[opendtv] Re: Analysis: Broadcast's $1 Billion Pot of Gold

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Mon, 14 Jul 2008 09:47:38 -0400

At 1:02 PM -0400 7/10/08, Manfredi, Albert E wrote:
On this cable bundle discussion, it's IMO a perfect example of how the
marketplace SHOULD be allowed to operate. Given that there are a few
alternatives, I don't think there's a reason for the govt to force
anything down cable's throat.

Sorry Bert, but this is not the marketplace operating. That may have been true prior to the 1992 Cable Act, but all that has happened since has been the result of the government INTERFERING with the normal operation of the marketplace. Without the 1992 Cable Act, the bundling that takes place today would be illegal, and quickly challenged by the FTC.

Even WITH the 1992 Cable Act, the practice of bundling is questionable and is now being challenged in a class action suit.

The reality is that we are all being screwed by the actions of TWO bad actors (actually only 85% of us):

1, The cable industry, which used its monopoly powers to build new networks and control access to their systems, which ultimately resulted in the re-regulation of their industry in 1992.

2. The big media conglomerates, which used their political influence (and money) to rebuild their empires on the back of the 1992 Cable Act.

Both of these bad actors are laughing all the way to the bank, having some government mandated protection from the normal operation of the marketplace.

And also, if the buying public shows very little "demand elasticity,"
the business in question will have very little reason to change its
(presumably carefully calculated) formula for optimized profits. If more
people did as Tom did, I'm sure the cablecos would adjust their
packages. Although I seriously doubt the average consumer would end up
paying any less!

Alas, while consumers hold the ultimate weapon - just saying NO to the oligopolies - there appears to be no one who has the ability to organize the masses to resist. Probably something to do with the "social influences" of the medium.

On the other hand, I feel differently when I see clearly
anti-competitive forces at work. Such as, XM Radio offered as standard
equipment, but HD Radio not even offered as an option. Which happened to
me. (Although John Shutt may be correct that this is about to change.)
So IMO, govt stepping in to prevent anti-competitive practices is a
legit function of he govt.

Companies are free to offer these options and to try to advantage their investments. This happens ALL THE TIME in a wide range of industries. THIS is the marketplace at work.


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