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Oh Janet, What Hast Thou Wrought?


Tired of the endless breast-beating over Ms. Jackson's infamous "wardrobe malfunction" at the Super Bowl? Well, politicians in Washington can't get enough of it. Whether it's mere election-year posturing or genuine outrage, the fallout over so-called indecent broadcasts could have a lasting impact on what Americans hear on the radio and see on TV -- possibly even on censor-free cable.

Even as Big Media moguls try to head off the morality police by turning the bleeper button back on and sending a not-so-subtle message to shock jocks like Howard Stern, draconian measures to combat bad taste and foul mouths on public airwaves are in the works. "Americans are saying 'enough is enough,"' says Representative Doug Ose (R-Calif.), who introduced legislation to strike from broadcasts seven dirty words -- amending a list of verbotens that the U.S. Supreme Court threw out in 1978. Other get-tough measures range from jacking up penalties on broadcasters to extending indecency rules to cable and satellite TV.

Much of the agitation is coming from the Right, which sees the public airwaves as a key battleground in the culture wars. "Before, you had a silent majority upset at the issue," says L. Brent Bozell III, president of the Parents Television Council, an anti-indecency group. "Now they're empowered to speak up." In fact, the crackdown has wide support. A powerful, bipartisan group of senators wants to suspend for one year new Federal Communications Commission rules relaxing ownership restrictions so the General Accounting Office can study the impact of media consolidation on indecency. Even Democratic Presidential candidate John Kerry says Clear Channel (CCU) was within its rights to bounce Stern from six of its stations.

The first new law likely to pass is a bill boosting the maximum penalty for indecency violations from $27,500 to a head-snapping $500,000. In addition, the legislation includes a three-strike provision that would put a broadcaster's license in jeopardy after a series of slip-ups. House Telecommunications Subcommittee Chairman Fred Upton (R-Mich.) and his Senate counterpart, Sam Brownback (R-Kan.), hope to have the measure on President Bush's desk by the end of March, an optimistic goal the White House supports.

Violence as Indecency

The proposal might revolutionize the airwaves. The Senate version of the bill could open the door to including TV violence under indecency rules. While House GOP leaders might be unwilling to go that far, a bipartisan group of 39 House members has asked the FCC to examine ways to curb TV violence that may be harmful to kids.

Feeling the heat, the FCC is preparing two dozen enforcement actions. And Chairman Michael K. Powell, long a free-speech defender, is now urging TV execs to clean up their acts. So the scramble is on to make amends. On Mar. 31, the National Association of Broadcasters will hold its first-ever Summit on Responsible Programming. And on Mar. 2, cable programmers and operators announced a sweeping campaign to teach the public about the tools already in place to block objectionable material -- network ratings, V-chips, and set-top-box controls.

That probably won't be enough. No pol wants to appear soft on smut in an election year. Another malfunction and Big Media could be in for the Big Chill. Peace seems to be breaking out in telecom-land. BusinessWeek has learned that warring local and long-distance carriers have agreed in principle to call a truce as early as April, when they are to propose to the Federal Communications Commission a solution to one of the thorniest issues in the industry.

For years, the two sides have battled over how much long-distance carriers should pay the local guys for connecting their calls. Such access fees -- many inflated above cost -- add up to $11 billion a year. They also help fund the universal-service system of subsidies, dear to farm-state senators, which keeps phone rates affordable for rural Americans.

Now that wireless calling has taken off and Internet phoning is spreading, all factions of the telecom industry are realizing that long-distance revenues will only continue to shrink and, along with them, the access fees that fund universal service. To preserve a well-functioning local network, a group of Bells, long-distance carriers, and rural phone companies will propose ditching those fees altogether, according to sources close to the talks. Instead, each company would charge customers the cost of operating their networks, including expenses for carrying others' calls. That could raise line charges for consumers from a maximum of $6.50 today to about $9. Carriers with higher costs could tap into the privately run universal-service fund, now at $6 billion. Lower long-distance rates, however, could mitigate the hikes.

The deal is still no sure thing, though. Rural carriers that depend on access fees could still balk, causing their senators to try to scuttle the agreement.


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