prospect of higher prices for consumers. We're not losing that protection at all. Nobody is talking about changing that basic rule that's been around since 1890.

MR. MAC NEIL: Are you reassured by that, Mr. Barber?

BENJAMIN BARBER, Rutgers University: [Albany] Well, I'm afraid I'm not. On the day that we just got rid of the exemption of baseball from the antitrust laws, it looks like the telecommunications bill is now going to have an exemption--

MR. MAC NEIL: That was passed by the Senate today, we should put in as a parenthesis.

MR. BARBER: Right. It looks to me like the communications industry is now going to be exempted from antitrust legislation. The whole spirit of what's happening in the Congress today, in fact, is to turn these large conglomerates loose in the market and let them have their way. And I haven't heard a word here about the public trust. Laurence Tisch said yesterday after the CBS- Westinghouse merger, he said, he'd done a good deal for our shareholders, and he sure did. The question is: What about the shareholders in the American public trust? Back in the 19th century, and I think we need some historical perspective here, back in the 19th century, when the goods were oil, steel, and railroads, the country saw fit to use their public ally, their public representative, the government, to intervene to regulate, to guarantee fair trade, to prevent unfair practices. At the very moment now when we're talking not about oil but ideas, not about steel but concepts and images and pictures and not just about the American market but about a global market, at this very moment, the government seems to be content to sit back on the sidelines, turn it over to the conglomerates and say, have your way with the American people and around the globe. I think it's the most dangerous development for the future of our democracy that I've seen in the last 15 years.

MR. MAC NEIL: What's your comment on that, Congressman Bliley?

REP. BLILEY: Well, the FCC, itself, said in their announcement of future rule-making that there is no problem with diversity in this country, and you know, I got to thinking about that last night, I went home, and I said, or rather early this morning when I did get to go home, I said, you know, in Richmond, we have an ABC, a CBS, and an NBC affiliate. None of them are owned locally. They're all owned by groups from out of town, and I bounced that off of my colleagues today as I passed them in the cloak room and almost every one of them said that no, they didn't--the station wasn't owned locally, it was owned out of town.

MR. BARBER: Could we look at our friends over at the Disney Corporation though? Nowadays if you get up in the morning, you might turn on the television and see a Disney cartoon, in the afternoon a Disney movie. You go to the mall, and there's a Disney store selling Disney goods. You go to a theme park on your vacation, you go--

MR. MAC NEIL: Why is that bad, Mr. Barber?

MR. BARBER: You travel abroad--I believe in a diversified pluralistic, multicultural world, and I'd like to see a world in which we have diversity, in which Mickey Mouse isn't the only icon. I think Mickey's a great icon, but I'd like to see a hundred such icons, not just one. If you let them take over the major distribution channels, if they get larger and larger, as government's getting smaller and smaller, then I think we're in trouble.

MR. MAC NEIL: Mr. Sidak.

MR. SIDAK: Well, I think one important question to ask is: What exactly is the policy prescription that is being proposed here? Having been a regulator at the Federal Communications Commission, I can assure you that the FCC is part of the problem; it's not part of the solution. The experience of 60 years of FCC regulation is that it has--the agency has repeatedly prevented competition from coming to protected markets--

REP. MARKEY: Not so.

MR. SIDAK: --like, like the networks, for example. So the answer is not to, to add greater levels of regulation; it's to open up markets to competition, and also I think it's important to bear in mind that the opportunity for diverse outlets and diverse programming has blossomed because of technological innovations in the last several decades, and will continue to blossom.

MR. MAC NEIL: Congressman Markey, you were shaking your head when he said that the FCC had blocked competition.

REP. MARKEY: That is absolutely as far from the truth as a statement could possibly be. The truth of the matter is, is that AT&T bitterly fought being broken up into eight companies; AT&T and NYNEX and Pacific Telesis back in the early 80's. It was the government that did it. The networks bitterly fought having to give their signal over to the cable networks in the 1970's--

MR. MAC NEIL: Actually, the government required--

REP. MARKEY: --so that we could--so that we would be able to have a cable competition. The cable industry in the 1980's and the 1990's fought the satellite dish revolution so that they would have access to programming as well. Each one of these monopolies--

MR. SIDAK: And as you well know, NBC seriously fought Fox to keep--

REP. MARKEY: --have fought competition right from the beginning, and the government has been the--has interjected itself for the public, so there would be more outlets.

MR. MAC NEIL: Mr. Sidak.

MR. SIDAK: The greatest single good that the Federal Communications Commission could do, if it really wanted to increase diversity and competition, is to allocate as much radio spectrum as quickly as possible to as many users who are out there, either point to point communication, or mass media.

REP. MARKEY: If the government is taken out of this area, we will go right back to thirty and forty years ago, where a small number of corporations gobbled up all of these communications systems, and in ten years or so, we'll have to come right back in to ensure that we have the diversity, the localism, and the number of voices which ensure that democracy works.

MR. MAC NEIL: Mr. Barber--

REP. MARKEY: We're heading in just the wrong direction.

MR. MAC NEIL: Mr. Barber, do you think you require government regulation to make culture richer and more diverse?

MR. BARBER: Let me put it this way. We require some help in putting a limit on corporate monopolies and on the concentration of power over information. Information and ideas are a public trust. They belong to the American people. The government is the American people's ally and instrument in guaranteeing their access and the fair distribution of information and ideas. I don't quite understand all the talk about term limits of Congressmen. There are no term limits for Michael Eisner or Tom Murphy. We can vote Clinton and Gingrich in and out of office. We can't do anything about Michael Eisner. I'll take my chances with the government guaranteeing access to fair information and not trust, frankly, Michael Eisner.

MR. MAC NEIL: Congressman Bliley, just to conclude this, because we must, the Democrats are complaining that your leadership is debating on voting this last night and tonight in the middle of the night. Why are you doing it in the middle of the night?

REP. BLILEY: Because--because the Democrat leadership insisted that we do it in the middle of the night if we do at all. They insisted that the HHS bill be brought up in daylight hours, and that's why we're doing it. I would prefer it in the daytime. And they also say we're trying to rush this through. Last year, we passed a telecommunications bill not too dissimilar on the suspension calendar, which means no amendments won our debate, and it passed with over 400 votes.

MR. MAC NEIL: Congressman Markey.

REP. MARKEY: Last year's bill passed because there was a consensus between Democrats and Republicans that was worked out. This year, they've added in all of these anti-competitive and anti- consumer provisions that are the hallmark of this new Republican era. The truth is we should be debating this issue tomorrow during the daylight hours, Saturday during the daylight hours. There's no reason we have to go home and not have debated this during daylight and not in the middle of the night.

REP. BLILEY: Let me say this. This is a bipartisan bill. John Dingell, the senior Democrat on the committee, is supportive of the bill.

MR. MAC NEIL: We need to leave it there, Congressman.

REP. MARKEY: Well, it's a tri-partisan bill, actually.

MR. MAC NEIL: Mr. Markey, Mr. Barber--Mr. Sidak, Mr. Barber, thank you all. SERIES - CYBERFUTURE

MS. WARNER: Now, the last in our series of conversations about the new world of cyberspace. Tonight, Charlayne Hunter-Gault talks to Omar Wasow, the founder and president of New York On-Line.

MS. HUNTER-GAULT: There's more than a tree growing on this block of brownstone homes in Brooklyn, New York. Also growing is New York's entry into cyberspace, New York Online. This local service is the product of a local New Yorker, 24-year-old Omar Wasow, a young man who began tinkering with computers long before he was old enough to shave. The New York look is visible as soon as you log on. The logo for New York Online is a subway token, symbol of a service that Wasow operates as a virtual subway to connect people from all over the city. There's more than a touch of New York attitude here too. Press a key, and the system responds with a jazz riff instead of the usual beep. Wasow and his co-founder, Peta Hoys, met a few years ago when both were students at Stanford. They've since graduated, she as a mechanical engineer, and he as a student of race relations. The service they began 15 months ago has been called the sixth borough of New York for the way it tries to bring New Yorkers from all backgrounds, classes, and beliefs together in a common forum to talk. Today, New York Online has about 1200 subscribers from around the world but mostly from New York. The service is growing, albeit slowly, operating in a high tech but low budget environment in a tangle of wires and blinking telephone modems. In spite of his youth, Wasow is an old hand at preaching the virtues of cyberspace, as we learned on a recent visit.

MS. HUNTER-GAULT: Omar Wasow, thank you for joining us.

OMAR WASOW, New York Online: Thank you for having me.

MS. HUNTER-GAULT: What is cyberspace?

OMAR WASOW: Cyberspace is the sort of--this on-line, this world you connect to through a computer and a modem, and it's not a physical place but it's--there are all kinds of conversations and archives of information that exist that you can access, and it's almost as if you were going to a cafe or going to a library, because there's almost a sense of travel and arriving and in getting something and coming back.

MS. HUNTER-GAULT: And you do it through the computer.

OMAR WASOW: You do it through the computer, yeah.

MS. HUNTER-GAULT: How do you see it affecting our lives now and in the future?

OMAR WASOW: Well, it's certainly going to change the way a lot of people communicate. It's more and more of the way we interact with other people will be mediated by computers, by cyberspace. And, and business transactions and personal relationships and all kinds of family relations will take place facilitated by the computer. In more broad terms, I mean, I think this is going to have a profound effect on all kinds of different relations in society. One very good example is what's happening now with the Worldwide Web, where you see lots of individuals and organizations who haven't historically had the power to publish information to a broad audience, now can put their, you know, everything from an internal newsletter to political treaties on the Internet and make that available to an audience of millions. The Worldwide Web is now considered the fastest growing part of the Internet, and the Internet--I think the best way to think about it is the Internet is sort of the wires that connect all these different computers, so it's just like a regular telephone system, where there are wires connecting up different people and countries. What's particularly useful about the Worldwide Web is that it's very easy to navigate, which means that with just a mouse and by clicking on different things, you can travel through all sorts of different information and, and read and browse lots of different resources that people have made available.

MS. HUNTER-GAULT: For example.

OMAR WASOW: Like for example, you might be reading about a piece of--something by, you know, James Baldwin, and then it mentions France, and you would click on France, and it would take you to the Louvre, and you'd--from the Louvre, you could go to, you know, a work by a particular artist, and there we've gone from literature to, you know, architecture, to art, and all of that's interrelated.

MS. HUNTER-GAULT: Who's going to benefit from this? I mean, who do you see benefiting from this?

OMAR WASOW: Well, right now, it's certainly a sort of privileged group of people who have access. It's middle and upper middle class people. It's kids in college, but one of the things that I find very exciting about what's happening with the technology is that the price, if you look at sort of the amount of what the cost of a computer is today versus what it was a few years ago and how much power you get for that money, I think it's reasonable to assume that in the not too distant future, it'll be very accessible to, to people across all kinds of class lines.

MS. HUNTER-GAULT: But you mentioned middle class and upper class. There's an elite that's the principal users of computers today, and that's been one of the arguments that the people who lose in all of this are likely to be the poor, minorities, non-technical people. Who do you think--I mean, do you think there are losers or are going to be losers or people left out of this so-called revolution?

OMAR WASOW: Well, I think that sort of the way computers are moving today, it's becoming more and more democratic. It's putting more and more power in people's hands. And at the same time, there's a whole body of people who are just not participating. And I think it's not--it's not going to be a question of cost down the road. It's going to be--you know, education and, and are people being encouraged to use the technology, are people--do people feel sort of welcome and comfortable with it.

MS. HUNTER-GAULT: So that education is going to be an important dimension to this in the future?

OMAR WASOW: Absolutely. I mean, education will be, I think, really one of the critical issues. I mean, for example, if you take my experience, I started on a hundred dollar computer twelve years ago, so clearly cost wasn't the issue there. The real issue was having parents who were teachers who wanted to encourage me, and that same hundred dollar computer wouldn't be available as a doorstop today, but, but there's--money is less the issue than, than I guess access--getting people sort of in a mind set that makes them enthusiastic, rather than scared.

MS. HUNTER-GAULT: Do you see this kind of technology affecting education and how people are educated? Because there have been some criticisms that, you know, it doesn't encourage the kind of education that is useful.

OMAR WASOW: Well--and this is before my time, but when--I'm told that when audio cassettes came out, people thought that would revolutionize education, and that when television came out, people thought that would revolutionize education, and, and to some degree I think all of the hype about computers is probably overstated. At the same time, though, I've seen programs that were working, again, with working class people who--where they were getting better training with a sort of multimedia station where there was a laser disk and a computer, getting basic job training skills, where they could pace the training to their own level, and when they didn't understand something, they could go back and, and when they did understand something, they could skip it.

MS. HUNTER-GAULT: You talked about demo--you mentioned the word democratic. You've been involved with groups that have been using the computer. How do you see this affecting activist groups and organizations and people?

OMAR WASOW: Again, part of what excites me about the technology is the powerful democratic effect it has. I mean, we saw in Tiananmen Square that people were sending E-mail out. There were recent student protests in France that were all coordinated by E- mail; the same thing happened in the United States last year, where people who share a common passion but are widely disparate are using this medium as a way of organizing. I mean, you even saw it in a way that has been sort of roundly criticized by the militias on the right. And, and while I'm certainly concerned about that, I think it speaks to the power of the technology that it allows people who are sort of disenfranchised to, to make links and build, build connections that, that are, you know, sort of politically and organizationally powerful.

MS. HUNTER-GAULT: What about the argument that, you know, you're talking about activists, but one argument against--that's made against the technology is that it makes people more isolated, that they stay in their houses, and sit behind their computer screens, rather than actually getting out and that it leads to more isolation rather than to more community.

OMAR WASOW: Right. That's a very good question, and part of what we've tried to do with New York Online is to really focus on community, rather than on the things that isolate you. So for example, all of the activities on New York Online involve people to people communication, and we really feel that, that the computer and that this medium should be a catalyst for getting out and meeting more people, rather than isolating you, so you know, we have parties on a regular basis, and there are people who meet and start dating, and people who get hired for jobs.

MS. HUNTER-GAULT: What kind of impact do you see it having on, for example, race relations, or social relations in general, but race relations in particular?

OMAR WASOW: Well, one of the things we're most proud of at New York Online is the diversity of the people on this service. We are about 50 percent of color, and a lot of those issues of race relations are dealt with on this service. People are talking to each other who had never talked to each other in real life, and like, like the subway, we're a network; it links up the whole city, and unlike the subway, people are talking to each other, and even when there's disagreement, there's a kind of connection and communication that's quite valuable, and you know, most people have a sort of fixed circle of friends that is work and neighborhood, and you know, and their friends. And what's happening on-line is that all of a sudden you're mingling in a much broader world, and you're doing it in a way that's still very comfortable and convenient but, but that sort of, kind of undermines a lot of those cleavages in society.

MS. HUNTER-GAULT: What about the argument, though, that too much information unfiltered tends to--has the potential for overwhelming people, or else people feel or think that they're informed and they're not really and that there's a danger in that?

OMAR WASOW: One problem with the idea that there can be too much information is that it means that the information we're getting now is sufficient, and I think there are a lot of people who would criticize, you know, mainstream newspapers, mainstream television, as having its own set of problems, and I think that, that broadening diversity of voices is, is--can only be a good thing. That said, there will be--there will be an information glut, and people will rely on--I mean, this is part of what's coming down the line, people will rely on filters and different kinds of filters to pick out the information they want and need.

MS. HUNTER-GAULT: What kind of filters?

OMAR WASOW: There'll be--the language that's used--an intelligent agent. You'll have sort of an electronic butler who will look at the 50,000 news stories that came out this morning and pick out the 10 that are of interest to you.

MS. HUNTER-GAULT: Is that real person?

OMAR WASOW: No. It'll be electronic. It'll be--it'll be a piece of software.

MS. HUNTER-GAULT: Is this Big Brother or Electronic Brother watching you?

OMAR WASOW: Yeah. I mean, surveillance is going to be another big issue, is that--I mean, one of my big fears is that we're moving towards a time when we will not just sort of give, have very little privacy, but we'll be giving it up voluntarily, that, that, you know, for the sake of convenience, we will be revealing all kinds of intimate things about ourselves.

MS. HUNTER-GAULT: And there's no way to regulate how it's used.

OMAR WASOW: Not yet.

MS. HUNTER-GAULT: I mean, isn't that an issue?

OMAR WASOW: It's a huge issue.

MS. HUNTER-GAULT: That so much is out there?

OMAR WASOW: The problem I think is not so much one of regulation but of, of making sure--you know, it's the old thing about don't believe everything you see on TV and, and I don't really want anybody else to regulate it for me, but I do think everybody should go into it knowing that you can't believe everything you need on the monitor.

MS. HUNTER-GAULT: What is the thing that concerns you the most about the future?

OMAR WASOW: I mean, I think there's a worst-case scenario where you have a lot of people who are poorly educated, who are sort of unwired, who are quite hostile to the technology, who don't have access to jobs, because many of the jobs require a level of sophistication, and you end up with more and more violence like we saw in Oklahoma, where there are people who sort of choose to sort of unplug from society and, and then become very antagonistic to the broader society.

MS. HUNTER-GAULT: And what excites you the most about the future?

OMAR WASOW: What excites me the most is the possibility that sort of every individual will have the ability to sort of communicate and express themselves and, and develop their mind to the fullest potential with--you know, through this tool so that it sort of breaks down national boundaries--it breaks down all kinds of, of cleavages that separate people, and also elevates a whole class of people who are sort of locked out because of, of poverty.

MS. HUNTER-GAULT: Well, Omar Wasow, thank you for joining us.

OMAR WASOW: Thank you, Charlayne. RECAP

MR. MAC NEIL: Again, the major story of this Thursday, Hurricane Erin churned across the Florida panhandle and into Alabama. It's expected to hit Southern Mississippi tonight and Central Louisiana tomorrow. The storm's been losing strength and coastal hurricane warnings have been dropped. Good night, Margaret.

MS. WARNER: Good night, Robin. That's the NewsHour for tonight. We'll be back tomorrow evening with Shields and Gigot, among other things. I'm Margaret Warner. Good night.