Congress Turns Up The Heat on FCC's Chairman 148
Fletch writes "FCC Chairman Kevin Martin could be in for an uncomfortable spring, as House Energy Committee Chair John Dingel (D-MI) has requested a truckload of FCC paperwork relating to some controversial decisions Martin has made. Those include the FCC's reversal on the a la carte cable issue and newspaper-television cross-ownership restrictions. 'This request has got to be turning the FCC completely upside down. Significantly, it appears to reflect a bipartisan discontent with Martin's performance. Democrats and some Republicans are upset over his recent move to relax one of the agency's key media ownership rules, as well as the rushed manner in which he handled the matter late last year. Other Republicans dislike what they see as Martin's persecution of the cable industry, especially Comcast.' The Committee originally announced its intention to investigate the FCC in January."
Comment removed (Score:5, Interesting)
Re:A re-energized House flexes their muscle.... (Score:3, Interesting)
Re:Moot controversy? (Score:3, Interesting)
Remind me again where the problem is?
It's in the readership base -- when was the last time the average American actually looked at (say) a foreign newspaper? Let alone a foreign-language one.
That said, there's no reason for the FCC to go out of their way to enable Information Domination. And do you seriously think that any of these companies would be happy to leave the Internet as an unsullied source of pure truth from outside their grip? No, they'll try to monetize that, and (as collateral damage) limit citizens' access to external sources of information. Not out of a Vast Conspiracy necessarily, but when your business model is predicated on grabbing as many eyeballs as possible, you don't want them looking at other networks, ja?
Re:Persecution of those who deserve it? Oh My! (Score:5, Interesting)
"Comcast deserves all the examination it has gotten, and more. They have been terrible."
The real problem, though, is that the government is able to impose such monopolies on us. It's pointless to go after companies as they become problems, because these companies will continue to spring up. The effective approach is to stop the problem at the source: get politics out of money. Don't permit legislation that creates monopolies and destroys competition. Trash these FCC regulations, and the market will take care of itself. People will have choices, and companies will have to compete to offer what people want at the lowest price possible. And idiotic situations such as the one we currently find ourselves in will not be able to thrive.
This is not troll!!! (Score:3, Interesting)
Not to defend the Cable companies but.... (Score:3, Interesting)
The reality is that the bulk of programming costs for the cable company are directly attributable to a few companies, such as Disney, HBO, etc.
First, you have to understand how pricing for channels from the channel owners is done. Its done based on volume, usually negotiated per head. When Disney and a provider (doesn't matter is its cable or satellite) negotiate a contract, they end up with a per-consumer cost that the cable company pays to carry the channel.
There are two reasons that more than 50% of the channels are complete crap.
1) The really crappy ones are so low cost that they have a negligible effect on the consumer. Channels provided by the non-big companies fall in this category. The one that comes to mind is the Christian Broadcast Network, which only cost pennies per month to the cable companies.
2) The bundle effect. In order to sell advertising, the big media providers (Disney, etc.) want to have as many channels as possible carried, preferably the ones that are in the starter bundles. Therefore, you get at least 3-5 ESPN channels. Unfortunately, none of the cable (or satellite) providers have any negotiating ability here at all. This is unregulated territory, so Disney will just sit back on its haunches and say, "You want ESPN? Guess what...you have to also put ESPN2, ESPN Classic, and ESPN Sports Nobody Cares About" in your Basic Tier.
Do you really think that a local cable provider will be able to refuse? So Disney ends up with a fairly significant portion of channels, which means they get to sell more ad revenue, and build up aftermarket sales of DVD's and paraphenalia.
The cable company is damned if they don't, effectively. They can't negotiate, as there isn't much choice about carrying Disney Channel and ESPN.
So, because of these contractual agreements, the cable companies *CANNOT* unbundle channels, at least in any meaningful way. Because there are only a handful of meaningful channels provided by a handful of extremely large companies, unbundling would, at best, mean having a Disney group, a TimeWarner group, etc. And the big media conglomerates will *NEVER* allow this. If they did, it would eat into their already shrinking ad revenues so fast the shareholders might explode.
So, not to defend the cable companies, but this matter is one that is largely unregulated, and the cable companies are unable to win the battle. While this isn't the only factor (certainly the cable companies want to charge you as much as possible for as many tiers of service as possible), it is one of the biggest. Remember, the highest margins for the cable companies are in the in-house services they control: data, phone, etc. When they have to pay per subscriber (or per event, such as On-Demand or PPV) they don't make nearly as much as they do for services they control.
Remember, also, that some channels *ARE* regulated by government, especially local access channels (my system carries 3-4 of them, I think). This is a huge waste of bandwidth that the cable companies are contractually obligated to provide in order to get local franchises. Again, crap. A waste of resources. But the cable company has no choice but to spend a ton of money and bandwidth to meet these obligations.
The future of cable is obviously to move to digital only services. I know of one small cable company that is actively looking to migrate to PacketCable exclusively, which means that they would deliver everything via packets, rather than channels. The minute the FCC lets the cable companies drop Analog services, expect this to happen quickly.
However, its unfair to only blame the Cable Co's. The Big Media is as much to blame if not more than anyone else.
Bill
it's like Nader said: (Score:2, Interesting)
Re:Congress turns up heat? (Score:2, Interesting)
Actually, it seems like it would be easier to have somebody that's not elected bought, since politicians have to publicly show who is giving them money.
Re:Not to defend the Cable companies but.... (Score:3, Interesting)
I understand and think that a la carte should still be done. What's the bottom line? The cable providers have to take in more than they spend, or they go out of business. Great, so they price the a la carte such that it makes them money. Period. It doesn't matter how they buy it, all that matters is that they sell it for whatever they are selling it for now. The reason they don't like it is uncertainty. Rather than buying $1 worth of programming and selling it for $2, they have to buy the bulk $10 lineup and get enough people on the right a la carte packages to spend $20 on it. They aren't sure what the numbers would be, so they refuse to do it. Once they start doing it, then it will work out to where the averages match what they are now. Once that's done, then the cable companies can go back to the contract negotiating and say "if we drop all ESPN, then we save $5 per subscriber. We don't get anyone subscribing to ESPN2, ESPN classic, ESPN west, so we want to get just ESPN for $2 and not the package for $5, if you don't like it, then we drop ESPN." If all the cable companies and satellite companies were offering a la carte and had similar subscription rates, that would happen. But no one wants to take the chance on runinig their proven-profitable system.
Remember, also, that some channels *ARE* regulated by government, especially local access channels (my system carries 3-4 of them, I think). This is a huge waste of bandwidth that the cable companies are contractually obligated to provide in order to get local franchises. Again, crap. A waste of resources. But the cable company has no choice but to spend a ton of money and bandwidth to meet these obligations.
Bandwidth is essentially free. The content on that bandwidth is the biggest cost. If the local stations pipe in a live feed at their cost, the cable company spends nothing to put it in a home.
Re:Go congress! (did I just say that?) (Score:2, Interesting)
Networks offer packages to the local operator (or big nationals like Comcast). They are package deals. I can personally verify that the small (8k subs) cable operator I work for would never carry MTV2, MTV Jams, or MTV Hits if they weren't part of a package that included Noggin and Nick Toons.
The problem is at the networks, not the cable operator. They are just like the recording industry who still thinks you can put an hour of crap on a CD, throw in two good songs and ship it out the door.
Now that digital cable is really getting wide deployment (again thanks to the FCC), ala carte wouldn't be hard technically, but the economic constraints placed upon an operator by the networks like Turner, MTV, Scripps (Discovery Channel), Fox, etc. prevent an operator from doing so.