Level Playing Field Between Cable, Dish

Nov 3, 2003  •  Post A Comment

The General Accounting Office, often called the investigative arm of Congress, recently issued a study saying that cable TV rates have jumped 40 percent in the past five years. The biggest reason, according to the GAO: lack of competition.
Well, the investigative arm didn’t have to reach far for that conclusion, did it? Despite the growth of satellite TV, cable TV operators enjoy a virtual monopoly in many U.S. markets, as most everyone knows. For various reasons, including residential restrictions and the lack of local channels in some areas, many consumers still do not see the dish as an alternative.
So rather than spending our tax dollars on a GAO “investigation” that could have been solved by Inspector Clouseau, Congress-and the Federal Communications Commission-should take steps to level the playing field. For instance:
Approve the Murdoch-DirecTV Deal: Rupert Murdoch’s News Corp. last spring purchased control of DirecTV, the nation’s largest satellite TV service. The media mogul is expected to spend a small fortune on new interactive services to better compete with cable. However, the FCC, still smarting over criticism of its media ownership vote, is proceeding cautiously on approving the deal.
The agency needs to get off its duff and get it done.
Relax the Network Restrictions on Satellite TV: DirecTV and EchoStar recently added local channel feeds for dozens of cities, with many more coming in 2004.
However, it might be years before the satellite TV services have the bandwidth to deliver local HDTV feeds from broadcast networks such as CBS.
The companies could offer a national hi-def signal for each broadcast network (from New York or Los Angeles, for instance). This would guarantee that dish owners would get their favorite network shows and sporting events in hi-def. However, federal law prohibits the satcasters from offering “out of market” local feeds unless the customer can prove that he cannot receive his local channels via an off-air antenna.
With HDTV sales expected to jump in the next few years, cable TV, which does have the technical capacity to deliver local hi-def, could have a big advantage. Congress needs to amend the “out of market” network restriction and permit the satellite TV services to offer national hi-def signals. Now.
Give Competition a Chance: Of course, cable TV operators are opposing the Murdoch-DirecTV deal as well as the lifting of the network restrictions. They say the satellite TV business already has an advantage because it does not have to meet stringent regulations set by local governments. For example, cable operators have to agree to broadcast city council sessions to win a city’s cable franchise.
That’s a valid point. However, if Congress is serious about forcing cable to be more competitive, it has only one choice. In fact, the GAO report notes that cable TV rates are most likely to fall in areas when operators face serious competition from satellite TV services.
In addition, in cities where dish operators were able to offer local channels, cable operators increased their channel lineups by 5 percent.
Sen. John McCain, R-Ariz., chairman of the Senate Commerce Committee, has been a vocal critic of rising cable rates, saying the industry needs more competition. Sen. McCain, the ball is in your court.
Phillip Swann is president and publisher of TVPredictions.com. He can be reached at Swann@TVPredictions.com.