Newly emboldened FCC Chairman Kevin Martin plans to wield the Cable Communications Act of 1984 to shatter the cable industry’s anti-competitive practices. The proposed regulations would give consumers flexible, diverse programming at cheaper rates, while capping the cancerous growth of conglomerates like Comcast and Time Warner.
The commission is preparing to take steps to make it less expensive for rivals of the largest cable conglomerates to buy their programs — so that, for instance, a satellite company would find it less expensive to purchase programs by the Turner Broadcasting System, a unit of Time Warner.One of the proposals under consideration by the commission would force the programming of the largest cable networks to be offered to the rivals of the big cable companies on an individual, rather than packaged, basis. That proposal, known as “wholesale à la carte,” is vigorously opposed by the large cable companies.
The agency is also preparing to adopt a rule this month that would make it easier for independent programmers, which are often small operations, to lease access to cable channels.
And Mr. Martin has been circulating a plan that would use the finding on cable television dominance to set a cap on the size of the nation’s largest cable companies so that no company could control more than 30 percent of the market.
À la carte programming would allow us to subscribe exclusively to Comedy Central without paying for useless filler like The Disney Channel. Selections may vary by household.
The Chairman is assuming the broad new regulatory powers under what is known as the 70/70 rule. Once the FCC finds that cable is available to 70% of American households, and that 70% of those households subscribe, the FCC is empowered by the Cable Communications Act of 1984 to promote “diversity of information sources.” Expect the cable industry to poach Verizon’s dragon-riding lawyers to argue that the requirements of the 70/70 rule have not yet been met.
F.C.C. Planning Rules to Open Cable Market [NYT]
(Photo: Jiri Kopsa)
More From Consumerist
-
FCC Chair Wants Gigabit Internet Access In All 50 States By 2015
-
FCC: Internet Service Providers Are Actually Delivering The Speeds They Promise
-
FCC To Look Into Legality Of Unlocking Cellphones, May Not Be Able To Do Anything
-
White House Agrees That Cellphone Unlocking Should Be Legal Again
-
FCC Tells Comcast It Had Better Get To Marketing That Standalone Broadband Service
@PYLON83 – Do you happen to work in the cable industry by chance? Seems probable given your responses.
I would be thrilled with a la carte…we watch Court TV, Comedy Central, Discovery, the History Channel, USA, and A&E…that is about it.
If I were able to delete “religious”, shopping, spanish, sports (except NASCAR) and the completely good-for-nothing PAID PROGRAMMING (WHICH IS LIKE being bill twice for nothing), I would be happy. Don’t care if the FCC does it or just good competion but the differences between satellite and cable are non existant from what I have experienced.
@erratapage: “I love how people say that cable tv is a luxury that you don’t have to buy.”
I don’t think you should get screwed on the pricing (and it’s utterly absurd) but, um, it IS a luxury you don’t have to buy. Something like 1 in 9 Americans are still on rabbit ears, and I’m one of ‘em.
@Raziya: “I would be thrilled with a la carte”
I would even be thrilled with semi-a la carte, where they’d give you plan levels, like “pick 5″ or “pick 10″ and then you’d get 7 or 12 channels, the last two on the plan beings ones they add for you, which would give content providers space to attempt to introduce me to their latest channel or another channel in their suite in the hopes that I’ll buy it when they take it off the “free channel” rotation. If I like History, Discovery, TLC, etc., it’s a good bet that I’ll like, say, Animal Planet, and if I can pay lower prices and pick my channels a la carte, I’m willing to have them provide me a couple extra they want to advertise to me.
@Pfluffy: outstanding!
@iamme99:
Actually, I do not. However, I did about 2 years ago. Most of my opinion stems from my belief that more government regulation of a private, non-necessity business is not the answer. What’s next, the government regulating the escalating price of Coca-Cola?
My husband made a valid point last night when I was discussing this thread. He suggested that we reevaluate what is luxury and necessity. Is it a luxury to have access to the dominant culture of our society?
We went through our “discretionary” expenses, and realized that some of them are about conveniece, some are about making it possible for me to earn more money, and some are about being connected with the outer world. I’m not sure being connected with the world is so much a luxury, even if it isn’t a true necessity.
However, yes… my original point (and I will admit to being very crabby last night) was that I shouldn’t have to pay monopoly prices for anything… be it a luxury like my XBox360, a semi-luxury like cable tv, or a necessity like eggs.
As for this topic, I don’t know whether ala carte pricing will be better or worse for the consumer. I have a suspicion that it will not help cultural diversity much, but that might be a small price to pay for having the ability to control the messages that come into my home.
@erratapage:
Perhaps you would prefer a Socialist or Communist government over our current regime then. Government price controls are not appropriate for items that are not absolutely necessary to live, such as heat, electricity, and water. Gas, Eggs, cable TV, X-Box’s should all be free-market items without the government meddling in the business of those who sell such items.
This is a good thing. I want “a la carte” pricing.
For people saying it is a luxury, what about areas that dont receive through-the-air programming? is cable tv still a luxury? or is your access to local news a “right”?. (I just mention this, because where I live doesn’t receive any channels clearly through the air)
What has made dish network and others become as expensive as cable (at least when i was pricing it out) is their dependance on phone lines, which many people dont have anymore. (at least in the under 35 bracket). this limits your options for any dish service, as well as for internet access, so the price of a home phone line must be added on top of the cost of any of those items.
For those of you bemoaning the lack of competition in the cable industry, it’s actually not the FCC’s problem — it’s your local (city, county, or perhaps state) franchising authority that is the problem. As I recall the Federal telecom act’s cable TV provisions (which I haven’t read for several years), the law reflects a policy choice (somewhat dated now) in favor or local licensing of cable TV providers. The stated goal for keeping cable locally rather than federally regulated was something like “protecting” local voices in the media and “diversity”, etc. In reality, the state and local regulators were simply afraid of being displaced — and local TV stations afraid that they’d become irrelevant if cable allowed you to bypass the local affiliate stations. The local regulators’ onerous requirements and/or preference for a particular provider are what keeps competition from happening.
For example, in Cambridge Mass. where I live, we only can get Comcast for cable service. You simply cannot get service from RCN or even Verizon FiOS here. Somerville, the city next door, has at least RCN, and several adjacent communities have access to FiOS. There’s no geographic issue — the cities are close together and are easy to wire urban areas, so that’s not an issue. What *is* an issue, however, is that Cambridge requires Comcast to offer about a half dozen “public access” channels that put on programming that make “Wayne’s World” look to be well produced and high in social value. The regulators also seem to require multilingual programming (on channels labeled for other networks’ content!) to placate the city’s various non-English speaking populations (I’m fine with a la carte that pricing that gets me off the hook for paying for Chinese, Portuguese, or Spanish stations I can’t understand.) Until these requirements are dropped, we’re stuck with Comcast and a not insignificant amount of crappy content most people don’t want, because some unelected licensing board crams it all down our throats.
Before fiber optics, broadband, and realtively easy installation technologies, etc. you could have made an argument that cable TV service was a classic “natural monopoly” that required regulation to prevent monopolistic practices because it was so impossible to get a competitor into the industry. Nowadays, however, (at least in urban areas), the only basis for the monopoly is a statutory one. It’s time for Congress and state and local governments to junk the 70s-era regulatory thinking and let us see the benefits of freewheeling competition in the cable market.
@jbl-az: No, the REAL reason why companies continue to get away with this is because, WE as consumers let them.
People are great at complaining about something, but don’t do anything past that. If you’re sick of the way a company does business, fire them! Most everything you mentioned aren’t necessities, think of all of the money you can keep in your pockets by choosing to do without and not have to deal with the monopoly at the same time!
We get the shaft because people refuse to go through the minor inconvenience of finding an alternative or can’t do without some perceived “need”. This is America after all, where we should never be denied any pleasure. Companies are very aware of that and exploit it because consumers allow them to.
Wife and I are close to not watching anything in real time anymore, we record the 5 shows we still watch and use the ‘net for the rest. Now 5 shows is only 5 away from none so if the cable [Comcast] company thinks that bright tech savy folks NEED them they are even more of an asshat than we all think. Add to that Peerflix for cheap DVD’s and on-line radio for politics and such and I think we can all see the future is not so bright for monopoply TV suppliers.
Think blacksmiths and buggy whip vendor’s fates as a model for the future.
@PYLON83: Perhaps you would prefer a Socialist or Communist government over our current regime then. Government price controls are not appropriate for items that are not absolutely necessary to live, such as heat, electricity, and water. Gas, Eggs, cable TV, X-Box’s should all be free-market items without the government meddling in the business of those who sell such items.
I think you should get off this horse. Government regulates to stay in business. W/O regulation, government would have nothing to do [lol]. Maybe your argument would hold some water if nothing was regulated and everything was free market. In this case, every company that offered TV signals could offer their service to anyone, anywhere. But this doesn’t exist now and is unlikely to exist in the future. Therefore, if consumers don’t have total free choice, then pricing needs to be regulated to protect consumers from predatory companies like Comcast.
@iamme99:
How is Comcast predatory? They might be expensive, but they are in no way predatory, seeking out customers who can least afford their service and exploiting them. Further, I’m not sure I am against predatory business practices. As a society, we should be able to expect at least a reasonable level of intelligence from consumers. If you don’t like how Comcast does business, don’t do business with them. But don’t go on a campaign to have them regulated and affect the way they do business with customers who do understand what they are offering and what they are paying for. I’m not saying that everything should be free market, but I think most things certainly should be.
@cyclade: I actually lived in an area with “cable choice.” What happened was that the rates went up for BOTH available cable companies, went up by quite a bit, and then one of them failed completely … and the other one left the rates high.
(There was something to do with cost per served consumer for why the rates skyrocketed, I don’t remember the economics.)
Things-that-come-into-your-house-on-wires — phone, cable TV, electricity — are more or less natural monopolies as well, because someone has to own the lines. Competition almost never works out as planned, because either the company that owns the lines get screwed (has to reduce rates for competitors to use the lines while paying for upkeep that makes the owning company non-competitive) or the companies that don’t own the lines get gouged.
I think it’s weird that we DON’T expect competition in things-that-come-into-your-house-in-pipes (water, sewer, gas) but we DO expect it in things-that-come-into-your-house-on-wires.
The real competition for wire-line telephones is cell phones. The real competition for cable has been satellite, not other cable companies.
“Cambridge requires Comcast to offer about a half dozen “public access” channels”
Providing public access channels on cable is actually federal law, not local.
@PYLON83, you keep coming up with these non-sequiturs! What year are you living in?
First you expect government to magically go away and let companies do whatever they want to do. Now you expect consumers to have a reasonable level of intelligence? Whew.
As has been discussed throughout this thread, many people do not have the option of choice when it comes to TV service, either do to their location or restrictions on adding satellite dishes in apartments and such. So Comcast is predatory because they take unfair advantage of their near monopoly in many locations.
Hmm,… So whats with Kevin Martin and his anti-cable agenda? Dish and DirecTv raise their rates. You can’t pick ala carte with them. They also own networks and sell them to cable providers for high costs. Yet, I see that this is directed only at cable companies, just like his apartment/condo legislation from a few weeks ago. Seems like Martin had a “bad” experience with a cable company and is taking it out on them. I’d hate to be the CSR that got on his bad side. Talk about a bad move.
Hopefully, should this come to pass, all types of providers will get on board. If Comcast, for instance, suddenly allowed people to choose just the channels they wanted and the price came in at say 50% less than what people pay today, this would ruin the business models for satellite companies. They would likely gain a lot of new customers. Satellite companies would lose business and would have to then modify their business plan, likely adopting the a la carte model also to regain a competitive position.
@spiderjerusalem: You need not worry about people not wanting the FOX News Channel – it’s the highest rated news channel, and often has the highest rated shows in all of cable. It is the ONE channel that will surely survive. CNN should worry. Personally, I don’t want news filtered through communist shills like Dan Rather, Katie, and those folks. Based on the ratings, I’m not alone.
FOX – what’s their slogan? “Fair & Balanced”? [ROFLOL]
The fact that FOX ratings are so high says a lot about the intellectual ability of the average American. And what it says is not positive. Also explains why Bush got elected to another term as el Presidente.
@Atomike: “Communist shills”? Say no more.
No, really. You may want to clam up before you look even dumber.
I am so sick of paying outrageous fees for cable. I have a package deal with Time Warner for digital cable, internet, and phone. With taxes, it costs about $150/mth. I’m sick of paying fees. No one holds the companies accountable for anything.
I pay a huge markup for their service and they charge me to rent the box? I mean its not like i can go to the store and buy a box that does all three things, not to mention it isn’t smart cause Time Warner warranties the equipment if it breaks.
But come on, they nickle and dime us cause their stock isn’t doing so hot. Do companies ever think about the consumers? Hmmmm. If we cost less than satellite TV maybe we will get more customers and more money. Instead, the raise prices and lose customers so they raise prices again.
Supply and demand time warner. Supply and demand. Lower the price of your supply and your demand will increase, then you will find an optimum point. Perhaps you could find ways to lower your costs internally! its called running an efficient busy..supply management. lower your costs, lower our costs.