FCC on Retrans: Will it Miss the Forest for the Trees?

March 1, 2011

It will be telling to see if the FCC’s proposed rule making Thursday on retransmission consent addresses the glaring issue of why prices ONLY go up in this obviously dysfunctional regulated, and out-of-date retrans marketplace, because the FCC’s rules have never been updated to reflect the competitive entry, and great success of, strong DBS and telco competitors into the pay TV market.

  • Embarrassingly, the FCC’s current retrans rules are fossilized in a 1992 cable monopoly era that is long extinct.
  • The pay TV market is obviously competitive, and the FCC’s current retrans rules are obviously based on an out-of-date cable monopoly market assumption.
  • It also will be telling to learn if the FCC is open to updating their retrans rules for the 21st century competitive Internet era.

In most every other FCC proceeding involving competition matters over the last fifteen years, the FCC has examined where industry pricing trends have gone directionally over time as a proxy for how competitive the market is and/or to learn if market power is at work.

It will be telling to learn if the FCC cares about competition policy and the state of competition in the pay TV market that the FCC has the direct statutory authority to oversee… given how focused the FCC has been over the last year to impose preemptive restrictions on broadband providers to address speculative harms to competition in the Open Internet Order based on questionable ancillary authority.

My fear is that the FCC will miss the proverbial forest for the trees by micro-scoping in on the legal bark of one tree, and totally missing the dsyfunctional retrans forest around them that obviously is ill because prices ONLY go up.

In short, it will be telling to see if there is any acknowledgement by the FCC in its Thursday retrans NPRM, that retrans prices ONLY go up.



One Response to “FCC on Retrans: Will it Miss the Forest for the Trees?”

  1. Bill said

    Yes…the “The pay TV market is obviously competitive”. Huh? Then why do I have 2 choices for my “pay TV” service? I get either DirectTV or Dish Network. Both are severely overpriced, quality often sucks, customer service is horrible, I’ve got to nail a freakin’ dish to the top of my house, clean snow off that dish many times during the winter months, and live with the fact that the only 5 or so channels I really want to watch are in the most expensive packages they offer? That’s really competitive isn’t it? It’s collusion is what it is.

    It’s exactly what’s going to happen to our internet service soon. I have ONE single choice for broadband internet access. Verizon DSL. There are no other choices at all. So what happens when there is no net neutrality and Verizon decides they don’t like the fact that I’m also a Netflix subscriber, so they decide throttle Netflix to the point where it’s un-watchable on my crappy DSL connection? Or they decide that I no longer need access to Facebook as part of my regular internet service and want to charge me an extra $10 / month for that service? I know you’re sitting there saying “they haven’t done it up to this point, they aren’t going to do it because of competition”. Well, there is no competition so I can take the extra fee or live without internet service. And they haven’t done it before is a sad excuse to use when you’re dealing with companies that only care about their bottom line and not about their customers. It will happen and it is going to happen as soon as net neutrality regulation is killed. When it does I’m going to scream to everyone “I told you so”.

    Hope you all enjoy paying more for less.

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