FCC Blames Your Town For The Uncompetitive TV Market The FCC Helped Create

from the you'd-have-100mbps-if-your-mayor-wasn't-a-jerk dept

Thu, Dec 21st 2006 10:47am — Karl Bode

Yesterday the FCC voted 3-2 along partisan lines to pass new guidelines that make it easier for Baby Bells to get into the TV business, protecting them from "unreasonable build-out requirements" by municipalities -- though the new rules don't really specify what "unreasonable" means. With the Baby Bell push for a national franchise system scuttled by network neutrality concerns, FCC chief Kevin Martin has been greasing the rails for this reform vote for months, villianizing local towns and cities by proclaiming it is their fault that cable rates are sky-high, and that the existing franchise system is why we're not basking in a TV & broadband competitive utopia. Of course we've noted that it's not clear that the current FCC chief even actually knows what competition is -- much less how to bring about more of it via policy change. High cable prices and limited broadband deployment are thanks in part to flawed FCC policy over the years, not necessarily because an Ohio suburb tried to get Comcast to build them a community swimming pool.

"Unreasonable" demands by town and city leaders are a major reason why many people have cable service today -- negotiations forcing companies to deploy service into less profitable rural areas they might otherwise ignore. Closer inspection shows the existing franchise system isn't quite the utopian firewall Martin is making it out to be. In a rare moment of un-scripted candor Verizon recently stated the existing system hasn't really slowed the pace of their Fios deployment, while AT&T has found their own simple solution: ignore the franchise system entirely and sue anyone who disagrees. There's also the issue of whether the FCC actually has the authority to make these changes, which will likely result in a protracted legal battle. None of this is to say franchise reform isn't necessary or that there aren't problems -- municipalities do sometimes make absurd demands, and many are obnoxiously greedy in their efforts to fill the local coffers. But Martin is using the franchise system's dysfunction as a scapegoat for failed FCC policy. Despite all the talk of reform and competition, it's not hard to see what the lobbyists are shooting for here. While they've convinced Martin that this is overall a good thing, the end result is going to erode local authority, legalize cherry picking and limit the number of people the Baby Bells have to lobby.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

21 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

d.l., 21 Dec 2006 @ 11:01am

what's wrong with cherry picking?
It's hard to imagine a much more effective barrier to entry than a build out requirement. This kind of thing is a legacy of monopoly regulation. If government wants a company to make an investment that it would not otherwise make, the government should pay that company to do so. "Cherry-picking" is nothing more than stupid name-calling. It should be beneath your dignity.
[ link to this | view in chronology ]
- Bumbling old fool, 21 Dec 2006 @ 11:25am
  
  Re: what's wrong with cherry picking?
  So you'd be ok with charging apartment renters in building "A" x$/month and a y$ installation fee, but charge building "B" 3x$/month and a 10y$ installation fee for the same service? And not offering building "C" renters anything at all.
  
  How about the "A" side of town versus the "B" side of town? The "C" side of town goes to collections too much, so we'd rather not do business there at all.
  
  Does that sound like good policy for an infrastructure provider? No?
  
  If a corporation wants access to dig up the streets and backyards of all a cities residents, then it damn well better benefit all members of that community.
  [ link to this | view in chronology ]
  - Anonymous Coward, 21 Dec 2006 @ 11:37am
    
    Re: Re: what's wrong with cherry picking?
    yeah, because all those residents pay equally for all those streets...
    [ link to this | view in chronology ]
    - Anonymous Coward, 21 Dec 2006 @ 12:05pm
      
      Re: Re: Re: what's wrong with cherry picking?
      Really? Everyone in town pays the same exact amount in property taxes?
      
      I don't think so....
      [ link to this | view in chronology ]
    - xjpx, 21 Dec 2006 @ 1:54pm
      
      Re: Re: Re: what's wrong with cherry picking?
      yeah, because all those residents pay equally for all those streets...
      
      again, that's not something you can base infrastructure development on. it's one of those things that everyone pitches in (like health insurance). like it or not, that's how taxes in general work. you may think that single family home owners pay more towards, for example, FIOS rollout, but think of it this way. how many user accounts per foot of fibre are there in the suburbs versus the city? even a high-rise apartment building versus row houses. in that sense, the people paying less in taxes are probably paying more for how much line is actually devoted to just them as a customer.
      
      obviously the major issue with competing cable providers and telephone companies coming in is really all about politics. i agree with other comments. i know my choice is being strangled because one big cable company makes huge donations to members of city council etc. the fact that they are building a new tower so Comcast can move their headquarters to downtown Philadelphia seems to solidify their position here. as an added slap in the face they demanded tons of corporate welfare or threatened to move elsewhere... and this on top of them making record profits this year. to other people not being offered choice, my whole city feels your pain.
      [ link to this | view in chronology ]
  - dazcon5, 21 Dec 2006 @ 11:40am
    
    Re: Re: what's wrong with cherry picking?
    Ran into a like issue at my last house. Local cable incumbent COMCAST put many dollars into local campaign coffers. This kept several competitors out of our area. RCN started a build out but got stopped by local politicians. Even after all demands were met it took an election to oust the current county commissioner to get started. The large incumbent cable and telco operators need to be pounded by some fresh competition. Example... at my folks place their small development was ignored for years until the county gov. said whoever started cabling first got that hood'. Well day one 2 cable operators started at each end. Their whole development is wired with 2 cables systems. End result? Prices are kept in check and service is excellent.
    [ link to this | view in chronology ]
- CA Customer, 21 Dec 2006 @ 11:37am
  
  Re: what's wrong with cherry picking?
  So which AT&T lobbying group employs you? Or are you just a bllind corporate talking head? Build-outs were required of the cable companies, why is it unfair to ask the Bells do the same thing? This whole argument is another example of the arrogance AT&T opertes under- we will do it our way or no way. How is giving what will soon be the largest telecommunications company a free ride into a market unfair?
  [ link to this | view in chronology ]
d.l., 21 Dec 2006 @ 11:33am

good for monopoly
Sure. That's competition. For access to rights of way, cities should recover whatever costs are incurred. But they shouldn't dictate pricing or deployment unless they're ready to pay for it.
[ link to this | view in chronology ]
d.l., 21 Dec 2006 @ 11:40am

No one made the cherry-picking argument any louder than the Bells when they faced competition. That alone should be sufficient proof of its idiocy.

Requiring a monopoly provider to do all kinds of things that the market wouldn't provide makes a certain kind of sense. But once you decide not to have a monopoly and to rely instead on competition, you have to give up the monopoly stuff.
[ link to this | view in chronology ]
Brian, 21 Dec 2006 @ 11:42am

franchises are government sanctioned Monopoly
With local governments only giving out rights to one company, and/or making it hard for other to move in, is basically allowing a monopolistic situation. Which of course means more money for the local governments, so they can all get blackberrys or toughbook laptops and other useless junk.
[ link to this | view in chronology ]
ehrichweiss, 21 Dec 2006 @ 11:54am

umm..
"Kevin Martin has been greasing the rails for this reform vote for months, villianizing local towns and cities by proclaiming it is their fault that cable rates are sky-high,"

BUT that is the TRUTH!!! It *is* the fault of every town(with some exceptions of course) that cable rates are as high as they are. When a cable company moves into a town they offer the government things like public access channels and such in exchange for a monopoly on cable service. When the government grants this, they in essence have granted the cable company the right to monetarily rape its population.

I don't think much of satellite companies either but there are other reasons to dislike how they operate.
[ link to this | view in chronology ]
Posterlogo, 21 Dec 2006 @ 12:10pm

FREE MARKET!!
These government mandated monopolies over telecommunications are total bullshit. I understand that the infrastructure clearly requires the local authorities' complicity, but it should be offered essentially to any provider if the provider is willing to 'lease' the town's 'pipes' so to speak. If the provider doesn't see any financial sense in providing service to the outskirts of some bumfuck town in Ohio, then they should not be punished for that. Find some other way, make room for innovators, go wireless for fucks sake. The biggest reason we are practically a 3rd world country in terms of broadband infrastructure is the FCC and their love-hate relationship with the bumfucks. The whole country shouldn't have to subsidize the bumfucks, and the FCC certainly shouldn't be offering monopolies to providers whose elbows are twisted into providing service where the houses are miles apart. Fuck em all.
[ link to this | view in chronology ]
Rick, 21 Dec 2006 @ 12:16pm

Huh?
While the 'build-out' requirement may be gone, the fact that they still need a local franchise to even get into the market still exists.

So, if a city WANTS a full build-out as a requirement for getting the franchise, they can still have it - it is city land after all they are building on. The FCC has no authority there.

All or nothing still stands, if a city so chooses.
[ link to this | view in chronology ]
DKP, 21 Dec 2006 @ 12:24pm

payoffs
No utilty company(and I consider telcos and ISPs utility companies) should be allowed to give money to any level of goverment.
[ link to this | view in chronology ]
jackb, 21 Dec 2006 @ 12:56pm

Stupid tech dirt writer
You are an idiot for thinking that the cable monopoly that is UNREGULATED is fine the way it is. You smell like a liberal rat just blaming a 3-2 decision that makes complete business sense at any level...
[ link to this | view in chronology ]
- Andy, 21 Dec 2006 @ 1:44pm
  
  Re: Stupid tech dirt writer
  liberal rat? karl's arguing for competition, most of which has been impeded by fcc bungling. a liberal thing to do would be to tell the municipalities that they're no longer allowed to bargain with telcos. and that's what the republicans are doing in a big slap to capitalism. a truly free market doesn't fix its prices.
  
  complete business sense? does it make complete business sense that billion-dollar telcos need to be handheld by the fcc through the build-out of a new system? when telcos had the training wheels taken off they reveled. but now, they're trying to get them back when the ground looks scary.
  
  another note: if a company is willing to put cable through south central slums in order to close a more lucrative market in beverly hills, then the gov't should be able to negotiate that without it seeming "unreasonable." if the company doesn't agree to the city's terms, they don't have to take the deal and another company, accepting of those terms can scoop the deal from them (see: competition). bargaining — even for things overall unrelated to the build-out, like pools — should be encouraged. the customer (in this case, the city) is always right.
  [ link to this | view in chronology ]
E, 21 Dec 2006 @ 1:02pm

I have Comcast Cable and verizon FiOS.
Where are the legal documents/laws that say I cannot get Verizon TV?

Verizon claims that the decision is stuck in Harrisburg, PA...

We _need_ someone to strike down laws that allow comcast-only services. Verizon is already here, has done the buildout, and is only waiting on the government to say ok.
[ link to this | view in chronology ]
Universal WTF, 21 Dec 2006 @ 2:07pm

Universal Serivce Charge
SO WTF is the purpose of the Universal Service charge, now?!?!

(Not that it had much purpose before this, but it does seem to remove all pretense that it's a bogus FEE)
[ link to this | view in chronology ]
Garrett, 21 Dec 2006 @ 3:12pm

I don't have cable.
I live about two miles outside Jersey Shore (pop about 4426). About 17 miles west of Williamsport (pop about 30,700). I live a mile and a half off of a major highway (Route 220) along a rural highway. Cable goes up this highway to about 1/2 mile before my house. Cable comes down this highway (from God knows where, ever look at the area in Google Maps? Eedge of the wilderness) tp about 200 yards after my house.

They just decided to not run it past my house...

So, I 'share' my parents broadband through two pirouette cans, and spend too god damn much money on DirecTiVo considering I don't watch 95% of the channels I get. Why am I subsidising this crap? No a la carte...what is this, 1950?

Why am I venting here? I don't know...the FCC, the media, cable companies, phone companies...I've had it up to the proverbial here with it all...
[ link to this | view in chronology ]
Franchise Expo, 15 Sep 2010 @ 6:48am

When you own or start a franchise business, you’re in business for yourself, but not by yourself. And when you use www.FranchiseExpo.com, you’re searching the leading franchise opportunities directory.
[ link to this | view in chronology ]
Tim Hargis, 14 Dec 2011 @ 10:29am

Everyone paying the same property tax in town isn't as bad as one of my classmates trying to convince me that no one in town pays property tax.
[ link to this | view in chronology ]