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Cable Companies Free To Grow, Grow, Grow
Dasheiff writes: "A federal appeals court [NYTimes, free reg. req. [?] ] struck down a set of regulations today that had prevented the nation's largest cable companies from growing beyond serving more than 30 percent of the cable and satellite market's subscribers and providing more than 40 percent of its channels with programming from its affiliated companies. In other words AT&T and AOL Time Warner can now continue to expand their monopoly. However it's not clear if this is a bad thing, if shows continue to be poor people will not watch them. Companies need to compete with the viewer more than the other companies." So, were those limits actually doing customers good or not? And will this make high-speed access (even if AOL-TW dominated) available in many places it's not right now?
In general, cable companies do not compete. With or without this regulation, most areas have one cable company available. If anything this may spur competition. Right now, AT&T has one area that they acquired from TCI and a couple of small players. Time Warner has a totally different area. They have no incentive to invade each others' territory because of the government regulation.
Now, without the regulation, it is at least remotely conceivable that either AT&T or TW might attempt to expand by invading the others' area. Hence, competition. Probably won't happen though. It's going to be a couple of large cable companies with non-overlapping service areas for decades to come.
Costs rise. It's called inflation.
A business therefore has two choices:
1) Expand to increase revenue and increase "economies of scale" efficiency.
2) Raise prices.
Unless you want your cable rate going up constantly, your cable company needs to expand or perish. Where in the Constitution of the United States is the government granted the power to tell them HOW MUCH they can expand?
Now, if your state or city has laws preventing other cable companies from moving into your area, there's something for you to protest. If other cable companies just don't choose to do it, however, that's your problem, not the government's. Start your own cable company.
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You laugh, but Vulcan Ventures, the investment vehicle for Paul Allen (you know, Microsoft Co-Founder) has been buying up lots of cable companies over the last few years.
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Here's just one story talking about it (the first good one that came up in google):
http://www.zdnet.com/zdnn/stories/news/0,4586,2
Now, Allen isn't as tight with MS as he once was, but perhaps there is more to your parody than even you realize...
When information is power, privacy is freedom.
Oh dear. While the poster does a good job of explaining how collusive oligopolies can be thought of as monopolies, this post does not deserve a +5 score.
The problem is that cable companies don't acheive their monopolies through collusion but rather through spatial monopolies. For instance, here in Canada, there are a number of cable companies: Rogers, Shaw, Videotron, etc. However, my only choice in cable company is Rogers Cable or no cable.
The problem is that Shaw and Videotron only have cable running to people's houses in their territories. The situation is no different in the US (or for that matter, pretty much anywhere in the developed world). If you have AT&T you can't pick TW. This is a monopoly.
Are these monopolies dangerous? In some sense, because they do control the flow of information into households, this might be a problem. However, as time goes on, there are more and more sources of information (ie dialup internet, satellite TV & internet, not to mention newspapers, magazines, etc).
Oh, and BTW, check out AT&T's website. There you'll see that, far from being in danger of buying more cable networks, the US's largest cable system is actually selling off parts of it's network.
I live in an apartment in the city, as do most people here. I'm sure some do it, but I can't imagine that my landlord is going to let me put a dish-- even a little one-- out my window. So Time Warner it is. Plus, how many satellite services are there going to be? At most a couple, and what's to stop the cable monoliths from buying them up when they hit hard times (with this ruling as precedent?)
Well, most areas have cable monopolies anyway. Whether there are 3 cable companies or 8, for the most part they don't compete (except in a very few markets.) The only thing that's going to control their prices is competition from the phone companies or government regulation. The government seems to be getting out of that market, and it's not clear that the phone companies have any interest in keeping prices down. Not being able to afford my crappy HBO wouldn't be so bad, but it's pretty clear that we're going to rely on these information services for more and more as time goes by.
Dude, are you new to Slashdot or something? 'Monopoly' has nothing to do with marketshare. It is fair game to use on any company which is really trendy to hate (i.e. any company which is actually successful). For example, everybody knows that all five (!) major record companies are monopolies, since they put only one good song per album. Similarly, Intel is a monopoly, since they make better products than Via, Transmeta, and AMD. Lastly, the cable companies are all monopolies, since they deliver high bandwidth data at affordable prices. Got it now?
The only solution to this is to have the government impose restrictions. Like the article submitter said, the government should choose what cable companies you should be allowed and not allowed to subscribe to, by putting caps on the marketshare of each company. The government always knows what's best for us. We're not smart enough to make decisions for ourselves, and the only solution is a massive, overreaching government beauracracy to control every aspect of our spending decisions (which, as we all know, are much more friendly and efficient than all of those evil, big, bad corporations).
Cable modems have a shared uplink of about 400Kbps (bits, not bytes). Even if @Home weren't limiting you (and they might not be, there might just be a lot of Napster on your local loop), you'd still be pretty tightly limited on uplink. This is the achilles heel of cable modem service. When the service was designed, people looked at high-bandwidth as almost purely a downlink solution. I think this was a big mistake, and unless new systems can be put together (quickly) that use a wider frequency range for the uplink, DSL is going to have a huge advantage.
story here
Basically, AT&T is in debt up to their eyeballs and need cash. I live in one of the markets being acquired, and can't wait. I don't use AT&T for broadband anymore, been with Qwest for a year on a buisness DSL plan and have been very happy. I still use AT&T for digital cable, but I hardly watch t.v. Besides, I'm pretty sure it would defy some law of the universe for Mediacom to charge more for less than what I'm currently getting from AT&T digital cable.
Stupider like a fox! - H.S.
I'm sorry you're getting such shitty bandwidth, but I'm afraid it depends almost completely on the company rather than the technology.
I have been a faithful and happy customer of MediaOne (now AT&T, who would have thought I'd *ever* say something like that?) for about 2 years now. The reason is that my cable modem has consistently given me speeds to rival those of a T1 on downloads and about half that on uploads. When downloading from university ftp sites, I will consistently get speeds of approx. 1.5 Mb/s. As far os uploads go, the best indicator I've seen is Napster uploads; people get transfer rates of about 120 KB/s (Yes, I'm pretty sure that's Bytes not bits, feel free to correct me, I don't feel like firing up napster to check which units it uses).
On the other side, I used to work for Bell Atlantic/Verizon in their DSL department, and I can attest that it is about the shittiest broadband service I have ever seen. I know however that there are many good DSL providers out there (although I don't think any of their customers get speeds like mine). It all depends on the company.
Now to keep the post at least moderately on-topic; this business with allowing Cable providers over *40* percent market penetration seems completely insane. Do people have no memories? Well, stupid question...
"He's more machine now than man, twisted and evil."
Depending on which dictionary you go to, monopoly is either held exclusively by one company, or by a group. (Dictionary.com uses the word "group", while Merriam-Webster just refers to a single company.) The definition of "group" is what's important here. There are many instances in business history where competitors in one field got together to agree not to compete in certain ways -- most notably by price-fixing.
Free-market economic theory would indicate that CEOs would never do this, that they would decide to compete in any way possible to eke out more market share. Yet this does happen. We have documented cases of price-fixing across all sorts of industries: legal research, oil firms, even vitamin manufacturers. There are plenty of theories as to why it happens, though my personal favorite is psychological. I think that CEOs, when they're placed in charge of vast corporations they cannot entirely control or understand, become extremely risk-averse. This is why large corporations rarely innovate; it's also why a CEO might enter into a price-fixing agreement. It's just one less thing to worry about. At least for the CEO; everybody else usually suffers, in higher prices and poorer quality.
Do domain names matter?
It's also worth noting that many people now consider cable a common carrier. There are certain types of communications networks that are considered common carriers, in that they should only be built once and then opened on a non-monopolistic basis, because it would be economically wasteful to duplicate the network for the sake of competition on that level.
There was once a time, for example, when AT&T owned not just the phone network, but all local service and long-distance service. They argued that decoupling the network from the service didn't make any technical sense; the government eventually decided to break them up anyway. The fact that you can have a different long-distance carrier than AT&T now is a direct result of governmental interference, and I for one am happy about the results.
And guess what? AT&T's still around. They're not in such great shape -- in large part because they were a large bureaucracy, unfit to compete in a world where they no longer owned a monopolistic advantage over the phone networks -- but they're still around. I never understand why companies argue against fairness in the marketplace by saying "We're so ass-backwards here that without our unnatural monopolistic advantage, we'll perish." If I believed my company was that fucked, I'd leave and find another employer.
Do domain names matter?
Free-market economic theory would indicate that CEOs would never do this, that they would decide to compete in any way possible to eke out more market share.
Go re-read your free market economic texts. This is not what they say. None of them say tht collusion or cartels can never happen. Quite the opposite. However, they point to market forces as being a very difficult thing for collusionists to overcome. No cartel that did not have government or criminal backing of some form has ever survived for any appreciable length of time.
One example is OPEC, one of the most successful cartels in history. But they are only able to maintain their cartels because all the members are governments. There is no free market in oil. Another example is one of yours: legal services. Attorneys in the US have the legal equivalent of a "Letter of Marquis", and can control their exact membership through the force of law.
A Government Is a Body of People, Usually Notably Ungoverned
Inflation is what happens when the government issues more currency, causing the value of existing currency to decrease. We're not living in a particularly inflationary time. Why do you think inflation has anything to do with this?
Expanding to increase revenue would not solve your hypothetical problem of rising costs, because the costs will presumably scale along with the revenue. As for economies of scale, I would guess that even the smallest cable company is already past the point where further growth would yield further economies of scale.
In the Commerce Clause, of course.
As far as I know, every cable TV operator in the US is operating under a "franchise" granted by the municipal government. A quote from this page sums it up:
"... if shows continue to be poor people will not watch them"
Many people will watch something even if they don't like it that much, just to avoid doing other things(reading?).
When you have 500 channels there is always something good on TV.
TechTV.com (good stuff)
I agree with the sentiment, but foresee implementation problems. Both the telco and cable co. have fat, expensive cables running along poles. The difference is that the telco's cable contains (typically) hundreds of twisted pairs, each of which is dedicated to one circuit. The cable co's cable contains (typically) a center conductor, insulation, and an outer shield. Although the cable has tremendous bandwidth, RF multiplexing is needed in order to have multiple signals peacefully share that cable.
What this means is that telephone cables are perfect for splitting up among many vendors. As long as their equipment is FCC compliant, the different vendors can't interfere with each other's signals. The TV cable, however, does not offer this automatic isolation of different signals. Some trusted entity has to be in charge of the equipment that actually connects to the cable.
Okay, so, big monopolistic cable companies are bad... but government regulation is also bad(unless you're British). I'd like to post the typical paranoid anti-establishment rant about the subject, but I'm not sure which one I'm supposed to hate. Can anyone help clear this up for me?
You must be kidding. @home has me capped with an upload speed of about 16 Kiloytes per second. During the evening a 56K modem might be faster for DOWNLOADS.
The prospect of large cable companies is disheartening. Their customer service sucks because they do not have anything that approaches competition. They think they are entitled to my business and they act like it.
As soon as I can I am dropping Cable and looking at satellite access for my tv and as soon as DSL makes it here I am making the switch.
I'm still working on a clever footer.
1. For the majority of people wired with HFC, roadrunner service is superior to any other form of personal isp. 2. The price is not terrible when packaged with their other services (cable/telephone), they do have specials, you know! 3. DSL is lame, the profit line on it, is not as good as HFC-cable modem, for resellers. Wonder why all the big dsl resellers are closing shop? They haven't raised prices, and have exceptional value and stability for the 2 years i've been using it. I have no comment on their cable/entertainment industry. I'm paying like $36+ for basic cable, i think that sucks. Most of the channels are junk.
===sam=== free nessus vulnerability scan = www.vulnerabilities.org
The quality of the shows has little to do with it, my friend -- remember that AOLTW doesn't produce all the shows, other people have to pay them to get them to carry them. Also, broadband is a significant issue here.
Now- care to BET on it? Preferably large sums of money...
RF multiplexing is needed in order to have multiple signals peacefully share that cable.
I believe what you are saying make sense for old-style cable systems, but is that really
the case in these days of fiber optic cables? Why wouldn't it be possible to have an architecture that supported several vendors of TV and broadband services on one optical pipe?
MOVE 'ZIG'.
People have a preconceived notion that large companies are bad. They are not inherently bad for several reasons.
1. Large companies are not bad if they are not hurting people or other businesses. Who says that by having a large market share is bad, only if you hurt consumers.
2. Large Companies are not bad if they are properly run and offer their services at the lowest cost to consumers.
3. The Bigger the company the more capital it has to expand to areas that they would not normally go to becuase of the cost to do so. Companies will offer services to people even if they lose money just to GET customers and know they will keep them. Small companies cannot do this.
4. AOL/Time Warner has the capability to become the consumers best friend by expanding broadband and expanding its cable and fiber optics to areas that cannot get them. If they do so and offer their services at a reasonable rate then they are helping consumers not hurting them.
I will agree 100% that if a company does hurt consumers and does hurt other competing business they should be find and or broken up by the government. Government is here for the People, By the people.
Let AOL/Time Warner expand and let AT&T expand and see what happens. If they do good, than things are ok, if they dont we have a recourse later.
Lord Arathres
stainless steel
Here in Eastern Ky,the cable people have no competition,lousy service and piss-poor customer service.Now the courts say they can gain a bigger monopoly? Has the entire court system's advailble brain-power turned to cream-of-wheat,or am I missing something? Does not affect me,since I stay on this computer 90% of the time,but to the rest of the family,it does. Looks I am going to revamp the old TV antenna 4400ft.up the mountain.
Geek Hillbilly
name: allyourbaseare password: belongtous make your time....
It seems to me that the products that cable companies offer, i.e. broadband, broadcast and in some case phone service are all offered by alternatives, i.e. DSL, satellite and the phone companies.
I think it would be nice if cablecos were treated like telcos, that is they have to rent their lines to other cable companies.
MOVE 'ZIG'.
Folks,
It's all these complaints about lousy cable service that is driving people to buy satellite dishes on a large scale.
No wonder DirecTV and Dish Network receiver sales are going strong lately; for the price of basic cable per month in most of the USA you get frequently two to three times the basic channels available with a DBS system compared to most cable providers.
DBS systems have far more pay-per-view movies and sporting events than any cable system, too. And you can get multichannel versions of HBO, Showtime, The Movie Channel and Cinemax that even digital cable systems mostly don't offer.
Raymond in Mountain View, CA
There may be benefits to monopolies. For example, AT&T invested so much in research only because they had a monopoly; since that was broken up, their research labs have steadily declined. But that was, in part, due to close government scrutiny and other idiosyncratic factors. I don't expect AT&T research to go back to the old days--I think you can be pretty sure that any profits they get now will be transferred to stock holders one way or another.
So, the big-bad corporations are going to lock up the cable & satellite market.
Well, are there any TECHNICAL solutions around this problem? Something which can be implemented in a distributed fashion, so that each individual doesn't have to pay too much, but where the whole solution can "route around" the control of these monopolies?
I live in upstate New York, Time Warner land. We're all stuck with dialup aound here. Not even good dialup (as I sit on my 31.2k connection). Starband is an option, obviously, but the outrageous pings make it useless for online gaming. I won't even get into the Radio Shack and MSN tie-ins. There's also a bit of wireless microwave access dotted about, but the rolling terrain doesn't allow many people access to the towers. ISDN is available, but difficult to get. It's hardly worth the money anyway. 2 years ago we were told we'd be getting cable access in 2008 and DSL in 2010. With the AOL-TW merge, we'll now be getting cablemodem this year. It's rumored that DSL will be arriving sooner also to compete with cable. In this case a monopoly has not only helped the consumer, but also CREATED competition. As long as AOL-TW doesn't require you to have Cable TV with your Cablemodem and doesn't require you to use AOL as your ISP (which they already announced they wouldn't), I don't see the problem here. No matter how many times you say it, people don't seem to understand that being a monopoly isn't illegal... abusing your monopoly is.
I could really care less whether we have dozens of independent cable companies, as these companies don't actually compete against each other. But it seems to me that this decision opens the way for a few companies to exert even greater control over what we see, read and hear. AT&T seems to have been much more sensitive about this, perhaps due to their previous run-ins with the law. They have thus far specifically avoided becoming a content company to avoid conflict (which may have been a disastrous decision, considering this ruling.) But they, along with the other major media and content providers will now begin looking to consolidate. Within a few years, we're going to have a very different competitive landscape.
The FCC ruling doesn't say you can put up an antenna anywhere.
Over 66% of the US population gets their TV exclusively over cable. You don't think those folks would want to change to something, anything else? I surely would.
The fact of the matter is you have to have access to a private area. Unfortunately, those of us who live in shared dwellings, apts, condos without balconies, etc. don't usually have a private area to put up an antenna. Most rental agreements specifically state that you can't modify the outside of the building in any way, and if you don't have access to the roof, you're shot.
This is why you'll see many condo dwellers mounting their dish in a cement block in the middle of their balconies, because they're not allowed to mount it to the rail or have it extend past that point.