An Inconvenient Mess

An Inconvenient Mess

How Al Gore and Kevin Martin screwed up cable regulation.

Posted Wednesday, May 27, 2009 - 12:48pm

In the early days of cable, long before anyone dreamed of a 24-hour food channel, Real World Season 22, or Glenn Beck, a startup network showing nothing but music videos struggled to get carried by cable systems—that is, the companies that own the wires leading into people's homes. Frustrated, the owners of this new channel created a now-classic advertising campaign urging teenagers to call their cable operators and declare: I Want My MTV!

Ever since—this was the early 1980s—the media companies that own networks (Viacom (VIA), Disney (DIS), CBS (CBS)) have fought with the companies that own cable systems (Comcast (CMCSA), Time Warner (TWC), Cox Communications) over distribution. Even today, when the average cable system offers about 120 channels—and many carry 500 or more—programmers complain that they can't get their fare onto the cable menu.

Now, though, instead of seeking to arouse the masses with "I Want My MTV"-style campaigns, disgruntled programmers hire lawyers to take their complaints to Washington—most recently, to a windowless conference room at the Federal Communications Commission, where dozens of high-priced attorneys have been arguing about which channels should be carried by what cable systems and at what prices. The complaints have been pending for years, the hearings before an administrative law judge have droned on for six weeks, and rulings won't come for months, after which they could be appealed to the federal courts.

Here it must be noted that the questions before the FCC are less than vital to the national interest: Must Comcast make the 24-hour NFL Network available to its digital subscribers, or can it charge them extra to see it? Can a startup channel known as Wealth TV force its way onto Comcast, Cox, and Time Warner cable systems? And should MASN, a Baltimore-Washington regional sports network, be carried by cable systems in Harrisburg, Pa., and Hampton, Va.?

What gives the legal wrangling an Alice in Wonderland quality is the fact that the cable industry is now struggling to hold onto subscribers in the face of spirited competition from satellite and telephone companies that offer pay-TV packages of their own. In other words, cable faces market pressures to give subscribers the networks they want—or the subscribers can turn elsewhere for programming, as millions already have.

So why does the federal government remain in the business of telling cable systems what networks to carry? No regulator, after all, can order the Washington Post to carry a comic strip or demand that Wal-Mart (WMT) provide shelf space to a new brand of cereal or toilet tissue.

  • Marc Gunther is a contributor to Fortune, and covers business and the environment on his blog.
How Al Gore and Kevin Martin screwed up cable regulation.

Comments

  • 1 Total
  • • Pending Comments 0
  • Login or register to post comments

I still can't get competition

Before you go writing off not having choices as a thing of the past, consider this: I live in an apartment complex. They won't let us put up dishes. FIOS runs down the main road just a block away, but our apartment complex owner won't let them rewire the place because he's getting kickbacks from Time Warner. I could get DSL for internet, but TWC is my only choice for cable.

Read more comments