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.

Why is this a federal issue?

[compumike (454538)]

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. [nerdkits.com]

Re:Why is this a federal issue?

[ExploHD (888637)]

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 [ieee.org]

Re:

[Jorgandar (450573)]

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

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.

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[Bacon Bits (926911)]

I fully agree with that sentiment, but taking that step leads to one obvious problem:
Who pays to maintain the wire, and who's job is it to do the maintaining?

Roads are publicly funded. Should the telecom physical layer do the same? Should property taxes also apply to data transmission lines?

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[jonwil (467024)]

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

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[Dahamma (304068)]

Big surprise, you're saying Comcast owns all of Philadelphia? Wow, that's so surprising considering how they own the city in many more ways than cable connectivity.

Also, your subject seems to be fairly contradictory to your whole post. As clearly stated in the US Constitution, interstate commerce - which clearly applies when, for example, CA gets a significant amount of electricity, natural gas, etc. from not only NV, CO, and WA, but also Canada - is the realm of the Federal government.

So yes, cable TV, I

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[jonwil (467024)]

The downside to the electricity market being the way that it is is that the generators are not located where the consumers are. So you have to have miles of high voltage transmission lines to get the electricity from the producer to the consumer. (which leads to blackouts). Thankfully that would not be the case with cable TV.

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[Palpitations (1092597)]

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

I could not agree more! Here, Time Warner is the only cable provider... If you choose to go with cable, you're basically screwed. In this area, Time Warner doesn't even carry FOX... I'm only missing out on The Simpson's - and it's not like FOX has much to offer, but that's a pretty major network to just say "nope, sorry, you don't get it no matter how much you pay!"

Open up the wires, and find a way to fairly charge those who use it for repairs... Tax consumers for the upkeep if need be, require the

Re:

[dreamchaser (49529)]

I'd like to know where you live that Time Warner doesn't offer FOX. I have Comcrap, but I have friends and relatives with TW Cable in other parts of the country. They *all* get FOX as part of the *basic* Cable package.

You're either trying to be tongue in cheek and failing, you're spreading FUD, or TW is even more screwed up that I'd thought. I'd like to see proof to show just which one of the above fits your post best.

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[Palpitations (1092597)]

Time Warner doesn't have FOX in the Pullman, WA and Moscow, ID area... Pullman is home to Washington State University. Moscow is home to the University of Idaho.

I dealt with Comcast in Portland, OR for quite some time... As much as I hated them, they are 1,000,000% better than Time Warner.

As far as not getting FOX? Take a look at KAYU [wikipedia.org]. If you're in the right place you can get it with an antenna or satellite, otherwise you don't get it at all in this area. The area I live in is basically a bunch of

How do you "open the wires"?

[brunes69 (86786)]

Comcast invested X billion dollars rolling out that wire network, on the expectation it will earn them X*Y billion dollars in revenue. How can the government come along and usurp the wires from Comcast without paying up that X*Y billion dollars?

Yes yes the wires were on public land blah blah - but I don't see the government forking out that cash to build their own competitive network.

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[necro81 (917438)]

It's not like the government is going to roll in with the National Guard and seize the cables as national property. The United States is not Cuba or Venezuela. "Opening the wires" simply means that cable companies have to allow other people access to use their cables, for the same price they charge themselves internally. The infrastructure still has value, and the company still gets a return on their investment in the form of other companies' access and lease payments. Right now, you can't get access to

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[nelsonal (549144)]

It's not that hard, regulate the returns on their investment with a "transmission" portion of the cable bill, and then allow them to select channels (similar to long distance carriers) as a separate service (billed by the cable company). If the cable companies don't adopt the model on their own, the open nature of the internet will provide it soon enough anyway (ABC/ESPN/Disney are beginning to offer proto-channels over the interent). Cable interent fees are effectively cover the network (and allow you ac

Re:

[ph4s3 (634087)]

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, d

Re:

[mikael (484)]

They would make more of a profit from me, if I could choose to receive international/documentary/science channels while not having to pay for junk/drunk/porn channels at the same time. Even after cancelling the higher tier bundle to avoid these channels, they are now reappearing/rechanneling on the freeview tier.

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[Detritus (11846)]

Maybe not now, but I can remember when the first franchises were awarded, and they were exclusive. It was also a catalyst for gross corruption in local government. The money train was coming to town, and most local politicians were eager to jump on board. Those early system builders enjoyed decades worth of monopoly rents, with no real threat of competition.

Freedom.

[rice_burners_suck (243660)]

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 was

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[Soporific (595477)]

But I think the question is, how does a business get into the cable market without just actually purchasing the whole cable company. It's not like Cox, Comcast, Adelphia, etc. are allowing anyone to even attempt to sell cable in their cities. DirecTV and DSL don't seem to have anything on a solid cable line yet, so while it is technically a competing business IMHO they both suck in comparison.

~S

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[mrxak (727974)]

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 li

Good Regulation Promotes Competition

[mechsoph (716782)]

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.

For competitive industries like retail and restaurants, that's exactly how it should work. However, cable is a natural monopoly or at best an oligopoly. Without sufficient competition, the customer will get screwed. Furthermore, it'd be rather difficult to go laying copper e

Cripple the industry?

[stox (131684)]

Is that a euphemism for not raping their customers?

A Wider Diversity Of Shows?

[rsmith-mac (639075)]

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.

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[wizardforce (1005805)]

the higher financial bar doesn't translate into better programming, as you said- 300 channels and very few of them are worth watching. the more channels that are able to be aired should be a good thing if it was combined with a system that lets you choose which shows you want and which you don't rather than getting a big package of mostly garbage just to watch a few good shows.

I suppose this change will make The Reality TV Rerun Channel cheaper to provide

I don;t think those kind of shows made by very larg

So what's the catch?

[PoderOmega (677170)]

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.

Re:

[Squarewav (241189)]

In a nutshell you can only send so much data over cable lines. splitting the band-with of the lines will eventually end up in a situation ware you are forced to subscribe to two companies to get all the channels you want. as we move more and more to high-def the less and less band-with (i.e. channels available to each service) will be available

More important

[edwardpickman (965122)]

How about requiring 30% to be good programming and limiting utter crap to 30%. Obviously it'd be best a 100% good programming but that appears to be unrealistic.

Obligatory Family Guy

[Misanthrope (49269)]

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

Teddy Roosevelt would be proud

[TwoHundredOk (1136131)]

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?

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[Scaba (183684)]

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 conve

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[Scaba (183684)]

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 [eei.org]. 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

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[bhima (46039)]

Hi... If you are ever in Austria you are welcome to stop by my home for a cup of coffee and a snack. Then I will show you the Fernwärme I use to heat my home. It's quite common actually. There's a large incinerator facility south of the city and they pipe the hot water all over.

Not that this is the only way to heat, but it sure is the least expensive.

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[darjen (879890)]

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.

You might be in

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[Detritus (11846)]

I used to live in a large housing development in the Washington, D.C. area, composed of many apartment buildings and townhouses, that was connected to a central heating and cooling plant. The federal government uses a similar system for many of their buildings. I would expect a centralized system to be more efficient and less expensive than installing a heating and air conditioning system in every building.

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[mechsoph (716782)]

I've never seen a home that had heat delivered from a remote provider.

Con Ed sells waste heat from its power plants as steam for heating in Manhattan. Kind of a neat trick for efficiency.

tag: fuckthefcc?

[GroeFaZ (850443)]

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

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[electroniceric (468976)]

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.

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[samweber (71605)]

*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 monopolie

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[rasputin465 (1032646)]

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 mono

Sounds like a muck creator.

[bombastinator (812664)]

This is IMHO yet more legislation that begs more questions. How much smaller is smaller? and what does slashed mean? To make some random guesses, if they are determining size by ad revenue then channels that do not sell ads will make out like crazy. If they do it my ratings, then weirdo ultra niche market stuff will do well. If they do it by company value The televangelists will saturate the airways.

None of these things sound useful to me. Who is it benefiting? Besides televangelists of course.

Lather rinse repeat. ( obl)

[killmofasta (460565)]

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 (89162)]

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.

Nothing to do ...

[The Cisco Kid (31490)]

.. with competition between cable companies for subscribers.

What would really be nice is if cable would be heavily regulated in every location where there are not at least two established players competiting against each other in the *same* market (and phone company vs cable company doesnt count)

In other words...

[InvisblePinkUnicorn (1126837)]

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 (961143)]

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

Treat Them All the Same

[Doc Ruby (173196)]

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.

Re:

[argent (18001)]

I don't have mod points or I'd have used them on that article.

We're moving closer and closer to the universal invisible media network that's been a staple of SF for decades (the earliest story containing a recognizable world computer network that I've been able to find is Murray Leinster's A Logic named Joe [baen.com] currently available online from Baen Books). As early as 1975 the universal media net was a central part of John Brunner's seminal Shockwave Rider [wikipedia.org] and the much-delayed Dr. Adder by K W Jeter [wikipedia.org] that would h

Re:

[Doc Ruby (173196)]

SF is technology marketing. It started as the "articles" in radio parts catalog "technoporn", which expanded the catalogs' audience outside those who actually built their own radios. And ever since, it's appealed to people who want to fantasize about science and engineering more than they can actually do it. Which is of course where the culture's overall desires for science and tech come from. SF writers articulate possible worlds, visualizing how we'd live in them. Their biggest audience is science and eng

That would be GREAT!

[arhar (773548)]

Here in NYC, the cable companies have created a laughable charade to resemble "competition". It works like this: Time Warner and Cablevision have split the city into various districts. Depending on where you live, you can ONLY get either TW or Cablevision. They have exactly the same prices, too!

The only alternative is to get Dish Network.. which is problematic if you live in an apartment. This is total B.S. and I'm glad the FCC is finally doing something about it.

Why are we still dealing with "TV Channels"?

[Riskable (19437)]

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.

Re:Titties

[Tuoqui (1091447)]

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