FCC May Move to Cap Cable Company Size 73
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."
I don't trust the FCC. (Score:5, Interesting)
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 [wsj.com]? And why are they trying to rush a vote on it?
Re:This doesn't really address the problem (Score:3, Interesting)
I'm lucky enough to have a surprisingly good cable company in my area, but it's cable internet or DSL- and I, like many people in my community, am just out of range of the CO for DSL. Satellite is too high latency, expensive, and slow, FiOS isn't here, and there's no other way to get the internet (other than dialup, which isn't an option with high bandwidth websites nowadays)
Why not allow foreign ownership? (Score:5, Interesting)
The problem isn't 30% or whatever the problem is lack of choice and competition.
Hypocritical (Score:4, Interesting)
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...
Common carrier? end vertical expansion! (Score:4, Interesting)
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).
Re:I don't trust the FCC. (Score:5, Interesting)
I don't buy that. It was the smaller outfits (Qwest and T-Mobile) that declined to take part in the NSA Call Database, while AT&T and Verizon were only too happy to fork over everything.
In fact, I'd make the case that larger companies are easier to "bully", in that they probably have Government contracts and a vested interest in not pissing the Government off.
This is, and will always be, a regulated industry (Score:5, Interesting)
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.
Advantage: Telcos (Score:5, Interesting)
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
The problem is content companies and... (Score:3, Interesting)
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.