Thursday, November 1, 2007

Time To End The Cable TV Rip-Off: This Is Just The First Step

Hey, channel surfers: Are you tired of 10 different versions of ESPN? Never watch Hallmark TV, or the Jewelry Channel? Hey, guys: Seen enough reruns of Gilligan's Island that even Ginger, or Mary Ann, can't get you interested in one more look?

This week, we in televisionland are getting a rare break from the Federal Communications Commission. This first move was mostly intended to break the back of the spiraling price increases of pay TV, largely heaped on the backs of the poor.

But much more needs to be done: What we need is menu subscription, and we should have had that long ago.

Here's what the FCC is doing. Thousands of contracts for exclusive service rights, provided to apartment buildings, are to be struck down. A blatantly monopolistic practice is being halted.

But much more needs to be done. This action wasn't the result of any strong official concern for the ratepayers. To quote The New York Times:


"It would be a huge victory for Verizon Communications and AT&T, which have challenged the cable industry by offering their own video services. The two phone companies have lobbied aggressively for the provision. They have been supported in their fight by consumer groups, satellite television companies and small rivals to the big cable providers."

This move will bring cable prices down for a lot of people, especially poor folks living in apartment complexes who were being victimized by monopolistic practices. It's an underreported scandal. Continuing to cite the NYT article, lower-income families have seen prices rise at three times the cost of inflation over the past decade. (I know, you can always go back to an antenna. But does that make the clip job OK?)

Back on subject, there's another step that is badly needed. I was astonished to hear that Kevin Martin, FCC chairman, has actually favored this. The NYT also reported:

"Martin has also pressed the cable companies to offer so-called a la carte plans that would permit subscribers to buy individual channels, or groups of channels, at lower rates than they now pay."

Better watch your ass, Kevin. If Cheney hears about the likes of you in the government, you may soon be toast.

I've been unable to see for many years why the "a la carte" concept couldn't have been part of all this very early -- other than, of course, simple greed. And even after the satellite services came on the scene, ostensibly offering some kind of competition, they behaved like monopolistic competitors (check out the British economist Joan Robinson) and offered essentially the same things as the cable providers, with only marginal improvements.

Here's yet one more take on this, excerpted from the Web site Gizmodo:

"Exclusive deals between landlords and cable companies that force tenants to use a specific cable provider are being terminated by the FCC, which hopes the move will spur competition and drive down cable prices. According to the NYT, the move will be a boon for low-income and minority families, who have "seen cable prices rise about three times the rate of inflation over the last decade," as "40 percent of households headed by Hispanics and African-Americans live in" buildings with 50 or more residents. The more cynical take on the FCC's agenda (as opposed to a snowy white heart filled with consumer advocacy) is that it's partially in response to telcos like Verizon and AT&T who've started to offer TV aren't feeling too shiny about being shut out. But if it really does push down prices, it's definitely not a bad thing, whatever inspired the FCC."

We've got at least one more large step to go. Not that this matters all that much in the vast scheme of things. But it's a shame to see legal theft go on for so long.