FCC Moves To Regulate Cable TV Competition

explosivejared writes "The Federal Communications Commission is likely to impose a new regulation on the largely unregulated cable television industry, the first of what may be more to come. Under a proposed rule circulating at the FCC, cable companies such as Comcast and Time Warner Cable would have to slash the price they charge smaller television programmers to lease access on spare cable channels, a move the FCC says would open up cable viewers to a wider diversity of shows. In addition, the FCC is contemplating a national ownership cap that would prevent one company from having more than 30 percent of all cable subscribers." TechDirt has a jaundiced view of FCC chairman Martin's animus against the cablecos.

Comments

Why is this a federal issue?

[compumike]

The problem is that individual municipalities have been selling cable monopolies for decades... and in the old days, it used to be the case that no one cable company would get all of a particular large city, to ensure at least some semblance of competition. These days, they've all merged into one (in Philadelphia, at least).

What I think might be interesting is to decouple the wire from the service provider. Think about electricity deregulation: the transmission is seperate from the generation, and while everyone has to pay for the transmission (since we don't want overly redundant infrastructure), individuals can choose their generation source. The disadvantage here, as seen in the electrical case, is that there are more places to nickel-and-dime consumers. However, done with cable systems, we might actually have enough diversity of service offerings that it makes sense.

--
Educational microcontroller lab kits for the digital generation.

Re:Why is this a federal issue?

[ExploHD]

What I think might be interesting is to decouple the wire from the service provider

They do have something like that in Utah called Utopia. Here's the link: http://www.spectrum.ieee.org/may06/3434

Re:Why is this a federal issue?

[Jorgandar]

Good point. I think this fundamentally is another text-book case of a natural monopoly.
http://en.wikipedia.org/wiki/Natural_monopoly

The wire is a monopoly, that is, as it should be. The content provider is an example of almost perfect competition (just like the internet). But what is needed is the government to step in to provide such regulation to decouple the wire from the content.

Re:Why is this a federal issue?

[jonwil]

The data transmission lines would be funded the same way as the electricity grid.

Re:Why is this a federal issue?

[ph4s3]

compumike (454538) on Tuesday November 13, @12:37AM, said
What I think might be interesting is to decouple the wire from the service provider. Think about electricity deregulation: the transmission is seperate from the generation, and while everyone has to pay for the transmission (since we don't want overly redundant infrastructure), individuals can choose their generation source. The disadvantage here, as seen in the electrical case, is that there are more places to nickel-and-dime consumers. However, done with cable systems, we might actually have enough diversity of service offerings that it makes sense.

Best idea ever. The same should be done on the telco side too, and very nearly has with CLECs and unbundled network element requirements. The physical layer is a natural monopoly that should have a regulated rate of return; the services layer is not and should be open to all comers. I think this would be the only way to push this country ahead of the rest of the world regarding connectivity - decouple cable and telco from their physical layer so you've got two distinct platforms to reach the home, three if you include wireless.

I think it's actually redundant to have the two infrastructures and more could be done with a single infrastructure, but I think the competition is good and each will push the other forward in technology. It's probably wasteful to maintain two networks, but I can't see this country's politicians actually choosing who would operate the single infrastructure or ever regulating it well enough so as to force innovation in that single network -- note how much telco innovation came post-breakup of Ma Bell.

Freedom.

[rice_burners_suck]

What we need is less government regulation and more freedom. Businesses should duke it out, and consumers should be mindful of what is happening and vote with their dollars when making purchasing decisions for products and services. I know that in many areas, Cable TV is monopolized, but nowadays with DirecTV and whatever satellite services, not to mention the Internet, also not to mention the option to avoid wasting time in front of the television set, it's not so important that the government needs to waste resources regulating this stuff. Remember: Whenever the government does something, it will be more expensive, less efficient, and less effective than if the same thing were done by private citizens or business.

Re:Freedom.

[mrxak]

We need less regulation, absolutely. The way it is currently you have to lobby every little municipality to get the right to lay your cables, and of course the other companies can lobby against you if they are already established. These so-called natural monopolies are a joke. They prevent all competition and your cable bill is all the higher. Same happens with internet. You have one or two big players (cable and DSL), and that's it. Verizon and other companies are spreading their fiber optics, but every little town needs to be lobbied to bring in their service, and of course your Comcast and your Time Warner or whatever put as much pressure as possible to keep out the competition. Less regulation will be better for everyone.

Sure, you won't have sleepy little towns in the middle of nowhere getting 500 channels (half of which are public access or community channels, of course), but oh wait, they already do. Whatever benefits regulation promised were one-time things and those benefits are now irrelevant. Let more players into the market.

Cripple the industry?

[stox]

Is that a euphemism for not raping their customers?

A Wider Diversity Of Shows?

[rsmith-mac]

From TFS:

Under a proposed rule circulating at the FCC, cable companies such as Comcast and Time Warner Cable would have to slash the price they charge smaller television programmers to lease access on spare cable channels, a move the FCC says would open up cable viewers to a wider diversity of shows

Am I the only one that doesn't see a problem with the current "diversity"? We have 300+ channels of everything imaginable, including plenty of channels that have no right existing (*cough* G4 *cough*). Is anyone trying to create a channel today, and finding their limiting factor is the cost to get space on the cable networks, as opposed to the costs of making decent programming?

I suppose this change will make The Reality TV Rerun Channel cheaper to provide, but I've never seen any evidence that the limiting factor is anything other than convincing people to watch your channel over 299 others they already get.

So what's the catch?

[PoderOmega]

Maybe I am just being cynical, but why is the FCC so interested in this? I've only heard the good stuff about this (cheaper cable, more competition), but there's got to be some downside to this. All I can tell is that the FCC just wants more power - but to do what? I have Comcast, and despite the general hate for them on net I've been fairly satisfied with the service, but the price keeps edging up every year.

I'm kind of locked in to Comcast because my condo fees pay for group rate basic cable for the building (I know the FCC passed something about apartment buildings lately and I have not looked into it). I can get an ugly dish on my balcony, but I am basically throwing away money in condo fees if I am not using Comcast. I'm sure if having an option to go to another cable company or dish would be that great if it means the building loses the volume discount.

Obligatory Family Guy

[Misanthrope]

http://www.metacafe.com/watch/174231/family_guy_fcc_song/
Possibly NSFW

Teddy Roosevelt would be proud

[TwoHundredOk]

I would be the first one to applaud the break-up of the cable-company monopolies. They seem to make the companies, at least Comcast which I have had experience with, cocky to the point of not caring about customer service, pricing, or competition in general. However, I am having difficulty seeing how the FCC can advocate for the end (or at least modifications) to this monopoly, while allowing heating, water, and electric utility companies to maintain theirs. Is there a differentiation that I am missing?

Re:Teddy Roosevelt would be proud

[Scaba]

I am having difficulty seeing how the FCC can advocate for the end (or at least modifications) to this monopoly, while allowing heating, water, and electric utility companies to maintain theirs. Is there a differentiation that I am missing?

The primary differentiation is that none of those utilities are communication services, and fall out of the purview of the FCC. Besides, around here (Philadelphia), you can buy electricity and "heat" (in the form of oil, electricity or whatever your heating system converts to heat) from whomever you want. You also have the option of changing the heating system you use if you don't like the providers of that form of energy. Water is supplied by the municipality, which is probably an advantage. I'd hate to have to pay premium for "advanced water services," like basic filtering and sterilization.

Re:Teddy Roosevelt would be proud

[Scaba]

In Philly (well, anywhere PECO services), you can buy power from any number of generating companies, buy you still need to pay PECO delivery charges, as it travels over their lines. Which makes sense, else you'd have power lines from a hundred different companies running through your neighborhood, which more or less used to be the case. In the early days, you had dozens of power companies supplying different electrical needs, using different equipment and voltages and whatnot. The same was true for early phone companies, but it was even worse. So regulation and the formation of a natural monopoly made sense in order to ensure efficient and widespread delivery of power.

I've never seen a home that had heat delivered from a remote provider. Generally, you install some sort of local device that converts some material into heat energy. Most popularly this is either oil or natural gas. Gas delivery is probably a natural monopoly in most places, for the same reason electricity is, but oil is delivered by trucks from any one of dozens of such companies in my area. You are free to choose any one, based on price, which keep the competitive. You could, if you so desired, also create your own heating device that runs off the power of human flatulence or insects moving through its chambers, though I doubt you'd generate sufficient amounts of heat for even a small room. Even with a high-fiber diet.

I think my point is that the only efficient way to ensure universal access to certain utilities is to allow one company have a monopoly on, at a minimum, delivery of said utility. However, television (can TV really be called a utility?) shows can be delivered as efficiently over satellite, cable, fiber or probably even wifi or copper pairs with some of the newer breakthroughs in networking. Of course, I'm getting off point, as the regulations aren't exactly about this issue, but fuck it - it's nearly 4am!

tag: fuckthefcc?

[GroeFaZ]

Excuse me for having missed the memo, but why is anti-monopolistic regulation in general or in this particular case a bad thing?

Re:tag: fuckthefcc?

[samweber]

*laugh* Have you even read the missive that you link to? And you do realize that you are arguing against the founders of the USA, don't you?

According to the argument that you linked to, it is immoral to have laws against murder, because such laws restrict the freedom of the murderer. (Which, indeed, they do.) However, society has decided that restricting the freedom of the murder victims outweighs the freedom of murderers. Similarly, restricting the freedom of consumers outweighs the freedom of monopolies.

It is ironic that the site you like claims to be in favor of free markets. The argument in favour of free markets is that they spur innovation and fair prices. Monopolies, however, prevent both.

Re:tag: fuckthefcc?

[rasputin465]

Armentano might be an economics professor, but his ideas are by no means accepted as canon by the larger economic community. This includes his idea that regulating monopolies is immoral (which, I might point out, is not an economic stance). His argument rests mainly on one assumption, that corporate regulation works against competition, and competition produces the best goods/services. If this argument were applied to other arenas, it might be true, but it is a fallacy when applied to monopolies. A monopoly is by definition a market where the commodity is controlled by a single entity. In other words, it is the absence of competition. When a corporation constructs a monopoly, they are no longer bound by the rules of the free market, and have much less obligation to maximally satisfy the consumer. Another company will not break that monopoly by simply producing superior products, and so the consumer, lacking the ability to choose, is ultimately who suffers in the end. A government agency stepping in to break that monopoly can stir up the market and provide more choices to the consumer. And that is NOT immoral.

Re:tag: fuckthefcc?

[electroniceric]

I'm certainly not opposed regulating monopolistic industries, but the point that the TechDirt article makes is well taken: if there is in fact competition emerging in the tv market, regulation of cablecos now could give a big competitive edge to telcos, and lead to a far more monopolistic situation in cable and broadband when telcos use their favored position to lock up the broadband market.

Regulation shouldn't be undertaken to punish a company or an industry, particularly not at the behest of a competitor. It should be undertaken to address some market failure that harms consumers and the public. Figuring out what will result in the market that best serves the public and is most competitive is a bit tricky in these kinds of situations, because it requires evaluating trends for the likelihood they'll introduce competition, so there's always some guesswork about things will actually unfold. I think in this situation you have to weigh the likelihood of that competition strengthening against the impact of handing the telcos a competitive advantage.

All that said, to my mind the best answer is to require open access to all the networks, cable, copper, fiber and otherwise. Doubly so because the government footed the bill for a lot of the work to build these networks.

Re:Titties

[Tuoqui]

Hope you got your fill of titties in cable movies, because the FCC will make all cable TV G-rated. All I have to say to that is...

Shit, Piss, Fuck, Cunt, CockSucker, MotherFucker, and Tits

Lather rinse repeat. ( obl)

[killmofasta]

1. Start cable company
2. Get regulated.
3. Raise prices.
4. Profit.
5. Get unregulated
6. More Profit.
7. GO to 2.

The endless money cycle.
I am looking forward to the price increase.
( So far, it has NEVER failed )

Serious Deja Vu

[BobGregg]

Wait, wait... the FCC is *thinking* of imposing an ownership cap on cable companies? How can you "think" of an idea you already had?

My understanding was that in the late '90s, there basically already *was* an ownership cap on cable. AT&T's entire strategy through that period was to obtain as much of the cable industry as possible and then to use those facilities as a new local-calling infrastructure, so they could take on the Bells head-on again. I was developing at Bell Atlantic in '99, and we were working on creating CLEC interfaces - I was working directly with the AT&T staff that were trying to establish local competition with BA in New York. AT&T's local services were all facilities-based (i.e. cable), nothing leased from the Bells.

Then they ran into a roadblock. They had been promised by the FCC in merger after merger that nobody would stand in their way. This was AT&T's whole gameplan - to build a brand-new local calling empire based on the cable infrastructure. But once they passed 33% share (I forget who they were going to merge with), the FCC suddenly stood up and said no. AT&T was billions and billions in the hole, and suddenly their whole gameplan was in the garbage thanks to the FCC. It was effectively the end of real competition for the telcos, at least at that time.

At least that's my recollection; I could be wrong. Anyway, it doesn't matter one hill of beans one way or the other whether they limit ownership of cable. Until they start forcing competition to be allowed in each metro market, it's all meaningless. My cable/phone bills are more expensive than ever, with even less choices than I had in the late '90s. It seems like the FCC has been *useless* to the American consumer over the past 10 years.

In other words...

[InvisblePinkUnicorn]

Instead of the 3 local televangelist channels and 1 UFO nutjob channel I'm used to, I'm now going to get another dozen or so of the former and a generous helping of the latter.

Yay!

When the price gets down to zero, let me know

[SlappyBastard]

Otherwise, I'm stickin' with my bitchin' antenna -- OTA HD ROCKS!

Treat Them All the Same

[Doc Ruby]

If the FCC, or the government in general, were serious about regulating these cablecos in the public interest, they'd just revise all the laws to treat cable "TV", "phone" and "data" networks all the same. What makes them different is no longer their content, as each of those three kinds of companies deliver the "triple play" of video/voice/data, and therefore the same customers. There might be distinctions among networks that cross state lines, or that have either government contracts specifying special liabilities (eg 911 service operators) or market status (eg monopoly or some subsidy for growth or competition), or perhaps even provided by a government.

But they're all networks. They all have directly comparable service levels, competition requirements, public interest requirements, consumer protections. The distinctions by their content type, even if their media mix is somewhat different, is largely irrelevant. They should all be regulated to ensure they offer the same levels of service in their products, especially as they market those products to the same consumers as being "the same" as their competitors, like TV from the "phone company" or phone from "the cable company" or all of it from "an ISP". And of course the content should be regulated separately from the network access/connection - perhaps even regulated to break up vertical monopolies that currently bundle content and network together.

After the basic rules they can make whatever smaller exceptions are appropriate. Radio broadcasts, including TV and "wireless networks", that use the public airwaves, all can get their special treatment different from that distributed on private wires/fibers. Private wires/fibers that use public rights of way (like in most cities) can have their concessions to the public in exchange for their right of way access. And purely private networks can have their protection from regulation, where that's appropriate, specified. Unrestricted content, like pure broadcast (eg open websites, basic cable) can be distinguished from content requested by adults - which should be largely unrestricted, except where production of that content might violate (non-telecom) laws in force where the content is produced (eg pornography or defamation).

The sum total of all the regulations, even in the "deregulated" modern environment, is now a huge mass that raises operating costs (and therefore prices) by requiring lawyers and bureaucrats at every turn. A reformed legal basis could be much shorter, simpler, and appropriate to the modern age, where tech and marketing has leveled the playing field in a way that is not at all recognizable in current law.

Why are we still dealing with "TV Channels"?

[Riskable]

Let's talk about the real problem here: Cable TV channels are a huge waste of bandwidth. I don't care if The Perfect Channel(TM) is on my cable. I want it off. Give me NO channels and let me use that bandwidth for INTERNET ACCESS.

Right now your "Cable Internet" is using up about 10% of your coaxial cable while the other 90% is used to deliver TV channels. What a waste! If the FCC (or Congress) forced cable providers to be CABLE PROVIDERS (as in, they provide the wire and nothing else) then we could all have 100MB+ Internet access with the ability to choose from a nearly infinite array of "channels", P2P-distributed "shows", and any other content we wanted. If they truly want diversity, that is the best way to do it.

Using bandwidth for things other than TCP/IP (or similar protocols) is a waste.