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Posted by on Jan 2, 2010 in At TMV | 3 comments

When Cable Fights the Networks, You Lose Either Way

So Time Warner and Fox have come to an agreement, at least for the time being, to continue bringing the various Fox channels to subscribers. Oh, good. In case you’re wondering who the winner is in that little staged drama, it’s both of them. There’s only one loser, and that’s you. You’re going to wind up paying more than you were before yet again. Except now, when they jack up your rates, they have provided themselves with the convenient fig leaf of saying, “But look how much more the rates would have gone up if we didn’t fight for you!

Time Warner made a big show of running non-stop advertisements for their web site, Roll Over or Get Tough, where they purported to demonstrate their concern for you and how they would protect you from the evil moneygrubbers at Fox. What a joke. If Time Warner actually had any interest in being responsive to the market and offering real choices to consumers they would move to a true a’ la carte menu. The technology is already in place to offer such a service, as demonstrated by the many pay per view and “on demand” options currently offered by the cable giant. Rather than offering only two tiers of channels in massive packages, Time Warner (and the rest of their ilk) should be able to offer hard strapped consumers a very basic package of twenty channels or less for under $25 a month. Then we could pick from the hundreds of other channels in groups of ten, five or even one and add to our bill for the channels we actually watch and not pay for the rest. Of course, neither the networks or the cable companies want to see anything like that since so many people would fail to subscribe to a ton of these useless channels.

Oh, boo hoo. Cry me a river. That’s the nature of business. If not enough people want to watch, you go out of business. That’s how it works. But is anyone pushing that sort of solution? No. Instead we have Senator John Kerry threatening to bring the government in to “solve” the problem for us. Gee, thanks.

Hi. We’re from the government and we’re here to help.

Exactly what we don’t need. We need competition to the cable giants who offer packages such as I described above. That would bring down prices and wake up Time Warner in a hurry. And providers like Fox would realize in a hurry that they need to continue delivering quality content which people actually want to see or they’ll get hit where it hurts the worst… right in the wallet.

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Copyright 2010 The Moderate Voice
  • Jazz, “competition” doesn’t work with monopolies. For most people, outside a few big urban areas, there is no choice or meaningful competition. We have only one pipe to our neighborhood, so if we want cable-speed broadband, it’s a pure monopoly. If we wanted to compromise on the pathetic DSL of the phone company, again, one choice. Or Dish. This isn’t real competition, and since we can’t have 6 companies tear up the street to put in cable, it’s never going to change. The situation for broadband in the US is grim, as Korea, Japan, India and China all outstrip us, and globally we pay more for slower connections than most of our modern competitors. It’s another case of penny wise and pound foolish, or in your case, deregulation despite the competitive disadvantage our businesses suffer. Having sacrificed our manufacturing sector, we now hobble tech businesses with worse service at higher cost than in India, Japan or S. Korea. Sad.

  • Don Quijote

    There is a simple solution to that problem, but it involves that most dreaded of things: GOVERNMENT INTERVENTION & REGULATION…

    Regulation # 1: Cable Companies cannot own TV networks, production companies, or any Media properties, they may not own any sports team or stadium.
    Regulation # 2: Cable Companies must carry all over the air Networks.
    Regulation # 3: Cable Companies must offer all other chanels “a la carte”.
    Regulation # 4: Cable Companies that offer Internet access must offer it at the same rate to every one, whether they are cable subscriber or not.
    Regulation # 5: All Internet traffic must be treated the same, ie Net Neutrality.
    Regulation # 6: Cable Companies that offer phone service must offer it at the same rate to every one, whether they are cable subscriber or not.

    And if these rules cannot be enforced, States should create a state owned corporation to take over the local cable companies…

  • DQ, I’ve linked to this article several times before and consider it a must read. An excerpt:

    “American residents and businesses now pay two to three times as much for slower and poorer quality service than countries like South Korea or Japan. Since 2001, according to the International Telecommunications Union, the United States has fallen from fourth to 16th in the world in broadband penetration. Thomas Bleha recently argued in Foreign Affairs that what passes for broadband in the United States is “the slowest, most expensive and least reliable in the developed world.” While about 60 percent of U.S. households do not subscribe to broadband because it is either unavailable where they live or they cannot afford it, most Japanese citizens can access a high-speed connection that’s more than 10 times faster than what’s available here for just $22 a month. (Japan is now rolling out ultra-high speed access at more than 500 times what the Federal Communications Commission considers to be “broadband” in this country.)

    The economic ramifications are profound. “Asians will have the first crack at developing the new commercial applications, products, services, and content of the high-speed-broadband era,” writes Bleha. Already, South Korea, which leads the world in the percentage of its businesses and homes with broadband, is the number one developer of online video games–perhaps the fastest-growing industry today. What’s more, societies in which broadband use is near-universal will adapt to its uses much more quickly than those where access is available only to the well-to-do few. ”

    http://www.washingtonmonthly.com/features/2006/0601.podesta.html

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