Marketplace: News Archives

Monday, September 11, 2000
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It's Monday, the 11th of September. I'm David Brancaccio.

Following a yearlong investigation sparked by the shootings at Columbine, Colorado, the Federal Trade Commission today issued findings linking the entertainment industry to violent behavior. The FTC report criticizes Hollywood for marketing adult content, violent films, video games and music, to kids. But as Marketplace's Sarah Gardner reports, the agency's bark is much worse than its bite.

Gardner: "Most parents reading today's report probably won't be shocked by anything in it. But, the FTC did get hold of some of the marketing plans from the movie studios which showed a Hollywood clearly focused on advertising R-rated movies to teens. FTC chairman, Robert Pitofski: "

Pitofski: "Of 44 movies rated R, 35, or 80 percent, were marketed to youngsters under 17. One document says, 'Our goal was to find the elusive teen target audience and make sure everyone between the ages of 12 and 18 was exposed to the film."

Gardner: "The FTC also criticized the music industry and video game makers. Pitofski said he personally found the level of violence in some video games astonishing. But after today's report, nobody in Hollywood will confuse Robert Pitofski with the Terminator. The report recommended no sanctions or new regulations. Instead, it urged the industry to police itself better and educate parents more about the way it rates its products. 'I don't want the FTC to be the thought police,' said Pitofski. Al Gore today, however, said if elected, he'd impose tougher measures on Hollywood if it doesn't clean up its act in the next six months. Whether Gore will reiterate that threat when he meets Julia Roberts and Matt Damon this week is doubtful. They're among the Hollywood glitterati hosting a mega-fund raiser for the Democrats this Thursday. I'm Sarah Gardner for Marketplace."

Warning: the following story may require a dictionary. The Federal Trade Commission or FTC gave a tentative thumbs up to a business to business, or B2B, Internet venture that links up five of the worlds biggest automakers. But here's where the dictionary comes in. Regulators remain concerned about a monopsony. Marketplace's Laura Sydell explains.

Sydell: "After six months, the FTC finally ended its investigation of Covisint. This is the first time the FTC has reviewed a B2B venture and probably not the last. Ford Motor Company, General Motors, DaimlerChrysler, Renault and Nissan will now be part of the online B2B exchange, which is expected to have purchasing power of as much as $240 million. What this means is that the automakers will be able to shop, pay for and arrange for delivery of their parts from a desktop computer. So, there will be less paper work and fewer phone calls. This would pass on savings to consumers of as much as $1,000 a vehicle, say some analysts. But here's the catch. Does it amount to a monopsony? Joe Bosquin, who covers technology for the online magazine The Street.com, says one way to understand a monopsony is to think of it as a monopoly of buyers."

Bosquin: "Well, basically it would be putting pressure on the suppliers by saying, 'Listen, you know we're gonna team up against you and this is the only outlet you have to sell into.'"

Sydell: "Regulators are insisting that the website include 'firewalls' to prevent against leaking of price information, and site designers must work closely with anti-trust lawyers. Though the Federal action ends the investigation, the Commission says it will be watching for what it calls 'competitive concerns.' I'm Laura Sydell for Marketplace."

Remember how President Ronald Reagan used to unwind on weekends? He'd go to his California ranch and cut brush. Well, that's exactly what President Clinton is prescribing on a grand scale throughout the Western United States. This is in hopes of preventing another devastating fire season. He's proposing $1.6 billion dollars to do the job. Christy George of the Marketplace Business and Environment Desk reports.

George: "Poor Smokey the Bear. After a little revisionism, the American icon of forest fire prevention is now the goat. Scientists say it turns out we should have let some forest fires burn because now there's a forest full of fuel, underbrush and small trees, just waiting for a spark. But how many trees will get cut? How big will they be? And who will do the cutting? Chris West of the Northwest Forestry Association says even a tree just four inches in diameter can become a two-by-four but, he adds, the timber industry will need more compensation than it gets for cutting giant trees."

West: "If you're putting 30 to 40 logs on a log truck and turn around and want to put 120 logs on that log truck, the costs of that piece work increases expenses dramatically. And also, the value of the products we can produce out of those smaller materials is a lot less than the value of those bigger logs."

George: "Environmentalists like Steve Holmer of American Lands are afraid the timber industry will use brush-cutting as an excuse to get out the chainsaws and go after the big, lucrative trees."

Holmer: "We're logging three billion board feet and it costs us over a billion dollars to do that logging. And not a single dime returns to the Federal Treasury, so this is completely unacceptable, a complete rip-off to the taxpayers and now we're talking about another $1.6 billion?"

George: "Instead of the timber industry getting the work, Holmer would rather see a new forest restoration business created to do the job. From Oregon Public Broadcasting, I'm Christy George for Marketplace."

And on the off chance you're one of the 15,700 people who went to www.westernunion.com recently and put in your credit card number, it turns out somebody left the computer equivalent of the back door open and anyone could have gone on the website and peaked at the numbers. Western Union is trying to contact its customers to warn them but so far the money-wiring company says there's no evidence anyone used the opportunity to commit fraud. Human error during computer maintenance is blamed.

And that's the top of our news for Monday. Today the Dow fell 25 points, but the Nasdaq closed at 3,896. That represents another drop of 2.1 percent.