Consumer Watch: FCC's likely cable ruling would leave out Phila.
By Jeff Gelles
Inquirer Columnist
Tomorrow, the Federal Communications Commission is expected to take two steps that will affect consumers here and elsewhere for years to come. As things stand, one of them will be awfully hard to explain.
After 15 months of jockeying, FCC Chairman Kevin J. Martin is pushing to approve a $17 billion deal conceived by Comcast and Time Warner. It calls for them to divvy up the cable franchises of bankrupt Adelphia Communications, then swap systems to enlarge their footprints in markets one or the other already dominates.
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The two cable companies, already the nation's largest, say expanded regional "clusters" will make each of them more efficient, to the benefit of consumers as well as shareholders.
To clinch the deal, Martin wants to impose conditions to limit the two companies' market power - a primary concern among rivals and critics.
A key condition is that Comcast and Time Warner must forswear a practice that has brought Comcast considerable notoriety: its refusal to share its Philadelphia sports channel, SportsNet, with its satellite competitors, Dish Network and DirecTV.
The rub? Martin proposes to bar the practice everywhere else, but not here - the only city where either company locks up local sports.
That's right. After years of complaints by Philadelphia sports fans that we're captive customers of Comcast, the FCC is about to take decisive action - by ignoring us.
Maybe I shouldn't be surprised, since I've never quite understood Comcast's logic either, except for its assertion that it's on solid legal ground under the 1992 Cable Act.
To keep a cable company from gaining unfair competitive advantage by hoarding channels it owns, that law required cable companies to share any programming distributed by satellite. But to encourage development of new local content, it exempted programming delivered via land-based lines - a rule that came to be called the "terrestrial loophole."
Competitors say the rule was meant to foster investment in news and other local shows, such as those carried by Comcast's CN8, and was never intended to be used for local sports.
It's easy to see the distinction: A competitor can create plausible substitutes for a news show or a talk show. Oprah's taken? Let's invent someone else.
That's not true of the Phillies, Flyers and Sixers games on Comcast SportsNet. Fans might occasionally wish for alternatives - say, a baseball team in first place. But if you live in Comcast Country and want Philadelphia baseball, you have no choice.
Comcast does make SportsNet available to other cable companies - to Time Warner, which plans to swap Philadelphia's last non-Comcast franchise to Comcast in the Adelphia deal, and even to RCN Corp., which offers competitive cable in sections of Delaware County and the Lehigh Valley, as well as in Boston and Washington.
Verizon Communications says it hopes to reach a deal to carry SportsNet on its new fiber-optic TV service.
But what Comcast gives voluntarily, it can also take away when a contract expires. And if you consider what else Verizon has been up to, and why, you'll see why Martin's proposal is so ill-advised.
Verizon and its Baby Bell counterparts, especially AT&T, are waging a multimillion-dollar campaign in Washington and state capitals with one main goal: getting around the local-franchising rules that have always governed the cable industry.
They see opportunity because cable TV is the only segment of communications where costs have been rising in the last decade - often at double or triple the inflation rate.
Big Cable is the epitome of an industry whose customers suffer for lack of competition. Philadelphia is Exhibit No. 1 for what happens when a cable company uses "must-have content" to limit consumers' choice.
Comcast gets away with the practice here, for reasons that are easy to speculate on. But as lawmakers and now the FCC have begun to focus on Comcast's anticompetitive aspects, the company's best defense has been: Hey, we don't do it anywhere else, so leave us alone.
It's a lousy argument, and Kevin Martin should know it. Philadelphians deserve equal protection from the FCC.
By Jeff Gelles
Inquirer Columnist
Tomorrow, the Federal Communications Commission is expected to take two steps that will affect consumers here and elsewhere for years to come. As things stand, one of them will be awfully hard to explain.
After 15 months of jockeying, FCC Chairman Kevin J. Martin is pushing to approve a $17 billion deal conceived by Comcast and Time Warner. It calls for them to divvy up the cable franchises of bankrupt Adelphia Communications, then swap systems to enlarge their footprints in markets one or the other already dominates.
Post a Comment
The two cable companies, already the nation's largest, say expanded regional "clusters" will make each of them more efficient, to the benefit of consumers as well as shareholders.
To clinch the deal, Martin wants to impose conditions to limit the two companies' market power - a primary concern among rivals and critics.
A key condition is that Comcast and Time Warner must forswear a practice that has brought Comcast considerable notoriety: its refusal to share its Philadelphia sports channel, SportsNet, with its satellite competitors, Dish Network and DirecTV.
The rub? Martin proposes to bar the practice everywhere else, but not here - the only city where either company locks up local sports.
That's right. After years of complaints by Philadelphia sports fans that we're captive customers of Comcast, the FCC is about to take decisive action - by ignoring us.
Maybe I shouldn't be surprised, since I've never quite understood Comcast's logic either, except for its assertion that it's on solid legal ground under the 1992 Cable Act.
To keep a cable company from gaining unfair competitive advantage by hoarding channels it owns, that law required cable companies to share any programming distributed by satellite. But to encourage development of new local content, it exempted programming delivered via land-based lines - a rule that came to be called the "terrestrial loophole."
Competitors say the rule was meant to foster investment in news and other local shows, such as those carried by Comcast's CN8, and was never intended to be used for local sports.
It's easy to see the distinction: A competitor can create plausible substitutes for a news show or a talk show. Oprah's taken? Let's invent someone else.
That's not true of the Phillies, Flyers and Sixers games on Comcast SportsNet. Fans might occasionally wish for alternatives - say, a baseball team in first place. But if you live in Comcast Country and want Philadelphia baseball, you have no choice.
Comcast does make SportsNet available to other cable companies - to Time Warner, which plans to swap Philadelphia's last non-Comcast franchise to Comcast in the Adelphia deal, and even to RCN Corp., which offers competitive cable in sections of Delaware County and the Lehigh Valley, as well as in Boston and Washington.
Verizon Communications says it hopes to reach a deal to carry SportsNet on its new fiber-optic TV service.
But what Comcast gives voluntarily, it can also take away when a contract expires. And if you consider what else Verizon has been up to, and why, you'll see why Martin's proposal is so ill-advised.
Verizon and its Baby Bell counterparts, especially AT&T, are waging a multimillion-dollar campaign in Washington and state capitals with one main goal: getting around the local-franchising rules that have always governed the cable industry.
They see opportunity because cable TV is the only segment of communications where costs have been rising in the last decade - often at double or triple the inflation rate.
Big Cable is the epitome of an industry whose customers suffer for lack of competition. Philadelphia is Exhibit No. 1 for what happens when a cable company uses "must-have content" to limit consumers' choice.
Comcast gets away with the practice here, for reasons that are easy to speculate on. But as lawmakers and now the FCC have begun to focus on Comcast's anticompetitive aspects, the company's best defense has been: Hey, we don't do it anywhere else, so leave us alone.
It's a lousy argument, and Kevin Martin should know it. Philadelphians deserve equal protection from the FCC.
