Business/Finance

FCC chairman finally makes a decision to benefit consumers–or does he?

By Martin Bosworth

If you live in an apartment building or condominium, the odds are good that your landlord or owner has locked the building into an exclusive contract with one cable or telecom provider to offer TV services–so if they have an exclusive contract with Comcast and you want DISH TV, you’re shit outta luck, as they say.

So it seems like a welcome development that Federal Communications Commission chair Kevin Martin announced today that his agency would move quickly to end the practice of exclusive contracts with multi-dwelling units (MDUs), in order to promote lower cable prices and prevent cable services from being priced out of reach of low-income families:

“Exclusive contracts have been one of the most significant barriers to competition,” Kevin J. Martin, chairman of the commission, said in an interview. Cable prices have risen “about 93 percent in the last 10 years,” he said. “This is a way to introduce additional competition, which will result in lower prices and greater innovation.”

Sounds great, right? No one likes their cable company, after all, and being able to choose your own provider instead of being stuck with whatever mediocre offering your building cut a deal with seems to be a good bargain. But what’s the real motive behind Martin’s move?

As my ConsumerAffairs.Com colleague Truman Lewis reports, Martin’s decision is the latest in a long series of moves by his FCC to favor major telecom companies to the exclusion of cable incumbents. Martin aggressively shepherded the rollout of new video franchising rights for telecom companies that would enable them to bypass local governments and deal directly with states–a big help when you want your expensive new video services like FiOS or U-Verse to go directly to specific, rich neighborhoods and bypass lower-income areas. As Ars Technica’s Nate Anderson notes, winning the ability to wire new “triple play” services to MDUs would be a huge boon to telecom competitors–and a bust for their foes in the cable sector.

Martin has also been a fervent champion of “a la carte” packaging for cable programming, which would enable subscribers to only buy the channels they want. Again, this seems like a boon for the end-user, but it would also severely undercut cable companies’ ability to buy channel packages at a bulk discount when creating programming blocks–and would thus limit their offerings and drive away subscribers, which could only benefit cable’s new competition in the telecom industry.

Kevin Martin has been such a lopsidedly zealous supporter of telecom interests that he and the entire commission got dragged before Congress earlier this year and grilled for their lack of oversight and attention paid to consumer issues. Martin’s zealous support for the megamerger of AT&T and BellSouth also won him no friends in the consumer rights world, especially his implied threat that the FCC would not force AT&T to live up to its agreement to support net neutrality as part of the merger. During the discussion of the rules for the upcoming 700 mhz wireless auction, Kevin Martin claimed to support “open access” wholly and ended up endorsing a much more lukewarm set of rules that may end up favoring incumbents in the long run.

And if his recent rush to approve new rules enabling even more consolidation of media in regional markets are any indication, Martin appears to have learned little from his recent criticism. So I guess the moral of this particular story is “Take nothing at face value.” Kevin Martin may be making decisions that benefit consumers, but his eyes have always been on the prize of ensuring his favored allies in the telecom industry get the biggest slice of the pie.

3 replies »

  1. Yeah. Right. The FCC wants to help me. So why is it that my cable company who shall remain nameless (COMCAST) just sent me a list of “good/better/best” options for my high speed Internet connection – with appropriate price jumps. Could it be because I live in a section of town where it’ll be very profitable for them? While people 10 miles away still have dial-up?

    Choice with cable companies = choice with cell phone companies – it’s either “Please, sir, may I have another?” or “Please, sir, may I have another?”

    They can all burn in hell….

    Hope I don’t come off as too angry.

    Oh, and don’t get me started on friggin’ XM/Sirius….

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