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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?
What will happen in the next 5 years when IPTV becomes a reality to the masses?
This is where I believe we are headed:
All HDTV's will begin to have Ethernet Jacks, a NIC Card, and some embeded linux with a VTR and a HD.
You can Access IPTV/Local/Cable Channels from All over the world. VTR them. Watch YouTube and Other Net Video Channels, and be able to buy Movies for Watching like OnDemand. You can set your VTR from your office etc through your IPTV online account.
Net IPTV Companies will partner w/ HDTV manufacturers to make sure there IPTV Portal is what is the default portal on connecting to the net.
So to bring this back to today. Technology is changing the game so fast that monitoring a 30% rule seems mute because it's tough to measure now and once the HDTV gets on the net how the hell are they going to monitor all that without everybody getting upset. Consumers don't want to be watched by the governement and the internet is a global entity; which makes it difficult to get Viewer numbers on a company that may be overseas.
The real problem is not that an individual cable TV provider has too large a market share. The problem is that there is no competition among providers because of regional, not national, monopoly status.
Now what would be really radical would be to allow more global competition for the US marketplace. One of the biggest issues at the moment is that there are a small number of companies who know their only competition comes from inside the US and there is no way that anyone outside could aggressively target the market. As much as Rupert Murdoch isn't my favourite person in the world it has to be admitted that he, as an Australian who sold his nationality for commercial gain, has shaken up the broadcast side and distribution sides of the market. Why not allow more people in from outside to see what they could do and to wake up what should be the world's most competitive market but which unfortunately is probably one of its least.
The problem isn't 30% or whatever the problem is lack of choice and competition.
An Eye for an Eye will make the whole world blind - Gandhi
The FCC gives SBC a free pass to stifle competition by recreating the AT&T conglomerate that was broken up in 1984 but they have a problem with cable company size?
And allowing local/regional phone and cable monopolies rather than leveling the playing field for 3rd parties to rent coax and phone lines from incumbents hurts the consumer more than any other decision the FCC makes.
Not to mention that the FCC has done nothing significant in the most egregious abuse of access, that of AT&T (formerly SBC) allowing the NSA to essentially wiretap the entire internet backbone...
While monopoly of "the last mile" might not be easily fixeable, the vertical expansion easily is and has been done in a number of cases. End the cableco's ability to sell any content beyond basic OTA. "premium" and PPV channels are sold by subsciption by unrelated others (in competition) and the content merely carried (billed, gated) on cable (at a regulated cost).
This rule is completely unnecessary. We don't need the FCC. Everyone knows that the magic of the free market can provide all our telephony needs, just as it provides all our healthcare, education, electricity, roads, water and national defenses.
All this big bad government regulation simply inhibits the market from reaching its optimal state; which is not a monopoly, despite what some pinko econmmunits and their "facts" would have you believe. The true patriot has faith in the Invisible Hand, Profit be Upon It.
May the Maths Be with you!
Why are they focusing on cable companies? What about DSS services? Seems to me that this move will hurt cables ability to compete with larger nationwide satelite services like DirectTV and Dish.
Nick
"A plan fiendishly clever in its intricacies"- Homer Simpson
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.
It's very simple. The FCC regulates two industries: Cable and Telco.
Back before the 1996 Telecom Act, the two never competed directly. Now, you've got cable companies offering phone service, telephone companies offering television service, and both offering Internet access. In some areas, the buildup of higher bandwidth infrastructure has forced cable companies to add channels in order to compete with new telco TV offerings.
Eventually, we'll likely move towards a model in which the cable and telephone companies simply sell bandwidth, and people will get most of their content through VOIP and IPTV. Until the real world implementation of the technology and the regulations catch up with the potential, the FCC is stuck regulating the services offered by these companies. As long as that's the case, added regulation on one industry means a competitive advantage for the others. If cablecos lose, telcos win.
In many communities, this can ultimately be good for consumers. Here in NYC, one cable company (Time Warner) has the monopoly on providing television access. Over the air reception is a non-starter because of all the tall buildings, and many people (myself included) have no southern line of sight for satellite. My cable company provides horrible service. As bad as the local telco is, their service is actually better than the cable company. When Verizon wires my building for FIOS (a project that's already underway), and eventually gets permission to carry TV signals here in NYC, I will actually have a choice of provider if I want to watch live TV. Time Warner has already started offering higher bandwidth Internet connections in anticipation of FIOS data rates. I look forward to seeing what else the competition will bring...
-JMP
So I end up with Comcast East and Comcast West. How much better will my life really be?
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
Blame content creators and telecom.
The FCC is trying to protect telecom's entrance into the content delivery business. Also, content creators like Viacom are pushing for breaking up cable, as this will provide them with more leverage on channel contracts.
Over the past couple of years, the FCC has pushed Time Warner to divest itself of it's channels, and threatened to cap Comcast from new markets. If the cable companies are capped in size, but still geographically monopolistic, the cable have less leverage to push against the broadcast flag, for the legality of DVR, remote DVR, and start over services. That's what the "concern" is over cable companies controlling what channels people watch. The big content companies are afraid of the concentrated buying power and the ability to say "No" to their shenanigans. If the big cable companies drop a major network, it will hurt the network. But if a smaller company drops it, the small cable company takes the hit.
I work at a local cable co. Right now, we record every channel, and can pipe any show straight to your box on demand from the past week. It's a remote DVR we keep at the head end, and our employees can test it out. But we can't roll it out to our subscribers, because no network will give us the rights to do so. Comcast tried to do this without negotiating rights, but they got slapped with a lawsuit. We've been totally unable to negotiate the rights to it. We're even losing the fight over the broadcast flag. We used to universally ignore the flag, but some networks are pushing us to use it. FiOS has no problem flagging content, and AT&T has said they will push for it. We get that thrown in our face, constantly, during negotiations. We don't have the buying power to face off against a monopoly. ESPN, MTV, these are monopolies.
Telecoms want smaller competitors (they are far larger than Time Warner or Comcast). Content companies want easier negotiations. What we need is local competition and more consumer friendly broadcast laws. The FCC just wants to push smaller cable companies.
I agree that cable operators should not grow and merge into a powerful monopoly. I think it is unfair to consumers and reduces competition. But I disagree that the FCC has the authority to regulate a business, even if they have done so in the past. If any battles between the FCC and corporations are ruled on by a constructionalist judge, it is unlikely the FCC would succeed. Since the FCC has little constitutional authority and a constructionalist would likely only view the department as a manager of broadcast spectrum and regulation of radio emitting and receiving devices. And such judges take a dim view of government entities overreaching their authority.
“Common sense is not so common.” — Voltaire
...Isn't this the FTC's job anyway?