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FCC May Move to Cap Cable Company Size
explosivejared writes "The FCC is making plans to bring back the concept of a 'size limit' on cable operators. 'FCC Chairman Kevin Martin has enough support on the five-member commission to pass a measure that would bar cable companies from owning systems that have more than a 30-percent share of U.S. multichannel video subscribers ... the FCC could have a difficult time defending the 30-percent cap in court. The move comes six years after a federal appeals court threw out an identical FCC rule on the grounds that the agency did not have enough evidence to justify it."
What do they know that we don't know? Are they trying to shift the ban from % of local ownership to national ownership? Are they trying to get this move knocked down in the legal system to set precedent for something else?
No way George W. Bush's FCC is having a change of heart about big business ownership. So what's the scoop on this and other recent anti-cable proposals? And why are they trying to rush a vote on it?
Parent is one of the most naively ignorant comments I've seen on the communications business. To wit:
Time and again we have people who moan about monopolistic tendencies of large corporations. They offer negative opinions of the so-called free market. Unfortunately for the consumer, the FCC and local municipalities have assured us of never having a truly free market in cable (and cable-provided services).
You can't get the local municipalities out of the cable business for the simple reason that the cable companies cannot possibly buy via the free market the property rights necessary to string up a network. It's a classic holdout problem. Every property owner (including the municipality itself) that sits in a strategic position will have the leverage and incentive to hold out from selling access until they can extract all of the cable company's profits. Without the political process to facilitate the necessary access to public and private property, it just doesn't happen. It's the same for the landline phone business. And wireless has its own reasons for requiring regulation. The simple fact is that this has always been a regulated business, and it always will be. It's the unavoidable nature of the business.
I know of so many people who are concerned that deregulation (national and local) of cable and comm providers would end up giving us millions of wires overhead on the telephone poles. This is untrue.
Your conclusion is correct, even if your reasoning is inane. There would not be millions of wires because that would be unbelievably economically inefficient. The market wouldn't support it. Even ignoring the property rights issues discussed above, last mile networks are extremely expensive and completely redundant. Combine with property rights complications and you have a market that will have very few entrants. Regulated or unregulated, there will be little competition for the physical last mile network. That's just going to have to be an uncompetitive market. The question is how far do you want this non-competitive market to extend? Should we allow lack of competition in last mile networks to turn into lack of competition in ISP's by getting rid of unbundling and open access to the local loop? Should we it to turn into lack of competition for services over the Internet like VoIP and IPTV by not enforcing net neutrality? The telecom companies want to push these noncompetitive advantages as far as possible into markets that are actually competitive. The only thing to stop them and preserve actual market competition is regulation.
Thankfully, we're seeing more solutions slowly popping up. WiFi networks, maybe WiMax networks, and other competitive products should hopefully push the cabled providers to lowering their prices, which may end up having the effect of creating a deregulated market before government will move to unrestrict that competition.
Funny that you should phrase it as if the emergence of wireless competition would spite the FCC. Platform competition has been the primary aim of the FCC. That's why they shut down unbundling and access to the local loop. Unfortunately I don't think it will play out very well. I remain unconvinced that wireless access networks (as opposed to WiFi, which is not really an access network at all) will be able to compete with wired access networks for speed. WiMax is likely to deliver 2-4 Mbps. Cable and DSL could do 10 times that (and do in other countries, although not often in the US), and fiber, forget about it. Wireless is just not in the same class, and as people more and more start to depend on broadband to get video content, that's going to make a big difference. And while we've all spent a decade waiting for broadband over powerlines, it just doesn't appear that it is going to be commercially viable. So we could be looking at a long term duopoly for residential broadband Internet service between the cable and phone companies. The market will not save us.