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FCC Planning Rules to Open Cable Market
quanticle writes "According to the New York Times, the FCC is planning to unveil new regulations for the cable market that will lower barriers to entry for independent programmers. The rules would be aimed at stopping the growth of existing cable giants like Comcast and Time Warner, while seeking to encourage more small companies to get into the field. Also, earlier this month, the FCC struck down the practice of having exclusive contracts between cable providers and apartment owners. All in all, this looks like a welcome infusion of competition into an otherwise stagnant market. The impact that this will have on the network neutrality debate is unclear."
..exclusive contracts between cable providers and municipalities?
If they really want to make it a level playing field, prohibit the ownership of both physical infrastructure and programming by the same entity. You can have one or the other, but not both. Once you own both, or a significant proportion of both (say, more than 3-5%), there is an inherent conflict of interest when the infrastructure side sets carrying rates for the programming side. If you own both, you can set the rates high enough that the programming side always loses money, and the infrastructure side makes enough money to keep the system afloat. That way, you can sell your programming costs below wholesale, knowing that at the end of the year the combined operation will make money. Outside players offering programming and paying the same infrastructure rate cannot compete, and you're back to a monopoly status.
Is it just my observation, or are there way too many stupid people in the world?
What's with the new crown for 'government' articles. I didn't vote for a king!
Who are you and what did you do with the real FCC?
"I am the king of the Romans, and am superior to rules of grammar!"
-Sigismund, Holy Roman Emperor (1368-1437)
Looks like someone forgot to pay their bribes this election season!
Software patents delenda est.
in the now great, nonwhite north, a few big cable companies divided the country into exclusive zones and built private networks, and personal fortunes, on the backs of a captive market
for all their talk of competition and free markets, in truth, the big boys simply can't and don't play fair and square
I don't know. Opening up the cable markets would certainly be a good thing. It would be nice to be able to pay for the services I use instead of having to pay for 150 channels when I only watch 15.
However, part of me is a little wary about this. I would rather it be the FTC that steps in and implements these kinds of change. The FCC has said in the past that they wish to bring their brand of censorship and anti-obscenity rules to the world of cable service, an area which is legally outside of their jurisdiction. However, if they can claim successfully that cable falls under their rule enough to implement business changes, what stops them from carrying out these other tasks?
Would it be worth it to have the monopolies of cable television broken up only to replace it with the mediocrity that is broadcast television?
I'm all for anything that creates competition and lowers prices, especially in the cable industry (all bastards), but I just have this bad feeling that this is really designed to make it harder for any of the cable companies to compete with the big telcos, which is already nigh impossible. So frustrating.
Does this mean we can really get that Side-Boob Hour late night show?
First off, I'm a little puzzled by the statement that they would make it cheaper for cable competitors (satellite and telcos), to purchase programming. So, Satellite pays $1.00, telco's pay $.50, and a cable company pays $2.00, just to throw out numbers? I'm not entirely clear I understand the rationale of the government price fixing on behalf of large industry.
Secondly, this is a little disturbing because of some of the other subisidies in these industries, and the fact that the FCC really appears to want to treat them equally, when, in fact, they are all on very different playing fields and games.
Telco's get massive subisidies and monies to maintain "universal access" and also provide government services, such as 911. As such, it puts them ahead of the game when it comes to maintaining the physical infrastructure.
The satellite providers have a much lower cost of maintenance (short of a bird frying), because they do not have a physical plant to maintain. The local cable company had over 7,000 miles of plant in my metro area alone.
And as far as programming goes, the truth is that 98% of the cost of programming to cable companies is charged by a few providers. Disney will force several channels down the throat of a cable company by telling them they have to carry those channels if they want ESPN. And then they'll ask for an extra $.05 or $.10 per subcriber per month just to carry ESPN. When you see programming of those channels you don't watch, the reason is that generally those are incredibly cheap to carry, and don't add much cost.
So the amount a consumer ends up paying, as a percentage, for all those channels they don't care about, is pretty much irrelevant in the larger scheme of things compared to the organized system of bribery that a few media providers are using, such as Disney, HBO, TW, and GE, and the like.
Which brings us back to this attempt by the FCC. Seems to me that treating all TV signal providers, regardless of the radically different issues each faces in providing a signal is shortsighted and counterproductive. As someone else commented, this smacks of letting the Telco's provide more service more cheaply at the expense of other types of providers is just another way of abusing the system.
For full disclosure, I worked for my local Cable company for several years.
Bill
So what're the chances of the FCC forcing cable companies to adopt an a la carte-type system? That's all I really want, to only have to pay for the channels I watch.
Comcast is the soup du jour round these parts but I don't know anyone who has them for anything other than internet access. I have DISH and all of my friends either have DISH or DirecTV. Comcast is more expensive, offers less channels, and has crappier customer service. Plus I'm dependent on the quality of the wiring in my apartment when using them. Not a problem where I live now, building is only a couple years old, but the townhouse I used to occupy had crap cabling from the early 60's and the high speed internet wasn't so high speed.
How is it that one careless match can start a forest fire, but it takes a whole box to start a campfire?
Kyle McSlarry whines that studies show fewer than 70% of American households subscribe to cable -- and thus the FCC doesn't have power to regulate cable. But under the "70/70 rule" of the 1984 Cable Communications Act, Congress empowered the FCC once cable was available to 70% of households and was subscribed to by 70% of those who could. So really the line is 49%, not 70%.
Are the cablecos deliberately misleading people or is it just that they can't do math? Judging from my cable bill, both.
The Mongrel Dogs Who Teach
I am all for allowing multiple people fight for my money. And in some locals, people like rcn already are in competition with Comcast.
One other aspect though is public access channels. The town makes deals where a certain amount of money goes to public access. While many hate the shows there, some can be rather good, and either way it gives people a voice, and the option to learn about tv.
The deals that the access channels are getting lately are starting to get worse and worse (many people are full time volunteers that can barely afford used equipment). Older deals allowed for at least some new equipment, and maybe a curtain or pipe grid for lights.
If opened up, what would the deals end up being? Would they revise the deals so that each pays the percentage of users it has at the end of the month or year? And who would you negotiate with for more money?
Like I said, I love the idea of competition and lowering prices (and a la carte), but I thought that someone should bring up the already suffering local channels.
Maybe after this the Americans will start having decent Internet connections again. In the last years evolution of Internet bandwidth in US was close to none. What's with those US ISPs still selling dial-up accounts at insane prices? Barbarism!
I'm paying a lousy 20$ for a real unlimited traffic 20 Mbit cable connection at home here in freaking 'technological retarded' Romania. I dare you to get this kind of deal in US.
Verizon moves into cable TV: telco debuts service in Texas.
Are you thinking the same thing that I am?
The Puppy Channel might come to fruition!
OMFPuppies!!~1
While I'm anti-State, I do accept the Constitution for what it is -- if it was followed properly.
I believe the Federal Government's primary goal is to protect the inherent rights of the People (not grant them, not restrain them). I believe the States, individual countries in their own design, should be prevented from passing legislation that revokes, restrains, regulates or perverts inherent rights, especially those listed in the Bill of Rights.
Municipalities are bribed by large cable and communications companies for monopoly licensing. This is counter-liberty. While I abhor the FCC and believe it is unconstitutional, I think Congress has a place to tell the States to stop licensing monopolies and restricting competition.
I'd rather see Congress remove OLD laws that provide for the non-competitive nature, but it is what it is. I don't think more government intrusion into the market will make it more competitive, though.
http://finance.google.com/finance?client=ig&q=CMCSA
The 3rd qtr conference call was all about customer loss on video. Seems like a lot of people are moving to another provider for their television service (as has been the case for years) Maybe because the prices are too high?
And what the hell is going on here anyway? The FCC does nothing about cross ownership rules and actually seems to encourage consolidation of the public airwaves (while advertising revenue is going up and listener/viewership has been decreasing), but beats up cable for not being open enough?
"Well, good luck finding a judge that doesn't run a bestiality site."
It's a good goal to increase competition for utility-like entities like cable and telephone, but why do the attempts always involve increasing regulation.
I suggest that the greatest barrier to entry for cable competitors isn't the programming, OR the copper, but the land. Everyone who wants to lay copper or glass has to go through miles of red tape just to get the rights of way, but this is silly. Where rights of way have already been granted, it makes sense to simply open that up: Pick a number of additional parallel lines that won't be too unsightly, and auction off the extra rights of way. Obviously, they would have lease-lengths, and no minimum bid, and the existing telcos would be barred from the first round of bidding on the additional cross-sectional area.
The point is that if you want competition, you're never going to have it as long as the "competition" has to buy or lease its capacity from the entrenched company they're trying to compete with.
Can you be Even More Awesome?!
It's not like they have to send out a cable guy to deliver my channels every month. They just flip the appropriate switches at "installation" time, and collect a check every month. They could charge, say, a $5 service fee and $2.50 per channel--maybe more for "premium" channels--and I'm sure they'd cover their costs. Under that plan, I'd pay two-thirds of what I'm paying now, and still get the channels I care about.
Now, naturally, it wouldn't be as profitable...
("To better serve our customers, we've added the Christian Golf Channel and ESPN Classic IV to our standard package! They take the place of channel 31 (formerly CNN) and 44 (formerly The Weather Channel) which are now exclusively part of our 112-channel supermegabundle...only $199 a month, plus you get the Christian Golf Channel II and ESPN Classic V and VI! Upgrade today!")
The US free market: two halves of a government-granted duopoly are free to set the market price.
IN the Business Section of the same issue of the Times there is an article about the NFL trying to get the cable guys to carry their channel as part of the "basic" service. What this means is that everyone gets the service and the cable company has to pay for every user. The NFL wants $0.70 per subscriber, whether or not the subscriber cares about the channel. This will translate into something like a $1.00 increase in cable bills.
The cable folks said "No", which is very pro-consumer. The NFL is lobbying Congress and the FCC. This is the kind of crap that raises you bills. Cable guys have to have ESPN and Disney keeps raising prices and forcing cable to take other channels and pay.
The FCC can't just address the access without dealing with they "baisc" channels issue or we'll wind up with some arbitrator somewhere deciding that the Tibetian Snow Channel is worthwhile and we ought to all pay $0.20/month for this, even if only 10 people watch it. In the end cable and the FCC's vision represents taxation of the many to pay for channels for the few.
Let the market decide. The only thing the FCC could do is possibly force unbundling of content and having consumers choose what they want. This would take the cable guys time to implement but then the folks who want NFL cna pay and NFL will have to convince the consumer that the channel is worth what they want to charge.
RCN cable tried to get into Philadelphia, but were killed by the local politicians at the behest of the local cable giant. This would really be a boost for them.
This would be more interesting, if a single word of it were true. But it isn't. It's the PR machine of AT&T at work.
The reality is more obvious, and certainly clear to anyone in the business of working with the FCC. This is about the triple play.
First, know this. Municipalities, by Federal and State law, cannot grant an exclusive franchise agreement (which is just a license to use local rights of way, in return for compensation to the municipality) to any telecommunications or cable provider, under any circumstances, and this has been the law for more than 20 years. To decry Cities for granting monopolies to cable companies (or phone companies) is simply ignorance of the truth. In fact, the converse is true - Cities have been trying in vain for many years to lure in other television and telco providers to no effect. The cost of entry is just too high (it takes a ton of money to build and maintain any kind of hard wire plant), and the entrenched industries have been too successful in getting doublespeak bills (like the referenced FCC action) passed.
What cities do do, is to collect useage fees (called franchise fees) from companies who use public property to make money. After all, the public has invested trillions of dollars buying rights-of-way over the years, and does deserve to be compensated when someone else wants to make (big) money using it. But of course, none of these companies likes to pay - so they work hard to get this cost eliminated, in an amazing variety of ways.
What this article ignores, is that this is the second FCC action on this matter. In the first action, the FCC acted to overrule Cities in the management of their rights-of-way, and they did so at the behest of AT&T and Verizon, who want very badly to sell Cable Television service over their own systems - including the new fiber plant they are busy laying in. And oh, by the way, the conned the FCC into screwing the cable companies blue - by relieving themselves (the telcos) of the obligations cable companies have had to pay, and still have to pay, in order to use all that valuable land to sell TV channels. So, Time Warner is placed at a massive economic disadvantage versus the Telcos. The FCC calls this "lowering the barriers to entry". I think it might more accurately be termed "lets give the Telcos their monopoly back, by killing the cable companies".
Of course, the Cable companies, being much aggrieved by the first action, immediately (along with Cities all across America who don't want to be forced to raise property taxes) filed suit. And to even the most casual observer, it is clear that the FCC violated the law and greatly exceeded their statuatory authority in passing the first measure. So, the second measure was hastily adopted, in hopes of giving the Cable companies enough of a bone, to get them out of court - after all, the cable companies enjoy screwing taxpayers too.
It's one of those deals where you have to know how things really work, in order to understand the play being done here. Not many do. That's why the FCC might get away with it. Or, the courts could side with the Cities, in which case the Telcos would have to play fair on their way in. But no one spends money like they do. That's why we have state legislatures passing bills written by Ma Bell attorneys all over the country now, and why the FCC is so eager to pass their pet rules.
One thing is certain - it isn't going to encourage competition. Neither will it encourage lower rates (monopolies just don't play that way).
It sure is interesting how easily these big companies can control the media though isn't it. It's also interesting how readily most people buy into these big lies. Makes you wonder about the rest of the "news", doesn't it?
You seem to have a serious prejudice against non-city-dwellers.
You also seem to have formed a very bizarre belief that anyone who doesn't live in a big city lives in "the sticks."
Well, I live in a small town, 20 minutes from a small city, 1 hour from a large-ish city (Syracuse, NY). (Oh, and I don't work in either of the cities. You can work in suburban and rural areas, too! Wow!) It's not the sticks. I know people who live in the sticks, and out there you can't get broadband. Well, if your location is good you can probably get satellite, but not cable, and not DSL.
I pay ~$50 for cable internet that's generally between 3 and 4 Mbps down, and about 384 up—so better than the guy you replied to, but not by a huge amount. The DSL around here is, from what I've heard, slightly worse. There are no plans that I know of to get any faster service out here (fiber or whatever).
So get your head out of the city and realize that yes, there are other people in the country. People who don't want to live in a city, and have no need to. But we still need services. And, y'know, maybe the tiniest smidgen of respect—or at least common courtesy/
Dan Aris
Fun. Free. Online. RPG. BattleMaster.
What about the satellite companies?!
I just had to return my Tivo Series 3 because satellite doesn't have to abide with federal CabelCard laws!
Cute, but it's not much of an extrapolation from this to "Oh My Balls" on the Violence Channel.