[opendtv] Re: News: The People Vs. Comcast

  • From: Craig Birkmaier <craig@xxxxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Sun, 13 Jan 2008 09:05:24 -0500

At 6:08 PM -0500 1/12/08, Albert Manfredi wrote:
In a relatively free market, it is consumers who decide, not pundits. If people were as adamant about "high cable prices" as the pundits keep telling us, you would see the beginnings of a decline in households using these umbillical systems. That's how it's supposed to work.

Nice try Bert, but your view of the "marketplace," is skewed...

The market for the delivery of TV content in the U.S. is heavily regulated, not relatively free.

In addition to the oligopolies that the politicians are protecting, government at many levels are not only encouraging regulatory gerrymandering of the market, they are taking a cut. Local cable franchise fees are a major source of revenue for local governments, and the industries spend many, many millions lobbying at all levels of government.

You seem to agree that the broadcasters are using regulatory power to get subscriber fees for programs that can be pulled from the air for free. It was the 1992 Cable Act that gave broadcasters the power to demand retransmission consent payments; and the media conglomerates used this legislation to force the cable industry to carry their water (and programming). The result has been an increase in cable rates that have caused the cost of extended basic to double in the past decade.

Invoking the old saw that consumers can "just say no" if the prices are too high, misses the point entirely. It is difficult to say no, when there is only one electric utility to buy power from, one utility for water and sewage, etc. And when there are choices like wired and wireless telephony, or multi-channel TV, the lack of a real marketplace allows all competitors to maintain oligopoly pricing levels.

You may be satisfied with OTA TV, but the vast majority of Americans consider cable/DBS to be a vital utility, just like electric, water and telephone. You may be right that there is not enough pain in the pricing of these necessities, or gasoline, or name your regulated necessities of life. But that does not make it right that the so called competitors and regulators are causing the prices to be artificially high. At least with vehicles, you CAN choose a fuel efficient model if the price of gas is hurting you. With multi-channel TV you have no choice but to pay for stuff you don;t want to get the stuff you do want. That, in my mind, is illegal tying and should be stopped.

That was the whole point of the post. We are finally seeing the potential to open up some of these markets to REAL competition. Yes it will take time, and for good reason. The companies that control these markets are working overtime to slow the pace of innovation and to throw up road blocks to the technologies that threaten them. For example, the 700 MHz spectrum should have been recovered for alternative uses a decade ago. The DTV transition has been carefully crafted to keep potential competitors at bay.

Such is the nature of regulated markets...

Regards
Craig


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